SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/X/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
MAIL-WELL, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
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(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
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(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE FILING
FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED):
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(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
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(5) TOTAL FEE PAID:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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MAIL-WELL, INC.
8310 SOUTH VALLEY HIGHWAY, #400
ENGLEWOOD, COLORADO 80112
[MAIL-WELL LOGO] (303) 790-8023
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 1, 2002
TO THE STOCKHOLDERS OF MAIL-WELL, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of
Mail-Well, Inc., a Colorado corporation (the "Company"), will be held on
Wednesday, May 1, 2002, at 8:30 a.m. at the Company's principal executive
offices, 8310 South Valley Highway, #400, Englewood, Colorado, for the
following purposes:
1. To elect seven directors of the Company to hold office until the
2003 Annual Meeting of Stockholders or until their respective successors
are duly elected and qualified;
2. To ratify the selection of Ernst & Young LLP, independent
auditors, as auditors of the Company for the year ending December 31,
2002; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The names of the nominees for directors are set forth in the
accompanying Proxy Statement.
The Board of Directors has fixed the close of business on March 8,
2002, as the record date for the determination of stockholders entitled
to receive notice of and to vote at the Annual Meeting or any
adjournments thereof.
A copy of the Company's 2001 Annual Report to Stockholders, which
includes the Company's consolidated financial statements, was mailed with
this Notice on or about March 25, 2002, to all stockholders of record on
the record date. The Company's Annual Report on Form 10-K to the
Securities and Exchange Commission may be obtained without charge upon
written request directed to the Secretary of the Company at the address
above. The officers and directors of the Company cordially invite you to
attend the Annual Meeting.
Whether or not you expect to attend the Annual Meeting, you should
complete, date and sign the enclosed proxy card and mail it promptly in
the enclosed postage prepaid envelope. The proxy card must be signed and
returned in order to be counted.
By Order of the Board of Directors,
/s/ Roger Wertheimer
Roger Wertheimer
Vice President--General Counsel
and Secretary
Englewood, Colorado
March 25, 2002
MAIL-WELL, INC.
8310 S. VALLEY HIGHWAY, #400
ENGLEWOOD, COLORADO 80112
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 2002
INTRODUCTION
This Proxy Statement is furnished to the stockholders of Mail-Well,
Inc., a Colorado corporation (the "Company"), in connection with the
solicitation of proxies to be used in voting at the Annual Meeting of
Stockholders to be held on Wednesday, May 1, 2002. The enclosed proxy is
solicited by the Board of Directors of the Company. The proxy materials
were mailed on or about March 25, 2002 to the stockholders of record at
the close of business on March 8, 2002 (the "Record Date").
The Company will bear the cost of the solicitation of proxies,
including the charges and expenses of brokerage firms and others who
forward solicitation material to beneficial owners of the Company's
common stock. In addition to the use of the mail, proxies may be
solicited by personal interview, telephone or telegraph by certain
employees of the Company. The Company will bear any costs relating to
such solicitations by Company personnel. The Company has arranged for its
stock transfer agent, Computershare Trust Company, Inc., to tabulate the
votes and report on the results at the Annual Meeting.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of common stock at the close of business on
the Record Date will be entitled to vote at the Annual Meeting. On the
Record Date, there were 48,322,248 shares of common stock outstanding.
Each share of common stock is entitled to one vote on all matters on
which stockholders may vote. There is no cumulative voting in the
election of directors.
Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the inspectors of election appointed for the meeting and
will determine whether or not a quorum is present. The holders of a
majority of the outstanding common stock are required for a quorum at the
Annual Meeting. The inspectors of election will treat abstentions as
shares that are present and entitled to vote for purposes of determining
the presence of a quorum, but as unvoted for purposes of determining the
approval of any matter submitted to the stockholders for a vote. If a
broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those
shares will not be considered as present and entitled to vote with
respect to that matter.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is exercised. It may be revoked by (1)
filing a written notice of revocation with the Secretary of the Company
at the Company's principal executive offices, 8310 South Valley Highway,
#400, Englewood, Colorado 80112, (2) duly executing and delivering a
proxy bearing a later date or (3) attending the Annual Meeting and voting
in person. Attendance at the Annual Meeting will not, by itself, revoke a
proxy.
SUMMARY OF PROPOSALS
Stockholders will be asked to vote upon the following proposals at
the Annual Meeting:
1. Election of the following seven persons to the Board of
Directors: Paul V. Reilly, Frank P. Diassi, Frank J. Hevrdejs, Janice C.
Peters, Jerome W. Pickholz, Alister W. Reynolds and W. Thomas Stephens.
2. Ratification of the selection of Ernst & Young LLP as independent
auditors for the Company for 2002.
The proxies will be voted, unless authority to do so is withheld, to
elect the seven nominees recommended by the Board and to ratify the
selection of Ernst & Young LLP as the Company's auditors for 2002.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The names, ages (as of December 31, 2001), positions with the Company
and the business experience over the past five years of each current
Board member and each Board nominee is set forth below. Each director has
served continuously with the Company since the date indicated.
DIRECTOR
NAME AGE POSITION(S) SINCE
---- --- ----------- --------
Paul V. Reilly (1) 49 Chairman of the Board, President and Chief 1998
Executive Officer
Frank P. Diassi (3)(4) 68 Director 1993
Frank J. Hevrdejs (1)(2)(4) 56 Director 1993
Janice C. Peters (2)(4) 50 Director 1999
Jerome W. Pickholz (1)(3) 69 Director 1994
Alister W. Reynolds 44 Nominee for Director NA
W. Thomas Stephens(1)(2) 59 Director 2000
William R. Thomas (3) 73 Director 1998
------------------
(1) Member of the Nominating Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
(4) Member of the Health, Safety and Environmental Committee.
PAUL V. REILLY was named our Chief Executive Officer in March 2001
and he became Chairman of the Board in June 2001. Prior to that
Mr. Reilly was our President and Chief Operating Officer from January 1998
to March 2001 and was our Senior Vice President--Finance and Chief Financial
Officer from September 1995 to January 1998. Mr. Reilly spent 14 years
with Polychrome Corporation, a prepress supplier to the printing
industry, where he held a number of positions including Assistant
Corporate Treasurer, Corporate Treasurer, Vice President and Chief
Financial Officer, and General Manager of United States Operations.
Mr. Reilly is a Certified Public Accountant.
FRANK P. DIASSI has been a director of the Company since its
inception in 1993. Mr. Diassi was Chairman of Sterling Chemicals, Inc., a
manufacturer of commodity petrochemicals and chemicals used primarily in
the pulp and paper industry, from August 1996 through December of 2001.
He was a founding director of Arcadian Corporation, the largest nitrogen
fertilizer company in North America. From 1989 to 1994, Mr. Diassi was a
Director and Chairman of the Finance Committee of Arcadia Corporation.
Mr. Diassi is a director of Fibreglass Holdings, Inc., a truck accessory
manufacturer, a director and Chairman of Amerlux Inc., a commercial
lighting company, and director and Chairman of Software Plus, Inc., a
human resources/ payroll software design firm. On July 16, 2001, Sterling
Chemicals, Inc., a company for which Mr. Diassi has served as an
executive officer, filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code. Mr. Diassi is a member
of the Audit Committee and Chairman of the Health, Safety and
Environmental Committee of the Board of Directors.
FRANK J. HEVRDEJS has been a director of the Company since its
inception in 1993. In 1982 Mr. Hevrdejs co-founded The Sterling Group,
L.P., a major management buyout company, where he is currently a
principal shareholder and president. He also serves as Chairman of First
Sterling Ventures Corp., an investment company, Endoro Holdings, Inc., a
structural and electrical manufacturing company, and Fibreglass Holdings,
Inc., a truck accessory manufacturer. He is a director of Eagle U.S.A.,
an air-
2
freight company, Sterling Chemicals, Inc., a petroleum chemical company
and serves on the Houston Regional Board of J.P. Morgan Chase and Co., a
financial institution. Mr. Hevrdejs serves as Chairman of the Nominating
Committee and is a member of the Compensation Committee and the Health,
Safety and Environmental Committee of the Board of Directors.
JANICE C. PETERS has been a director since 1999. From 1997 to 2000,
Ms. Peters served as President and Chief Executive Officer of
MediaOne(R), the broadband services arm of MediaOne Group. From 1995 to
1997, Ms. Peters was employed by US WEST, MediaOne's former parent
company, in various positions including Executive Vice President of
MediaOne Group, Managing Director of One2One, a United Kingdom wireless
communications joint venture between US WEST and Cable & Wireless, and
President of Wireless Operations for US WEST Media Group. Ms. Peters
serves as a director of Primus Knowledge Solutions, Inc., a knowledge-
enabled software provider. Ms. Peters serves as Chairperson of the
Compensation Committee of the Board of Directors and is a member of
the Health, Safety and Environmental Committee of the Board of Directors.
