<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<S> <C> <C>
ENNIS BUSINESS FORMS, INC.
- --------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<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 15, 2000
------------------------
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 15, 2000 for the following
purposes:
1. To elect three directors for terms ending in 2003;
2. To ratify the selection of KPMG LLP as independent auditors of the
Company for the fiscal year ending February 28, 2001; and
3. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on April 17, 2000 are
entitled to notice of, and to vote at, the meeting or any adjournment or
adjournments thereof.
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 29, 2000, which contains financial statements and other information of
interest to shareholders, is being mailed to you.
By Order of the Board of Directors,
Harve Cathey
SECRETARY
DeSoto, Texas
May 12, 2000
<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 15, 2000
10:00 A.M. CDT
THE DESOTO CITY HALL
211 EAST PLEASANT RUN ROAD
DESOTO, TEXAS 75115
------------------------
The holders of the Company's Common Stock of record at the close of business
on April 17, 2000 are entitled to vote at the Annual Meeting of Shareholders,
which will be held on June 15, 2000. 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. This proxy statement is first mailed to shareholders on
May 12, 2000.
VOTING RIGHTS AND VOTES REQUIRED
At the close of business on April 17, 2000, the Company had 16,191,795
shares of Common Stock issued and outstanding. Each share of Common Stock is
entitled to one vote, except in the election of directors, shareholders may
cumulate their votes. See "Election of Directors".
The presence, in person or by proxy, of stockholders entitled to cast a
majority of all votes entitled to be cast at the Annual Meeting will constitute
a quorum. Assuming a quorum, the nominees receiving a plurality of the votes
cast at the Annual Meeting for the election of directors will be elected as
directors.
With regard to the election of directors, votes may be cast in favor or
withheld, votes that are withheld will be counted for purposes of determining
the presence or absence of a quorum but will have no other effect. Abstentions
and broker non-votes, if any, will be counted for purposes of determining the
presence or absence of a quorum but will have no effect on the outcome of the
election of directors.
VOTING OF PROXIES
If the accompanying proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the instructions specified
in the proxy. In the absence of instructions to the contrary, such shares will
be voted in favor of the nominees for election to the Board of Directors listed
in this proxy statement and named in the accompanying Proxy. The Board of
Directors does not intend to bring any other matters before the Annual Meeting
and is not aware of any matters that will come before the Annual Meeting other
than as described herein. In the absence of instructions to the contrary,
however, it is the intention of each of the persons named in the accompanying
proxy to vote all properly executed proxies on behalf of the stockholders they
represent in accordance with their discretion with respect to any such other
matters properly coming before the Annual Meeting.
<PAGE>
REVOCATION OF PROXIES
Any stockholder may revoke such stockholder's proxy at any time prior to the
voting thereof on any matter (without, however, affecting any vote taken prior
to such revocation). A proxy may be revoked by filing with Harve Cathey,
Secretary of Ennis Business Forms, Inc., at the Annual Meeting, a written notice
of revocation or a subsequently dated, executed proxy at any time prior to the
time it has been voted at the Annual Meeting, or by attending the Annual Meeting
and voting in person (although attendance at the Annual Meeting will not in and
of itself constitute revocation of a proxy).
COST OF SOLICITATION
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 the Company will reimburse such persons for their
out-of-pocket expenses incurred in this connection.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following persons own more than five percent of the outstanding voting
securities of the Company:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE PERCENT
TITLE OF CLASS BENEFICIAL OWNER(1) OF BENEFICIAL OWNERSHIP OF CLASS
- -------------- --------------------------- ----------------------- --------
<S> <C> <C> <C>
Common Stock Royce & Associates, Inc. 1,299,500 shares 8.0%
1414 Avenue of the Americas
New York, New York 10019
</TABLE>
- ------------------------
(1) This information was obtained from the Schedule 13g filing by Royce &
Associates, Inc. on February 1, 2000.
