MAIL-WELL, INC.
ALLIED ACQUISITION NON-QUALIFIED STOCK OPTION PLAN
SECTION 1. Purpose of the Plan. The purpose of the Allied Acquisition
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Non-Qualified Stock Option Plan, ("Plan") is to encourage ownership of common
stock, $.01 par value ("Common Stock"), of Mail-Well, Inc., a Colorado
corporation (the "Company"), by eligible key employees of the Company and its
Affiliates (as defined below), who were formerly employees of The Allied
Printers prior to the acquisition of Allied by the Company, pursuant to that
certain Stock Purchase Agreement dated July 11, 1997, and to provide increased
incentive for such employees to render services and to exert maximum effort for
the business success of the Company. In addition, the Company expects that the
Plan will further strengthen the identification of employees with the
stockholders. Options to be granted under this Plan are not intended to qualify
as Incentive Stock Options pursuant to Section 422 of the Internal Revenue Code
of 1986, as amended ("Code"). As used in this Plan, the term "Affiliates" means
any "parent corporation" of the Company and any "subsidiary corporation" of the
Company within the meaning of Code Sections 424(e) and (f), respectively.
SECTION 2. Administration of the Plan.
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(a) Composition of Committee. The Plan shall be administered by the
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Compensation Committee (the "Committee") comprised of two or more directors
designated by the Board of Directors of the Company (the "Board"), which
shall also designate the Chairman of the Committee. No director shall
serve as a member of the Committee unless he or she is a "Non-Employee
Director" within the meaning of such Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("Exchange Act").
(b) Committee Action. The Committee shall hold its meetings at such
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times and places as it may determine. A majority of its members shall
constitute a quorum, and all determinations of the Committee shall be made
by not less than a majority of its members. Any decision or determination
reduced to writing and signed by a majority of the members shall be fully
effective as if it had been made by a majority vote of its members at a
meeting duly called and held. The Committee may designate the Vice
President-General Counsel and Secretary of the Company or other Company
employees to assist the Committee in the administration of the Plan, and
may grant authority to such persons to execute award agreements or other
documents on behalf of the Committee and the Company. Any duly constituted
committee of the Board satisfying the qualifications of this Section 2 may
be appointed as the Committee.
(c) Committee Expenses. All expenses and liabilities incurred by the
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Committee in the administration of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants or other
persons.
SECTION 3. Stock Reserved for the Plan. Subject to adjustment as provided in
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Section 6(h) hereof, the aggregate number of shares of Common Stock that may be
optioned under the Plan is 62,400. The shares subject to the Plan shall consist
of authorized but unissued shares of Common Stock and such number of shares
shall be and is hereby reserved for sale for such purpose. Any of such shares
which may remain unsold and which are not subject to outstanding options at the
termination of the Plan shall cease to be reserved for the purpose of the Plan,
but until termination of the Plan or the termination of the last of the options
granted under the Plan, whichever last occurs, the Company shall at all times
reserve a sufficient number of shares to meet the requirements of the Plan.
Should any option expire or be canceled prior to its exercise in full, the
shares theretofore subject to such option may again be made subject to an option
under the Plan.
SECTION 4. Eligibility. The persons eligible to participate in the Plan as a
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recipient of options ("Optionee") shall include only key employees of the
Company or its Affiliates at the time the option is granted. An employee who has
been granted an option hereunder may be granted an additional option or options,
if the Committee shall so determine.
SECTION 5. Grant of Options. The Committee shall have sole and absolute
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discretionary authority (i) to determine, authorize, and designate those key
employees of the Company or its Affiliates who are to receive options under the
Plan, (ii) to determine the number of shares of Common Stock to be covered by
such options, (iii) to determine the exercise price for options granted under
the Plan, and (iv) to determine the other terms of such options and the
conditions for exercise thereof. The Committee shall thereupon grant options in
accordance with such determinations and such options shall be evidenced by a
written option agreement. Subject to the express provisions of the Plan, the
Committee shall have discretionary authority to prescribe, amend and rescind
rules and regulations relating to the Plan, to interpret the Plan, to prescribe
and amend the terms of the option agreements (which need not be identical) and
to make all other determinations deemed necessary or advisable for the
administration of the Plan.