JEROME W. PICKHOLZ has been a director since September 1994. From
1978 until 1994, he was Chief Executive Officer of Ogilvy & Mather Direct
Worldwide, a direct advertising agency. From 1994 until September 1995,
he served as Chairman of the Board of Ogilvy & Mather Direct Worldwide
where he is now Chairman Emeritus. Mr. Pickholz served as founder and
Chairman of Pickholz, Tweedy, Cowan, L.L.C., a marketing communications
company, from January 1, 1996 through the end of January 2001, and he has
served as a direct marketing consultant to that firm from February 1,
2001 to the present. Mr. Pickholz serves as the Chairman of the Audit
Committee and as a member of the Nominating Committee of the Board of
Directors.
ALISTER W. REYNOLDS is a nominee for director standing for election
at the 2002 Annual Meeting. Mr. Reynolds has been employed by Quest
Diagnostics, Inc., a provider of diagnostic laboratory testing services,
and its former parent company, Corning Incorporated, since 1982 in
various positions, including Senior Vice President--U.S. Operations and,
most recently, Senior Advisor to the Office of the Chairman. He serves as
director of Soma Logic Incorporated, a bio-technology company, and Health
Care Waste Solutions, a healthcare disposal services company.
W. THOMAS STEPHENS has been a director since 2000 and served as
Chairman of the Board from February 2001 to June 2001. From 1997 to 1999,
Mr. Stephens served as President and Chief Executive Officer of MacMillan
Bloedel, Canada's largest forest products company. From 1986 to 1996, he
served as CEO and President of Johns Manville Corporation serving as
Chairman from 1993 to 1996. Currently, Mr. Stephens is a director of
Qwest Communications International, Inc., Norske Skog Canada Limited,
Xcel Energy, Inc., TransCanada PipeLines Ltd., and a trustee of Putnam
Mutual Funds. Mr. Stephens is a member of the Compensation Committee and
the Nominating Committee of the Board of Directors.
WILLIAM R. THOMAS has been a director since 1998. Mr. Thomas will be
retiring from the Board of Directors and will not stand for re-election
as a director at the Annual Meeting. He has served as Chairman of Capital
Southwest Corporation, a publicly owned venture capital investment
company, since 1982 and as President since 1980. Mr. Thomas has been a
director of Capital Southwest Corporation since 1972 and was Senior Vice
President from 1969 to 1980. Mr. Thomas also serves as a director of
Alamo Group, Inc., a heavy-duty mowing equipment company, Encore Wire
Corporation, an electrical wire and cable company, and Palm Harbor Homes,
Inc., a manufactured housing company. Mr. Thomas is a member of the Audit
Committee of the Board of Directors.
BOARD MEETINGS AND CERTAIN COMMITTEE MEETINGS
During 2001, the Board met on 18 occasions (4 regular meetings and
14 special meetings). All directors attended at least 75% of the meetings
of the Board and of the committees of the Board on which they were members,
except that Mr. Pickholz attended 13 of the 18 Board meetings. The Board
has an Audit Committee, a Compensation Committee, a Nominating Committee
and a Health, Safety and Environmental Committee, in addition to other
committees.
The Audit Committee meets with the Company's independent auditors
to review the results of the annual audit and discuss the financial
statements. The committee also recommends to the Board the
3
independent auditors to be retained; receives and considers the auditors'
comments as to controls and adequacy of staff and management performance
and procedures in connection with audit and financial controls; and
reviews the system of internal controls and compliance with policies
regarding business conduct. See "Report of the Audit Committee." The
Audit Committee, comprised of Mr. Pickholz (Chairperson), Mr. Thomas and
Mr. Diassi, met 8 times during 2001. Mr. Thomas's replacement on the
Audit Committee remains to be decided.
The Compensation Committee determines the compensation arrangements
for senior management and administers the 2001 Long-Term Equity Incentive
Plan ("2001 Plan") and the Cash Bonus Incentive Plan. The committee makes
recommendations concerning salaries, incentive compensation and stock-
based awards for officers and directors and performs such other functions
regarding compensation as the Board may delegate. See "Compensation
Committee Report on Executive Compensation." This committee is comprised
of Ms. Peters (Chairperson), Mr. Hevrdejs and Mr. Stephens. The
Compensation Committee met 7 times during 2001.
The Nominating Committee is responsible for identifying candidates
for open director positions and proposing their nomination to the full
Board. The Nominating Committee will not consider nominees recommended
by stockholders. The Nominating Committee has nominated Mr. Reynolds
for election to fill the vacancy which will occur upon Mr. Thomas's
retirement from the Board of Directors at the Annual Meeting. This
committee is comprised of Mr. Hevrdejs (Chairperson), Mr. Pickholz,
Mr. Stephens and Mr. Reilly. The Nominating Committee did not meet
during 2001.
The Health, Safety and Environmental Committee is responsible for
oversight and assistance to the Company in regard to activities relating
to health, safety and the environment. Such oversight and assistance
include, among other things, reviewing with management the Company's
health, safety and environmental policies and plans, reviewing with
management the Company's compliance with related laws and regulations,
and reviewing with management the Company's organization, programs and
procedures for promoting safety and protecting the environment and
health. This committee is comprised of Mr. Diassi (Chairperson),
Mr. Hevrdejs and Ms. Peters, and met 2 times during 2001.
DIRECTOR COMPENSATION
Each non-employee director of the Company receives:
* an annual retainer of $20,000;
* $1,000 for each regular Board meeting attended;
* $1,000 for each special Board meeting attended;
* $1,000 for each Board committee meeting attended; and
* non-qualified stock options, stock appreciation rights, restricted
shares, restricted share units and/or other stock-based awards
pursuant to the 2001 Plan in amounts determined by the Compensation
Committee. In 2001 each non-employee director received options for
3,000 shares of common stock pursuant to the 2001 Plan.
In addition, for his services as chairman from February 2001 to June
2001, the Company paid $66,666.68 to Mr. Stephens.
Directors who are employees of the Company do not receive
compensation for their service on the Board. The Company also provides
directors' and officers' liability insurance and indemnity agreements for
its directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The three members of the Compensation Committee, Ms. Peters and
Messrs. Hevrdejs and Stephens, have no interlocking relationships as
defined by rules and regulations of the Securities and Exchange
Commission. The Compensation Committee determined the compensation
for the Company's executive
4
officers for 2001 and recommended grants of stock options and performance
accelerated restricted stock awards to executive officers in 2001 under
the 2001 Plan. See "Long-Term Equity Incentive Plan" and "Compensation
Committee Report on Executive Compensation."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 8, 2002, there were 48,322,248 shares of common stock
outstanding held of record by 454 stockholders. The following table
summarizes information regarding the beneficial ownership of the
Company's common stock as of March 8, 2002, by:
* each person known by the Company to beneficially own more than 5%
of the outstanding common stock based upon filings with the
Securities and Exchange Commission;
* each current director of the Company and nominee for director;
* each executive officer named in the compensation table on page 8;
and
* all directors and executive officers of the Company as a group.
Shares of common stock subject to options currently exercisable or
exercisable within 60 days of the Record Date are deemed outstanding for
computing the percentage ownership of the person holding the options.
AMOUNT AND NATURE PERCENTAGE
OF BENEFICIAL OWNERSHIP OF OUTSTANDING
BENEFICIAL OWNERS OF COMMON STOCK(1) COMMON STOCK
----------------- ----------------------- --------------
Mail-Well Employee Stock Ownership Plan 3,049,133(2) 6.3%
c/o Mail-Well, Inc.
8310 South Valley Highway, #400
Englewood, Colorado 80112
Wallace R. Weitz & Company 13,030,100(3) 27.0%
1125 South 103 Street, Suite 600
Omaha, Nebraska 68124
Paul V. Reilly 869,942(4) 1.8%
Frank P. Diassi 1,575,096(5) 3.3%
Frank J. Hevrdejs 1,819,214(6) 3.8%
Janice C. Peters 9,000(7) *
Jerome W. Pickholz 76,238(8) *
Alister W. Reynolds 0(9) *
W. Thomas Stephens 21,000(10) *
William R. Thomas 2,105,588(11) 4.4%
Michel P. Salbaing 69,600(12) *
David W. Blue 72,000(13) *
Robert C. Hart 72,500(14) *
Robert Meyer 37,200(15) *
All executive officers and directors of the
Company as a group (14 persons) 6,905,867(16) 14.1%
------------------
* Less than 1.0%.
(1) Unless otherwise noted, each stockholder has direct ownership and sole voting and investment power with
respect to the indicated shares of common stock.
(2) Shares held by the Company's Employee Stock Ownership Plan (the "ESOP") are voted by Putnam Fiduciary
Trust Company, as Trustee, at the direction of participants.