2
<PAGE>
The following table lists, as of the close of business on April 17, 2000,
the Company's common 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 2,134(1) 4,875 7,009 *
James B. Gardner........................ 13,125 4,000(3) 17,125 *
Harold W. Hartley....................... 3,375 26,975(2) 30,350 *
Robert L. Mitchell...................... 59,581 59,581 *
Thomas R. Price......................... 21,500 30,000(3) 51,500 *
Kenneth G. Pritchett.................... 10,000 7,000(3)&(4) 17,000 *
Ewell L. Tankersley..................... 10,825 1,600(3) 12,425 *
James C. Taylor......................... 4,000 4,000 *
Keith S. Walters........................ 7,650 5,000 12,650 *
All Directors and Executive Officers as
a group (13).......................... 156,056 74,352 22,875 253,283 1.7%
</TABLE>
- ------------------------
(1) Indirect shares attributable to Mr. Bouldin are shares held by Trustee of
Ennis Business Forms, Inc. Employee Stock Ownership Plan.
(2) Shares held in trust of which Mr. Hartley is one of two trustees with shared
voting power.
(3) Indirect shares attributable to Mr. Gardner, Mr. Price, Mr. Pritchett and
Mr. Tankersley are held in trust for the benefit of the named Directors.
Each has voting power over the shares.
(4) Additional shares held in a Profit Sharing plan in which Mr. Pritchett has a
beneficial interest.
(5) Shares exercisable through stock option exercise represent options
exercisable within 60 days.
* Indicates less than 1%.
ELECTION OF DIRECTORS (PROPOSAL 1)
The Board of Directors is composed of nine directors, six of whom are not,
and have not been, officers or employees of the Company. The terms of three
directors currently expire at this year's Annual Meeting, the terms of three
directors currently expire at the 2001 Annual Meeting and the terms of three
directors currently expire at the 2002 Annual Meeting. At this year's Annual
Meeting, three directors will be elected for a term expiring at the 2003 Annual
Meeting. The Board of Directors recommends the election of the nominees for
election to the terms expiring in 2003.
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
3
<PAGE>
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 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.
THREE-YEAR TERMS EXPIRING IN 2003
<TABLE>
<CAPTION>
YEAR IN WHICH
SERVICE AS A
NAME OF NOMINEE BACKGROUND AGE DIRECTOR BEGAN
- --------------- ------------------------------------------------------ -------- --------------
<S> <C> <C> <C>
Robert L. Mitchell, Retired President and Chief Operating Officer of the 66 1985
Company.
Mr. Mitchell retired in December 1989. Prior to that
date, he served as President and Chief Operating
Officer of the Company from April 1985, and was
continuously employed by the Company beginning in
1969.
Thomas R. Price, Owner and President of Price Industries, Inc., Ennis, Texas. 61 1989
Mr. Price has been engaged in his present occupation
since 1975 and is a director of Price Bros. Co.,
Dayton, Ohio.
Ewell L. Tankersley, Ranching and Investments. 67 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.
</TABLE>
THREE-YEAR TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF SERVICE AS A
CONTINUING DIRECTOR BACKGROUND AGE DIRECTOR BEGAN
- --------------------- ----------------------------------------------------- -------- --------------
<S> <C> <C> <C>
Harold W. Hartley, Investments. 76 1971
Mr. Hartley retired in December 1985 and since that
time has managed his private investments. From June
1984 to December 1985, he served as a consultant to
Tenneco Financial Services, Inc. From February 1981
to June 1984 Mr. Hartley served as Executive
Vice-President of Tenneco Financial Services, Inc.
Mr. Hartley serves as a director of the Conseco Fund
Group.
Kenneth G. Pritchett, President of Ken Pritchett Properties. 62 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.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF SERVICE AS A
CONTINUING DIRECTOR BACKGROUND AGE DIRECTOR BEGAN
- --------------------- ----------------------------------------------------- -------- --------------
<S> <C> <C> <C>
James C. Taylor, Principal, The Anderson Group Inc. Bloomfield Hills, 58 1998
Michigan.
The Anderson Group Inc. is 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.
</TABLE>
THREE-YEAR TERMS EXPIRING IN 2002
<TABLE>
<CAPTION>
YEAR IN WHICH
NAME OF SERVICE AS A
CONTINUING DIRECTOR BACKGROUND AGE DIRECTOR BEGAN
- --------------------- --------------------------------------------------------- -------- --------------
<S> <C> <C> <C>
Keith S. Walters, Chairman of the Board, CEO and President of the Company. 50 1997
Mr. Walters joined the Company in August 1997 as Vice
President--Commercial Printing Operations and was
appointed Vice Chairman of the Board and Chief Executive
Officer in November 1997. Prior to joining the Company,
Mr. Walters was with Atlas/Soundolier, a division of
American Trading and Production Company, for 8 years,
most recently as Vice President of Manufacturing. Prior
to that time, Mr. Walters was with the Automotive
Division of United Technologies Corporation for
15 years, primarily in manufacturing and operations.
