The Company grants stock options, restricted stock and restricted stock units (“RSUs”) to key executives and managerial employees and non-employee directors. Subject to the affirmative vote of the shareholders, the Board adopted the 2021 Long-Term Incentive Plan of Ennis, Inc. (the "Plan") on April 16, 2021 authorizing 1,033,648 shares of common stock for awards. The Plan was approved by the shareholders at the Annual Meeting on July 15, 2021 by a majority vote. The Plan expires June 30, 2031 and all unissued stock will expire on that date. At fiscal year ended February 28, 2026, the Company has 259,560 shares of unissued common stock reserved under the Plan for issuance and uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense for stock options and restricted stock grants on a straight-line basis over the requisite service period. For the fiscal years ended 2026, 2025 and 2024, the Company included in selling, general and administrative expenses, compensation expense related to share based compensation of $2.7 million, $2.9 million and $2.5 million, respectively.

No stock options were granted during fiscal year 2025. The following is a summary of the assumptions used and the weighted average grant-date fair value of the stock options granted during the fiscal years 2026 and 2024.


	February 28,			February 29
	2026			2024
Expected volatility		19.95	%		19.55	%
Expected term (years)		3.0			3.0
Risk free interest rate		3.97	%		3.87	%
Dividend Yield		4.66	%		4.94	%
Weighted average grant-date fair value	$	2.41		$	2.47

The Company had the following stock option activity for fiscal years 2025 and 2026.


						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, 2024		52,500			19.88		9.1		23.0
Granted		—
Forfeited		(12,500	)		—
Exercised		(8,749	)		—
Outstanding at March 1, 2025		31,251			19.88		8.1		41.3
Granted		10,809			17.27
Terminated		—			—
Exercised		(2,500	)		17.27
Outstanding at February 28, 2026		39,560		$	19.33		7.6	$	70.3
Exercisable at February 28, 2026		26,222		$	19.05		7.8	$	53.9

A summary of the status of the Company’s unvested stock options at February 28, 2026 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 February 28, 2026		13,338			2.47

As of February 28, 2026, there was less than $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 0.1 years. All unvested options had a exercise price of $19.88.

The following occurred with respect to the Company’s unvested restricted stock awards for each of the three fiscal years 2024, 2025 and 2026:


				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Unvested at March 1, 2023		49,783		$	18.99
Granted		21,672			20.31
Terminated		—			—
Vested		(29,324	)		18.36
Unvested at February 29, 2024		42,131		$	20.11
Granted		19,880			23.24
Terminated		—			—
Vested		(20,344	)		20.08
Unvested at February 28, 2025		41,667		$	21.61
Granted		37,477			17.99
Terminated		(6,776	)		22.46
Vested		(32,307	)		19.81
Unvested at February 28, 2026		40,061		$	19.53

The total fair value of restricted stock awards vested during fiscal 2026, 2025 and 2024 were $0.6 million, $0.5 million, and $0.6 million, respectively.

As of February 28, 2026, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $0.5 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.9 years. As of February 28, 2026, the Company’s outstanding restricted stock had an underlying fair value of $0.8 million at date of grant.

During fiscal year 2026, no RSUs were granted under the New 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. 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. 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. Holders of RSUs receive cash dividends equal to the dividends we declare and pay on our common stock, which are included in dividends paid in the Consolidated Financial Statements.

The performance-based RSUs will vest no later than March 15, 2027, which is the deadline for the Compensation Committee to determine the extent of the Company’s attainment of the Performance Goals during the Performance Period that ends on February 28, 2027. The time-based RSUs vest ratably over three years from the date of grant.

The following occurred with respect to the Company’s unvested RSUs for fiscal years 2024, 2025 and 2026:


	Time-based					Performance-based
				Weighted					Weighted
				Average					Average
	Number of			Grant Date		Number of			Grant Date
	Shares			Fair Value		Shares			Fair Value
Unvested at March 1, 2023		33,274		$	20.11		233,819		$	23.17
Granted		—			—		—			—
Terminated		—			—		(81,247	)		20.32
Vested		(16,635	)		20.11		—			—
Unvested at February 29, 2024		16,639		$	20.11		152,572		$	23.17
Granted (1)		122,303			19.43		238,494			19.97
Change due to performance achievement		—			—		61,337			—
Terminated		(8,695	)		19.43		(29,462	)		19.97
Vested		(28,286	)		19.83		(224,114	)		22.59
Unvested at February 28, 2025		101,961		$	19.43		198,827		$	19.97
Granted		—			—		—			—
Terminated		(5,403	)		19.43		—			—
Vested		(28,582	)		19.43		—			—
Unvested at February 28, 2026		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.

The total fair value of restricted stock unit awards vested during fiscal 2026, 2025 and 2024 were $0.3 million, $4.9 million and $0.3 million, respectively.

As of February 28, 2026, the total remaining unrecognized compensation cost of time-based RSUs was approximately $0.7 million over a weighted average remaining requisite service period of 1.1 years. The total remaining unrecognized compensation of performance-based RSUs was approximately $1.5 million over a weighted average

remaining requisite service period of 1.1 years. As of February 28, 2026, the Company’s outstanding RSUs had an underlying fair value of $5.6 million at date of grant.