The Company grants stock options, restricted stock and restricted stock units (“RSUs”) to key executives and managerial employees and non-employee directors. At August 31, 2025, the Company had one stock option plan, the 2021 Long-Term Incentive Plan of Ennis, Inc., adopted by the Board April 16, 2021 and affirmed by vote of the shareholders July 15, 2021 (the “Plan”). The Plan authorized 1,033,648 shares of common stock for awards and expires June 30, 2031 and all unissued stock will expire on that date. As of August 31, 2025, the Company has 259,560 shares of unissued common stock reserved under the Plan for issuance. The exercise price of each stock option granted under the Plan equals a referenced price of the Company’s common stock as reported on the New York Stock Exchange on the date of grant, and an option’s maximum term is ten years. Stock options and restricted stock may be granted at different times during the year and vest ratably over various periods, from grant date up to five years. The Company uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense for stock options and restricted stock grants based on the grant date fair value of the award for stock options, restricted stock grants and RSUs on a straight-line basis over the requisite service period. The estimated number of shares to be achieved for performance based RSUs is updated each reporting period. For the three months ended August 31, 2025 and August 31, 2024, the Company included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $0.8 million and $0.7 million, respectively. For the six months ended August 31, 2025 and August 31, 2024, the Company included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $1.3 million and $2.5 million, respectively.

The Company had the following stock option activity for the six months ended August 31, 2025.


						Weighted
				Weighted		Average		Aggregate
	Number			Average		Remaining		Intrinsic
	of Shares			Exercise		Contractual		Value(a)
	(exact quantity)			Price		Life (in years)		(in thousands)
Outstanding at March 1, 2025		31,251		$	19.88		9.0		—
Granted		10,809			17.27
Terminated		—			—
Exercised		(2,500	)		17.27
Outstanding at August 31, 2025		39,560		$	19.33		8.1	$	8.3
Exercisable at August 31, 2025		26,222		$	19.05		8.3	$	8.3

A summary of the status of the Company’s unvested stock options at August 31, 2025 and the changes during the six months ended August 31, 2025 are presented below:


		Weighted
		Average
	Number	Grant Date
	of Options	Fair Value
Unvested at March 1, 2025	26,669	2.47
New grants	10,809	2.41
Vested	(24,140)	2.44
Forfeited	—	—
Unvested at August 31, 2025	13,338	2.47

As of August 31, 2025, there was $0.1 million of unrecognized compensation cost related to unvested stock options granted under the Plan. The weighted average remaining requisite service period of the unvested stock options was 0.6 years.

The following activity occurred with respect to the Company’s restricted stock awards for the six months ended August 31, 2025:


				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2025		41,667		$	21.61
Granted		37,477			17.99
Terminated		(6,776	)		22.46
Vested		(32,307	)		19.81
Outstanding at August 31, 2025		40,061		$	19.53

As of August 31, 2025, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $0.7 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 2.4 years.

During the six months ended August 31, 2025, no performance-based or time-based RSUs were granted under the Plan. The fair value of the time-based RSUs was estimated based on the fair market value of the Company’s stock on the date of grant of $19.43 per unit. The fair value of the performance-based RSUs, using a Monte Carlo valuation model, was $19.97 per unit. The performance measures include a threshold, target and maximum performance level providing the grantees an opportunity to receive more or less shares than targeted depending on actual financial performance of the Company. The award will be based on the Company’s return on equity, EBITDA and adjusted for the Company’s Relative Shareholder Return as measured against a defined peer group. The RSUs include dividend equivalent rights that entitle the holders to receive cash payments per RSU that are equal to the per share dividends we declare and pay on our common stock, which are included in dividends paid in the Condensed Consolidated Financial Statements.

The performance-based RSUs vest on the third anniversary from the date of grant and the time-based RSUs vest ratably over three years from the date of grant.

The following activity occurred with respect to the Company’s restricted stock units for the six months ended August 31, 2025:


	Time-based					Performance-based
				Weighted				Weighted
				Average				Average
	Number of			Grant Date		Number of		Grant Date
	Shares			Fair Value		Shares		Fair Value
Outstanding at March 1, 2025 (1)		101,961		$	19.43		198,827	$	19.97
Granted		—			—		—		—
Change due to performance achievement		—			—		—		—
Terminated		(5,403	)		19.43		—		—
Vested		(28,582	)		19.43		—		—
Outstanding at August 31, 2025		67,976		$	19.43		198,827	$	19.97

(1) The number of shares of time-based grants may, upon vesting, convert 50% into common stock and the remaining 50% into two incentive stock options for each RSU with an exercise price equal to the closing price of the Company's stock on that date for employees who have not met their stock ownership requirements. The number of shares of performance-based grants includes an estimate 55,037 of additional RSUs at the maximum achievement level of 130% of target payout. Actual shares that may be issued can range from 0% to 130% of target.

As of August 31, 2025, the total remaining unrecognized compensation cost of time-based RSUs was approximately $1.0 million over a weighted average remaining requisite service period of 1.6 years. As of August 31, 2025, the total remaining unrecognized compensation of performance-based RSUs was approximately $2.1 million over a weighted average remaining requisite service period of 1.6 years.