(11) 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 2017, 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 604,308 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 2017, 2016 and 2015, the Company included in selling, general and administrative expenses, compensation expense related to share based compensation of $1.4 million ($0.9 million net of tax), $1.3 million ($0.8 million net of tax) and $1.3 million ($0.8 million net of tax), respectively.

Stock Options

The Company had the following stock option activity for the three years ended February 28, 2017:


	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, 2014		369,405		$	15.86		6.0	$	416
Granted		31,418			15.78
Terminated		(20,000	)		16.21
Exercised		(6,000	)		8.94

Outstanding at February 28, 2015		374,823		$	15.95		5.7	$	210
Granted		43,426			13.69
Terminated		(47,300	)		18.31
Exercised		—			—

Outstanding at February 29, 2016		370,949		$	15.38		5.9	$	1,616
Granted		—			—
Terminated		(5,000	)		8.94
Exercised		(193,453	)		15.04

Outstanding at February 28, 2017		172,496		$	15.95		4.2	$	223

Exercisable at February 28, 2017		167,423		$	16.00		4.1	$	213

(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.

No stock options were granted during fiscal year 2017. 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 2016 and 2015:


	2016			2015
Expected volatility		24.06	%		29.25	%
Expected term (years)		3			3
Risk free interest rate		0.89	%		0.91	%
Dividend yield		4.92	%		4.11	%
Weighted average grant-date fair value	$	2.24		$	2.70

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
	2017		2016			2015
Total cash received	$	2,910	$	—		$	54
Income tax (expense) benefit		265		(46	)		(106	)
Total grant-date fair value		532		—			9
Intrinsic value		969		—			36

A summary of the status of the Company’s unvested stock options at February 29, 2016, and changes during the fiscal year ended February 28, 2017 is presented below:


	Number of Options			Weighted Average Grant Date Fair Value
Unvested at February 29, 2016		76,425		$	2.32
New grants		—			—
Vested		(71,352	)		2.32
Forfeited		—			—

Unvested at February 28, 2017		5,073		$	2.41

As of February 28, 2017, there was $3,000 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 0.8 years. The total fair value of shares underlying the options vested during the fiscal year ended February 28, 2017 was $1.2 million.

The following table summarizes information about stock options outstanding at the end of fiscal year 2017:


	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 $13.69		24,848		3.3	$	9.87		21,616	$	9.30
14.05 to 15.78		51,956		5.6		15.16		50,115		15.13
17.57 to 18.46		95,692		3.7		17.97		95,692		17.97

		172,496		4.2		15.95		167,423		16.00

Restricted Stock

The Company had the following restricted stock grants activity for each of the three fiscal years ended February 28, 2017:


	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at March 1, 2014		180,902		$	15.77
Granted		85,807			15.78
Terminated		—			—
Vested		(113,061	)		16.42

Outstanding at February 28, 2015		153,648		$	15.30
Granted		113,648			13.69
Terminated		—			—
Vested		(77,900	)		15.24

Outstanding at February 29, 2016		189,396		$	14.36
Granted		66,685			19.49
Terminated		—			—
Vested		(89,535	)		14.46

Outstanding at February 28, 2017		166,546		$	16.35

As of February 28, 2017, the total remaining unrecognized compensation cost related to unvested restricted stock was approximately $1.5 million. The weighted average remaining requisite service period of the unvested restricted stock awards was 1.4 years. As of February 28, 2017, the Company’s outstanding restricted stock had an underlying fair value of $2.7 million at date of grant.