MAIL-WELL, INC.
1998 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement ("Option Agreement") is between
Mail-Well, Inc., a Colorado corporation (the "Company"), and < < Name > > (the
"Optionee").
W I T N E S S E T H:
WHEREAS, the Company has heretofore adopted the Mail-Well, Inc. 1998
Stock Option Plan (the "Plan") for the purpose of providing employees of the
Company or its Affiliates (as defined in the Plan) with additional incentive
to promote the success of the business, to increase their proprietary
interest in the success of the Company, and to encourage them to remain in
the employ of the Company or its Affiliates; and
WHEREAS, the Company, acting through the Compensation Committee of its
Board of Directors (the "Committee"), has determined that its interests will
be advanced by the issuance to Optionee of an incentive stock option under
the Plan;
NOW THEREFORE, for and in consideration of these premises it is agreed
as follows:
1. OPTION. Subject to the terms and conditions contained herein, the
Company hereby irrevocably grants to Optionee the right and option ("Option")
to purchase from the Company < < Shares > > shares of the Company's common
stock, $0.01 par value ("Common Stock"), at a price of < < PurchasePrice > >
per share (the "Option Price"), which is deemed to be not less than the fair
market value of the Common Stock at the date of grant of this Option.
2. OPTION PERIOD. The Option herein granted may be exercised by
Optionee in whole or in part at any time during a ten (10) year period
beginning on < < EffectiveDate > > ("Option Period"), subject to the limitation
that said Option shall not be exercisable for more than a percentage of the
aggregate number of shares offered by this option determined by the number of
full years of employment with the Company or its Affiliates from the
effective date of the Optionee's grant, to the date of such exercise, in
accordance with the following schedule:
Number of Percentage of
Full Years Shares Purchasable
---------- ------------------
1 20%
2 40%
3 60%
4 80%
5 100%
Notwithstanding anything in this Agreement to the contrary, the Committee, in
its sole discretion may waive the foregoing schedule of vesting and upon
written notice to the Optionee, accelerate the earliest date or dates on
which any of the Options granted hereunder are exercisable.
3. PROCEDURE FOR EXERCISE. The Option herein granted may be exercised
by written notice by Optionee to the Secretary of the Company setting forth
the number of shares of Common Stock with respect to which the Option is to
be exercised accompanied by payment for the shares to be purchased, and
specifying the address to which the certificate for such shares is to be
mailed. Payment shall be by means of 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 Optionee, in Common Stock theretofore owned by such Optionee
(or a combination of cash and Common Stock). As promptly as practicable
after receipt of such written notification and payment, the Company shall
deliver to Optionee certificates for the number of shares of Common Stock
with respect to which such Option has been so exercised.
4. TERMINATION OF EMPLOYMENT. If Optionee's employment with the
Company or its Affiliates is terminated during the Option Period for any
reason, Options granted to him which are not exercisable on such date
thereupon terminate. Subject to paragraphs 5 and 10 below, any Options which
are exercisable on the date of his termination of employment which have not
been exercised within ninety (90) days of such termination shall expire and
be of no force or effect.
5. DISABILITY OR DEATH. If Optionee's employment with the Company or
its Affiliates is terminated by his disability or death, all Options
hereunder exercisable at the date of such disability or death shall be
thereafter exercisable by Optionee, his executor or administrator, or the
person or persons to whom his 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 six months from the date of Optionee's disability or death, unless
this Option Agreement should earlier terminate in accordance with its other
terms. In no event may any Option be exercised after the end of the Option
Period. 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 or its Affiliates 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.
6. TRANSFERABILITY. This Option shall not be transferable by Optionee
otherwise than by Optionee's will or by the laws of descent and distribution.
During the lifetime of Optionee, the Option shall be exercisable only by him.
Any heir or legatee of Optionee shall take rights herein granted subject to
the terms and conditions hereof. No such transfer of this Option Agreement
to heirs or legatees of Optionee shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and
a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions hereof.
7. NO RIGHTS AS STOCKHOLDER. Optionee shall have no rights as a
stockholder with respect to any shares of Common Stock covered by this Option
Agreement until the date of
issuance of a certificate for shares of Common Stock purchased pursuant to
this Option Agreement. Until such time, Optionee shall not be entitled to
dividends or to vote at meetings of the stockholders of the Company. Except
as provided in paragraph 9 hereof, no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash or securities or other property)
paid or distributions or other rights granted in respect of any share of
Common Stock for which the record date for such payment, distribution or
grant is prior to the date upon which the Optionee shall have been issued
share certificates, as provided hereinabove.
8. EXTRAORDINARY CORPORATE TRANSACTIONS. 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. If the Company shall not
be the surviving entity upon the occurrence of a Fundamental Change, the
Options granted hereunder shall be governed by subparagraph 6(n) of the Plan.
9. CHANGES IN CAPITAL STRUCTURE. The existence of outstanding Options
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations 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 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 proceedings, whether of a similar
character or otherwise. If the outstanding shares of Common Stock of the
company shall at any time be changed or exchanged by declaration of a stock
dividend, stock split, combination of shares, or recapitalization, the number
and kind of shares subject to the Plan or subject to any Options theretofore
granted, and the Option prices, shall be appropriately and equitably adjusted
by the Committee so as to maintain the proportionate number of shares without
changing the aggregate Option price.
