<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 1998.
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PIONEER COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 06-1215192
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
700 LOUISIANA
SUITE 4300
HOUSTON, TEXAS 77002
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
PIONEER COMPANIES, INC. 1995 STOCK INCENTIVE PLAN,
PIONEER COMPANIES, INC. 1998 STOCK PLAN,
NON-QUALIFIED STOCK OPTION AGREEMENT FOR MICHAEL J. FERRIS AND
NON-QUALIFIED STOCK OPTION AGREEMENT FOR ANDREW M. BURSKY
(FULL TITLE OF THE PLANS)
KENT R. STEPHENSON COPY TO:
VICE PRESIDENT, GENERAL COUNSEL JAMES M. PRINCE, ESQ.
AND SECRETARY ANDREWS & KURTH L.L.P.
700 LOUISIANA, SUITE 4300 600 TRAVIS, SUITE 4200,
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
(713) 570-3200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (2) PRICE (2) FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value
$0.01 per share 500,000 Shares(3) $ 11.125 $5,562,500 $1,640.94
858,675 Shares(4) 11.125 9,552,760 2,818.07
204,637 Shares(5) 4.67 955,655 281.92
26,750 Shares(5) 5.61 150,068 44.27
26,750 Shares(5) 6.54 174,945 51.61
26,750 Shares(5) 7.48 200,090 59.03
Total: 107,000 Shares(6) 5.20 556,400 164.14
1,750,562 Shares $17,152,418 $ 5,059.98
==============================================================================================================
</TABLE>
(1) The number of Shares of Class A Common Stock registered herein is subject
to adjustment to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h) under the Securities Act, based on
(a) $11.125 per share (the average of the high and low prices of the
Registrant's Class A Common Stock on the Nasdaq National Market on April
13, 1998 as reported in the Wall Street Journal on April 14, 1998) for
1,358,675 break out shares that may be acquired upon exercise of options
under the Pioneer Companies, Inc. Stock Incentive Plan and the Pioneer
Companies, Inc. 1998 Stock Plan; (b) an exercise price of $4.67 per share
for 204,637 shares that may be acquired upon exercise of options under the
Non-qualified Stock Option Agreement for Michael J. Ferris (the "Ferris
Option"); (c) $5.61 per share for 26,750 shares that may be acquired upon
exercise of options under the Ferris Option; (d) an exercise price of $6.54
per share for 26,750 shares that may be acquired upon exercise of options
under the Ferris Option (e) an exercise price of $7.48 per share for 26,750
shares that may be acquired upon exercise of options under the Ferris
Option and (f) an exercise price of $5.20 per share for 107,000 shares that
may be acquired upon exercise of options under the Non-Qualified Stock
Option Agreement for Andrew M. Bursky (the "Bursky Option"). The number of
shares subject to purchase and the exercise price per share in (b) through
(f) above have been adjusted to reflect the 7% stock dividend paid to
holders of record of the Registrants Class A Common Stock on December 1,
1997.
(3) Represents shares subject to the Pioneer Companies, Inc. 1998 Stock Plan.
(4) Represents shares subject to the Pioneer Companies, Inc. 1995 Stock
Incentive Plan.
(5) Represents shares subject to the Ferris Option.
(6) Represents shares subject to the Bursky Option.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8
will be sent or given to participating employees as specified by Rule 428(b)(1)
of the Securities Act of 1933, as amended (the "Securities Act"). These
documents and the documents incorporated herein by reference pursuant to Item 3
of Part II of this Registration Statement, taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
Pioneer Companies, Inc. (the "Company") incorporates herein by reference
the following documents as of their respective dates as filed with the
Securities and Exchange Commission (the "Commission"):
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997.
(b) The description of the Company's Class A common
stock, par value $0.01 per share, contained in the
Company's Registration Statement on Form S-1 (No.
033-37460), filed with the Commission on October 29,
1990.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated herein by reference shall be deemed
to be modified or superseded for purposes of the Registration Statement and the
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or the
Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since the class of securities to be offered is
registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests
1
<PAGE> 3
of the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall
have been made to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; that indemnification provided
for by Section 145 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of such person's heirs,
executors and administrators; and empowers the corporation to purchase and
maintain insurance on behalf of a director or officer of the corporation
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such whether or not the corporation
would have the power to indemnify him against such liabilities under Section
145.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal benefit.
Article Seventh of the Company's Third Restated Certificate of
Incorporation states that:
No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by
such director as a director. Notwithstanding the foregoing sentence,
a director shall be liable to the extent provided by applicable law
(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to section 174 of the GCL or (iv) for
any transaction from which the director derived an improper personal
benefit.
In addition, Section 8 of the Company's Bylaws further provide that
the Company shall indemnify its officers, directors and employees to the
fullest extent permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement.
