(9) Stock Option Plan and Stock Based Compensation

The Company grants stock options and restricted stock to key executives and managerial employees and non-employee directors. At fiscal year ended 2014, the Company has one stock option plan: the 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated as of June 30, 2011, formerly the 1998 Option and Restricted Stock Plan amended and restated as of May 14, 2008 (the “Plan”). The Company has 872,992 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 on a straight-line basis over the requisite service period. For the years ended 2014, 2013 and 2012, the Company included in selling, general and administrative expenses, compensation expense related to share based compensation of $1.5 million ($1.0 million net of tax), $1.5 million ($0.9 million net of tax) and $1.0 million ($0.7 million net of tax), respectively.

Stock Options

The Company had the following stock option activity for the three years ended February 28, 2014:


	Number of Shares *(exact quantity)*			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life *(in years)*		Aggregate Intrinsic Value(a) *(in thousands)*
Outstanding at March 1, 2011		261,900		$	14.31		6.5	$	757
Granted		82,743			17.57
Terminated		(2,500	)		8.94
Exercised		(31,950	)		10.68

Outstanding at February 29, 2012		310,193		$	15.60		6.6	$	626
Granted		72,707			15.48
Terminated		(11,400	)		13.57
Exercised		(8,500	)		8.94

Outstanding at February 28, 2013		363,000		$	15.79		6.4	$	421
Granted		36,155			14.05
Terminated		(7,750	)		13.30
Exercised		(22,000	)		12.59

Outstanding at February 28, 2014		369,405		$	15.86		6.0	$	416

Exercisable at February 28, 2014		257,194		$	16.01		5.1	$	337

(a)	Intrinsic value is measured as the excess fair market value of the Company’s Common Stock as reported on the New York Stock Exchange over the applicable exercise price.

The following is a summary of the assumptions used and the weighted average grant-date fair value of the stock options granted during fiscal years ended 2014, 2013 and 2012:


	2014			2013			2012
Expected volatility		30.41	%		37.02	%		43.76	%
Expected term (years)		3			3			3
Risk free interest rate		0.35	%		0.43	%		1.16	%
Dividend yield		4.63	%		4.42	%		3.66	%
Weighted average grant-date fair value	$	1.96		$	2.83		$	4.24

A summary of the stock options exercised and tax benefits realized from stock based compensation is presented below for the three fiscal years ended (in thousands):


	Fiscal years ended
	2014		2013		2012
Total cash received	$	94	$	85	$	217
Income tax (expense) benefit		17		66		63
Total grant-date fair value		50		13		54
Intrinsic value		117		54		200

A summary of the status of the Company’s unvested stock options at February 28, 2014, and changes during the fiscal year ended February 28, 2014 is presented below:


	Number of Options			Weighted Average Grant Date Fair Value
Unvested at February 28, 2013		169,954		$	3.20
New grants		36,155			1.96
Vested		(93,898	)		3.08
Forfeited		—			—

Unvested at February 28, 2014		112,211		$	2.89

As of February 28, 2014, there was $144,000 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 1.2 years. The total fair value of shares underlying the options vested during the fiscal year ended February 28, 2014 was $1.5 million.

The following table summarizes information about stock options outstanding at the end of fiscal year 2014:


	Options Outstanding						Options Exercisable
Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$8.94 to $11.67		48,000		5.2	$	8.94		48,000	$	8.94
14.82 to 16.42		148,862		6.4		15.36		64,234		16.00
17.57 to 19.69		172,543		6.0		18.23		144,960		18.35

		369,405		6.0		15.86		257,194		16.01

Restricted Stock

The Company had the following restricted stock grants activity for the three fiscal years ended February 28, 2014:


	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at March 1, 2011		80,823		$	15.59
Granted		93,959			17.57
Terminated		—			—
Vested		(43,449	)		15.34

Outstanding at February 29, 2012		131,333		$	17.09
Granted		92,293			15.46
Terminated		—			—
Vested		(36,578	)		16.05

Outstanding at February 28, 2013		187,048		$	16.49
Granted		55,607			14.05
Terminated		—			—
Vested		(61,753	)		16.40

Outstanding at February 28, 2014		180,902		$	15.77

As of February 28, 2014, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $1.2 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.1 years. As of February 28, 2014, the Company’s outstanding restricted stock had an underlying fair value at date of grant of $2.9 million.