SECTION 6. Terms and Conditions. Each option granted under the Plan shall be
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evidenced by an agreement, in a form approved by the Committee, which shall be
subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate.
(a) Option Period. The Committee shall notify the Optionee of the
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option grant and a written agreement shall promptly be executed and
delivered by and on behalf of the Company and the Optionee. The date of
grant shall be the date the option is actually granted by the Committee,
even though the written agreement may be executed and delivered by the
Company and the Optionee after that date. Each option agreement shall
specify the period for which the option thereunder is granted (which in no
event shall exceed ten years from the date of grant) and shall provide that
the option shall expire at the end of such period. If the original term of
an option is less than ten years from the date of grant, the option may be
amended prior to its expiration, with the approval of the Committee and the
Optionee, to extend the term so that the term as amended is not more than
ten years from the date of grant.
(b) Exercise Period. The Committee may provide in the option
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agreement that an option may be exercised in whole, immediately, or is to
be exercisable in increments.
(c) Procedure for Exercise. Options shall be exercised by the
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delivery of written notice to the Secretary of the Company setting forth
the number of shares with respect to which the option is being exercised.
Such notice shall be accompanied by cash or cashier's check, bank draft,
postal or express money order payable to the order of the Company, or at
the option of the Committee, in Common Stock theretofore owned by such
Optionee (or any combination of cash and Common Stock). Notice may also be
delivered by fax or telecopy provided that the purchase price of such
shares is delivered to the Company via wire transfer on the same day the
fax is received by the Company. The notice shall specify the address to
which the certificates for such shares are to be mailed. An Optionee shall
be deemed to be a stockholder with respect to shares covered by an option
on the date the Company receives such written notice and such option
payment.
As promptly as practicable after receipt of such written notification
and payment, the Company shall deliver to the Optionee certificates for the
number of shares with respect to which such option has been so exercised,
issued in the Optionee's name or such other name as Optionee directs;
provided, however, that such delivery shall be deemed effected for all
purposes when a stock transfer agent of the Company shall have deposited
such certificates in the United States mail, addressed to the Optionee at
the address specified pursuant to this Section 6(c).
(d) Termination of Employment, Death or Disability. If Optionee's
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employment with the Company or its Affiliates is terminated during the
Option Period by reason of Optionee's voluntary resignation or termination
for "Cause" (as defined below), Options granted to him or her which are not
exercisable on such date thereupon terminate. Any Options which are
exercisable on the date of Optionee's voluntary resignation or termination
of employment for cause which have not been exercised within thirty (30)
days of such voluntary resignation or termination for Cause shall expire
and be of no force or effect. "Cause" means (i) gross or repeated failure
by Optionee to substantially perform his or her duties hereunder which
persists thirty (30) days after written notice thereof is delivered to
Optionee by the Company (or any Affiliate); (ii) the existence of legal
restrictions on the ability of Optionee to substantially perform his or her
duties hereunder; (iii) misappropriation or embezzlement of corporate
funds; (iv) conviction of a felony involving moral turpitude or which in
the opinion of the
Board of Directors brings Optionee into disrepute or causes material harm
to the Company's (or any Affiliate's) business, customer relations,
financial condition or prospects; or (v) material breach of the provisions
of any covenant not to compete or confidentiality agreement entered into
between Optionee and the Company (or any Affiliate).
If Optionee's employment with the Company or its Affiliates is
terminated involuntarily other than for Cause, or by reason of his or her
disability or death, all Options granted pursuant to this Plan shall be
thereafter exercisable by Optionee, his or her executor or administrator,
or the person or persons to whom his or her rights under this Option
Agreement shall pass by will or by the laws of descent and distribution, as
the case may be, for a period of ninty (90) days from the date of
Optionee's involuntary termination other than for Cause, or by reason of
disability or death, whether such Options had vested in accordance with
their terms or not, unless this Option Agreement should earlier terminate
in accordance with its other terms. Optionee shall be deemed to be
disabled if, in the opinion of a physician selected by the Committee, he or
she is incapable of performing services for the Company by reason of any
medically determinable physical or mental impairment which can be expected
to result in death or to be of long, continued and indefinite duration.
