ebf-8k_20190515.htm

0001564590-19-019650.txt : 20190516 0001564590-19-019650.hdr.sgml : 20190516 20190516165440 ACCESSION NUMBER: 0001564590-19-019650 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20190515 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20190516 DATE AS OF CHANGE: 20190516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENNIS, INC. CENTRAL INDEX KEY: 0000033002 STANDARD INDUSTRIAL CLASSIFICATION: MANIFOLD BUSINESS FORMS [2761] IRS NUMBER: 750256410 STATE OF INCORPORATION: TX FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05807 FILM NUMBER: 19833047 BUSINESS ADDRESS: STREET 1: 2441 PRESIDENTIAL PARKWAY CITY: MIDLOTHIAN STATE: TX ZIP: 76065 BUSINESS PHONE: 9727759801 MAIL ADDRESS: STREET 1: 2441 PRESIDENTIAL PARKWAY CITY: MIDLOTHIAN STATE: TX ZIP: 76065 FORMER COMPANY: FORMER CONFORMED NAME: ENNIS BUSINESS FORMS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ENNIS TAG & SALESBOOK CO DATE OF NAME CHANGE: 19700805 8-K 1 ebf-8k_20190515.htm 8-K EMPLOYMENT AGREEMENTS ebf-8k_20190515.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 or 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): May 16, 2019 (May 15, 2019)

Ennis, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Texas	1-5807		75-0256410
(State or Other Jurisdiction of Incorporation)	(Commission File Number)		(IRS Employer Identification No.)

2441 Presidential Pkwy. Midlothian, Texas		76065

(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (972) 775-9801

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $2.50 per share

EBF

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 1.01.ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

As previously disclosed, effective July 31, 2019, Ennis, Inc. (the “Company”) entered into Amended and Restated Employment Agreements with each of Michael Magill, as Executive Vice President and Secretary, Ronald Graham, as Vice President of Administration, and Richard Travis, as Vice President of Finance, Chief Financial Officer and Treasurer (the “Employment Agreements”).

On May 15, 2019 the Company entered into Amendment No. 1 to each of the Employment Agreements (the “Amendments”). Under the Amendments, each employee must terminate his employment for “Good Reason” (rather than for any reason) to receive a severance payment in connection with a “Change of Control” of the Company, and the definition of Good Reason is modified. The Amendments also eliminate the requirement that the Company “gross up” the employee for incremental taxes that would be payable by the employee in connection with a Change of Control. If amounts payable to the employee under the Employment Agreement would result in tax consequences under Section 280G of the Internal Revenue Code, then such payments will either be reduced or paid in full depending on which approach produces the better tax result for the employee.

Except as set forth in the Amendments, each of the Employment Agreements remains in full force and effect.

The foregoing summary of the Amendments is not complete and is qualified in its entirety by the Amendments, copies of which are attached hereto as Exhibit 10.1, 10.2 and 10.3 and incorporated by reference herein.

ITEM 5.02.

DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

(b)

On May 15, 2019, Michael Magill resigned his position as a member of the Board of Directors of the Company (the “Board”). Mr. Magill’s resignation from the Board was not because of any disagreement with the Company or the Board.

(d)

On May 15, 2019, the Board elected Gary Mozina to fill the seat formerly occupied by Mr. Magill. Mr. Mozina will serve as a director with a term of office expiring at the Company’s 2020 annual meeting of stockholders.

Mr. Mozina, is the current Chief Executive Officer of Stevenson Holdings, Inc., a holding company which also does digital printing and mailing under the d/b/a Superior Copies, and which is located in Chicago, Illinois. Previously, Mr. Mozina served as the Chief Executive Officer of Integrated Print and Graphics (“IPG”) until March 16, 2019, when the assets of IPG were acquired by the Company. He held a variety of positions during his 48-year tenure with IPG and was instrumental in developing IPG’s business prior to its acquisition by the Company. Mr. Mozina has an extensive background in manufacturing and sales and has also been responsible for the design and construction of multiple facilities used for manufacturing and warehousing. Since 2003, through his service at IPG, Mr. Mozina has overseen acquisitions of 16 sales and manufacturing organizations. The Board believes that Mr. Mozina, with over four decades of experience in the print industry, has the knowledge and experience that will make him a valuable member of the Board.