2
<PAGE> 4
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1 Third Restated Certificate of Incorporation of Pioneer Companies, Inc. (filed as Exhibit 3.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1993, and incorporated herein by
reference).
4.2 Amendment to Third Restated Certificate of Incorporation of Pioneer Companies, Inc. (filed as Exhibit 3.1(b)
to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 and incorporated
herein by reference).
4.3 Bylaws of Pioneer Companies, Inc. (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1988 and incorporated herein by reference).
4.4* Pioneer Companies, Inc. 1995 Stock Incentive Plan.
4.5* Pioneer Companies, Inc. 1998 Stock Plan.
4.6* Non-Qualified Stock Option Agreement for Michael J. Ferris dated January 4, 1997.
4.7* Non-Qualified Stock Option Agreement for Michael J. Ferris dated January 4, 1998.
4.8* Non-Qualified Stock Option Agreement for Andrew M. Bursky dated May 15, 1997.
5.1* Opinion of Andrews & Kurth L.L.P. as to the legality of the shares being registered.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ernst & Young LLP.
23.2 Consent of Andrews & Kurth L.L.P. (included in the opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 Power of Attorney (set forth on the signature page contained in Part II of this Registration Statement).
</TABLE>
- ----------
*filed herewith
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the
3
<PAGE> 5
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement:
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S- 3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item 6 of
this Registration Statement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1993 and will be
governed by the final adjudication of such issue.
4
<PAGE> 6
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act, Pioneer Companies,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas on April 17, 1998.
PIONEER COMPANIES, INC.
(Registrant)
By: /s/ KENT R. STEPHENSON
-------------------------------------
Kent R. Stephenson
Vice President, General
Counsel and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of PIONEER COMPANIES, INC. (the "Company") hereby constitutes and
appoints Michael J. Ferris, and Philip J. Ablove, or either of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute and file
this Registration Statement under the Securities Act of 1933, as amended, and
any or all amendments (including, without limitation, post-effective
amendments), with all exhibits and any and all documents required to be filed
with respect thereto, with the Securities and Exchange Commission or any
regulatory authority, granting unto such attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might
or could do, if personally present, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL J. FERRIS President and Chief Executive April 17, 1998
--------------------------------------------------
(Michael J. Ferris) Officer and Director
/s/ PHILLIP J. ABLOVE Vice President and Chief April 17, 1998
--------------------------------------------------
(Philip J. Ablove) Financial Officer and Director
(Principal Financial Officer)
/s/ JOHN R. BEAVER Controller (Principal Accounting April 17, 1998
--------------------------------------------------
(John R. Beaver) Officer)
/s/ WILLIAM R. BERKLEY Chairman of the Board April 17, 1998
--------------------------------------------------
(William R. Berkley)
</TABLE>
5
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ ANDREW M. BURSKY Director April 17, 1998
--------------------------------------------------
(Andrew M. Bursky)
/s/ DONALD J. DONAHUE Director April 17, 1998
--------------------------------------------------
(Donald J. Donahue)
/s/ RICHARD C. KELLOGG, JR. Director April 17, 1998
--------------------------------------------------
(Richard C. Kellogg, Jr.)
/s/ JACK H. NUSBAUM Director April 17, 1998
--------------------------------------------------
(Jack H. Nusbaum)
/s/ THOMAS H. SCHNITZIUS Director April 17, 1998
--------------------------------------------------
(Thomas H. Schnitzius)
</TABLE>
6
<PAGE> 8
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1 Third Restated Certificate of Incorporation of Pioneer Companies, Inc. (filed as Exhibit 3.1 to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1993, and incorporated herein by
reference).
4.2 Amendment to Third Restated Certificate of Incorporation of Pioneer Companies, Inc. (filed as Exhibit 3.1(b)
to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 and incorporated
herein by reference).
4.3 Bylaws of Pioneer Companies, Inc. (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1988 and incorporated herein by reference).
4.4* Pioneer Companies, Inc. 1995 Stock Incentive Plan.
4.5* Pioneer Companies, Inc. 1998 Stock Plan.
4.6* Non-Qualified Stock Option Agreement for Michael J. Ferris dated January 4, 1997.
4.7* Non-Qualified Stock Option Agreement for Michael J. Ferris dated January 4, 1998.
4.8* Non-Qualified Stock Option Agreement for Andrew M. Bursky dated May 15, 1997.
5.1* Opinion of Andrews & Kurth L.L.P. as to the legality of the shares being registered.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ernst & Young LLP.
23.2 Consent of Andrews & Kurth L.L.P. (included in the opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 Power of Attorney (set forth on the signature page contained in Part II of this Registration Statement).
</TABLE>
- ----------
*filed herewith
7
<PAGE> 1
EXHIBIT 4.4
INCENTIVE
STOCK OPTION AGREEMENT
UNDER THE
PIONEER COMPANIES, INC.