(3) Wallace R. Weitz & Company disclaims beneficial ownership of these shares, which are owned beneficially
by registered investment companies for which Wallace R. Weitz & Company serves as advisor.
(4) Includes 26,698 shares held by Mr. Reilly's wife, 696 shares held by a trust benefiting his child of
which Mr. Reilly is trustee, stock options for 442,667 shares, 1,823 shares allocated under the ESOP
5
to Mr. Reilly, and 644 shares held by one of his children. Mr. Reilly disclaims beneficial ownership of
the 644 shares held by one of his children.
(5) Includes 82,396 shares held by two trusts benefiting members of Mr. Diassi's immediate family, 977,438
shares held by Winged Lion Holdings II L.L.C., which is controlled by Mr. Diassi, 364,020 shares held
jointly with Mr. Diassi's wife, 6,842 shares that may be acquired upon conversion of convertible notes,
112,000 shares held by Mr. Diassi's children of which he retains sole voting rights, and stock options
for 32,400 shares.
(6) Includes 33,514 shares held by Mr. Hevrdejs' wife, 200,000 shares held by First Sterling Ventures Corp.,
which is controlled by Mr. Hevrdejs, and stock options for 32,400 shares.
(7) Includes stock options for 9,000 shares.
(8) Includes 3,948 shares that may be acquired upon conversion of convertible notes and stock options for
32,400 shares.
(9) Nominee for directorship.
(10) Includes stock options for 6,000 shares.
(11) Includes 2,096,588 shares held by Capital Southwest, of which Mr. Thomas is President, and stock options
for 9,000 shares. Mr. Thomas disclaims beneficial ownership of the shares held by Capital Southwest.
(12) Includes stock options for 8,000 shares.
(13) Includes stock options for 15,000 shares.
(14) Includes stock options for 15,000 shares.
(15) Includes stock options for 12,200 shares.
(16) Includes stock options for 677,567 shares, 12,632 shares that may be acquired upon conversion of
convertible notes and 3,442 shares allocated under the ESOP to executive officers.
EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS AND OTHER OFFICERS
Following are descriptions of the Company's executive officers and
certain other officers whom the Company deems to be key employees,
including age (as of December 31, 2001), positions with the Company and
the business experience during the past five years. The officers hold
office at the discretion of the Board of Directors.
NAME AGE POSITION(S)
---- --- -----------
Paul V. Reilly(1) 49 Chairman, President and Chief Executive Officer
Michel P. Salbaing 56 Senior Vice President--Chief Financial Officer
Herbert H. Davis III 54 Senior Vice President--Corporate Development and Chief Legal
Officer
David W. Blue 59 President and Chief Executive Officer--Commercial Printing
Division
Robert C. Hart 65 President and Chief Executive Officer--Envelope Division
Kimberly T. Henry 50 Vice President--Human Resources
William W. Huffman, Jr. 53 Vice President--Controller
D. Robert Meyer, Jr. 45 Vice President--Treasurer and Tax
Keith T. Pratt 56 Vice President--Purchasing
Roger Wertheimer 42 Vice President--General Counsel and Secretary
Mark L. Zoeller 42 Vice President--Corporate Development
------------------
(1) See "Information Concerning Directors and Nominees" for a biographical summary.
MICHEL P. SALBAING has been the Company's Senior Vice President--
Finance and Chief Financial Officer since November 2000. From 1996 to
November 2000, Mr. Salbaing was with Quebecor World, the largest
North American printer, where he held a number of positions including
Chief Financial Officer of the overall corporation, President and Chief
Executive Officer of Quebecor Printing Europe and Senior Vice President
and Chief Financial Officer of Quebecor World North America. Prior to 1996,
Mr. Salbaing held various senior financial positions with three large
Canadian manufacturing firms and spent eight
6
years with Ernst & Young LLP. Mr. Salbaing is a member of the Canadian
Institute of Chartered Accountants.
HERBERT H. DAVIS III has been the Company's Senior Vice President--
Corporate Development and Chief Legal Officer since August 2001. Prior
to that time, Mr. Davis was in the private practice of law and was a
partner at the Denver, Colorado law firm of Rothgerber Johnson & Lyons LLP
for over 20 years.
DAVID W. BLUE has served as Chief Executive Officer of the commercial
print segment of the Company since September 2000. He served as President
of USFI, the $1 billion Specialty Ingredient Division of ConAgra, from
1998 until joining the Company. His career included 15 years at Kraft
Foods, from 1976 to 1991, where he was Vice President, Marketing and Vice
President, Finance for Kraft Cheese, as well as President of Churny
Company, a Kraft subsidiary that he grew eightfold in four years. From
1991 to 1995, Mr. Blue was with Stella Foods as President of Stella
Cheese and Executive Vice President, Sales and Marketing of Stella Foods.
From 1995 to 1998 he was President and Owner of O'Boisie Corporation, a
manufacturer and distributor of snack foods. O'Boisie Corporation filed
for bankruptcy under Chapter 7 of the United States Bankruptcy Code in
February 1998.
ROBERT C. HART has served as Chief Executive Officer of the envelope
segment of the Company since October 2000. From 1998 until he joined
Mail-Well, he owned his own consulting firm after having spent over
thirty years, from 1967 to 1998, with Riverwood International, a
$1.3 billion paperboard and packaging company headquartered in Atlanta, GA.
Throughout his tenure with Riverwood, Mr. Hart served as Vice President &
Mill Manager; Vice President, Sales and Marketing; Vice President, and
General Manager of Paperboard Operations. Most recently, as Senior Vice
President of the $600 million Paperboard Operation, Mr. Hart directed the
operations of three paper mills, producing 1.4 million tons of packaging
products to improve productivity over 250,000 tons in eight years.
KIMBERLY T. HENRY has been the Company's Vice President--Human
Resources since March 2000. From 1988 to March 2000, she worked for
Samsonite Corporation in various capacities, most recently Vice President
Human Resources. Ms. Henry is a licensed attorney.
WILLIAM W. HUFFMAN, JR. has been the Company's Vice President--
Controller since November 2000. Prior to that he served in various
financial capacities at Custom Papers Group, Specialty Coatings
International, and James River Corporation. Mr. Huffman began his
career with Coopers & Lybrand, and is a Certified Public Accountant.
D. ROBERT MEYER, JR. has been the Company's Vice President--Treasurer
and Tax since 1998. Mr. Meyer is a licensed attorney, Certified Public
Accountant and Certified Financial Planner. From 1988 to 1998, Mr. Meyer
was a partner in the tax department of the accounting firm of Deloitte &
Touche LLP.
KEITH T. PRATT has been the Company's Vice President--Purchasing
since 1998. From 1994 to 1998, Mr. Pratt was Vice President of Material
Sourcing and Logistics of Ply Gem Industries. From 1981 to 1994, Mr. Pratt
was responsible for purchasing and logistics with several companies where
he held a variety of positions up to the director level.
ROGER WERTHEIMER has been the Company's Vice President--General
Counsel and Secretary since February 1995. Mr. Wertheimer began
practicing law in 1984 and served as Corporate Counsel for PACE
Membership Warehouse, Inc. from 1988 to 1994. Mr. Wertheimer was in
private practice from March 1994 until February 1995, when he joined
the Company.
MARK L. ZOELLER has been the Company's Vice President--Corporate
Development since May 2001. Mr. Zoeller joined the Company in 1997 as
Corporate Counsel, and from May 2000 to May 2001, he was Assistant
General Counsel. Prior to joining the Company, Mr. Zoeller was an
associate at the law firm of Rothgerber Johnson & Lyons LLP, and he
is a licensed attorney.
There are no arrangements or understandings between the Company's
directors or officers, or any other persons, pursuant to which any of the
directors have been selected as directors or officers have been selected
as officers.