(e) Assignability. An option shall not be assignable or otherwise
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transferable except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the Code or
Title I of the Employee Retirement Income Security Act, as amended, or the
rules thereunder. During the lifetime of an Optionee, an option shall be
exercisable only by the Optionee.
(f) No Rights as Stockholder. No Optionee shall have any rights as a
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stockholder with respect to shares covered by an option until the option is
exercised by the written notice and accompanied by payment as provided in
clause (c) above.
(g) Extraordinary Corporate Transactions. The existence of
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outstanding options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the
Company's capital structure or its business, or any merger or consolidation
of the Company, or any issuance of Common Stock or other securities or
subscription rights thereto, or any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common Stock
or the rights thereof, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or
otherwise. If the Company recapitalizes or otherwise changes its capital
structure, or merges or consolidates, (each of the foregoing a
"Fundamental Change"), then
thereafter upon any exercise of an option theretofore granted the Optionee
shall be entitled to purchase under such option, in lieu of the number of
shares of Common Stock as to which option shall then be exercisable, the
number and class of shares of stock and securities to which the Optionee
would have been entitled pursuant to the terms of the Fundamental Change
if, immediately prior to such Fundamental Change, the Optionee had been the
holder of record of the number of shares of Common Stock as to which such
option is then exercisable.
(h) Changes in Company's Capital Structure. If the outstanding
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shares of Common Stock or other securities of the Company, or both, for
which the option is then exercisable shall at any time be changed or
exchanged by declaration of a stock dividend, stock split, or combination
of shares, the number and kind of shares of Common Stock or other
securities which are subject to the Plan or subject to any options
theretofore granted, and the option prices, shall be appropriately and
equitably adjusted so as to maintain the proportionate number of shares or
other securities without changing the aggregate option price.
(i) Acceleration of Options. Except as hereinbefore expressly
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provided, (i) the issuance by the Company of shares of stock of any class
of securities convertible into shares of stock of any class, for cash,
property, labor or services, upon direct sale, upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, (ii) the payment of a dividend in property other than Common
Stock or (iii) the occurrence of any similar transaction, and in any case
whether or not for fair value, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of shares of
Common Stock subject to options theretofore granted or the purchase price
per share, unless the Committee shall determine in its sole discretion that
an adjustment is necessary to provide equitable treatment to Optionee.
Notwithstanding anything to the contrary contained in this Plan, the
Committee may in its sole discretion accelerate the time at which any
option may be exercised, including, but not limited to, upon the occurrence
of the events specified in this Section 6.
(j) Change of Control. In the event that (i) there is a proposed
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action whereby the Company would not be the surviving entity in any merger
or consolidation (or survives only as a subsidiary of another entity) other
than a merger for the sole purpose of changing the Company's state of
incorporation, (ii) there is a proposed action whereby the Company would
sell all or substantially all of its assets to any person or entity (other
than a wholly-owned subsidiary), (iii) any person or entity (including a
"group" as contemplated by Section 13(d)(3) of the Exchange Act), acquires
or gains ownership or control of (including, without limitation, power to
vote) more than 50% of the outstanding shares of Common Stock, (iv) there
is a proposed action whereby the Company would be dissolved and liquidated,
or (v) as a result of or in connection with a contested
election of directors, the persons who were directors of the Company before
such election shall cease to constitute a majority of the Board (each such
event in clauses (i) through (v) above is referred to herein as a
"Corporate Change"), all Optionees hereunder shall be given notice of such
Corporate Change and shall have a period of thirty (30) days thereafter to
exercise their options after receipt of such notice whether such options
had vested in accordance with their terms or not.