James B. Gardner, Managing Director of Service Asset Management Company. 65 1970
Mr. Gardner has been associated with this financial
services firm, since May 1994. Mr. Gardner has also been
a director of Century Telephone Enterprises, Inc. since
1981 and serves as a director of NAB Asset Corporation.
Joe R. Bouldin, Director of the Company's Central Business Unit. 49 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. The Company has continuously employed Mr. Bouldin
since 1975 in various management positions.
</TABLE>
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. The Company also reimburses travel and
accommodation expenses of directors incurred with respect to board and committee
meetings. The Company grants each outside director an option to purchase 10,000
shares at the time of election and 5,000 shares annually while service as a
director continues. These are non-qualified options as provided under the 1998
Option and Restricted Stock Plan. 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 April 1999 and Mr. Pritchett was granted an
option of 10,000 shares upon his election in April 1999.
MEETINGS OF BOARD AND COMMITTEES
The Company's Board held six meetings during the fiscal year ended
February 29, 2000. The Board's Executive Compensation and Stock Option, Audit
and Executive committees each held three meetings. The Nominating committee met
once. Each director attended at least 75% of the meetings of the Board of
Directors and the committees on which each served during the fiscal year.
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. All members are independent within the listing
standards of the New York Stock Exchange. 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, Mr. Price 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. Pritchett and Mr.Taylor.
EXECUTIVE COMMITTEE. This committee advises and consults with the Chief
Executive Officer regarding the management of the business and affairs of the
Company and makes recommendations for consideration by the full Board of
Directors. The committee currently consists of Mr. Gardner (Chairman),
Mr. Walters and Mr. Tankersley.
6
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
The Executive 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 2000 compensation determinations were made by the Committee
with respect to the executive officers of the Company, including the Chief
Executive Officer and the four 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 2000, 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 executive (other than the Named Executives). The
Committee believes the recommended salary increases and incentive awards were
7
<PAGE>
warranted, are properly aligned to the Board's compensation philosophy, and
consistent with the performance of such executives during fiscal year 2000 based
on the Committee's evaluation of each individual's overall contribution to
accomplishing the Company's fiscal year 2000 corporate goals and of each
individual's achievement of individual goals during the year.
STOCK OPTIONS
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 option grants. 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.
COMPENSATION OF CEO
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, 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 $325,000 (midpoint for his position in the Company's salary
administration system). A performance bonus of $238,362 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 2000.
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.
The Committee believes the actions taken regarding executive compensation
were appropriate in view of individual and corporate performance.
<TABLE>
<S> <C> <C>
Ewell L. Tankersley--Chairman James B. Gardner James C. Taylor
</TABLE>
8
<PAGE>
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 does not
believe that any compensation paid to its named executive officers will not be
deductible by the Company under this provision.
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.
CERTAIN TRANSACTIONS
During fiscal year 2000 with approval from the Board of Directors, Jamces 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 $32,250 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All of the members of the Executive Compensation and Stock Option Committee
are non-employee directors of the Company and are not former officer of the
Company. During fiscal year 2000, no executive officer of the Company served as
a member of the Board of Directors or on the compensation committee of a
corporation of which an executive officer served on the Executive Compensation
and Stock Option Committee or on the Board of Directors of the Company.