7
EXECUTIVE COMPENSATION
The following table sets forth information concerning all
compensation received for services rendered for the three years ended
December 31, 2001, by (i) the Company's Chief Executive Officer, (ii) the
four most highly compensated executive officers who were serving as
executive officers of the Company or one of the Company's divisions or
wholly owned subsidiaries at the end of 2001 and whose total annual
salary and bonus exceeded $100,000 in 2001, and (iii) the Company's
former Chief Executive Officer.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
-----------------------
ANNUAL COMPENSATION SECURITIES
------------------------------ RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS ALL OTHER
SALARY BONUS COMPENSATION AWARD(S) GRANTED COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $(1) ($)(2) ($)(3) (#) ($)
--------------------------- ---- ------ ----- ------------ ---------- ---------- ------------
Paul V. Reilly(4) 2001 586,732 0 0 1,193,100 536,000 0
President and Chief 2000 425,000 0 0 0 210,000 0
Executive Officer 1999 350,000 278,040 0 0 20,000 0
Michel P. Salbaing 2001 325,000 100,000 0 233,700 105,000 0
Senior Vice President-- 2000 60,495 70,000 0 0 40,000 0
Chief Financial Officer
David W. Blue 2001 325,000 0 0 233,700 110,000 0
President--Commercial 2000 129,369 0 0 0 75,000 0
Printing Division
Robert C. Hart 2001 325,000 107,250 0 233,700 85,000 0
President--Envelope 2000 74,240 0 0 0 75,000 0
Division
Robert Meyer 2001 183,426 40,000 0 102,500 37,000 0
Vice President-- 2000 171,462 0 0 0 8,000 0
Treasurer and Tax 1999 165,000 79,461 0 0 0 0
Gerald F. Mahoney(5) 2001 150,000 0 0 0 0 83,051
Former Chief Executive 2000 481,000 0 0 0 210,000 0
Officer 1999 500,000 463,400 0 0 20,000 0
------------------
(1) Bonus amounts are shown for the year earned and are paid in the following year.
(2) None of the named executive officers has received perquisites the value of which exceeded the lesser of
either $50,000 or 10% of his total salary and bonus. Perquisites paid include contributions to each
person's 401(k) account, tax reimbursements and car allowance.
(3) Amounts shown reflect the grant of performance accelerated restricted stock based upon the closing sale
price per share of the Common Stock as quoted on the NYSE on December 31, 2001 ($4.10 per share). None
of these shares has vested. See "2001 Long-Term Incentive Plan Awards in 2001."
(4) Mr. Reilly served as Chief Operating Officer until January 2001 when he became Chief Executive Officer.
(5) Mr. Mahoney served as Chief Executive Officer until January 2001. Mr. Mahoney received severance pay in
connection with his departure from the Company, as indicated in the "All Other Compensation" column for
2001. See "Executive Agreements."
2001 LONG-TERM EQUITY INCENTIVE PLAN
On February 7, 2001, the Board adopted the 2001 Long-Term Equity
Incentive Plan (the "2001 Plan"), which was approved by stockholders on
May 1, 2001. The 2001 Plan provides the means by which the Company,
through the grant of options and other awards, can (i) attract and retain
key officers, employees and directors of, and consultants to, the Company
and its subsidiaries and affiliates, (ii) motivate such individuals by
means of performance-related incentives to achieve long-range performance
goals, and (iii) link their compensation to the long-term interests of
the Company and its stockholders.
8
Upon adoption of the 2001 Plan, the Company's 1994 Stock Option Plan,
1998 Stock Option Plan, 1996 Directors' Stock Option Plan and 1997
Non-Qualified Stock Option Plan (collectively, the "Old Plans") were
merged into the 2001 Plan, and no longer separately exist. Options
outstanding under the Old Plans continue to the governed by their
respective grant agreements, but are administered under the 2001 Plan.
SHARES AVAILABLE FOR AWARDS UNDER THE 2001 PLAN. Under the 2001 Plan,
awards may be made in common stock of the Company. Subject to adjustment
as provided by the terms of the 2001 Plan, the maximum number of shares
of common stock with respect to which awards may be granted under the
Plan is 4,425,000 (which includes 424,717 shares with respect to which
awards under the Old Plans were authorized but not granted). Except as
adjusted in accordance with the terms of the 2001 Plan, no more than
4,425,000 shares of common stock authorized under the 2001 Plan may be
incentive stock options and no more than 800,000 shares may be awarded as
awards other than options.
Shares of common stock subject to an award under the 2001 Plan or the
Old Plans that are cancelled, expire unexercised, forfeited, settled in
cash or otherwise terminated without a delivery of shares of common stock
to the participant, including shares of common stock withheld or
surrendered in payment of any exercise or purchase price of an award or
taxes relating to an award, remain available for awards under the 2001
Plan. Shares of common stock issued under the 2001 Plan may be either
newly issued shares or shares which have been reacquired by the Company.
Shares issued by the Company as substitute awards granted solely in
assumption of outstanding awards previously granted by a company acquired
by the Company or with which the Company combines ("Substitute Awards")
do not reduce the number of shares available for awards under the 2001
Plan.
In addition, the 2001 Plan imposes individual limitations on the
amount of certain awards in order to comply with Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Under these
limitations, no single participant may receive options or stock
appreciation rights ("SARs") in any calendar year that relate to more
than 1,500,000 shares of common stock, subject to adjustment in certain
circumstances.
With certain limitations, awards made under the 2001 Plan may be
adjusted to prevent dilution or enlargement of benefits or potential
benefits intended to be made available under the 2001 Plan in the event
of any stock dividend, reorganization, recapitalization, stock split,
combination, merger, consolidation, change in laws, regulations or
accounting principles or other relevant unusual or nonrecurring event
affecting the Company.
ELIGIBILITY AND ADMINISTRATION. Current and prospective officers and
employees of, and directors of, and consultants to, the Company or its
subsidiaries or affiliates are eligible to be granted awards under the
2001 Plan. The 2001 Plan is administered by the Compensation Committee
(the "Committee"). The Board may amend, alter or discontinue the 2001
Plan, but no amendment or alteration can be made which would impair the
rights of any recipient of an award without his or her consent.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. The Committee is
authorized to grant stock options, including both incentive stock
options, which can result in potentially favorable tax treatment to the
participant, and non-qualified stock options. The Committee may specify
the terms of such grants subject to the terms of the 2001 Plan. The
Committee is also authorized to grant SARs, either with or without a
related option. The exercise price per share subject to an option is
determined by the Committee, but may not be less than the fair market
value of a share of common stock on the date of the grant, except in the
case of Substitute Awards. The maximum term of each option or SAR, the
times at which each option or SAR will be exercisable, and the provisions
requiring forfeiture of unexercised options at or following termination
of employment generally are fixed by the Committee, except that no option
or tandem SAR relating to an option may have a term exceeding ten years.
Incentive stock options or tandem SARs related thereto that are granted
to holders of more than ten percent of the Company's voting securities
are subject to certain additional restrictions, including a five-year
maximum term and a minimum exercise price of 110% of fair market value.
The Committee may also, in its discretion, add an accelerated ownership
feature to any option granted, which is the right to acquire an "AO Option."
The right to
9
acquire an AO Option would be triggered upon exercise of the original
option and payment of the option price for the original option in shares
held by the option holder, subject to certain limitations. The right to
acquire an AO Option would allow the option holder to receive, upon
such exercise, another option to purchase, at fair market value at
the date of grant of the AO Option, a number of shares of common stock
equal to the sum of: (i) the number of whole shares delivered by the
option holder in payment of the option price of the original option and
(ii) the number of whole shares, if any, withheld by the Company as
payment for withholding taxes. An AO Option will expire on the same
date that the original option would have expired had it not been
exercised. All AO Options will be non-qualified stock options. As of
March 8, 2002, there were non-qualified options for 2,225,766 shares and
incentive options for 3,902,871 shares outstanding under the 2001 Plan.
RESTRICTED SHARES AND RESTRICTED SHARE UNITS. The Committee is
authorized to grant restricted shares of common stock and restricted
share units. Restricted shares are shares of common stock subject to
transfer restrictions as well as forfeiture upon certain terminations of
employment prior to the end of a restricted period or other conditions
specified by the Committee in the award agreement. A participant granted
restricted shares of common stock generally has most of the rights of a
stockholder of the Company with respect to the restricted shares,
including the right to receive dividends and the right to vote such
shares. None of the restricted shares may be transferred, encumbered or
disposed of during the restricted period or until after fulfillment of
the restrictive conditions. As of March 8, 2002, the Company had issued
669,000 restricted shares under the 2001 Plan.
Each restricted share unit has a value equal to the fair market
value of a share of common stock on the date of grant. The Committee
determines, in its sole discretion, the restrictions applicable to the
restricted share units. A participant will be credited with dividend
equivalents on any vested restricted share units at the time of any
payment of dividends to stockholders on shares of common stock. Except as
determined otherwise by the Committee, restricted share units may not be
transferred, encumbered or disposed of, and such units shall terminate,
without further obligation on the part of the Company, unless the
participant remains in continuous employment of the Company for the
restricted period and any other restrictive conditions relating to the
restricted share units are met. As of March 8, 2002, there were no
restricted share units outstanding under the 2001 Plan.
PERFORMANCE AWARDS. A performance award consists of a right that is
denominated in cash or shares of common stock, valued in accordance with
the achievement of certain performance goals during certain performance
periods as established by the Committee, and payable at such time and in
such form as the Committee shall determine. Performance awards may be
paid in a lump sum or in installments following the close of a
performance period or on a deferred basis, as determined by the
Committee. Termination of employment prior to the end of any performance
period, other than for reasons of death or total disability, will result
in the forfeiture of the performance award. A participant's rights to any
performance award may not be transferred, encumbered or disposed of in
any manner, except by will or the laws of descent and distribution.
