The Company grants stock options, restricted stock and restricted stock units ("RSUs") to key executives and managerial employees and non-employee directors. Prior to June 30, 2021, the Company had one stock incentive plan, the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of May 18, 2008 and was further amended on June 30, 2011 (the "Old Plan"). The Old Plan expired June 30, 2021 and all remaining unused shares expired. Subject to the affirmative vote of the shareholders, the Board adopted the 2021 Long-Term Incentive Plan of Ennis, Inc. (the "New Plan") on April 16, 2021 authorizing 1,033,648 shares of common stock for awards and was approved by the shareholders at the Annual Meeting on July 15, 2021 by a majority vote. The New Plan expires June 30, 2031 and all unissued stock will expire on that date. At November 30, 2022, the Company has 977,277 shares of unissued common stock reserved under the New Plan for issuance and uses treasury stock to satisfy option exercises and restricted stock awards.

The Company recognizes compensation expense 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 November 30, 2022 and November 30, 2021, the Company included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $0.6 million and $0.6 million, respectively. For the nine months ended November 30, 2022 and November 30, 2021, the Company

included in selling, general and administrative expenses, compensation expense related to stock-based compensation of $1.5 million and $2.4 million, respectively.

The Company had no outstanding vested or unvested stock options at any time during the nine months ended November 30, 2022 and November 30, 2021. No stock options were granted during the nine months ended November 30, 2022 and November 30, 2021.

The following activity occurred with respect to the Company’s restricted stock awards for the nine months ended November 30, 2022, of which 22,000 shares were granted under the New Plan:


				Weighted
				Average
	Number of			Grant Date
	Shares			Fair Value
Outstanding at March 1, 2022		67,164		$	18.73
Granted		22,000			19.78
Terminated		—			—
Vested		(39,381	)		19.00
Outstanding at November 30, 2022		49,783		$	18.99

As of November 30, 2022, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $1.1 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.7 years.

During the nine months ended November 30, 2022, 39,574 performance-based RSUs and 9,893 time-based 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 of $19.47 per unit. The fair value of the performance-based RSUs, using a Monte Carlo valuation model, was $23.17 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.

The performance-based RSUs will vest no later than March 15, 2024, 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 29, 2024. The time-based RSUs vest ratably over two to three years from the date of grant.


	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, 2022		35,071		$	20.38		140,287	$	23.17
Granted		9,893			19.47		39,574		23.17
Terminated		—			—		—		—
Vested		(11,690	)		20.38		—		—
Outstanding at November 30, 2022		33,274		$	20.11		179,861	$	23.17

As of November 30, 2022, the total remaining unrecognized compensation cost of time-based RSUs was approximately $0.4 million over a weighted average remaining requisite service period of 1.8 years. As of November 30, 2022, the total remaining unrecognized compensation of performance-based RSUs was approximately $1.7 million over a weighted average remaining requisite service period of 1.7 years.