SECTION 7. Amendments or Termination. The Board may amend, alter or
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discontinue the Plan, but no amendment or alteration shall be made which would
impair the rights of any Optionee, without his or her consent.
SECTION 8. Compliance With Other Laws and Regulations. The Plan, the grant and
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exercise of options thereunder, and the obligation of the Company to sell and
deliver shares under such options, shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any governmental
or regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificates for shares of Common Stock prior to the
completion of any registration or qualification of such shares under any federal
or state law or issuance of any ruling or regulation of any government body
which the Company shall, in its sole discretion, determine to be necessary or
advisable.
SECTION 9. Purchase for Investment. Unless the options and shares of Common
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Stock covered by this Plan have been registered under the Securities Act of
1933, as amended, or the Company has determined that such registration is
unnecessary, each person exercising an option under this Plan may be required by
the Company to give a representation in writing that he or she is acquiring such
shares for his or her own account for investment and not with a view to, or for
sale in connection with, the distribution of any part thereof.
SECTION 10. Taxes.
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(a) The Company may make such provisions as it may deem appropriate
for the withholding of any taxes which it determines is required in
connection with any options granted under this Plan.
(b) Notwithstanding the terms of Section 10 (a), any Optionee may pay
all or any portion of the taxes required to be withheld by the Company or
paid by him or her in connection with the exercise of a nonqualified option
by electing to have the Company withhold shares of Common Stock, or by
delivering previously owned shares of Common Stock, having a current market
value, determined in accordance with Section 7(a)(iii), equal to the amount
required to be withheld or paid. An Optionee must make the foregoing
election on or before the date that the amount of tax to be withheld is
determined ("Tax Date"). All such elections are irrevocable and subject to
disapproval by the Committee.
SECTION 11. Replacement of Options. The Committee from time to time may permit
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an Optionee under the Plan to surrender for cancellation any unexercised
outstanding option and receive from the Company in exchange an option for such
number of shares of Common Stock as may be designated by the Committee. The
Committee may, with the consent of the person entitled to exercise any
outstanding option, amend such option, including reducing the exercise price of
any option to not less than the fair market value of the Common Stock at the
time of the amendment and extending the term thereof.
SECTION 12. No Right to Company Employment. Nothing in this Plan or as a result
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of any option granted pursuant to this Plan shall confer on any individual any
right to continue in the employ of the Company or interfere in any way with the
right of the Company to terminate an individual's employment at any time, nor
shall anything contained herein be construed or interpreted to limit the
"employment-at-will" relationship between the Optionee and the Company. The
option agreements may contain such provisions as the Committee may approve with
reference to the effect of approved leaves of absence.
SECTION 13. Liability of Company. The Company and any Affiliate which is in
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existence or hereafter comes into existence shall not be liable to an Optionee
or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of
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shares as to which the Company has been unable to obtain from any
regulatory body having jurisdiction with the authority deemed by the
Company's counsel to be necessary to the lawful issuance and sale of
any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected, but not
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realized, by any Optionee or other person due to the exercise of any
option granted hereunder.
SECTION 14. Effectiveness and Expiration of Plan. The Plan shall be effective
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as of July 11, 1997.
SECTION 15. Non-Exclusivity of the Plan. Neither the adoption by the Board nor
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the submission of the Plan to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including without
limitation, the granting of restricted stock or stock options otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
SECTION 16. Governing Law. This Plan and any agreements hereunder shall be
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interpreted and construed in accordance with the laws of the state in which the
Company is incorporated and applicable federal law.
SECTION 17. Cashless Exercise. The Committee also may allow cashless exercises
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as permitted under Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law. The
proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing
by its directors, the Company has caused these presents to be duly executed in
its name and behalf by its proper officers thereunto duly authorized.
Mail-Well, Inc.
By:________________________________
Roger Wertheimer
Title: Vice President-General Counsel
and Secretary
ATTEST:
____________________________
Mark L. Zoeller
Assistant Secretary
[CORPORATE SEAL]