Performance awards are subject to certain specific terms and
conditions under the 2001 Plan. Performance goals for Covered Officers
(as defined in the 2001 Plan) are limited to one or more of the following
financial performance measures relating to the Company or any of its
subsidiaries, operating units or divisions: (a) earnings before interest,
taxes, depreciation and/or amortization; (b) operating income or profit;
(c) operating efficiencies; (d) return on equity, assets, capital,
capital employed, or investment; (e) after tax operating income; (f) net
income; (g) earnings or book value per share; (h) cash flow(s); (i) total
sales or revenues or sales or revenues per employee; (j) production
(separate work units or Saw's); (k) stock price or total shareholder
return; (l) dividends; or (m) strategic business objectives, consisting
of one or more objectives based on meeting specified cost targets,
business expansion goals, and goals relating to acquisitions or
divestitures; or any combination thereof. Each goal may be expressed on
an absolute and/or relative basis, may be based on or otherwise employ
comparisons based on internal targets, the past performance of the
Company or any subsidiary, operating unit or division of the Company
and/or the past or current performance of other companies, and in the
case of earnings-based
10
measures, may use or employ comparisons relating to capital, shareholders'
equity and/or shares outstanding, or to assets or net assets.
To the extent necessary to comply with Section 162(m), with respect
to grants of performance awards, no later than 90 days following the
commencement of each performance period (or such other time as may be
required or permitted by Section 162(m)), the Committee will, in writing,
(1) select the performance goal or goals applicable to the performance
period, (2) establish the various targets and bonus amounts which may be
earned for such performance period, and (3) specify the relationship
between performance goals and targets and the amounts to be earned by
each Covered Officer for such performance period. Following the
completion of each performance period, the Committee will certify in
writing whether the applicable performance targets have been achieved and
the amounts, if any, payable to Covered Officers for such performance
period. In determining the amount earned by a Covered Officer for a given
performance period, subject to any applicable award agreement, the
Committee shall have the right to reduce (but not increase) the amount
payable at a given level of performance to take into account additional
factors that the Committee may deem relevant to the assessment of
individual or corporate performance for the performance period. With
respect to any Covered Officer, the maximum annual number of shares in
respect of which all performance awards may be granted under the 2001
Plan is 150,000 and the maximum annual amount of any award settled in
cash is $1,000,000.
OTHER STOCK-BASED AWARDS. The Committee is authorized to grant any
other type of awards that are denominated or payable in, valued by
reference to, or otherwise based on or related to shares of common stock.
The Committee will determine the terms and conditions of such awards,
consistent with the terms of the Plan.
NON-EMPLOYEE DIRECTOR AWARDS. The Board of Directors may provide that
all or a portion of a non-employee director's annual retainer and/or
retainer fees or other awards or compensation as determined by the Board
be payable in non-qualified stock options, SARs, restricted shares,
restricted share units and/or other stock-based awards, including
unrestricted shares, either automatically or at the option of the
non-employee directors. The Board of Directors will determine the terms
and conditions of any such awards, including those that apply upon the
termination of a non-employee director's service as a member of the
Board of Directors. The 2001 Plan will be administered by the Board of
Directors with respect to non-employee directors, including awards made
to members of the Committee.
11
The following table sets forth information concerning stock options
granted to each of the named executive officers in 2001 under the 2001
Plan and the potential realizable value for the stock options based on
future appreciation assumptions.
OPTION GRANTS IN 2001
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE APPRECIATION
SECURITIES UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM(1)
OPTIONS GRANTED TO EMPLOYEES PRICE EXPIRATION ---------------------------
(#) IN 2001 ($/SH) DATE 5% ($) 10% ($)
--------------------- --------------- -------- ---------- ------- ---------
Paul V. Reilly 100,000 3.06% 4.7125 01-24-11 322,836 793,199
436,000 13.33% 5.51 06-11-06 663,728 1,466,665
Michel P. Salbaing 20,000 0.61% 3.74 11-13-11 47,041 119,212
85,000 2.60% 5.51 06-11-06 129,396 285,932
David W. Blue 25,000 0.76% 5.00 09-05-11 78,612 199,218
85,000 2.60% 5.51 06-11-06 129,396 285,932
Robert C. Hart 85,000 2.60% 5.51 06-11-06 129,396 285,932
Robert Meyer 37,000 1.13% 5.51 06-11-06 56,326 124,465
Gerald F. Mahoney -- -- -- -- -- --
------------------
(1) Amounts reported in these columns show hypothetical gains that may be realized upon exercise of the
options assuming that the market price of common stock appreciates at the specified annual rates of
appreciation, compounded annually over the terms of the options. These numbers are calculated based upon
rules promulgated by the SEC. Actual gains, if any, depend on the future performance of common stock and
overall market conditions.
The following table sets forth information about the number and value
of stock options exercised in 2001 and held at December 31, 2001, by each
named executive officer. A stock option is "in-the-money" if the closing
market price of the common stock exceeds the exercise price of the stock
option.
AGGREGATED OPTION EXERCISES IN 2001 AND 2001 YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES VALUE AT 12-31-01 (#) AT 12-31-01 ($)(1)
ACQUIRED ON REALIZED ------------------------- -------------------------
EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------ -------- ------------------------- -------------------------
Paul V. Reilly 0 -- 288,534/754,798 33,989/0
Michel P. Salbaing 0 -- 8,000/137,000 0/7,200
David W. Blue 0 -- 15,000/170,000 0/0
Robert C. Hart 0 -- 15,000/145,000 0/0
Robert Meyer 0 -- 10,600/49,400 0/0
Gerald F. Mahoney 187,890 405,784 0/0 0/0
------------------
(1) Represents the difference between the option exercise price and the closing sales price per share of the
common stock as quoted on the NYSE on December 31, 2001 ($4.10 per share).
12
The following table sets forth information concerning performance
accelerated restricted stock (PARS) granted to each of the named
executive officers in 2001 under the 2001 Plan.
2001 LONG-TERM INCENTIVE PLAN AWARDS IN 2001
NUMBER OF SHARES, PERFORMANCE OR
UNITS OR OTHER RIGHTS OTHER PERIOD UNTIL
NAME (#) MATURATION OR PAYOUT
---- --------------------- --------------------
Paul V. Reilly 291,000 (1)
Michel P. Salbaing 57,000 (1)
David W. Blue 57,000 (1)
Robert C. Hart 57,000 (1)
Robert Meyer 25,000 (1)
Gerald F. Mahoney 0 --
------------------
(1) 50% of the PARS will vest in June 2006 and 50% will vest in June 2007. PARS may vest earlier if the
price of the Company's common stock increases to certain levels for at least 20 consecutive trading
days. The PARS are held in escrow with an independent financial institution until they vest. The named
executive officer retains rights as a shareholder over the unvested PARS held in escrow, including the
rights to vote such shares and receive cash dividends, if any.
EXECUTIVE AGREEMENTS
CHANGE IN CONTROL AGREEMENT. In November 1999 the Company entered
into Change in Control Agreements with certain key employees. None of the
Change in Control Agreements remains in effect, except that of Mr. Reilly.
This agreement, among other things, provides that if Mr. Reilly's
employment with the Company is terminated in certain circumstances upon
or in anticipation of a change of control (as defined in such agreement),
Mr. Reilly shall receive a lump sum payment equal to three years' salary
and bonus. Mr. Reilly would also receive any salary or other benefits
accrued or otherwise owed to him under the Company's various employee
benefit plans and programs at the time of termination.
MAHONEY SEVERANCE AGREEMENT. On February 28, 2001, the Company
entered into an agreement with Gerald Mahoney relating to his departure
as CEO of the Company. This agreement provides for severance payments to
Mr. Mahoney of $1,080,000 on January 1, 2002, and $1,080,000 on January
1, 2003, plus interest thereon at 6% per annum from April 1, 2001.
Mr. Mahoney may accelerate such payments upon a change in control of the
Company. The Company shall also reimburse Mr. Mahoney for reasonable
expenses associated with (i) his personal financial and tax planning in
2000 and 2001, (ii) maintaining office space and administrative support
from April 2001 through March 2002, and (iii) health care coverage.
Mr. Mahoney's agreement also provides certain covenants by Mr. Mahoney
not to compete with the Company nor solicit the Company's employees for
a period of two years following the date of the agreement.
SEVERANCE AGREEMENTS. In June 2001 the Company entered into
Severance Agreements with certain key employees, including Messrs.