1995 STOCK INCENTIVE PLAN
THIS AGREEMENT, made as of the 4th day of January, 1997, by
and between Pioneer Companies, Inc., a Delaware corporation (the "Company") and
Michael J. Ferris (the "Optionee").
W I T N E S S E T H :
WHEREAS, the Optionee is now employed by the Company or a
"parent" or "subsidiary" of the Company (such terms, as used herein, shall be
as defined in 424(e) and (f) of the Internal Revenue Code of 1986, as amended
(the "Code")), and the Company desires to have him remain in such employment
and to afford him the opportunity to acquire, or enlarge, his ownership of the
Company's Class A Common Stock, par value $.01 per share ("Stock"), so that he
may have a direct proprietary interest in the Company's success;
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein and in the Company's 1995 Stock Incentive Plan (the "Plan"), the
Company hereby grants to the Optionee, during the period commencing on the date
of this Agreement and ending on January 4, 2007 (the "Termination Date"), the
right and option (the right to purchase any one share of Stock hereunder being
an "Option") to purchase from the Company, at a price of $5.00 per share, an
aggregate of 133,750 shares of Stock. The Options granted hereunder shall be
"incentive stock options" within the meaning of Section 422 of the Code.
2. Limitations on Exercise of Option. (a) Subject to the
terms and conditions set forth herein, the Optionee may exercise 20,000 of the
Options on January 4, 1998, with none being exercisable prior to such date, an
additional 20,000 on January 4, 1999, an additional 20,000 on January 4, 2000,
an additional 20,000 on January 4, 2001, an additional 20,000 on January 4,
2002, an additional 20,000 on January 4, 2003, and an additional 13,750 on
January 4, 2004.
<PAGE> 2
(b) Notwithstanding the limitations set forth in paragraph
2(a), 100% of the Options shall become immediately exercisable (i) in the event
of a change in control of the Company, or (ii) if Optionee's employment with
the Company or a subsidiary thereof, as the case may be, is terminated by the
Company or a subsidiary thereof, as the case may be, without Cause (as defined
in paragraph 3 hereof). For purposes of the preceding sentence, a "change of
control" shall, unless the Board of Directors of the Company (the "Board")
otherwise directs by resolution adopted prior thereto, be deemed to occur if
(i) any "person" (as that term is used in Sections 13 and 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act")) other than William R.
Berkley or his "affiliates" (as that term is defined in Rule 144 promulgated
pursuant to the Securities Act of 1933 (the "Securities Act")) is or becomes
the beneficial owner (as that term is used in Section 13(d) of the Exchange
Act), directly or indirectly, of 30% or more of either the outstanding shares
of Common Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute at least a majority thereof,
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least three-
quarters of the directors then still in office who were directors at the
beginning of the period, or (iii) the Company undergoes a liquidation or
dissolution or a sale of all or substantially all of the assets of the Company.
Any merger, consolidation or corporate reorganization in which the owners of
the combined voting power of the Company's then outstanding securities entitled
to vote generally prior to said combination, own 50% or more of the resulting
entity's outstanding securities entitled to vote generally shall not, by
itself, be considered a change in control.
3. Termination of Employment. (a) If the Optionee shall
cease to be employed by reason of Normal Termination, the Options shall remain
exercisable until the earlier of the Termination Date or the date that is three
months after the date of such Normal Termination to the extent the Options were
exercisable at the time of such Normal Termination. For purposes of this
Agreement, the term "Normal Termination" shall mean termination of Optionee's
employment with the Company or a subsidiary thereof, as the case may be, (i)
because of retirement pursuant to the qualified retirement plan of the Company
or a parent or subsidiary thereof, as the case may be; (ii) on account of
Disability; (iii) with the written approval of the committee administering the
Plan in accordance therewith (the "Committee"); or (iv) by the Company or a
parent or subsidiary thereof, as the case may be, without Cause. For purposes
of the preceding sentence, (I) "Disability" shall mean disability as defined in
the Company's or a subsidiary's or parent's, as the case may be, long term
disability plan then in effect, or, in the absence of such plan, the complete
and permanent inability by reason of illness or accident to perform the duties
of the occupation at which the Optionee was employed when such disability
commenced or, if the Optionee was retired when such disability commenced, the
inability to engage in any substantial gainful activity, as determined by the
Committee based upon medical evidence acceptable to it, and (II) "Cause" shall
mean the Company or a parent or subsidiary thereof, as the case may be, having
cause to terminate an Optionee's
<PAGE> 3
employment under any existing employment agreement between the Optionee and the
Company or such parent or subsidiary or, in the absence of such an employment
agreement, upon (A) the determination by the Committee that the Optionee has
ceased to perform his duties to the Company or a parent or subsidiary thereof,
as the case may be (other than as a result of his incapacity due to physical or
mental illness or injury), which failure amounts to an intentional and extended
neglect of his duties to such party, (B) the Committee's determination that the
Optionee has engaged or is about to engage in conduct materially injurious to
the Company or a parent or subsidiary thereof, or (C) the Optionee having been
convicted of a felony.