Mr. Mozina will be eligible to participate in the Company’s standard compensation arrangements for non-employee directors, consisting of an annual cash retainer, meeting fees, stock options and restricted stock, as described in the Company’s proxy statement filed with the Securities and Exchange Commission.

As previously disclosed, on March 16, 2019, the Company acquired the assets of IPG, which was wholly owned by Mr. Mozina. In connection with the purchase of IPG, the Company entered into a sourcing agreement with the Stevens Group LLC (“Stevens Group”), a distributorship located in Chicago, Illinois that is 70% owned by Mr. Mozina and his family Stevenson Holdings, Inc. The sourcing agreement has a four-year term and requires the Stevens Group to make minimum purchases of products from the Company of approximately $2.0 million per year. The Company also leases certain facilities from Stevenson Road LLC, a real estate company that is 100% owned by Mr. Mozina and his family. The lease has an initial term of three years and provides for rent of approximately $31 thousand per month.

(e)

The disclosures set forth in Item 1.01 are incorporated by reference into this Item 5.02(e).

ITEM 9.01.FINANCIAL STATEMENTS AND EXHIBITS

(d)Exhibits

Exhibit No.		Description

10.1		Amendment No. 1 to the Amended and Restated Employment Agreement between the Company and Michael Magill, effective May 15, 2019.

10.2		Amendment No. 1 to the Amended and Restated Employment Agreement between the Company and Ronald Graham, effective May 15, 2019.

10.3		Amendment No. 1 to the Amended and Restated Employment Agreement between the Company and Richard Travis, effective May 15, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Ennis, Inc.

Date: May 16, 2019	By:	/s/ Richard L. Travis, Jr.
		Richard L. Travis, Jr
		Chief Financial Officer

EX-10.1 2 ebf-ex101_8.htm EX-10.1 ebf-ex101_8.htm

Exhibit 10.1

ENNIS, INC.

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

Amendment No. 1

This AMENDMENT NO. 1 (the "Amendment") to the Amended and Restated Employment Agreement entered into by and between Ennis, Inc., a Texas corporation ("Company") and Michael D. Magill, an individual ("Executive") (such agreement being the "Employment Agreement"), is made by the parties as follows:

WHEREAS, Company and Executive are currently parties to the Employment Agreement effective July 31, 2017; and

WHEREAS, the parties now desire to amend the Employment Agreement.

NOW THEREFORE, Company and Executive hereby agree to amend the Employment Agreement as follows:

1.Definition of Good Reason. The definition of Good Reason in Section 4(c) of the Employment Agreement is amended in its entirety and replaced to read as follows:

Good Reason means any of the following reasons:

(i)a material diminution in Executive's Base Salary or total compensation (as in effect at the time);

(ii)a material, adverse change in Executive's title, authority, duties, or responsibilities from those applicable to Executive as of the Effective Date;

(iii)a relocation of the geographic location of Executive's principal place of employment by more than 50 miles from Midlothian, Texas;

(iv)a material breach by Company of any written agreement with Company, including this Agreement;

(v)the failure of any successor to Company to assume and agree to perform this Agreement in the same manner and to the same extent that Company would be required to perform if no succession had taken place; and

(iv)a material adverse change in the reporting structure applicable to Executive.

2.Termination By or of Executive After Change of Control. The first two sentences of Section 4(d) are amended in their entirety and replaced to read as follows:

Notwithstanding any other provision contained herein, if at any time during the period commencing 90 days prior to a Change of Control Event and ending 12 months after the Change of Control Event (the "Change of Control Period"), Executive's employment is terminated, other than by death, either (i) by the Company other than for Cause as provided in Section 4(b), or (ii) by Executive for Good Reason as provided in Section 4(c), then in addition to any other amounts payable to Executive pursuant to this Agreement, other than the Severance Payment, Company shall pay to Executive, Accrued Compensation plus an amount equal to two times (2.0x) the sum of (x) Executive's then annual Base Salary plus (y) an amount equal to Executive's Discretionary Bonus for the immediately preceding fiscal year (the "Change of Control Severance Payment"). Subject to Section 4(j), the Change of Control Severance Payment shall be paid in periodic bi-weekly payments over a period of one (1) year in accordance with the ordinary payroll practices of Company. In the event that Executive is terminated and commences receiving the Severance Payment and it is later determined that Executive is entitled to the Change in Control Severance Payment, Executive shall receive a catch-up payment (the "Catch-up Payment"), payable no later than 90 days following the termination of Executive's employment, equal to the additional payments Executive would have received during the period beginning on the date of his termination from employment and ending on the date the Catch-Up Payment is made had Executive received the Change in Control Severance Payment in the first instance.