Salbaing, Blue, Hart and Meyer. These agreements, among other things,
provide that if the executive's employment with the Company is terminated
in certain circumstances upon, after or in anticipation of a change of
control of the Company (as defined in such agreements), the executive
shall receive a lump sum payment based upon the executive's base salary
and target annual bonus at termination of employment, reimbursement of
post-termination medical and dental premiums paid under COBRA, and
reimbursement of outplacement services. In the case of Messrs. Salbaing,
Blue and Hart, the agreement provides for a lump sum payment equal to two
years' salary plus two years' target bonus plus target bonus for the
portion of the year completed prior to termination, one year of COBRA
reimbursement, and up to $10,000 in outplacement services. In the case
of Mr. Meyer, the agreement provides for a lump sum payment equal to one
and one-half years' salary plus one and one-half years' target bonus plus
target bonus for the portion of the year completed prior to termination,
one year of
13
COBRA reimbursement, and up to $10,000 in outplacement services.
Mr. Meyer's agreement also provides for tax planning and income tax
return preparation by a "Big Five" accounting firm for the year in
which termination occurs. Each agreement includes a covenant from the
executive not to compete with the Company during his tenure and for a
period of two years thereafter.
LOAN TO MR. SALBAING. During 2001, the Company made a loan to
Mr. Salbaing in the amount of $100,000.00 to assist in his purchase of
a home in Colorado as part of his relocation. The loan bears interest
at 5% and is due upon the earliest to occur of (i) Mr. Salbaing's
cessation of employment with the Company, (ii) Mr. Salbaing's sale of
certain real property located in Canada, or (iii) if the loan becomes
secured by Mr. Salbaing's home in Colorado, his sale of that home.
EMPLOYEE BENEFITS
INCENTIVE PLAN. The Board of Directors adopted a Cash Bonus
Incentive Plan (the "Incentive Plan") pursuant to which named executives
and other key employees may receive bonus compensation. The Incentive
Plan is designed to promote achievement of the Company's financial goals
by making a portion of the designated participants' compensation
dependent upon the achievement of EBITDA goals established by the Board
under the Incentive Plan and the achievement of individual performance
objectives. Participants must be employed on the date the incentive
payments are distributed in order to receive any payment under the
Incentive Plan. The Incentive Plan is further described in the
"Compensation Committee Report on Executive Compensation."
401(K) SAVINGS RETIREMENT PLAN. The Company's subsidiary, Mail-Well
I Corporation, has maintained a 401(k) Savings and Retirement Plan (the
"Plan") since 1994 for non-union employees. Each U.S. based, union-free
employee of Mail-Well I Corporation, or of an affiliate that has adopted
the Plan, and who is classified as an employee expected to work a minimum
of 1,000 hours per year is eligible to participate in the Plan. For 2002,
a participant can contribute to the Plan up to the lesser of $11,000 or
50% of his compensation. Per IRS regulations, maximum compensation of
$200,000 is considered for purposes of Plan contributions. All
contributions are not included in participant's current taxable income.
During 2001, the Company will make a matching contribution to participant
accounts equal to 50% of the participant's contributions, up to a maximum
of 6% of the participant's compensation. Mail-Well I Corporation also
sponsors a 401(k) Savings and Retirement Plan for union employees (the
"Union Plan"). Eligibility for participation and the amount of employer
match for the Union Plan are determined according to the applicable
collective bargaining agreements.
Beginning January 1, 2001, the Company made an additional
non-discretionary contribution to each eligible employee in an amount
equal to 1% of the participant's annual eligible compensation. The
Company also has the option to make an additional discretionary
contribution of up to 2% of annual compensation to participant accounts.
To be eligible for these contributions, the employee must have a minimum
of one year of service and be employed on the last day of the year for
which the contribution is being calculated.
Plan assets are held in trust. A Plan participant can direct the
investment of his contributions and the matching contributions into one
of twelve mutual funds and other investment vehicles, one of which is
Company common stock. Participant contributions to the Plan are always
fully vested. Company contributions including match, non-discretionary
and discretionary contributions vest at a rate of 20% for each year of
service completed by the participant. Generally, a participant's vested
Plan benefit is distributable upon his retirement, disability, death or
other separation from employment.
EMPLOYEE STOCK OWNERSHIP PLAN. Mail-Well I Corporation has also
maintained an Employee Stock Ownership Plan (the "ESOP") since 1994. The
ESOP has been amended to "freeze" both participation and future
contributions to the ESOP. Participants with current balances will
maintain their ESOP account and distributions will continue to be allowed
at retirement, disability, death or other termination from employment. A
participant's ESOP account will continue to become non-forfeitable in
increments of 20% for each year of service completed by the participant.
Amounts that are forfeited from a partially vested participant's account
are allocated to the remaining participants' accounts as an additional
14
contribution or used to offset administration expenses. ESOP monies
are held in trust and primarily invested in the Company's common stock.
KEY EMPLOYEE SHARE OPTION PLAN. Mail-Well I Corporation has
maintained a Key Employee Share Option Plan (the "KEYSOP") since 1997.
The KEYSOP is offered to selected executive officers and other key
employees who occupy senior managerial or professional positions and who
have the capacity to make a substantial contribution to the success of
the Company. The purpose of the KEYSOP is to provide participants a
vehicle for long-term capital accumulation on a tax-favored basis by
allowing them to forgo current compensation in exchange for the right to
purchase options in selected mutual funds. The KEYSOP is a nonqualified
stock option plan within the meaning of Section 83 of the Internal
Revenue Code, and is not intended to be covered by the provisions of
the Employee Retirement Income Security Act of 1974.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation for the Company's executive officers for
the year ending December 31, 2001, were made by the three-member
Compensation Committee of the Board. Each member of the Committee is an
outside director. No member of the Committee has ever been an officer or
employee of the Company or any of its subsidiaries. The Committee is
responsible for establishing and administering the policies that govern
the annual compensation and stock ownership programs for the Company's
executive officers and key employees.
COMPENSATION PHILOSOPHY
The Company's executive compensation policies are designed to:
* align compensation with the Company's annual and long-term
performance goals;
* attract and retain a highly qualified and motivated management
team;
* reward individual performance; and
* link the interests of the executive officers directly with those of
shareholders through the use of stock-based incentives as a
compensation vehicle.
These policies are being implemented by setting salaries and
incentive levels for executives which are at or above the targeted
mid-point for salaries and bonuses given to executives in similar
positions, with total compensation packages, including grants of stock
options and performance accelerated restricted shares of stock ("PARS"),
designed with the goal of compensating the executives at a level above
the mid-point for total gain opportunities received by counterparts at
similar companies. This compensation program requires commensurate
performance levels, emphasizes long-term incentives that will encourage
executives to maintain their focus on long-term shareholder interests,
and is designed to attract and retain top executive talent.
COMPONENTS OF COMPENSATION
Total compensation for each executive officer is set by the Committee
at levels which it believes are competitive in relation to companies of
similar type and size based upon a study and recommendations provided by
an independent compensation consultant. The components of executive
compensation include salary, the Incentive Plan discussed below, equity
participation in the Company in the form of options to purchase common
stock and, in some cases, a grant of PARS. Compensation for executive
officers of the Company is usually set by the Committee in March or April
of each year for that year. In connection with the development and
implementation of the Company's strategic plan, certain executive
officers received severance and non-competition agreements as more fully
described under "Executive Agreements."
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public corporations for compensation over $1,000,000 paid
for any fiscal year to the corporation's chief executive officer
15
and four other most highly compensated executive officers as of the end
of any fiscal year. However, the statute exempts qualifying performance-
based compensation from the deduction limit if certain requirements
are met.
The Committee believes it is in the Company's best interest to
attempt to structure performance-based compensation, including stock
option grants, restricted shares and incentive plan payments, to
executive officers who may be subject to Section 162(m) in a manner that
satisfies the statute's requirements. However, the Committee also
recognizes the need to retain flexibility to make compensation decisions
that may not meet Section 162(m) standards when necessary to enable the
Company to meet its overall objectives, even if the Company may not
deduct all of the compensation. Accordingly, the Board and the
Compensation Committee have expressly reserved the authority to award
non-deductible compensation in appropriate circumstances. Further,
because of ambiguities and uncertainties as to the application and
interpretation of Section 162(m) and the regulations issued thereunder,
no assurance can be given, notwithstanding the Company's efforts, that
compensation intended by the Company to satisfy the requirements for
deductibility under Section 162(m) does in fact do so.
BASE SALARY. The Committee reviews the salaries of the executive
officers annually. The Committee's policy is to fix base salaries, with
commensurate performance requirements, at levels at or above the
mid-point for amounts paid to senior executives with comparable
qualifications, experience and responsibilities at other companies of
similar size who are engaged in a business similar to that of the
Company. Salary recommendations are submitted annually to the Committee
by the Chairman and Chief Executive Officer. In determining salary
compensation, the Committee takes into account financial and operating
performance versus the Company's internal operating plan and external
benchmarking data, as well as management's accomplishment of certain
long-term and short-term strategic goals.
In addition, the base salaries take into account the individual's
experience within the industry, with the Company and its predecessors
and/or within the profession, and their adherence to the values of the
Company. The Committee believes that compensation for its executive
officers has been competitive, appropriate and comparable to similarly
situated companies.
Based upon its evaluation of these factors, the Committee believes
that senior management is dedicated to achieving long-term financial
improvements and that the compensation policies, plans and programs
administered by the Committee contribute to management's commitments. The
Committee attempts to assimilate all of the foregoing factors when it
renders its compensation decisions; however, the Committee recognizes
that its decisions are primarily subjective in nature. The Committee does
not assign any specified weight to the criteria it considers.
The Committee's recommendations are offered to the full Board of the
Company which ultimately ratifies, amends or rejects them.
LONG-TERM INCENTIVES. The Company believes that the interests of
stockholders and the Company's key employees, including officers and
directors, are more closely aligned when such key employees are provided
an opportunity to acquire a proprietary interest through ownership of
common stock. Officers, directors and other key employees are granted
options under the Company's stock option plans to purchase common stock.
Certain key employees were, in 2001, granted PARS for retention purposes
and to motivate accomplishment of the Company's strategic goals. To date,
the Company has only granted stock options at a price equal to or greater
than fair market value. The number of options granted by the Committee is
based upon the Committee's evaluation of:
* the anticipated performance requirements and potential
contributions of each employee;
* each employee's current equity participation in the Company; and
* recommendations of senior management.
In 2001, the Committee granted options representing 995,000 shares of
common stock and 569,000 PARS to executive officers. This grant of stock
options and PARS was made to further align the interests
16
of those executive officers with that of shareholders by providing
incentives to achieve the long-range goals of the Company.
INCENTIVE COMPENSATION. Incentive compensation is paid to officers
under the Company's Incentive Plan. Incentive compensation is ordinarily
paid as a percentage of each executive's base salary and is based upon
the level of attainment of EBITDA goals established by the Board under
the Incentive Plan and the achievement of individual performance
objectives. The components that are considered in paying incentive
compensation to the executive officers include profitability and growth
of the Company and the officer's job performance. Due to the Company's
performance, none of the named executive officers was paid that portion
of their incentive based on EBITDA goals under the Incentive Plan for
2001.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Reilly was named Chief Executive Officer on January 31, 2001, and
Chairman of the Board of the Company on June 29, 2001. Prior to becoming
Chief Executive Officer, he served as the Company's President and Chief
Operating Officer. As a result of his promotion to Chief Executive
Officer, and after considering certain competitive peer benchmark data,
the Committee granted Mr. Reilly an increase in base salary of $150,000
from $450,000 annually to $600,000 annually, effective February 1, 2001,
and granted him options for 100,000 shares at an exercise price of
$4.7125 per share. Mr. Reilly was also eligible for an incentive payment
pursuant to the Incentive Plan. Under the terms of the Incentive Plan
Mr. Reilly earned $180,000 for 2001 results. Due to the impact of current
industry economic conditions on the Company and its employees, Mr. Reilly
decided not to accept the bonus. In June 2001 the Committee granted
options for 436,000 shares of common stock at an exercise price of $5.51
per share and 291,000 PARS to Mr. Reilly under the 2001 Plan. These
grants were made to align Mr. Reilly's compensation with the interests of
the Company's stockholders, pursuant to the policies and philosophy
described above.
CONCLUSION
In summary, the Committee believes that its policy of linking
executive compensation to Company performance was met. The Committee
believes that the Company's compensation levels adequately reflect its
philosophy. In addition, the Committee believes that the Company's
executive compensation programs and policies are supportive of its
overall objective to enhance stockholder value through the profitable
management of its operations.
Janice C. Peters (Chairperson)
Frank J. Hevrdejs
W. Thomas Stephens
17
STOCK PRICE PERFORMANCE GRAPH
The following graph presents the cumulative total quarterly
stockholder return (assuming reinvestment of dividends, if any) from
investing $100 on December 31, 1996 in each of (i) the Company's common
stock; (ii) Standard & Poor's 500 Index; and (iii) a Company-chosen peer
group, weighted by market capitalization, which includes Consolidated
Graphics, Inc., Deluxe Corporation, R. R. Donnelley & Sons Company,
Wallace Computer Services, Inc. and Standard Register Company (the "Peer
Group Index"). The Company's common stock is listed on the New York Stock
Exchange.
[GRAPH]
MAIL-WELL PEER GROUP S&P 500
--------- ---------- -------
31-Dec-96 $100.00 $100.00 $100.00
27-Mar-97 113.93 110.00 102.26
27-Jun-97 237.02 117.11 117.24
26-Sep-97 247.33 115.02 124.90
31-Dec-97 346.95 119.01 123.74
31-Mar-98 346.95 129.29 145.58
30-Jun-98 397.33 139.30 149.82
30-Sep-98 156.87 109.88 134.38
31-Dec-98 209.54 137.03 162.43
31-Mar-99 245.04 106.04 169.98
30-Jun-99 296.56 123.87 181.39
30-Sep-99 254.20 101.62 169.49
31-Dec-99 247.33 88.14 194.14
31-Mar-00 159.16 77.61 198.02
30-Jun-00 158.02 80.17 192.21
30-Sep-00 87.02 85.43 189.82
31-Dec-00 79.01 94.36 174.46
31-Mar-01 89.40 92.66 153.32
30-Jun-01 77.86 104.26 161.79
30-Sep-01 67.79 101.23 137.55
31-Dec-01 75.11 115.15 151.70
18
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, executive officers and holders of more
than 10% of the common stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in
ownership of the common stock. Based solely upon a review of Forms 3, 4
and 5 and amendments thereto furnished to the Company with respect to the
year ended December 31, 2001, to the best of the Company's knowledge, the
Company's directors, executive officers and holders of more than 10% of
its common stock complied with all Section 16(a) filing requirements,
except that Jerome Pickholz was inadvertently one day late in filing one
Form 4.
PROPOSAL 1--ELECTION OF DIRECTORS
Seven directors will be elected at the Annual Meeting to hold office
until the Company's 2003 Annual Meeting of Stockholders or until his or
her respective successor has been elected and qualified. All of the
nominees are currently directors of the Company, except for Mr. Reynolds.
William Thomas will be retiring from the Board of Directors and will not
be standing for reelection. The Board has no reason to anticipate that
any nominee will decline or be unable to serve as a director. In the
event any nominee does decline or is unable to serve, proxies may be
voted for the election of a substitute nominee or the Board may reduce
the number of directors to be elected.
The shares of common stock represented by the enclosed proxy will be
voted for the election to the Board of the seven nominees named below
unless a vote is withheld from one or more individual nominees. If any
nominee becomes unavailable for any reason, or if a vacancy should occur
before election, shares represented by the enclosed proxy may be voted
for such other person as may be determined by the holders of such proxy.
The simple majority vote of shares voting is required for election of
directors. Assuming a quorum is present, the seven nominees receiving the
highest number of affirmative votes will be elected as directors.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF: PAUL V.
---
REILLY, FRANK P. DIASSI, FRANK J. HEVRDEJS, JANICE C. PETERS, JEROME W.
PICKHOLZ, ALISTER W. REYNOLDS AND W. THOMAS STEPHENS.
PROPOSAL 2--RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
At the Annual Meeting, stockholders will be asked to ratify the
appointment of Ernst & Young LLP as the Company's independent auditors
for the fiscal year ended December 31, 2002. Management recommends that
Ernst & Young LLP be ratified as the principal accounting firm to be
utilized by the Company for the year ending December 31, 2002.
The Company anticipates that representatives of Ernst & Young LLP
will attend the Annual Meeting for the purpose of responding to
appropriate questions. At the Annual Meeting, the representatives of
Ernst & Young LLP will be afforded an opportunity to make a statement
if they so desire.
AUDIT FEES
Ernst & Young LLP's fees for professional services rendered for the
audit of the Company's consolidated financial statements for the year
ended December 31, 2001, and its reviews of the financial statements
included in the Company's Forms 10-Q for that fiscal year were $604,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
No fees were paid to Ernst & Young LLP during 2001 for financial
information systems design and implementation services.
19
ALL OTHER FEES
Other fees paid to Ernst & Young LLP in 2001 totaled $1,399,000,
including $867,000 of audit-related services and $532,000 of tax
services. Audit-related services consisted primarily of audits of
separate subsidiary financial statements, accounting research and
SEC registration statements.
AUDITOR INDEPENDENCE
The Audit Committee has considered the effect that provision of the
services described under "Financial Information Systems Design and
Implementation Fees" and "All Other Fees" may have on the independence of
Ernst & Young LLP. The Audit Committee has determined that provision of
those services is compatible with maintaining the independence of Ernst &
Young LLP as the Company's principal auditor.
