EXHIBIT 10.29
MAIL-WELL, INC.
2001 LONG-TERM EQUITY INCENTIVE PLAN
FORM OF INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement ("Option Agreement") is between
Mail-Well, Inc., a Colorado corporation (the "Company"), and ______________
(the "Optionee").
W I T N E S S E T H:
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WHEREAS, the Company has heretofore adopted the Mail-Well, Inc. 2001
Long-Term Equity Incentive Plan (the "Plan") for the purpose of providing
employees and directors of the Company and 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 or remain as a director of the
Company and 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 a nonqualified 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
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Company hereby irrevocably grants to Optionee the right and option
("Option") to purchase from the Company __________ shares of the Company's
common stock, $0.01 par value ("Common Stock"), at a price at $______ per
share (the "Option Price").
2. Option Period. The Option herein granted may be exercised by
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Optionee in whole or in part at any time during a five (5) year period
beginning on June 11, 2001 ("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 or half 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 Percentage of
of Years Shares Purchasable
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1 20%
2 40%
3 60%
4 80%
4 1/2 100%
Notwithstanding the foregoing, if prior to December 1, 2005 the average
closing price for the Company's Common Stock for any period of 20
consecutive trading-days is (i) $7.50 or more
the Option shall be immediately exercisable as to one-third of the
underlying shares (ii) $10.00 or more the Option shall be immediately
exercisable as to an additional one-third of the underlying shares and (iii)
$12.50 or more the Option shall be immediately exercisable as to the
remaining one-third of the underlying shares. 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 date on which any of the Options
granted hereunder are exercisable.
3. Procedure for Exercise. The Option herein granted may be exercised
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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 a 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
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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 that 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
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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 option of
a physician selected by the Committee, he 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.
6. Transferability. This Option shall not be transferable by Optionee
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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 Optionee. 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
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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
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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.
9. Changes in Capital Structure. The existence of outstanding Options
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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 price and the prices at which portions
of the Option may be exercisable on an accelerated basis as set forth in
Section 2, shall be appropriately and equitably adjusted so as to maintain
the proportionate number of shares without changing the aggregate Option
price.
10. Change of Control. In the event that there is a proposed Change
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of Control Event the Option shall become immediately exercisable
notwithstanding the provisions of Section 2, Optionee hereunder shall be
given reasonable notice of such Change of Control Event and shall have a
period of at least thirty (30) days thereafter to exercise the Options.
As used herein, the term "Change of Control Event" shall mean the
occurrence with respect to the Company of any of the following events:
(a) a report on Schedule 13D is filed with the Securities and Exchange
Commission pursuant to Section 13(d) of the Securities Exchange Act of
1934, as amended (the
"Exchange Act"), disclosing that any person, entity or group (within the
meaning of Section 13(d) or 14(d) of the Exchange Act), other than (i)
the Company (or one of its subsidiaries) or (ii) any employee benefit
plan sponsored by the Company (or one of its subsidiaries), is the
beneficial owner (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of 50% or more of the
outstanding shares of common stock of the Company or 50% or more of the
combined voting power of the then outstanding securities of the Company
(as determined under paragraph (d) of Rule 13d-3 promulgated under the
Exchange Act, in the case of rights to acquire common stock or other
securities);
(b) an event of a nature that would be required to be reported in response
to Item 1(a) of the Current Report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Exchange Act or
would have been required to be so reported but for the fact that such
event had been "previously reported" as that term is defined in Rule
12b-2 promulgated under the Exchange Act;
(c) any person, entity or group (within the meaning of Section 13(d) or
14(d) of the Exchange Act), other than (i) the Company (or one of its
subsidiaries) or (ii) any employee benefit plan sponsored by the
Company (or one of its subsidiaries), shall become the beneficial owner
(as such term is defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of 50% or more of the outstanding shares
of common stock of the Company or 50% or more of the combined voting
power of the then outstanding securities of the Company (as determined
under paragraph (d) of Rule 13d-3 promulgated under the Exchange Act,
in the case of rights to acquire common stock or other securities);
(d) the stockholders of the Company shall approve any liquidation or
dissolution of the Company;
(e) the stockholders of the Company shall approve a merger, consolidation,
reorganization, recapitalization, exchange offer, acquisition or
disposition of assets or other transaction after the consummation of
which any person, entity or group (within the meaning of Section 13(d)
or 14(d) of the Exchange Act) would become the beneficial owner (as
such term is defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of 50% or more of the outstanding shares of
common stock of the Company or 50% or more of the combined voting power
of the then outstanding securities of the Company (as determined under
paragraph (d) of Rule 13d-3 promulgated under the Exchange Act, in the
case of rights to acquire common stock or other securities);
(f) individuals who constitute the Board on the date hereof ("Incumbent
Board") cease for any reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of the
directors comprising the remaining members of the Incumbent Board
(either by a specific vote or by approval of the proxy statement of the
Company in which such person
is named as a nominee for director, without objection to such nomination)
shall be, for purposes of this clause (f), considered as though such
person were a member of the Incumbent Board; or
(g) a recapitalization or other transaction or series of related
transactions occurs which results in a decrease by 50% or more in the
aggregate percentage ownership of the then outstanding common stock of
the Company or 50% or more in the combined voting power of the
outstanding securities of the Company held by the stockholders of the
Company immediately prior to giving effect thereto (on a primary basis
or on a fully diluted basis after giving effect to the exercise of
stock options and warrants).
11. Compliance With Securities Laws. Upon the acquisition of any shares
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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
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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. Withholding of Tax. To the extent that the exercise of this Option
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or the disposition of shares of Common Stock acquired by exercise of this
Option results in compensation income to the Optionee for federal or state
income tax purposes, the Optionee shall pay to the Company at the time of
such exercise or disposition (or such other time as the law permits if the
Optionee is subject to Section 16(b) of the Securities Exchange Act of 1934,
as amended) such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations; and, if the Optionee
fails to do so, the Company is authorized to withhold from any cash
remuneration then or thereafter payable to the Optionee, any tax required to
be withheld by reason of such resulting compensation income or Company may
otherwise refuse to issue or transfer any shares otherwise required to be
issued or transferred pursuant to the terms hereof.
14. Resolution of Disputes. As a condition of the granting of the
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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.
15. Legends on Certificate. The certificates representing the shares of
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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. Forfeiture. If Optionee's employment is terminated For Cause (as
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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. Nothing herein shall prohibit
Optionee from being a passive owner of not more than 5% of the outstanding
stock of any class of securities of a competitive operation which is
publicly traded, so long as Optionee has no active participation in the
business of such competitive operation.
17. Notices. Every notice hereunder shall be in writing and shall be
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given by registered or certified mail. All notices of the exercise of any
Option hereunder shall be directed to Mail-Well, Inc. 0000 X. Xxxxxx Xxx.,
#000, Xxxxxxxxx, Xxxxxxxx 00000, 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.
18. Construction and Interpretation. Whenever the term "Optionee" is
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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 word "Optionee" shall be deemed to include such
person or persons. References to the masculine gender herein also include
the feminine gender for all purposes.
19. Agreement Subject to Plan. This Option Agreement is subject to the
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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
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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 the Optionee the right to continue in the employ of the Company, nor
shall anything contained herein be construed or interpreted to limit the
"employment at will" relationship between the Optionee and the Company.
21. Binding Effect. This Option Agreement shall be binding upon and
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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 June, 2001.
MAIL-WELL, INC.
ATTEST: By:
___________________________________
_________________________________
Its: _________________________________
_____________________________
_____________________________
_____________________________ OPTIONEE
______________________________________
______________________________________