(b) If the Optionee shall die on or prior to the Termination
Date or within three months of Normal Termination, the executor or
administrator of the estate of the Optionee or the person or persons to whom
the Options shall have been validly transferred by the executor or
administrator pursuant to will or the laws of descent and distribution shall
have the right, until the earlier of the Termination Date or the date that is
12 months after the date of the Optionee's death, to exercise the Options to
the extent that the Options were exercisable at the date of death, subject to
any other limitation contained herein on the exercise of the Options in effect
on the date of exercise.
(c) If the Optionee terminates employment for reasons other
than death or Normal Termination, the Options, to the extent not exercised
prior to such termination, shall lapse and be cancelled; provided, however,
that a transfer of employment directly from the Company or a parent or
subsidiary thereof directly to another of any such entities shall not be deemed
a termination of employment for purposes of this Agreement.
(d) Any provision of paragraphs 3(a), 3(b) or 3(c) hereof to
the contrary notwithstanding, the Options may not be exercised beyond the
Termination Date.
(e) Whether employment has been or could have been terminated
for the purposes of this Agreement, and the reasons therefor, shall be
determined by the Committee, whose determination shall be final, binding and
conclusive.
(f) After the expiration of any exercise period described in
either of paragraphs 3(a), 3(b) or 3(c) hereof, the Options shall terminate
together with all of the Optionee's rights hereunder, to the extent not
previously exercised.
<PAGE> 4
4. Method of Exercising Option. The Optionee may exercise any
or all of the Options by delivering to the Committee a written notice signed by
the Optionee stating the number of Options that the Optionee has elected to
exercise at that time and full payment of the purchase price of the shares to
be thereby purchased from the Company. Payment of the purchase price of the
shares may be made (a) by certified or bank cashier's check payable to the
order of the Company, (b) by surrender or delivery to the Company of shares of
Stock having an aggregate fair market value equal to the exercise price, or (c)
in the discretion of the Committee, by surrender or delivery to the Company of,
(X) other property having a fair market value on the date of exercise equal to
the purchase price or (Y) a copy of irrevocable instructions to a stockbroker
to deliver promptly to the Company an amount of sale or loan proceeds
sufficient to pay the purchase price.
5. Issuance of Shares. As promptly as practical after
receipt of such written notification and full payment of such purchase price,
the Company shall issue or transfer to the Optionee the number of shares with
respect to which Options have been so exercised, and shall deliver to the
Optionee a certificate or certificates therefor, registered in the Optionee's
name.
6. Optionee. Whenever the word "Optionee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the executors, the administrators, or the
person or persons to whom the Options may be transferred by will or by the laws
of descent and distribution, the word "Optionee" shall be deemed to include
such person or persons.
7. Non-Transferability. The Options are not transferable by
the Optionee otherwise than by will or the laws of descent and distribution and
are exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Options, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except by will or
the laws of descent and distribution), shall vest in the assignee or transferee
any interest or right herein whatsoever, but immediately upon such assignment
or transfer the Options shall terminate and become of no further effect.
8. Rights as Stockholder. The Optionee or a transferee of
the Options shall have no rights as a stockholder with respect to any share
covered by the Options until he shall have become the holder of record of such
share, and no adjustment shall be made for dividends or distributions or other
rights in respect of such share for which the record date is prior to the date
upon which he shall become the holder of record thereof.
9. Recapitalizations, Reorganizations, etc. (a) The existence
of the Options shall not affect in any way the right or power of the Company or
its stockholders to make or authorize any or all adjustments,
<PAGE> 5
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Stock or the rights thereof or convertible into or exchangeable for Stock,
or the dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) The shares with respect to which the Options are granted
are shares of Stock of the Company as presently constituted, but if, and
whenever, prior to the delivery by the Company of all of the shares of the
Stock with respect to which the Options are granted, the Company shall effect a
subdivision or consolidation of shares of the Stock outstanding, without
receiving compensation therefor in money, services or property, the number and
price of shares remaining under the Options shall be appropriately adjusted.
Such adjustment shall be made by the Committee, whose determination as to what
adjustment shall be made, and the extent thereof, shall be final, binding and
conclusive. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to the Options.
(c) In the event of any change in the outstanding shares of
Stock by reason of any recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than cash dividends, the Committee
shall make such substitution or adjustment, if any, as it deems to be
equitable, as to the number or kind or shares of Stock or other securities
covered by the Options and the option price thereof.