REPORT OF THE AUDIT COMMITTEE
The Company has an Audit Committee composed entirely of
non-management directors. The members of the Audit Committee meet the
independence and experience requirements of the New York Stock Exchange.
In 2001, the Audit Committee met formally four (4) times and held four
(4) conference calls to review earnings-related press releases, reports
to the Securities and Exchange Commission and proxy materials. The Audit
Committee follows the substance of the procedures recommended in the
report of the Blue Ribbon Committee on Improving the Effectiveness of
Corporate Audit Committees, sponsored by the major securities markets,
issued in February 1999. The full responsibilities of the Audit Committee
are set forth in its Charter, adopted by the Company's Board of Directors
in May 2000, a copy of which is available upon written request to the
Secretary of the Company.
During the year 2001, at each of its meetings, the Audit Committee
met with the senior members of the Company's financial management team,
its Vice President and General Auditor, its Sr. Vice President--
Corporate Development and Chief Legal Officer and its independent
auditors. The Audit Committee's agenda is established by the Audit
Committee's chairperson and the Vice President and General Auditor. The
Audit Committee had a private session at one of its meetings with the
Company's independent auditors and, separately, with the Vice President
and General Auditor, at which candid discussions of financial management,
accounting and internal control issues took place.
The Audit Committee recommended to the Board of Directors the
engagement of Ernst & Young LLP as the Company's independent auditors and
reviewed with the Company's financial managers, the independent auditors
and the Vice President and General Auditor, overall audit scopes and
plans, the results of internal and external audit examinations,
evaluations by the auditors of the Company's internal controls and the
quality of the Company's financial reporting.
Management has reviewed the audited financial statements in the
Annual Report for 2001 with the Audit Committee including a discussion of
the quality, not just the acceptability, of the accounting principles,
the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements. In addressing the quality of
management's accounting judgments, members of the Audit Committee asked
for management's representations that the audited consolidated financial
statements of the Company have been prepared in conformity with generally
accepted accounting principles, and have expressed to both management and
auditors their general preference for conservative policies when a range
of accounting options is available.
20
In its meetings with representatives of the independent auditors, the
Audit Committee asks them to address, and discusses their responses to,
several questions that the Audit Committee believes are particularly
relevant to its oversight. These questions addressed the following
matters, among others:
* Whether there are any significant accounting judgments made by
management in preparing the financial statements that would have
been made differently had the auditors themselves prepared and been
responsible for the financial statements;
* Whether, based on the auditors' experience and their knowledge of
the Company, the Company's financial statements fairly present to
investors, with clarity and completeness, the Company's financial
position and performance for the reporting period in accordance
with generally accepted accounting principles, and SEC disclosure
requirements; and
* Whether, based on the auditors' experience and their knowledge of
the Company, the Company has implemented internal controls and
internal audit procedures that are appropriate for the Company.
The Audit Committee believes that, by thus focusing its discussions
with the independent auditors, it can promote a meaningful dialogue that
provides a basis for its oversight judgments.
The Audit Committee also discussed with the independent auditors
other matters required to be discussed by the auditors with the Audit
Committee under Statement on Auditing Standards No. 61 (communication
with audit committees). The Audit Committee received and discussed with
the auditors their annual written report on their independence from the
Company and its management, which is made under Independence Standards
Board Standard No. 1 (independence discussions with audit committees),
and considered with the auditors whether non-audit services provided by
them to the Company during 2001 was compatible with the auditors'
independence.
In performing all of these functions, the Audit Committee acts in an
oversight capacity. While the Audit Committee reviews the quarterly and
annual financial statements in its oversight role, the Committee relies
on the work and assurances of the Company's management, which has the
primary responsibility for financial statements and reports, and of the
independent auditors, who, in their report, express an opinion on the
conformity of the Company's annual financial statements to generally
accepted accounting principles.
In reliance on these reviews and discussions, and the report of the
independent auditors, the Audit Committee has recommended to the Board of
Directors, and the Board has approved, that the audited financial
statements be included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2001, for filing with the Securities and
Exchange Commission.
Jerome W. Pickholz (Chairperson)
William R. Thomas
Frank P. Diassi
21
REQUIRED VOTE
Ratification of the selection of Ernst & Young LLP as the Company's
independent auditors requires the affirmative vote of a majority of the
outstanding shares of common stock present, in person or by proxy, and
entitled to vote at the Annual Meeting.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
---
SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S AUDITORS FOR 2002.
STOCKHOLDER PROPOSALS FOR 2003 MEETING
Proposals of stockholders that are intended to be presented at the
Company's 2003 Annual Meeting of Stockholders must be received by the
Company at its principal executive offices not later than November 25,
2002 in order to be included in the proxy statement and form of proxy
relating to the annual meeting. The 2003 Annual Meeting is currently
scheduled for May 1, 2003. The Company's Board of Directors will consider
stockholder proposals submitted for the meeting. A proposal that does not
supply adequate information about the proposal and the stockholder making
the proposal will be disregarded.
OTHER ITEMS
The Board does not intend to present further items of business to the
meeting and knows of no such items which will or may be presented by
others. However, if any other matter properly comes before the meeting,
the persons named in the enclosed proxy form will vote thereon in such
manner as they may in their discretion determine.
By Order of the Board of Directors,
/s/ Roger Wertheimer
Roger Wertheimer
Vice President--General Counsel and Secretary
Englewood, Colorado
March 25, 2002
22
[MAIL-WELL LOGO]
MAIL-WELL, INC.
8310 S. VALLEY HWY. #400
ENGLEWOOD, CO 80112
VOTE BY INTERNET - www.proxyvote.com
-----------------
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before the
cut-off date or meeting date. Have your proxy card in hand when you access
the web site. You will be prompted to enter your 12-digit Control Number
which is located below to obtain your records and to create an electronic
voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting date.
Have your proxy card in hand when you call. You wll be prompted to enter
your 12-digit Control Number which is located below and then follow the
simple instructions the Vote Voice provides you.
VOTE BY MAIL -
Mark, sign, and date your proxy card and return it in the postage-paid
envelope we have provided or return it to Mail-Well, Inc., c/o ADP,
51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
MWINC KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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MAIL-WELL, INC.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE FOLLOWING
---
ITEMS:
(1) To elect as directors the nominees listed below.
Frank P. Diassi, Frank J. Hevrdejs, Janice C. Peters, Jerome W.
Pickholz, Paul V. Reilly, Alister W. Reynolds, and W. Thomas Stephens
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
/ / / / / /
To withhold authority to vote, mark "For All Except" and write the
nominee's name on the line below.
----------------------------------------------
VOTE ON PROPOSALS
(2) To ratify the selection of Ernst & Young LLP, independent auditors,
as auditors of the Company for the year ending December 31, 2002.
FOR AGAINST ABSTAIN
/ / / / / /
NOTE: In their discretion, the proxy holders are authorized to
vote upon such other business as may properly come before
the meeting or matters incidental to the conduct of the
meeting.
THIS PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF
DIRECTORS, AND MAY BE REVOKED PRIOR TO ITS EXERCISE. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2. THIS PROXY,
---
WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS MADE, IT WILL BE VOTED FOR PROPOSALS 1 AND 2.
---
(Please sign exactly as name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, give full title as such.
If a corporation, please affix corporate seal. If a partnership, please
sign in partnership name by authorized persons. If joint tenants, each
joint tenant should sign.)
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Signature (PLEASE SIGN WITHIN BOX) Date
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Signature (Joint Owners) Date
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REVOCABLE PROXY MAIL-WELL, INC.
SOLICITED BY THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS, MAY 1, 2002
The undersigned holder of common stock of Mail-Well, Inc., a Colorado
corporation (the "Company"), acknowledges receipt of a copy of the Notice of
Annual Meeting of Stockholders dated March 25, 2002, and, revoking any proxy
heretofore given, hereby appoints Roger Wertheimer and Michel P. Salbaing,
and each of them, with full power to each of substitution, as attorneys and
proxies, to appear and vote all shares of common stock of the Company
registered in the name(s) of the undersigned and held by the undersigned of
record as of March 8, 2002, at the Annual Meeting of Stockholders of the
Company to be held at the Company's principal executive offices, 8310 S.
Valley Hwy., Englewood, Colorado, on May 1, 2002, at 8:30 a.m., and at any
postponements and adjournments thereof, upon the following items, as set
forth in the Notice of Annual Meeting, and to vote according to their
discretion on all other matters which may be properly presented for action
at the meeting. All properly executed proxies will be voted as indicated.
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD PROMPTLY BY USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
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APPENDIX
Page 18 of the printed Proxy contains a Performance Graph. The
information contained in the graph appears in the table immediately
following the graph.