10. FORFEITURE. If Optionee's employment is terminated For Cause (as
defined below), or if Optionee shall, upon separation from employment for any
reason, accept employment with, consult for or acquire an ownership interest
in, an envelope manufacturing company, a printing company, (or any other
business which is in direct competition with the Company), doing business
within a 300 mile radius of any Company (or subsidiary) facility in the U.S.,
Canada, or any other country where the Company is doing business at that
time, at any time within one (1) year after the date of Optionee's separation
from employment, Optionee agrees that (i) all unexercised Options shall
terminate, (ii) the Company shall have the right to repurchase any or all
shares of Common Stock received upon the exercise of Options and which were
then held by Optionee for an amount equal to the Option Price times the
number of shares
of Common Stock so repurchased and (iii) the Optionee shall pay to the
Company the amount by which the proceeds from any sale of the Common Stock
received upon exercise of Options exceeded the Option Price of such Common
Stock sold. "For Cause" shall mean (i) gross disregard of the Company's best
interest, (ii) misappropriation or embezzlement of corporate funds or other
property (iii) conviction of a felony involving moral turpitude or which in
the opinion of the Committee brings Optionee into disrepute or causes harm to
the Company's business, customer relations, financial condition or prospects,
or (iv) violation of any statutory or common law duty of loyalty to the
Company.
11. COMPLIANCE WITH SECURITIES LAWS. Upon the acquisition of any
shares pursuant to the exercise of the Option herein granted, Optionee (or
any person acting under paragraph 6) will enter into such written
representations, warranties and agreements as the Company may reasonably
request in order to comply with applicable securities laws or with this
Option Agreement.
12. COMPLIANCE WITH LAWS. Notwithstanding any of the other provisions
hereof, Optionee agrees that he will not exercise the Option(s) granted
hereby, and that the Company will not be obligated to issue any shares
pursuant to this Option Agreement, if the exercise of the Option(s) or the
issuance of such shares of Common Stock would constitute a violation by the
Optionee or by the Company of any provision of any law or regulation of any
governmental authority.
13. RESOLUTION OF DISPUTES. As a condition of the granting of the
Option hereby, the Optionee and his heirs and successors agree that any
dispute or disagreement which may arise hereunder shall be determined by the
Committee in its sole discretion and judgment, and that any such
determination and any interpretation by the Committee of the terms of this
Option Agreement shall be final and shall be binding and conclusive, for all
purposes, upon the Company, Optionee, his heirs and personal representatives.
14. STOCKHOLDER AGREEMENT. Optionee, or the Optionee's representative
upon the Optionee's death, prior to the exercise of an Option granted
hereunder, agrees to enter into the Company's Stockholders Agreement or the
Company's Employee Stockholders Agreement, whichever the Committee deems
appropriate.
15. LEGENDS ON CERTIFICATE. The certificates representing the shares
of Common Stock purchased by exercise of an Option will be stamped or
otherwise imprinted with legends in such form as the Company or its counsel
may require with respect to any applicable restrictions on sale or transfer
and the stock transfer records of the Company will reflect stop-transfer
instructions with respect to such shares.
16. NOTICES. Every notice hereunder shall be in writing and shall be
given by registered or certified mail. All notices of the exercise of any
Option hereunder shall be directed to Mail-Well , Inc., ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secretary. Any notice given by
the Company to Optionee directed to him at his address on file with the
Company shall be effective to bind him and any other person who shall acquire
rights hereunder.
The Company shall be under no obligation whatsoever to advise Optionee of the
existence, maturity or termination of any of Optionee's rights hereunder and
Optionee shall be deemed to have familiarized himself with all matters
contained herein and in the Plan which may affect any of Optionee's rights or
privileges hereunder.
17. CONSTRUCTION AND INTERPRETATION. Whenever the term "Optionee" is
used herein under circumstances applicable to any other person or persons to
whom this award, in accordance with the provisions of paragraph 6 hereof, may
be transferred, the work "Optionee" shall be deemed to include such person or
persons. References to the masculine gender herein also include the feminine
gender for all purposes.
18. NOTICE OF DISPOSITION. If Optionee disposes of any shares of
Common Stock acquired pursuant to the exercise of an Option granted hereunder
prior to the earlier of (I) two years from the date of this Option Agreement
or (ii) one year from the date the shares of Common Stock were acquired,
Optionee shall notify the Company of such disposition within ten days of its
occurrence and deliver to the Company any amount of federal or state income
tax withholding required by law. Payment of the withholding shall be made in
accordance with Section 11 of the Plan. If the Optionee fails to pay the
withholding tax, the Company is authorized and Optionee hereby consents to
withhold from any cash remuneration then or thereafter payable to the
Optionee any tax required to be withheld by reason of any disposition named
herein.
19. AGREEMENT SUBJECT TO PLAN. This Option Agreement is subject to the
Plan. The terms and provisions of the Plan (including any subsequent
amendments thereto) are hereby incorporated herein by reference thereto. In
the event of a conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and provisions of the
Plan will govern and prevail. All definitions of words and terms contained
in the Plan shall be applicable to this Option Agreement.
20. EMPLOYMENT RELATIONSHIP. Employees shall be considered to be in
the employment of the Company as long as they remain employees of the Company
or a parent or subsidiary corporation (as defined in Section 424 of the
Internal Revenue Code of 1986, as amended). Any questions as to whether and
when there has been a termination of such employment and the cause of such
termination, shall be determined by the Committee, and its determination
shall be final. Nothing contained herein shall be construed as conferring
upon Optionee the right to continue in the employ of the Company, nor shall
anything contained herein be construed or interpreted to limit the existing
"employment at will" relationship between the Optionee and the Company.
21. BINDING EFFECT. This Option Agreement shall be binding upon and
inure to the benefit of any successors to the Company and all persons
lawfully claiming under Optionee.
In WITNESS WHEREOF, this Option Agreement has been executed as of the
____ day of ____________________, 1998.
MAIL-WELL, INC.
By:________________________________
ATTEST: Name:
Its:
___________________________
OPTIONEE
__________________________________
< < Name > >