(d) Except as expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into or exchangeable
for shares of stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of options, rights or
warrants to subscribe therefor, or to purchase the same, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to the Options.
10. Compliance with Law. (a) Notwithstanding any of the
provisions hereof, the Optionee hereby agrees that he will not exercise the
Options, and that the Company will not be obligated to issue or transfer any
shares to the Optionee hereunder, if the exercise hereof or the issuance or
transfer of such shares shall constitute a violation by the Optionee or the
Company of any provisions of any law or regulation of any governmental
authority. Any determination in this connection by the Committee shall be
final, binding and conclusive. The Company shall in no event be obliged to
<PAGE> 6
register any securities pursuant to the Securities Act of 1933 (as now in
effect or as hereafter amended) or to take any other affirmative action in
order to cause the exercise of the Options or the issuance or transfer of
shares pursuant thereto to comply with any law or regulation of any
governmental authority.
(b) Upon demand by the Committee, the Optionee shall deliver
to the Committee at the time of any exercise of an Option hereunder a written
representation that the shares to be acquired upon such exercise are to be
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the
delivery of any shares issued upon exercise of an Option shall be a condition
precedent to the right of the Optionee or such other person to purchase any
shares. In the event certificates for Stock are delivered under this Agreement
with respect to which such investment representation has been obtained, the
Committee may cause a legend or legends to be placed on such certificates to
make appropriate reference to such representation and to restrict transfer in
the absence of compliance with applicable federal or state securities laws.
11. Notice. Every notice or other communication relating to
this Agreement shall be in writing, and shall be mailed to or delivered to the
party for whom it is intended at such address as may from time to time be
designated by it in a notice mailed or delivered to the other party as herein
provided; provided that, unless and until some other address be so designated,
all notices or communications by the Optionee to the Company shall be mailed or
delivered to the Company at its principal executive office, and all notices or
communications by the Company to the Optionee may be given to the Optionee
personally or may be mailed to him at the Optionee's last known address as
reflected in the Company's records.
12. Disposition of Stock. The Optionee agrees to notify the
Company in writing, within 30 days of any disposition (whether by sale,
exchange, gift or otherwise) of shares of Stock purchased under this Option,
within two years from the date of the granting of the Option or within one year
of the transfer of such shares of Stock to the Optionee.
13. Binding Effect. Subject to Section 7 hereof, this
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.
14. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas without reference
to the principles of conflicts of law thereof.
<PAGE> 7
15. Plan. The terms and provisions of the Plan are
incorporated herein by reference. In the event of a conflict or inconsistency
between discretionary terms and provisions of the Plan and the express
provisions of this Agreement, this Agreement shall govern and control. In all
other instances of conflicts or inconsistencies or omissions, the terms and
provisions of the Plan shall govern and control.
16. Restrictions in Certificate of Incorporation. The Options
and any shares acquired upon exercise thereof may be subject to certain
restrictions on transfer contained in the Certificate of Incorporation of the
Company, a copy of which may be obtained by the Optionee upon written request to
the Secretary of the Company.
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PIONEER COMPANIES, INC.
By: /s/ Philip J. Ablove
--------------------------------------
Philip J. Ablove
Vice President
/s/ Michael J. Ferris
--------------------------------------
Michael J. Ferris, Optionee
<PAGE> 1
EXHIBIT 4.5
PIONEER COMPANIES, INC. 1998 STOCK PLAN
SECTION 1. Purpose of the Plan.
The Pioneer Companies, Inc. 1998 Stock Plan (the "Plan") is intended
to promote the interests of Pioneer Companies, Inc., a Delaware corporation
(the "Company"), by encouraging officers, employees, directors, and consultants
of the Company, its subsidiaries and affiliated entities to acquire or increase
their equity interest in the Company and to provide a means whereby they may
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated
to enhance the ability of the Company, its subsidiaries and affiliated entities
to attract and retain the services of individuals who are essential for the
growth and profitability of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set
forth below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity in which
the Company has a significant equity interest, as determined by the Committee.
"Award" shall mean any Option, Restricted Stock, Performance Award,
Phantom Shares, Bonus Shares, or Other Stock-Based Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to
Section 6(d) of the Plan.
"Change in Control" shall, unless the Board otherwise directs by
resolution adopted prior thereto, be deemed to occur if (i) any "person" (as
that term is used in Sections 13 and 14(d)(2) of the Exchange Act) other than
William R. Berkley or his "affiliates" (as that term is defined in Rule 144
promulgated pursuant to the Securities Act of 1933, as amended) is or becomes
the beneficial owner (as that term is used in Section 13(d) of the Exchange
Act), directly or indirectly, of 30% or more of either the outstanding shares
of Common Stock or the combined voting power of the
<PAGE> 2
Company's then outstanding voting securities entitled to vote generally, (ii)
during any period of two consecutive years, individuals who constitute the
Board at the beginning of such period cease for any to constitute at least a
majority thereof, unless the election or the nomination for election by the
Company's shareholders of each new director was approved by a vote of at least
three-quarters of the directors then still in office who were directors at the
beginning of the period or (iii) the Company undergoes a liquidation or
dissolution or a sale of all or substantially all of the assets of the Company.
