EMPLOYMENT AGREEMENT
EXHIBIT 10.2
EMPLOYMENT AGREEMENT, dated as of May 2, 2006 (this “Agreement”) by and among PIONEER
COMPANIES, INC., a Delaware corporation (the “Company”), and XXXXXXX X. XxXXXXXX (the “Executive”).
W I T N E S S E T H:
WHEREAS, the Company desires to engage Executive as Chairman, President and Chief Executive
Officer upon the terms and conditions contained in this Agreement; and
WHEREAS, Executive desires to be so employed by the Company from and after the Effective Date,
as hereinafter defined, upon the terms and conditions contained in this Agreement; and
WHEREAS, the parties hereto desire to enter this Agreement upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties, intending legally to be bound, hereby
agree as follows:
1. Employment. The Company hereby employs Executive, and Executive hereby accepts such
employment, upon the terms and conditions hereinafter set forth.
(a) Position. Executive shall be the Chairman, President and Chief Executive Officer of the
Company. At all times during the term of this Agreement, the Company shall cause Executive to be
nominated as a member of the Company’s Board of Directors (the “Board”).
(b) Duties. Subject to the Board’s authority and oversight, the Executive shall have full
responsibility for all the day-to-day activities of the Company and its affiliated companies and
over all officers and employees of the Company, including, but not limited to, the power to hire
and, subject to contractual commitments, fire employees, and shall have responsibilities
commensurate with those normally performed by a chief executive officer. In such capacity, the
Executive shall report solely and directly to the Board.
(c) Place of Employment. During the term of this Agreement, the Executive shall perform the
services required by this Agreement at the principal executive office of the Company, subject to
travel necessary to appropriately discharge Executive’s responsibilities, recognizing that the
Company has operations, customers and suppliers in locations other than that of its principal
executive office.
(d) Performance of Duties. The Executive agrees to devote his full time and best efforts to
the performance of his duties and to serve the Company well and faithfully in conformity with the
direction of the Board and written policies of the Company.
The foregoing shall not prevent Executive from serving on the boards of directors of other
companies; provided that service on more than one board must have been approved by the Board and in
the case of service on any board only for so long as such service does not interfere or conflict
with the Executive’s discharge of his duties under this Agreement.
2. Term.
(a) Effective Date. This Agreement shall become effective on May 2, 2006 (the “Effective
Date”) and have an initial term of three (3) years after the Effective Date. Beginning on the
first anniversary of the Effective Date, the term of this Agreement shall automatically be extended
from day to day so that it always has a remaining term of (2) years, unless terminated pursuant to
Section 2(b) below.
(b) Termination Date. The term of employment under this Agreement shall terminate upon the
earliest to occur of the following events (the date specified in each such event is referred to as
the “Termination Date”):
(i) the date upon which the Company terminates the Executive’s employment by the Company for
Cause or without Cause (it being understood that the date of termination shall be the date upon
which the Company provides the Executive written notice of such event);
(ii) the date of the Executive’s death;
(iii) the date upon which the Company terminates Executive’s employment by the Company as a
result of Executive’s Disability;
(iv) the date upon which Executive effects a Voluntary Termination (it being understood that
the date of termination shall be the date upon which the Executive provides the Company written
notice of such event); or
(v) upon or after the date of a Change in Control.
(c) Performance of Duties Following Notice of Termination. In the event that either (i) the
Company terminates the Executive’s employment pursuant to Section 2(b)(i) hereof or (ii) Executive
effects a Voluntary Termination pursuant to Section 2(b)(iv), Executive, if requested by the
Company, shall continue to render services hereunder to the Company for a period not to exceed 30
days from the Termination Date, and shall, in such event, be paid the compensation and benefits
hereunder for such period.
3. Compensation and Benefits.
(a) Base Salary.
(i) The Company shall pay the Executive a base salary at the annual rate of $550,000 per year
(“Base Salary”).
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(ii) The Base Salary shall be paid in equal installments, consistent with the manner in which
other senior executives of the Company are paid, and subject to all applicable withholding and
deductions, in accordance with the usual payroll practices of the Company, but not less frequently
than monthly.