9
<PAGE>
SUMMARY COMPENSATION TABLE*
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS
ANNUAL COMPENSATION(B) LONG-TERM
----------------------------------------- COMPENSATION
NAME AND PRINCIPAL POSITION(A) YEAR SALARY BONUS OTHER AWARDS
- ------------------------------ -------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Keith S. Walters(c)............................. 2000 $315,384 238,362 100,000
Chairman of the Board, 1999 $233,461 134,750 100,000
President and Chief Executive Officer 1998 $ 79,243 20,000
Ronald M. Graham................................ 2000 $115,115 49,306 15,000
Vice President--Human Resources 1999 $ 79,464 30,800 16,000
David P. Erickson............................... 2000 $130,000 38,118 15,000
Vice President--Sales and Marketing 1999 $ 86,154 36,400 16,000
Robert M. Halowec .............................. 2000 $128,654 63,118 15,000
Vice President--Finance And CFO
Harve Cathey ................................... 2000 $ 95,000 25,917
Secretary and Treasurer
</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) 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.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
NUMBER OF ASSUMED PRICE
SECURITIES % OF TOTAL APPRECIATION
UNDERLYING OPTIONS/SARS EXERCISE OR FOR OPTION TERM
OPTIONS/SARS GRANTED TO BASE PRICE ---------------------
GRANTED(1) FISCAL YEAR PER SHARE EXPIRATION 5% 10%
------------- ------------ ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
David Erickson............ 15,000 10.3% 8.69 04/21/09 $ 72,000 $ 177,000
Ronald M. Graham.......... 15,000 10.3% 8.69 04/21/09 $ 72,000 $ 177,000
Robert M. Halowec......... 15,000 10.3% 8.69 04/21/09 $ 72,000 $ 177,000
Keith S. Walters.......... 100,000 69.1% 8.69 04/21/09 $479,000 $1,180,000
</TABLE>
- ------------------------
(1) Total number of options granted to employees during fiscal 2000 was 145,000.
(2) Options become exercisable in increments of 25% per year (cumulative)
beginning April 21, 2001.
10
<PAGE>
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..................................... 1,250 218,750
Robert M. Halowec.................................... -- 15,000
Ronald M. Graham..................................... -- 31,000
David P. Erickson.................................... -- 31,000
Harve Cathey......................................... 13,000 12,500
</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 tables above sets forth approximate annual retirement
benefits that would be received under the plan, computed on the basis of the
specified average annual earnings and years of service. The table presents
annual benefit amounts for remuneration above the current $160,000 since
(a) the $160,000 maximum can increase with inflation and (b) prior to 1994
the maximum annual compensation limitation was more than $160,000.
The number of full years of continuous service in the plan as of
February 29, 2000 for Mr. Walters, Graham, Erickson, Halowec and Cathey were 2,
1, 1, 0 and 30, respectively.
11
<PAGE>
FIVE-YEAR STOCK PERFORMANCE
The graph below provides an indicator of cumulative total shareholder
returns for the Company compared with the S&P 500 Stock Index(1) 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. 1995 100 100 100
Feb. 1996 135 86 129
Feb. 1997 170 89 170
Feb. 1998 229 91 165
Feb. 1999 275 81 129
Feb. 2000 307 73 102
</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., New England Business Services, Inc.,
Mail-Well, Inc., The Reynolds & Reynolds Company and Ennis Business
Forms, Inc. American Business Products, Inc.was acquired in 1999 by
Mail-Well, Inc., which has been added to the Peer Group.
12
<PAGE>
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. Mr. Tankersley was an Audit Partner
with KPMG LLP until his retirement in 1985. 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. The members of
the Audit Committee of the Board of Directors, 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 28, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and persons who own more than 10% of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than 10% beneficial owners are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on a review of the copies of the forms furnished to the
Company, the Company believes that during the fiscal year ended February 29,
2000, all Section 16(a) filing requirements applicable to its officers and
directors were made.
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 29, 2000 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 2001 Annual Meeting of Shareholders,
the Secretary of the Company must receive such proposals not less than 120 days
in advance of May 15, 2001.
By Order of the Board of Directors
Harve Cathey
SECRETARY
DeSoto, Texas
May 12, 2000
13
<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, Robert M. Halowec 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 17, 2000 at the Annual Meeting of Shareholders to be held
June 15, 2000 or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE)
- -------------------------------------------------------------------------------
<PAGE>
ENNIS BUSINESS FORMS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS FOR TERM ENDING IN 2003-- For All
NOMINEES: 01-Robert L. Mitchell, For Withhold (Except Nominee(s)
02-Thomas R. Price and All All written below)
03-Ewell L. Tankersley. / / / / / /
------------------------------------------------
2. Proposal to approve the selection of KPMG For Against Abstain
LLP as independent auditors for the fiscal / / / / / /
year ending February 28, 2001.
3. In their discretion, the Proxies are For Against Abstain
authorized to vote upon such other / / / / / /
business as may properly come before
the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND
IN THE PROXIES' DISCRETION ON MATTERS ARISING UNDER 3. 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: ___________________________________, 2000
Signature _________________________________________________________
Signature if held jointly _________________________________________
</TABLE>
- -------------------------------------------------------------------------------
PLEASE FOLD AND DETACH HERE AND READ THE REVERSE SIDE
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