Any merger, consolidation or corporate reorganization in which the owners of
the combined voting power of the Company's then outstanding securities entitled
to vote generally prior to said combination, own 50% or more of the resulting
entity's outstanding securities entitled to vote generally shall not, by
itself, be considered a Change in Control.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.
"Committee" shall mean the Board or any committee of the Board
designated, from time to time, by the Board to act as the Committee under the
Plan.
"Consultant" shall mean any individual who renders consulting services
or advice to the Company or an Affiliate for a fee, excluding any individual
who is a Director.
"Director" shall mean an individual, other than an Employee, who is a
member of the Board.
"Employee" shall mean any employee of the Company or an Affiliate or
any person who has been extended an offer of employment by the Company or an
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, with respect to Shares, the closing
price of a Share quoted on the Composite Tape, or if the Shares are not listed
on the New York Stock Exchange, on the principal United States securities
exchange registered under the Exchange Act on which such stock is listed, or if
the Shares are not listed on any such stock exchange, the last sale price, or
if none is reported, the highest closing bid quotation on the Nasdaq Stock
Market or any successor system then in use on the date of grant, or if none are
available on such day, on the next preceding day for which are available, or if
no such quotations are available, the fair market value on the date of grant of
a Share as determined in good faith by the Committee. In the event the Shares
are not publicly traded at the time a determination of its fair market value is
required to be made hereunder, the determination of fair market value shall be
made in good faith by the Committee.
"Incentive Stock Option" or "ISO" shall mean an option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive stock
option" under Section 422 of the Code or any successor provision thereto.
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<PAGE> 3
"Non-Qualified Stock Option" or "NQO" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Other Stock-Based Award" shall mean an award granted pursuant to
Section 6(f) of the Plan that is not otherwise specifically provided for, the
value of which is based in whole or in part upon the value of a Share.
"Participant" shall mean any Employee, Director or Consultant granted
an Award under the Plan.
"Performance Award" shall mean any right granted under Section 6(c) of
the Plan.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive Shares
issued at the end of a Restricted Period which is granted pursuant to Section
6(e) of the Plan.
"Restricted Period" shall mean the period established by the Committee
with respect to an Award during which the Award either remains subject to
forfeiture or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Section 6(b) of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from
time to time.
"SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the Class A
common stock of the Company, $0.01 par value, and such other securities or
property as may become the subject of Awards of the Plan.
"Substitute Award" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by (i) a company
acquired by the Company or one or more of its Affiliates, or (ii) a company
with which the Company or one or more of its Affiliates combines.
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<PAGE> 4
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following, the Committee, in its
sole discretion, may delegate any or all of its powers and duties under the
Plan, including the power to grant Awards under the Plan, to the Chief
Executive Officer of the Company, subject to such limitations on such delegated
powers and duties as the Committee may impose. Upon any such delegation all
references in the Plan to the "Committee", other than in Section 7, shall be
deemed to include the Chief Executive Officer; provided, however, that such
delegation shall not limit the Chief Executive Officer's right to receive
Awards under the Plan. Notwithstanding the foregoing, the Chief Executive
Officer may not grant Awards to, or take any action with respect to any Award
previously granted to, a Participant who is subject to Rule 16b-3. Subject to
the terms of the Plan and applicable law, and in addition to other express
powers and authorizations conferred on the Committee by the Plan, the Committee
shall have full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to a Participant; (iii)
determine the number of Shares to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with,
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited, or suspended and the method or methods by which Awards may
be settled, exercised canceled, forfeited, or suspended; (vi) determine
whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election
of the holder thereof or of the Committee; (vii) interpret and administer the
Plan and any instrument or agreement relating to an Award made under the Plan;
(viii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (ix) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan. Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or
beneficiary of any Award, any stockholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in
Section 4(c), the number of Shares with respect to which Awards may be granted
under the Plan shall be 500,000; however, the aggregate amount of Restricted
Stock Awards that may be paid in Shares shall not exceed 100,000 Shares. If
any Award is forfeited or otherwise terminates or is canceled without the
delivery of Shares or other consideration, then the Shares covered by such
Award, to the extent of such
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<PAGE> 5
forfeiture, termination or cancellation, shall again be Shares with respect to
which Awards may be granted.
(b) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of authorized
and unissued Shares or of treasury Shares.
