ENNIS AUTO RECYCLERS, INC.

yees had the option to rollover their participant balances into the Plan. Eligibility Employees age 18 and older of the Company are eligible to participate in the Plan and receive matching contributions the first of the month after completing 60 days of service, as defined by the Plan. Employees are eligible to receive discretionary profit-sharing contributions, if granted, after completing 1,000 hours within their first 12 months of service. Contributions Participants may make voluntary contributions to the Plan ranging from 1 % to 100 % of eligible pay subject to the Internal Revenue Service (“IRS”) annual limitations. The Plan allows catch-up contributions (within the meaning of Section 414(v) of the IRC) for participants who have reached age 50 by the end of the plan year. The Plan als

ance with the benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested interest in his or her account. Vesting Participants are immediately vested in their salary deferrals, rollover contributions, and employer matching contributions. Profit sharing contributions vest over a 5-year graded vesting schedule as defined in the Plan document. Special vesting schedules ranging from 3 to 6 years apply to certain employees based on their location as defined in the Plan document. Notes receivable from participants Under provisions of the Plan, participants are allowed to borrow from their Plan accounts. The maximum amount that a participant may borrow is the lesser of (i) 50 % of their total vested account balance or (ii) $ 50,000 less the highest

vestment income: Interest and dividends 608,202 Net appreciation in fair value of investments 20,061,477 Total investment income: 20,669,679 Total additions 28,832,931 Deductions: Administrative expenses 201,323 Benefits paid and withdrawals 23,110,085 Total deductions 23,311,408 Net increase 5,521,523 Net assets available for benefits at beginning of year 159,964,895 Net assets available for benefits at end of year $ 165,486,418 See accompanying notes to the financial statements - 3 - Note 1 - Plan Description The following description of the Ennis, Inc. 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions. General The Plan is a defined contribution plan covering substantially al