(b) Bonuses; Benefits; Long Term Incentives.
(i) Annual Incentive Bonus.
(A) The Executive will have an annual incentive opportunity to earn a performance bonus equal
to sixty percent (60%) of Base Salary (the “Performance Bonus”) in accordance with such terms and
conditions as shall be determined by the Compensation and Governance Committee of the Board, or its
successor (the “Compensation Committee”).
(B) The Executive will have an annual additional incentive opportunity to earn a profit
sharing bonus of up to ten percent (10%) of Base Salary (the “Profit Sharing Bonus”) in accordance
with such terms and conditions as shall be determined by the Compensation Committee.
(ii) In the event the Executive’s employment is terminated (other than if such termination is
by the Company for Cause or pursuant to Section 2(b)(iv) in which case there shall be no
Performance Bonus or Profit Sharing payable), the Performance Bonus and Profit Sharing Bonus, if
any, to which the Executive may be entitled for the calendar year in which the termination occurs
shall each be prorated, such prorated portion being the portion of each such Performance Bonus and
Profit Sharing Bonus corresponding to the period commencing with the beginning of such calendar
year in which such termination occurs and ending on the date of termination.
(c) Benefits. During the term of this Agreement, the Executive shall be entitled to all such
benefits as may, from time to time, be made generally available to employees and senior executives
of the Company, including, but not limited to, pension or other retirement plans, medical plans,
disability plans, incentive plans, stock plans, investment plans, additional compensation plans and
all other group and other insurance plans and benefits to the extent that the Executive is, and
remains, eligible to participate therein and subject to eligibility provisions of such plans then
in effect.
(d) Business Expenses. The Company shall pay, either directly or by reimbursement to the
Executive, all documented expenses incurred by the Executive, including travel and entertainment
expenses, in the performance of his duties upon submission of appropriate evidence thereof and on a
basis consistent with the Company’s then current policies.
(e) Vacation. For each year of this Agreement, the Executive shall be entitled to paid
vacation in accordance with the Company’s standard policy for the Company’s executives.
(f) Long Term Incentives.
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(i) The Executive will participate each year in a long term incentive award of up to 60% of
Base Salary (the “Long Term Incentive Award”), which shall consist of a combination of stock
options and/or performance or restricted stock grants, and the amount of such grants and the
performance metrics determined by the Compensation Committee and subject to such terms and
conditions as shall be determined by the Compensation Committee.
(ii) Fundamental Change Compensation. If during the term there is a fundamental change in the
business or operations of the Company, the Compensation Committee shall evaluate in good faith the
contribution of Executive to such change with a view to conferring upon Executive additional
compensation and/or benefits that in the view of the Compensation Committee are appropriate, having
regard to not only the contributions of Executive but also other compensation and benefits to be
received by Executive.
(g) Relocation Expenses. The Company shall pay, either directly or by reimbursement to the
Executive, all documented expenses associated with the move of Executive’s principal residence from
Dallas, Texas to Houston, Texas in accordance with the Company’s employee relocation policy.
Executive and Company agree that Executive shall complete his relocation within six months of the
Effective Date. In addition, until Executive relocates, the Company shall continue to pay lease
expenses for Executive’s current residence in Houston, Texas for a period not to exceed six months.
4. Compensation Upon Termination of Employment.
(a) Termination Upon Death. If Executive’s employment by the Company is terminated as a
result of the occurrence of Executive’s death pursuant to Section 2(b)(ii), the Company shall be
obligated to pay to the Executive’s estate any unpaid compensation and other benefits expressly
provided under this Agreement through the Termination Date, and any unpaid Performance Bonus or
Profit Sharing Bonus for any prior fiscal period and the term shall thereupon end.
(b) Termination Because of Disability. If Executive’s employment by the Company is terminated
by the Company as a result of the occurrence of Executive’s Disability pursuant to Section
2(b)(iii), the Company shall pay Executive the compensation and other benefits expressly provided
under this Agreement through the Termination Date, and any unpaid Performance Bonus or Profit
Sharing Bonus for any prior fiscal period and the term shall thereupon end.