(c) Adjustments. In the event that the Committee determines that
any dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and type
of Shares (or other securities or property) with respect to which Awards may be
granted, (ii) the number and type of Shares (or other securities or property)
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award; provided, in each case, that
with respect to Awards of Incentive Stock Options and Awards intended to
qualify as performance based compensation under Section 162(m)(4)(C) of the
Code, no such adjustment shall be authorized to the extent that such authority
would cause the Plan to violate Section 422(b)(1) of the Code or would cause
such Award to fail to so qualify under Section 162(m) of the Code, as the case
may be, or any successor provisions thereto; and provided, further, that the
number of Shares subject to any Award denominated in Shares shall always be a
whole number.
SECTION 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be
designated a Participant.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the Participants to whom Options shall be
granted, the number of Shares to be covered by each Option (no Participant may
receive Options with respect to more than 100,000 Shares during any calendar
year), the purchase price therefor and the conditions and limitations
applicable to the exercise of the Option, including the following terms and
conditions and such additional terms and conditions, as the Committee shall
determine, that are not inconsistent with the provisions of the Plan.
(i) Exercise Price. The purchase price per Share
purchasable under an Option shall be determined by the Committee at
the time the Option is granted, but shall not be less than the Fair
Market Value of a Share on such date, unless such Option is a
Substitute Award.
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<PAGE> 6
(ii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, and the method or methods by which, and the form or
forms (which may include, without limitation, cash, check acceptable
to the Company, Shares already-owned for more than six months, a
"cashless-broker" exercise (through procedures approved by the
Company), other securities or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to the
relevant exercise price) in which payment of the exercise price with
respect thereto may be made or deemed to have been made.
(iii) Incentive Stock Options. The terms of any Incentive
Stock Option granted under the Plan shall comply in all respects with
the provisions of Section 422 of the Code, or any successor provision,
and any regulations promulgated thereunder. Incentive Stock Options
may be granted only to employees of the Company and its "parent
corporation" and "subsidiary corporations", as defined in Section 424
of the Code.
(b) Restricted Stock. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Participants to whom
Restricted Stock shall be granted, the number of Shares of Restricted Stock to
be granted to each such Participant, the duration of the Restricted Period
during which, and the conditions, including the performance criteria, if any,
under which, the Restricted Stock may be forfeited to the Company, and the
other terms and conditions of such Awards.
(i) Dividends. Dividends paid on Restricted Stock may be
paid directly to the Participant, may be subject to risk of forfeiture
and/or transfer restrictions during any period established by the
Committee or sequestered and held in a bookkeeping cash account (with
or without interest) or reinvested on an immediate or deferred basis
in additional shares of Common Stock, which credit or shares may be
subject to the same restrictions as the underlying Award or such other
restrictions, all as determined by the Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced
in such manner as the Committee shall deem appropriate, including,
without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is
issued in respect of Restricted Stock granted under the Plan, such
certificate shall be registered in the name of the Participant and
shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Restricted Stock.
(iii) Forfeiture and Restrictions Lapse. Except as
otherwise determined by the Committee or the terms of the Award or
other agreement that granted the Restricted Stock, upon termination of
a Participant's employment, consulting or membership on the Board, as
the case may be, (as determined under criteria established by the
Committee) for any reason (other than a Change in Control) during the
applicable Restricted Period, all Restricted Stock shall be forfeited
by the Participant and re-acquired by the Company. The
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<PAGE> 7
Committee may, when it finds that a waiver would be in the best
interests of the Company and not cause such Award, if it is intended
to qualify as performance based compensation under Section 162(m) of
the Code, to fail to so qualify under Section 162(m) of the Code,
waive in whole or in part any or all remaining restrictions with
respect to such Participant's Restricted Stock. Unrestricted Shares,
evidenced in such manner as the Committee shall deem appropriate,
shall be issued to the holder of Restricted Stock promptly after the
applicable restrictions have lapsed or otherwise been satisfied.
(iv) Transfer Restrictions. During the Restricted Period,
Restricted Stock will be subject to the limitations on transfer as
provided in Section 6(h)(iii).
(v) Limit. The maximum number of Shares of Restricted
Stock that may be granted to any Participant during any year shall not
exceed 20,000 Shares.
(c) Performance Awards. The Committee shall have the authority to
determine the Participants who shall receive a Performance Award, which shall
be denominated as a cash amount at the time of grant and confer on the
Participant the right to receive payment of such Award, in whole or in part,
upon the achievement of such performance goals during such performance periods
as the Committee shall establish with respect to the Award.
(i) Terms and Conditions. Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine
the performance goals to be achieved during any performance period,
the length of any performance period, the amount of any Performance
Award and the amount of any payment or transfer to be made pursuant to
any Performance Award.
(ii) Payment of Performance Awards. Performance Awards
may be paid (in cash and/or in Shares, in the sole discretion of the
Committee) in a lump sum or in installments following the close of the
performance period, in accordance with procedures established by the
Committee with respect to such Award.
