SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
/X/ Annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934 [no fee required, effective October 7, 1996] for the fiscal year
ending December 30, 2002.
OR
/_/ Transition report pursuant to section 15(d) of the Securities Exchange
Act of 1934 [no fee required]
Commission file number 1-12551
A. Full title of the Plan:
Mail-Well Corporation 401(k) Savings and Retirement Plan
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principle executive office:
Mail-Well, Inc.
8310 South Valley Highway
Suite 400
Englewood, Colorado 80112
Mail-Well Corporation 401(k) Savings and Retirement Plan
Financial Statements
and Supplemental Schedule
Year ended December 30, 2002
CONTENTS
Report of Independent Auditors.......................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits......................2
Statement of Changes in Net Assets Available for Benefits............3
Notes to Financial Statements........................................4
Supplemental Schedule
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)........9
Report of Independent Auditors
The Trustees and Participants of
Mail-Well Corporation 401(k)
Savings and Retirement Plan
We have audited the accompanying statements of net assets available for
benefits of the Mail-Well Corporation 401(k) Savings and Retirement Plan as
of December 30, 2002 and 2001, and the related statement of changes in net
assets available for benefits for the year ended December 30, 2002. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan
at December 30, 2002 and 2001, and the changes in its net assets available
for benefits for the year ended December 30, 2002, in conformity with
accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedule of assets (held at end of year) at December 30, 2002 is presented
for purposes of additional analysis and is not a required part of the
financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. This supplemental
schedule is the responsibility of the Plan's management. The supplemental
schedule has been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Denver, Colorado
June 20, 2003
1
Mail-Well Corporation 401(k) Savings and Retirement Plan
Statements of Net Assets Available for Benefits
DECEMBER 30,
2002 2001
----------------------------------------
Investments, at fair value:
Mutual funds $110,811,715 $146,957,134
Common collective trusts 61,550,779 66,186,162
Mail-Well common stock 7,462,118 7,066,964
Participant loans 6,587,780 7,769,579
----------------------------------------
Total investments 186,412,392 227,979,839
Receivables:
Employee contributions 520,145 1,031,537
Employer contributions 294,999 368,362
----------------------------------------
Total receivables 815,144 1,399,899
----------------------------------------
Net assets available for benefits $187,227,536 $229,379,738
========================================
See accompanying notes.
2
Mail-Well Corporation 401(k) Savings and Retirement Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 30, 2002
Investment income (loss):
Net depreciation in fair value of investments $ (31,809,817)
Investment income 5,347,309
Interest on loans to participants 527,455
--------------------
Net investment loss (25,935,053)
Contributions:
Employee contributions 18,993,262
Employer contributions 10,988,684
Adjustments and forfeitures (322,393)
--------------------
Total contributions 29,659,553
Asset transfers to other plans (13,107,401)
Payment of benefits to participants (32,769,301)
--------------------
Decrease in net assets available for benefits (42,152,202)
Net assets available for benefits, beginning of year 229,379,738
--------------------
Net assets available for benefits, end of year $187,227,536
====================
See accompanying notes.
3
Mail-Well Corporation 401(k) Savings and Retirement Plan
Notes to Financial Statements
December 30, 2002
1. DESCRIPTION OF THE PLAN
The following description of the Mail-Well Corporation 401(k) Savings and
Retirement Plan (the "Plan") provides only general information. Participants
should refer to the Plan document for a complete description of the Plan's
provisions.
GENERAL
The Plan was adopted effective February 24, 1994. The Plan is a salary
deferral plan of Mail-Well Corporation (the "Company"). Effective December
1, 1999, the Plan was amended and restated to only include full-time
salaried and nonunion hourly employees. The union employees began a new plan
effective December 1, 1999.
The full-time salaried and nonunion hourly employees become eligible the
first day of the month following 30 days of service with the Company.
CONTRIBUTIONS
Each year, participants may contribute up to 50% of pretax annual
compensation, as defined in the Plan document and as limited by the Internal
Revenue Service. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans. The Company contributes 50% of the first 6% of base compensation that
a participant contributes to the Plan. In 2002, the Company made a
discretionary contribution of $3,657,173 to the Plan. No discretionary
contributions were made to the Plan in 2001.
ASSET TRANSFERS TO OTHER PLANS
During 2002, selected employee assets were transferred out of the Plan as a
result of the Company selling certain operating locations.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions
and withdrawals, as applicable, and allocations of Company contributions and
Plan earnings, and is charged with an allocation of administrative expenses.
4
Mail-Well Corporation 401(k) Savings and Retirement Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
A participant is 100% vested in their contributions at all times. Vesting in
employer contributions occurs 20% for each year of service. Upon reaching
five years of service, all employer contributions are fully vested. Years of
service attributable to predecessor companies prior to such individual being
employed by the Company are recognized in full for vesting purposes. All
employer contributions become fully vested upon retirement, disability, or
death of the participant.
INVESTMENT OPTIONS
Upon enrollment in the Plan, participants may elect to invest their
contributions in a variety of investment options offered by the Plan.
LOANS TO PARTICIPANTS
Participants may borrow from the Plan a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50% of their vested interest in the Plan.
Such loans bear interest at the prime rate (as published in The Wall Street
Journal) plus 1% and are collateralized by the participants' nonforfeitable
interest in the Plan. Loans must be repaid within five years unless they are
for the purchase of a principal residence, in which event they may be repaid
over a period up to a maximum of 10 years.
PAYMENT OF BENEFITS
Upon retirement or termination of service, participants may roll their
account balance into another qualified retirement savings account, withdraw
their vested account balance less applicable taxes in a lump-sum payment, or
leave their account balance with the Company until normal retirement age if
their account balance is greater than $5,000. The Plan provides for advance
distribution for hardship if certain conditions are met.
EXPENSES
Certain of the Plan's administrative expenses are paid by the Company. All
other administrative expenses are paid by the Plan and allocated to
participant accounts. Participants pay fees for loans and withdrawals.
5
Mail-Well Corporation 401(k) Savings and Retirement Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
FORFEITURES
Upon termination by a participant, employer matching contributions that have
not vested are used to offset administrative expenses. Any forfeitures
remaining shall then be used to reduce employer contributions for the Plan
year immediately following the Plan year in which the forfeiture occurs. In
2002, of the $291,239 in forfeitures, $27,914 was used to fund
administrative expenses.
PLAN TERMINATION
Although it has not expressed an intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of the Employee Retirement Income
Security Act of 1974. In the event of Plan termination, participants will
become 100% vested in their accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Plan recognizes income, expenses, and other changes in net assets
available for benefits using the accrual method of accounting.
The Plan's investments are recorded in the financial statements at fair
value based on published market value except for participant loans, which
are stated at face value, which approximates fair value. Unrealized and
realized appreciation (depreciation) of investments during the year is
included in net depreciation in the fair value of investments. Realized
gains and losses on sales of investments are determined on the average-cost
basis.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
3. FEDERAL INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue
Service dated October 15, 1996, stating that the Plan is qualified under
Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the
related trust is exempt from taxation. Subsequent to this issuance of the
determination letter, the Plan was amended. Once
6
Mail-Well Corporation 401(k) Savings and Retirement Plan
Notes to Financial Statements (continued)
3. FEDERAL INCOME TAX STATUS (CONTINUED)
qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan administrator believe that the Plan is
being operated in compliance with the applicable requirements of the Code
and, therefore, believe that the Plan is qualified and the related trust is
tax-exempt.
4. INVESTMENTS
The Plan's investments (including investments purchased, sold, and held
during the year) depreciated in fair value during the year ended December
30, 2002 as determined by quoted market prices as follows:
Mutual funds $(23,368,474)
Common collective trusts (7,048,062)
Common stock (1,393,281)
--------------------
$(31,809,817)
====================
The fair values of individual investments that represent 5% or more of the
Plan's net assets at December 30, 2002 and 2001 are as follows:
2002 2001
----------------------------------------
Mutual funds:
PIMCO Total Return $ 26,404,631 $ 25,422,148
Putnam International Growth Fund 10,060,325 13,786,416
Putnam Investors Fund 26,735,130 45,480,783
The George Putnam Fund of Boston 19,096,481 23,168,623
The Putnam Fund for Growth & Income 10,471,862 14,743,386
Putnam S&P 500 Index Fund 20,405,141 28,459,702
Putnam Stable Value Fund 41,145,638 37,726,460
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The financial statements are prepared on the accrual basis of accounting and
the Form 5500 is prepared on the cash basis of accounting by the Plan
trustee.
7
Mail-Well Corporation 401(k) Savings and Retirement Plan
Notes to Financial Statements (continued)
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED)
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 as of December 30, 2002 and 2001:
2002 2001
----------------------------------------
Net assets available for benefits per the financial
statements $187,227,536 $229,379,738
Employer's contribution receivable (294,999) (368,362)
Participants' contributions receivable (520,145) (1,031,537)
----------------------------------------
Net assets available for benefits per the Form 5500 $186,412,392 $227,979,839
========================================
The following is a reconciliation of contributions to participant accounts
per the financial statements to the Form 5500 for the years ended December
30, 2002 and 2001:
EMPLOYER EMPLOYEE
CONTRIBUTIONS CONTRIBUTIONS
----------------------------------------
Contributions made to participant accounts
per the financial statements $10,988,684 $18,993,262
Contribution receivable not
recorded on the Form 5500 at
December 30, 2001 368,362 1,031,537
Contribution receivable not
recorded on the Form 5500 at
December 30, 2002 (294,999) (520,145)
----------------------------------------
Contributions made to participant accounts
per the Form 5500 $11,062,047 $19,504,654
========================================
8
Mail-Well Corporation 401(k) Savings and Retirement Plan
EIN: 84-1250534--Plan: No. 001
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
December 30, 2002
NUMBER CURRENT
IDENTITY OF ISSUE/DESCRIPTION OF SHARES VALUE
------------------------------------------------------------------------------------------------------------
Mutual Funds:
PIMCO Total Return 2,474,661 $ 26,404,631
Putnam International Growth Fund* 614,183 10,060,325
Putnam Investors Fund* 3,003,947 26,735,130
The George Putnam Fund of Boston* 1,289,432 19,096,481
The Putnam Fund for Growth & Income* 741,108 10,471,862
Algers Fund 595,863 6,500,855
Growth Fund Putnam Asset Allocation* 501,855 3,984,732
Balanced Fund Putnam Asset Allocation* 763,414 6,374,503
Conservative Fund Putnam Asset Allocation* 149,205 1,183,196
Putnam S&P 500 Index Fund* 943,809 20,405,141
Putnam Stable Value Fund* 41,145,637 41,145,638
Mail-Well Common Stock* 2,870,045 7,462,118
Participant loans, 7.0%-10.5%* 6,587,780
-------------------
$186,412,392
===================
*Investments with a party-in-interest.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
DATE: June 30, 2003 Mail-Well Corporation 401(k) Savings and Retirement
Plan
/s/ Michel P. Salbaing
Michel P. Salbaing
Sr. Vice President - Chief Financial Officer