(c) Termination by the Company for Cause. If Executive’s employment by the Company is
terminated by the Company for Cause pursuant to Section 2(b)(i), Executive shall receive the
compensation and other benefits expressly provided under this Agreement through the Termination
Date and the term shall thereupon end.
(d) Termination by the Company without Cause or Constructive Termination. If Executive’s
employment by the Company is terminated by the Company without Cause pursuant to Section 2(b)(i),
or if Executive’s employment is Constructively Terminated, Executive shall become automatically and
fully vested in any Long Term Incentive
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Awards described in Section 3(f)(i) herein and the Company shall pay Executive (i) the
compensation and other benefits expressly provided under this Agreement through the Termination
Date, (ii) any unpaid Performance Bonus or Profit Sharing Bonus for any prior fiscal period, and
(iii) a lump sum payment equal to two (2) times Base Salary and the term shall thereupon end.
(e) Voluntary Termination by Executive. If the Executive’s employment by the Company is
terminated as a result of a Voluntary Termination by the Executive pursuant to Section 2(b)(iv),
the Company shall pay the Executive the compensation and other benefits expressly provided under
this Agreement through the Termination Date, and any unpaid Performance Bonus or Profit Sharing
Bonus for any prior fiscal year and the term shall thereupon end.
(f) Termination Following Change in Control. If the Executive’s employment by the Company is
terminated for any reason or Constructively Terminated within 18 months following the occurrence of
a Change in Control, Executive shall become automatically and fully vested in any Long Term
Incentive Awards described in Section 3(f)(i) herein and the Company shall pay Executive (i) the
compensation and other benefits expressly provided under this Agreement through the Termination
Date, (ii) any unpaid Performance Bonus or Profit Sharing Bonus for any prior fiscal period, and
(iii) a lump sum payment equal to two (2) times the Base Salary and the term shall thereupon end.
(g) No Mitigation. If the Executive’s employment described herein is terminated, the
Executive shall have no duty to mitigate his damages or seek other employment, and the Company
shall have no right to offset any amounts which are paid to or earned by Executive from other
employment obtained by Executive (including self-employment) against any amounts which are payable
to Executive pursuant to this Agreement.
(h) Continuation of Health and Life Insurance Coverage. At Executive’s own expense, Executive
and Executive’s dependents shall also be entitled to any continuation of health insurance coverage
rights after the Termination Date under any applicable law; provided, however, that in the event of
the termination of Executive’s employment with the Company pursuant to Section 4(d), health and
life insurance coverage shall be provided until the Executive qualifies for Medicare, with the
Executive paying the premium charged by the Company for coverage under its health plan pursuant to
the Consolidated Omnibus Reconciliation Act of 1986, as amended, after the Termination Date.
(i) Effects of Termination; Payments.
(i) Effective as of the Termination Date, the Executive shall be deemed to have resigned from
all offices and directorships then held with the Company and its subsidiaries.
(ii) The covenants and agreements of the Executive contained in Sections 5, 6 and 7 shall
survive termination of the Executive’s employment by the Company and the termination of this
Agreement.
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(iii) All payments due to Executive or his estate pursuant to Section 4 shall be paid as soon
as practicable after the Termination Date, but in no event later than ten (10) days thereafter,
except in the case of the Performance Bonus for any prior fiscal period which shall be paid as soon
as practicable after the end of such fiscal period, but not later than seventy-five (75) days
thereafter, and except for benefits provided by the Company pursuant to Section 4(h).
5. Confidentiality and Non-Disclosure. The Executive recognizes and acknowledges that he will
have access to certain information concerning the Company that is confidential and proprietary and
constitutes valuable and unique property of the Company. The Executive agrees that he will not at
any time disclose to others, use, copy or permit to be copied, except pursuant to his duties on
behalf of the Company or its successors, assigns or nominees, any secret or confidential
information of the Company (whether or not developed by the Executive) without the prior written
consent of the Board. The term “secret or confidential information of the Company” (sometimes
referred to herein as “Confidential Information”) shall include, without limitation, the Company’s
plans, strategies, potential acquisitions, costs, prices, systems for buying, selling, and/or
trading relating to the manufacture and market chlorine, caustic soda and related products, client
lists, pricing policies, financial information, the names of and pertinent information regarding
suppliers, computer programs, policy or procedure manuals, training and recruiting procedures,
accounting procedures, the status and content of the Company’s contracts with its suppliers or
clients, or servicing methods and techniques at any time used, developed, or investigated by the
Company, before or during the Executive’s tenure of employment to the extent any of the foregoing
are (i) not generally available to the public and (ii) maintained as confidential by the Company.
The Executive further agrees to maintain in confidence any confidential information of third
parties received as a result of the Executive’s employment and duties with the Company. Upon
termination, the Executive will deliver to the Company, as determined appropriate by the Company,
all correspondence, memoranda, notes, records, client lists, computer systems, programs, or other
documents and all copies thereof made, composed or received by the Executive, solely or jointly
with others, and which are in his possession, custody or control at such date and which are related
in any manner to the past, present or anticipated business of the Company. The provisions of this
Section 5 are in addition to any other agreements which Executive now has or enters into in the
future regarding the Company’s secret or confidential information. The provisions of this Section
5 shall survive the termination of this Agreement.
6. Non-Solicitation. During the term of this Agreement and for a period of two (2) years
following the Executive’s termination of employment, the Executive agrees that he will not solicit,
raid, entice, encourage or induce any person who at the time of his termination of employment is an
employee of the Company, or any of its parents, subsidiaries or affiliates or to become employed by
any person, firm or corporation or to discontinue their employment with the Company. The Executive
further agrees, for the two (2) year period following his termination of employment, to refrain
from approaching any such employee for such purpose or authorizing or knowingly approving such
actions by any other person, firm or corporation or assisting any such person, firm or corporation
in taking such action. The provisions of this Section 6 are in addition to any other agreements
which Executive now has or enters into in the future regarding the Executive’s relationship with
Company employees following Executive’s
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termination of employment. The provisions of this Section 6 shall survive the termination of
this Agreement.
7. Enforcement. It is understood and agreed by the parties that no amount of money would
adequately compensate the Company for damages which the parties acknowledge would be suffered as a
result of a violation by the Executive of the covenants contained in Sections 5 and 6 above, and
that, therefore, the Company shall be entitled, upon application to a court of competent
jurisdiction, to obtain injunctive relief (without the need to post bond) to enforce the provisions
of Sections 5 and 6, which injunctive relief shall be in addition to any other rights or remedies
available to the Company. The provisions of this Section 7 shall survive the termination of this
Agreement.
8. Certain Defined Terms. For purposes of this Agreement the following terms and phrases
shall have the following meanings:
“Cause” shall mean: (i) the Executive shall have committed an act of fraud, embezzlement or
misappropriation against the Company or committed a material breach of fiduciary duty owed to the
Company; or (ii) the Executive shall have been convicted by a court of competent jurisdiction (or
entered a plea of guilty or nolo contendere) of any felony or crime involving moral turpitude or
fraud; or (iii) the Executive shall have engaged in willful misconduct, material breach of his
obligations under this Agreement or the refusal or failure to perform his duties as required by
this Agreement (other than as a result of incapacity due to physical or mental illness) which
violations are not remedied within 15 days after receipt of written notice from the Company
specifying such violations.
“Change in Control” means (in accordance with Internal Revenue Code Section 409A):
(i) Any one person, or more than one person acting as a group (as defined in U.S. Treasury
Notice 2005-1) acquires ownership of stock of the Company that, together with stock held by such
person or group, constitutes more than 50 percent of the total fair market value or total voting
power of the stock of the Company. An increase in the percentage of stock owned by any one person,
or persons acting as a group, as a result of a transaction in which the Company acquires its stock
in exchange for property will be treated as an acquisition of stock for purposes of this section.
(ii) Any one person, or more than one person acting as a group acquires, (or has acquired
during the 12-month period ending on the date of the most recent acquisition by such person or
persons) ownership of stock of the Company possessing 35 percent or more of the total voting power
of the stock of the Company; or
(iii) A majority of members of the Board is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of the Board prior to
the date of the appointment or election.
(iv) Any one person has acquired, or more than one person acting as a group acquires (or
during the 12-month period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal
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to or more than 40 percent of the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market
value means the value of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets. A transfer of assets by
a Company is not treated as a change in the ownership of such assets if the assets are transferred
to -
(a) A shareholder of the Company (immediately before the asset transfer) in exchange for or
with respect to its stock;
(b) An entity, 50 percent or more of the total value or voting power of which is owned,
directly or indirectly, by the Company;
(c) A person, or more than one person acting as a group, that owns, directly or indirectly, 50
percent or more of the total value or voting power of all the outstanding stock of the Company; or
(d) An entity, at least 50 percent of the total value or voting power of which is owned,
directly or indirectly, by a person described in paragraph (c).
“Company” as used in this Agreement, the term “the Company” includes the Company, any assignee
or other successor of interest in the Company, and any parent, subsidiary, or other corporation or
partnership under common ownership or control with the Company.
“Constructive Termination” means a material diminution of the title or management
responsibilities of the Executive or the diminution of Executive’s Base Salary, annual incentive
opportunity or long term incentive opportunity which is not remedied within 30 days after written
notice thereof is given by the Executive.
“Disability” means (i) an inability by the Executive to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, or (ii) the Executive’s medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, which impairment is the reason for Executive’s receipt of income replacement benefits for a
period of not less than 3 months under an accident and health plan covering employees of the
Company.
“Fair Market Value” means, as of a particular date, with respect to any security, the fair
value thereof determined by the Board in good faith taking into account all relevant factors,
including recently reported trades of such security.
“Voluntary Termination” shall mean the voluntary termination by Executive of Executive’s
employment from the Company by voluntary resignation or any other means (other than (i) death or
Disability or (ii) simultaneous with or following termination for Cause or an event which if known
to the Company at the time of such voluntary termination by Executive would constitute Cause).
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9. Miscellaneous Provisions.
(a) Arbitration. Any controversy or claim arising out of or relating to this Agreement,
including the making, interpretation or breach thereof, or the employment or termination of
employment of Executive shall be resolved by expedited arbitration in the City of the principal
offices of the Company in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof, and any party to the arbitration may, if such party so
elects, institute proceedings in any court having jurisdiction for the specific performance of any
such award.
The powers of the arbitrator(s) shall include, but not be limited to, the awarding of injunctive
relief. Notwithstanding any other provision of this Section 9(a) to the contrary, the parties
agree that any monetary award arising out of a claim or controversy relating to this Agreement
which may be awarded by the arbitrator(s) or any court having jurisdiction thereof shall be limited
to the prevailing party’s actual damages and shall not include any monetary awards for punitive,
special, consequential, exemplary, indirect or other damages of any kind; provided, however, that
(i) the arbitrator(s) shall include in any award in which Executive is the prevailing party the
amount of his reasonable attorneys’ fees and expenses and all other reasonable costs and expenses
of the arbitration; and (ii) in the event the arbitrator(s) do not rule in favor of Executive in
respect to all of the material claims alleged by Executive, the arbitrator(s) may include in the
award in favor of Executive, if any, the amount of Executive’s reasonable costs and expenses of the
arbitration, if any, as the arbitrator(s) deem just and equitable under the circumstances. Except
as provided above, each party shall bear his or its own attorneys’ fees and expenses, and the
parties shall bear equally all other costs and expenses of the arbitration. The provisions of this
Section 9 shall survive the termination of this Agreement.
(b) Entire Agreement. This Agreement sets forth the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all prior agreements,
arrangements, and understandings between the parties with respect to the subject matter hereof.
(c) Modification. This Agreement may be amended, modified, superseded, canceled, renewed or
extended, and the terms or covenants hereof may be waived, only by a written instrument executed by
both of the parties or in the case of a waiver, by the party waiving compliance.
(d) Waiver. The failure of either party at any time or times to require performance of any
provision hereof in no manner shall affect the right at a later time to enforce the same. No
waiver by either party of a breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further
or continuing waiver of any such breach or waiver of any other term or covenant contained in this
Agreement.
(e) Notices. Any and all notices or other communications provided for herein shall be given
in writing and shall be hand-delivered or sent by United States mail, postage prepaid, registered
or certified, return receipt requested, addressed as follows:
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If to the Company:
Pioneer Companies, Inc.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Board of Directors
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Board of Directors
With a copy to:
Xxxxx Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxxx
If to Executive:
Xxxxxxx X. XxXxxxxx
4899 Montrose, Xxxx 0000
Xxxxxxx, Xxxxx 00000
4899 Montrose, Xxxx 0000
Xxxxxxx, Xxxxx 00000
provided, however, that any of the parties may, from time to time, give notice to the other parties
of some other address to which notices or other communications to such party shall be sent, in
which event, notices or other communications to such party shall be sent to such address. Any
notice or other communication shall be deemed to have been given and received hereunder as of the
date the same is actually hand delivered or, if mailed, three days after deposit in the United
States mail, postage prepaid, registered or certified, return receipt requested.
(f) Governing Law. This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware applicable to contracts made and to be performed wholly within such
state.
(g) Assignability. This Agreement, and the Executive’s rights and obligations hereunder, may
not be assigned by the Executive. The Company may assign its rights, together with its obligations
hereunder, only to a successor by merger or by the purchase of all or substantially all of the
assets and business of the Company and such rights and obligations shall inure to, and be binding
upon, any such successor.
(h) Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of
the parties and their respective legal representatives, heirs, permitted successors and permitted
assigns.
(i) Captions. Headings and titles in this Agreement are for convenience of reference only and
shall not control the construction or interpretation of any provisions hereof. The words “herein,”
“hereof,” “hereunder,” and the words of similar import, when used anywhere in this Agreement, refer
to this Agreement as a whole and not merely to a
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subdivision in which such words appear, unless the context otherwise requires. The singular
shall include the plural unless the context otherwise requires.
(j) Indemnification. The Company agrees that the Executive shall be entitled to
indemnification and payment or reimbursement of expenses (including attorneys’ fees and expenses)
to the fullest extent provided in the Company’s Certificate of Incorporation, as in effect on the
date hereof and as it may be hereafter amended (but in no event on terms less favorable to the
Executive than those in effect on the date hereof), for all damages, losses and expenses incurred
by the Executive in connection with any claim, action, suit or proceeding which arises from the
Executive’s services and/or activities as an officer and/or employee of the Company or any
affiliate thereof. This Section shall survive any termination of the term of this Agreement.
(k) Separability. Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such validity
or unenforceability without rendering invalid or unenforceable the
(l) Remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
10. Section 409A. Notwithstanding any provision of the Agreement to the contrary, the
following provisions shall apply for purposes of complying with Section 409A of the Internal
Revenue Code and applicable Treasury authorities (“Section 409A”):
(a) If Executive is a “specified employee,” as such term is defined in Section 409A and
determined as described below in this Section 10(a), any payments or benefits payable or provided
as a result of Executive’s termination of employment that would otherwise be paid or provided
within six months and one day of such termination (other than death or Disability) shall instead be
paid or provided on the earlier of (i) the date that is six months and two days after Executive’s
termination, (ii) the date of Executive’s death, or (iii) the date that otherwise complies with the
requirements of Section 409A. This Section 10(a) shall be applied by accumulating all payments or
benefits that otherwise would have been paid or provided within six months of Executive’s
termination and paying or providing such accumulated amounts at the earliest date which complies
with the requirements of Section 409A.
(b) If any provision of the Agreement would result in the imposition of an applicable tax
under Section 409A, Executive and the Company agree that such provision will be reformed to avoid
imposition of the applicable tax in a manner that will result in the least adverse economic impact
on the Executive.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above
written.
| THE COMPANY: | ||||||
| PIONEER COMPANIES, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxxxxxx | |||||
| Title: | Chairman of the Compensation Committee | |||||
| EXECUTIVE: | ||||||
| /s/ Xxxxxxx X. XxXxxxxx | ||||||
| Xxxxxxx X. XxXxxxxx | ||||||
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