3.Mitigation. Section 5 is amended in its entirety and replaced to read as follows:

MITIGATION. Upon termination of this Agreement for any reason, Executive shall not be obligated to seek other employment or take any other action by way of mitigation of Severance Payment set forth in Section 4(a) and 4(c) or the Change of Control Severance Payment set forth in Section 4(d), and such amounts shall not be reduced whether or not Executive obtains other employment; provided, however, that Company shall maintain a right of set-off for damages and/or harm resulting from a breach of this Agreement or any improper acts or conduct of Executive which harm Company.

4.Release. Section 7 is amended in its entirety and replaced to read as follows:

RELEASE. Notwithstanding any other provision in this Agreement to the contrary, Executive agrees to execute upon termination (and not to revoke) a separation agreement and general release of claims acceptable to Company (the "Release"). If Executive fails to execute and deliver the Release, or revokes the Release, within forty-five (45) days of the date on which Executive's employment terminates, Executive agrees that he is entitled to receive neither the Severance Payment set forth in Sections 4(a) and 4(c) nor the Change in Control Severance Payment set forth in Section 4(d). If such forty-five (45) day period straddles two (2) taxable years of Executive, then Company shall commence the Severance Payment or the Change in Control Severance Payment, as applicable, starting in the second of such taxable years, regardless of the taxable year in which Executive actually delivers the executed Release; provided that, the first installment payment shall include all amounts that would otherwise have been paid to Executive during the period beginning on the date of his termination from employment and ending on the first payment date if no delay have been imposed. For purposes of this Agreement, the Release shall be considered to have been executed by Executive if it is signed by his legal representative in the case of legal incompetence or on behalf of Executive's estate in the case of his death. In no event shall the Severance Payment or Change in Control Severance Payment be made hereunder until the period in which to revoke the Release has terminated.

5.Section 280G. Section 30 is amended in its entirety and replaced to read as follows:

SECTION 280G. Notwithstanding anything in this Agreement to the contrary, if Executive is a "disqualified individual" (as defined in Section 280G(c) of the Code), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which Executive has the right to receive from Company or any other person, would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Executive from Company and/or such person(s) will be $1.00 less than three (3) times Executive's "base amount" (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full,

whichever produces the better "net after-tax position" to Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made applying principles, assumptions and procedures consistent with Section 280G of the Code by an accounting firm or law firm of national reputation that is selected for this purpose by Company (the "280G Firm") (with all such costs borne by Company). In order to assess whether payments under this Agreement or otherwise qualify as reasonable compensation that is exempt from being a parachute payment under Section 280G of the Code, the 280G Firm or Company may retain the services of an independent valuation expert. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from Company (or its affiliates) used in determining if a "parachute payment" exists, exceeds $1.00 less than three (3) times Executive's base amount, then Executive shall immediately repay such excess to Company upon notification that an overpayment has been made. Nothing in this paragraph shall require Company to be responsible for, or have any liability or obligation with respect to, Executive's excise tax liabilities under Section 4999 of the Code.

6.Force and Effect. Except as otherwise set forth in this Amendment, the Employment Agreement shall remain in full force and effect.

7.Effective Date of this Amendment. This Amendment shall become effective as of May 15, 2019.

[SIGNATURES ON NEXT PAGE]

IN WITNESS WHEREOF, Company and Executive have executed this Amendment effective as of the day set forth above.


ENNIS, INC.:	EXECUTIVE:
By: /s/ Alejandro Quiroz	/s/ Michael D. Magill
Its: Compensation Committee Chairman	Michael D. Magill

EX-10.2 3 ebf-ex102_7.htm EX-10.2 ebf-ex102_7.htm

Exhibit 10.2

ENNIS, INC.

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

Amendment No. 1

This AMENDMENT NO. 1 (the "Amendment") to the Amended and Restated Employment Agreement entered into by and between Ennis, Inc., a Texas corporation ("Company") and Ronald M. Graham, an individual ("Executive") (such agreement being the "Employment Agreement"), is made by the parties as follows: