MAIL-WELL, INC.
1998 INCENTIVE STOCK OPTION PLAN
SECTION 1. PURPOSE OF THE PLAN. The purpose of this Mail-Well, Inc.
1998 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 and directors of the Company and
its Affiliates (as defined below) and to provide increased incentive for such
employees and directors 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 and
directors with the stockholders. Certain options to be granted under this
Plan are intended to qualify as Incentive Stock Options ("ISOs") pursuant to
Section 422 of the Internal Revenue Code of 1986, as amended ("Code"), while
other options granted under this Plan will be nonqualified options which are
not intended to qualify as ISOs ("Nonqualified Options"), either or both as
provided in the agreements evidencing the options as provided in the Section
6 hereof. 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.
(a) COMPOSITION OF COMMITTEE. The Plan shall be administered by
the 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. If
the Company is governed by Rule 16b-3 promulgated by the Securities and
Exchange Commission ("Commission") pursuant to the Securities Exchange
Act of 1934, as amended ("Exchange Act"), no director shall serve as a
member of the Committee unless he is a "Non-Employee Director" within
the meaning of such Rule 16b-3.
(b) COMMITTEE ACTION. The Committee shall hold its meetings at
such 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 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 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 Section 6(k) hereof, the aggregate number of shares of Common
Stock that may be optioned under the Plan is 500,000. 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 recipient of options ("Optionee") shall include only key employees
and directors 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.
(a) COMMITTEE DISCRETION. The Committee shall have sole and
absolute discretionary authority (i) to determine, authorize, and
designate those key employees and directors 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 and
the terms thereof, and (iii) to determine the type of option granted:
ISO, Nonqualified Option or a combination of ISO and Nonqualified
Options; provided that a director who is not also an employee of the
Company may not receive any ISOs. The Committee shall thereupon grant
options in accordance with such determinations as 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.
(b) STOCKHOLDER APPROVAL. All options granted under this Plan are
subject to, and may not be exercised before, the approval of this Plan
by the stockholders prior to the first anniversary date of the Board
meeting held to approve the Plan, by the affirmative vote of the holders
of a majority of the outstanding shares of the Company present, or
represented by proxy, and entitled to vote thereat or by written consent
in accordance with applicable corporate law; provided that if such
approval by the stockholders of the Company is not forthcoming, all
options previously granted under this Plan shall be void.
(c) LIMITATION ON INCENTIVE STOCK OPTIONS. The aggregate fair
market value (determined in accordance with Section 6(b) of this Plan at
the time the option is granted) of the Common Stock with respect to
which ISOs may be exercisable for the first time by any Optionee during
any calendar year under all such plans of the Company and its Affiliates
shall not exceed $100,000.
SECTION 6. TERMS AND CONDITIONS. Each option granted under the Plan
shall be 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 promptly notify the
Optionee of the option grant and a written agreement shall promptly be
executed and delivered by and on behalf of the Company and the Optionee,
provided that the option grant shall expire if a written agreement is
not signed by said Optionee (or his agent or attorney) and returned to
the Company within 60 days from date of receipt by the Optionee of such
agreement. 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. However, in the case of an ISO granted to an
individual who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of
the Company or its Affiliate ("Ten Percent Stockholder"), such period
shall not exceed five years from the date of grant.
(b) OPTION PRICE. The purchase price of each share of Common
Stock subject to each option granted pursuant to the Plan shall be
determined by the Committee at the time the option is granted and, in
the case of ISOs, shall not be less than 100% of the fair market value
of a share of Common Stock on the date the option is granted, as
determined by the Committee. In the case of an ISO granted to a Ten
Percent Stockholder, the option price shall not be less than 110% of the
fair market value of a share of Common Stock on the date the option is
granted. The purchase price of each share of Common Stock subject to a
Nonqualified Option under this Plan shall be determined by the Committee
prior to granting the option. The Committee shall set the purchase
price for each share subject to a Nonqualified Option at such price as
the Committee in its sole discretion shall determine, provided that the
purchase price of each share of
Common Stock subject to a Nonqualified Option shall not be greater than
the fair market value of a share of Common Stock on the date the option
is granted as determined by the Committee.
For all purposes under the Plan, the fair market value of a share
of Common Stock on a particular date shall be equal to the mean of the
reported high and low sales prices of the Common Stock on the New York
Stock Exchange Composite Tape on that date, or if no prices are reported
on that date, on the last preceding date on which such prices of the
Common Stock are so reported. If the Common Stock is not traded on the
New York Stock Exchange at the time a determination of its fair market
value is required to be made hereunder, its fair market value shall be
deemed to be equal to the average between the closing bid and ask prices
of the Common Stock on the most recent date the Common Stock was
publicly traded.
In the event the Common Stock is not publicly traded at the time a
determination of its value is required to be made hereunder, the
determination of its fair market value shall be made by the Committee in
such manner as it deems appropriate.
(c) EXERCISE PERIOD. The Committee may provide in the option
agreement that an option may be exercised in whole, immediately, or is
to be exercisable in increments. However, no portion of any option may
be exercisable by an Optionee prior to the approval of the Plan by the
Stockholders of the Company.
(d) PROCEDURE FOR EXERCISE. Options shall be exercised by the
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(d).
(e) TERMINATION OF EMPLOYMENT. If an employee to whom an option
is granted ceases to be employed by the Company for any reason other
than death or disability or if a director to whom an option is granted
ceases to serve on the Board for any reason other than death or
disability, any option which is exercisable on the date of such
termination of employment or cessation from the Board shall expire upon
such date of such termination of employment or cessation from the Board;
provided, however, the Committee, in its sole discretion, may allow an
Optionee to exercise all or a portion of the Options granted but
unexercised for a period of time after the Optionee's termination of
employment or cessation from the Board provided that in no event shall
ISOs be exercised after the date three months from the effective date of
the termination of employment and provided further in no event may any
option be exercised after its expiration under the terms of the option
agreement.
(f) DISABILITY OR DEATH OF OPTIONEE. In the event of the
determination of disability or death of an Optionee under the Plan while
he is employed by the Company or while he serves on the Board, the
options previously granted to him may be exercised (to the extent he
would have been entitled to do so at the date of the determination of
disability or death) at any time and from time to time, within a
three-month period after such determination of disability or death, by
the former employee or director, the guardian of his estate, the
executor or administrator of his estate or by the person or persons to
whom his rights under the option shall pass by will or the laws of
descent and distribution, but in no event may the option be exercised
after its expiration under the terms of the option agreement. An
Optionee shall be deemed to be disabled if, in the opinion of a
physician selected by the Committee, he is incapable of performing
services for the Company of the kind he was performing at the time the
disability occurred 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. The date of determination of
disability for purposes hereof shall be the date of such determination
by such physician. The Committee, in its sole discretion, may allow an
Optionee to exercise all or a portion of the Options granted but
unexercised for a longer period than three months after disability or
death provided that in no event shall ISOs be exercised after the date
12 months from the effective date of the termination of employment due
to disability or the date 18 months from the effective date of
termination of employment due to death (or 18 months after the death of
the optionee within 12 months of the termination of such optionee's
employment due to disability).
(g) ASSIGNABILITY. An option shall not be assignable or otherwise
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 him.
(h) INCENTIVE STOCK OPTIONS. Each option agreement may contain
such terms and provisions as the Committee may determine to be necessary
or desirable in order to qualify an option designated as an incentive
stock option under Section 422 of the Code.
(i) NO RIGHTS AS STOCKHOLDER. No Optionee shall have any rights
as a 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 (d) above.
(j) EXTRAORDINARY CORPORATE TRANSACTIONS. The existence of
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,
consolidates, sells all of its assets or dissolves (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.
(k) CHANGES IN COMPANY'S CAPITAL STRUCTURE. If the outstanding
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.
(l) ACCELERATION OF OPTIONS. Except as hereinbefore expressly
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, and is authorized at any time (with the
consent of the Optionee) to purchase options pursuant to Section 7.
(m) STOCKHOLDERS AGREEMENT. The Committee shall provide in the
option agreement that prior to receiving any shares of Common Stock or
other securities on the exercise of the option, the Optionee (or the
Optionee's representative upon the Optionee's death) shall be required
to execute the American Mail-Well Employee Stockholders Agreement, or
the Company's Stockholders Agreement, whichever the Committee deems
appropriate.
(n) CHANGE OF CONTROL. In the event that (i) there is a proposed
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. RELINQUISHMENT OF OPTIONS.
(a) The Committee, in granting options hereunder, shall have
discretion to determine whether or not options shall include a right of
relinquishment as hereinafter provided by this Section 7. The Committee
shall also have discretion to determine whether an option agreement
evidencing an option initially granted by the Committee without a right
of relinquishment shall be amended or supplemented to include such a
right of relinquishment. Neither the Committee
nor the Company shall be under any obligation or incur any liability to
any person by reason of the Committee's refusal to grant or include a
right of relinquishment in any option granted hereunder or in any option
agreement evidencing the same. Subject to the Committee's determination
in any case that the grant by it of a right of relinquishment is
consistent with Paragraph 1 hereof, any option granted under this Plan,
and the option agreement evidencing such option, may provide:
i) That the Optionee, or his heirs or other legal
representatives to the extent entitled to exercise the option under
the terms thereof, in lieu of purchasing the entire number of
shares subject to purchase thereunder, shall have the right to
relinquish all or any part of the then unexercised portion of the
option (to the extent then exercisable) for a number of shares of
Common Stock, for an amount of cash or for a combination of Common
Stock and cash to be determined in accordance with the following
provisions of this clause (i):
a) The written notice of exercise of such right of
relinquishment shall state the percentage, if any, of the
Appreciated Value (as defined below) that the Optionee elects
to receive in cash ("Cash Percentage"), such Cash Percentage
to be in increments of 10% of such Appreciated Value up to
100% thereof;
b) The number of shares of Common Stock, if any,
issuable pursuant to such relinquishment shall be the number
of such shares, rounded to the next greater number of full
shares, as shall be equal to the quotient obtained by dividing
(A) the difference between (I) the Appreciated Value and (II)
the result obtained by multiplying the Appreciated Value and
the Cash Percentage by (B) the then current market value per
share of Common Stock;
c) The amount of cash payable pursuant to such
relinquishment shall be an amount equal to the Appreciated
Value less the aggregate current market value of the Common
Stock issued pursuant to such relinquishment, if any, which
cash shall be paid by the Company subject to such conditions
as are deemed advisable by the Committee to permit compliance
by the Company with the withholding provisions applicable to
employers under the Code and any applicable state income tax
laws;
d) For the purpose of this clause (i), "Appreciated
Value" means the excess of (x) the aggregate current market
value of the shares of Common Stock covered by the option or
the portion thereof to be relinquished over (y) the aggregate
purchase price for such shares specified in such option;
ii) That such right of relinquishment may be exercised only
upon receipt by the Company of a written notice of such
relinquishment which shall be dated the date of election to make
such relinquishment; and that, for the purposes of this Plan, such
date of election shall be deemed to be the date when such notice is
sent by registered or certified mail, or when receipt is
acknowledged by the Company, if mailed by other than registered or
certified mail or if delivered by hand or by any telegraphic
communications equipment of the sender or otherwise delivered;
provided, that, in the event the method just described for
determining such date of election shall not be or remain consistent
with the provisions of Section 16(b) of the Exchange Act or the
rules and regulations adopted by the Commission thereunder, as
presently existing or as may be hereafter amended, which
regulations exempt from the operation of Section 16(b) of the
Exchange Act in whole or in part any such relinquishment
transaction, then such date of election shall be determined by such
other method consistent with Section 16 (b) of the Exchange Act or
the rules and regulations thereunder as the Committee shall in its
discretion select and apply;
iii) That the "current market value" of a share of Common
Stock on a particular date shall be deemed to be its fair market
value on that date as determined in accordance with Paragraph 6
(b); and
iv) That the option, or any portion thereof, may be
relinquished only to the extent that (A) it is exercisable on the
date written notice of relinquishment is received by the Company,
(B) the Committee, subject to the provisions of Paragraph 7(b),
shall consent to the election of the holder to relinquish such
option in whole or in part for cash as set forth in such written
notice of relinquishment and (C) the holder of such option pays, or
makes provision satisfactory to the Company for the payment of, any
taxes which the Company is obligated to collect with respect to
such relinquishment.
(b) The Committee shall have sole discretion to consent to or
disapprove, and neither the Committee nor the Company shall be under any
liability by reason of the Committee's disapproval of, any election by a
holder of an option to relinquish such option in whole or in part for
cash as provided in Paragraph 7(a), except that no such consent to or
approval of a relinquishment for cash shall be required under the
following circumstances. Each Optionee who is subject to the
short-swing profits recapture provisions of Section 16(b) of the
Exchange Act ("Covered Optionee") shall be entitled to receive payment
only in cash when options are relinquished during any window period
commencing on the third business day following the Company's release of
a quarterly or annual summary statement of sales and earnings and ending
on the twelfth business day following such release ("Window Period");
provided, however, that payment shall be so made in cash only in
respect of 50% of the options covered by any
stock option agreement. A Covered Optionee shall be entitled to receive
payment only in shares of Common Stock upon (a) the relinquishment of
options outside a Window Period and (b) the relinquishment of options
during a Window Period once such Optionee has received payment in cash
for the relinquishment of 50% of the options covered by any stock option
agreement.
(c) The Committee, in granting options hereunder, shall have
discretion to determine the terms upon which such options shall be
relinquishable, subject to the applicable provisions of this Plan, and
including such provisions as are deemed advisable to permit the
exemption from the operation from Section 16(b) of the Exchange Act of
any such relinquishment transaction, and options outstanding, and option
agreements evidencing such options, may be amended, if necessary, to
permit such exemption. If an option is relinquished, such option shall
be deemed to have been exercised to the extent of the number of shares
of Common Stock covered by the option or part thereof which is
relinquished, and no further options may be granted covering such shares
of Common Stock.
(d) Neither any option nor any right to relinquish the same to the
Company as contemplated by this Paragraph 7 shall be assignable or
otherwise transferable except by will or 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.
(e) Except as provided in Section 7(f) below, no right of
relinquishment may be exercised within the first six months after the
initial award of any Option containing, or the amendment or
supplementation of any existing option agreement adding, the right of
relinquishment.
(f) No right of relinquishment may be exercised after the initial
award of any option containing, or the amendment or supplementation of
any existing option agreement adding the right of relinquishment, unless
such right of relinquishment is effective upon the Optionee's death,
disability or termination of his relationship with the Company and the
payment upon the exercise of such right is only in cash.
SECTION 8. AMENDMENTS OR TERMINATION. The Board may amend, alter or
discontinue the Plan, but no amendment or alteration shall be made which
would impair the rights of any Optionee, without his consent, under any
option theretofore granted, or which, without the approval of the
stockholders, would: (i) except as is provided in Section 6(k) of the Plan,
increase the total number of shares reserved for the purposes of the Plan,
(ii) change the class of persons eligible to participate in the Plan as
provided in Section 4 of the Plan, (iii) extend the applicable maximum option
period provided for in Section 6(a) of the Plan, (iv) extend the expiration
date of this Plan set forth in Section 14 of the Plan, (v) except as provided
in Section 6(k) of the Plan, decrease to any extent the option price of any
option granted under the Plan or (vi) withdraw the administration of the Plan
from the Committee.
SECTION 9. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the
grant and 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. Any adjustments provided
for in subparagraphs 6(j), (k) and (l) shall be subject to any shareholder
action required by applicable corporate law.
SECTION 10. PURCHASE FOR INVESTMENT. Unless the options and shares of
Common 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 is
acquiring such shares for his own account for investment and not with a view
to, or for sale in connection with, the distribution of any part thereof.
SECTION 11. TAXES.
(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 Paragraph 11(a), any Optionee may
pay all or any portion of the taxes required to be withheld by the
Company or paid by him 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 fair
market value, determined in accordance with Paragraph 6(b), 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 12. REPLACEMENT OF OPTIONS. The Committee from time to time
may permit 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 13. NO RIGHT TO COMPANY EMPLOYMENT. Nothing in this Plan or as
a result 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. The option agreements may contain such provisions as the
Committee may approve with reference to the effect of approved leaves of
absence.
SECTION 14. LIABILITY OF COMPANY. The Company and any Affiliate which
is in 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
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
realized, by any Optionee or other person due to the exercise of any
option granted hereunder.
SECTION 15. EFFECTIVENESS AND EXPIRATION OF PLAN. The Plan shall be
effective on the date the Board adopts the Plan. If the stockholders of the
Company fail to approve the Plan within twelve months of the date the Board
approved the Plan, the Plan shall terminate and all options previously
granted under the Plan shall become void and of no effect. The Plan shall
expire ten years after the date the Board approves the Plan and thereafter no
option shall be granted pursuant to the Plan.
SECTION 16. NON-EXCLUSIVITY OF THE PLAN. Neither the adoption by the
Board nor 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 17. GOVERNING LAW. This Plan and any agreements hereunder
shall be interpreted and construed in accordance with the laws of the state
in which the Company is incorporated and applicable federal law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by directors of the Company, Mail-Well, Inc. has caused these
presents to be duly executed in its name and behalf by its proper officers
thereunto duly authorized on February 4, 1998.
ATTEST: Mail-Well, Inc.
____________________________ By: _______________________________
Secretary Name: ________________________
Title: _________________________
[CORPORATE SEAL]