(iii) Limit. The maximum number of Performance Awards that
may be granted to any Participant during any year shall not exceed
$500,000.
(d) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to Participants. Each Bonus Share shall
constitute a transfer of an unrestricted Share to the Participant, without
other payment therefor.
(e) Phantom Shares. The Committee shall have the authority to
grant Awards of Phantom Shares to Participants upon such terms and conditions
as the Committee may determine.
(i) Terms and Conditions. Each Phantom Share Award shall
constitute an agreement by the Company to issue or transfer a
specified number of Shares or pay an
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<PAGE> 8
amount of cash equal to a specified number of Shares, or a combination
thereof to the Participant in the future, subject to the fulfillment
during the Restricted Period of such conditions, including performance
objectives, if any, as the Committee may specify at the date of grant.
During the Restricted Period, the Participant shall not have any right
to transfer any rights under the subject Award, shall not have any
rights of ownership in the Phantom Shares and shall not have any right
to vote such shares.
(ii) Dividends. Any Phantom Share award may provide that
any or all dividends or other distributions paid on Shares during the
Restricted Period be credited in a cash bookkeeping account (without
interest) or that equivalent additional Phantom Shares be awarded,
which account or shares may be subject to the same restrictions as the
underlying Award or such other restrictions as the Committee may
determine.
(iii) Limit. The maximum number of Phantom Shares that may
be awarded to any Participant during any year shall not exceed 20,000
Phantom Shares.
(f) Other Stock-Based Awards. The Committee may also grant to
Participants an Other Stock-Based Award, which shall consist of a right which
is an Award denominated or payable in, valued in whole or in part by reference
to, or otherwise based on or related to, Shares as is deemed by the Committee
to be consistent with the purposes of the Plan. Subject to the terms of the
Plan, the Committee shall determine the terms and conditions of any such Other
Stock- Based Award. The maximum number of Other Stock-Based Awards that may be
awarded to any Participant during any year shall not exceed awards with respect
to 20,000 Shares.
(g) Substitute Awards. Awards may be granted from time to
time in substitution for similar awards held by employees of other corporations
who become Participants as the result of a merger or consolidation of the
employing corporation with the Company or any subsidiary, or the acquisition by
the Company or any subsidiary of the assets of the employing corporation, or
the acquisition by the Company or any subsidiary or an affiliate of stock of
the employing corporation. The terms and conditions of substitute Awards
granted may vary from the terms and conditions set forth in the Plan, to the
extent the Committee, at the time of grant, deems it appropriate to conform, in
whole or in part, to the provisions of awards in substitution for which they
are granted.
(h) General.
(i) Awards May Be Granted Separately or Together. Awards
may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for any other Award
granted under the Plan or any award granted under any other plan of
the Company or any Affiliate. Awards granted in addition to or in
tandem with other Awards or awards granted under any other plan of the
Company or any Affiliate may be granted either at the same time as or
at a different time from the grant of such other Awards or awards.
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<PAGE> 9
(ii) Forms of Payment by Company Under Awards. Subject to
the terms of the Plan and of any applicable Award Agreement, payments
or transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation, cash,
Shares, other securities, other Awards or other property, or any
combination thereof, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the
payment or crediting of reasonable interest on installment or deferred
payments.
(iii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Award,
and each right under any Award, shall be exercisable only by
the Participant during the Participant's lifetime, or, if
permissible under applicable law, by the Participant's
guardian or legal representative as determined by the
Committee.
(B) Except as provided in (C) below, no Award and
no right under any such Award may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered
by a Participant otherwise than by will or by the laws of
descent and distribution (or, in the case of Restricted Stock,
to the Company) and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate.
(C) Notwithstanding anything in the Plan to the
contrary, to the extent specifically provided by the Committee
with respect to a grant, a Nonqualified Stock Option may be
transferred to immediate family members or related family
trusts, limited partnerships or similar entities or Persons or
on such terms and conditions as the Committee may establish
from time to time.
(iv) Term of Awards. The term of each Award shall be for
such period as may be determined by the Committee; provided, that in
no event shall the term of any Award exceed a period of 10 years from
the date of its grant.
(v) Share Certificates. All certificates for Shares or
other securities of the Company or any Affiliate delivered under the
Plan pursuant to any Award or the exercise thereof shall be subject to
such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations, and other
requirements of the SEC, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
-9-
<PAGE> 10
(vi) Consideration for Grants. Awards may be granted for
no cash consideration or for such consideration as the Committee
determines including, without limitation, such minimal cash
consideration as may be required by applicable law.
(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award
Agreement (including, without limitation, any exercise price, tax
payment or tax withholding) is received by the Company. Such payment
may be made by such method or methods and in such form or forms as the
Committee shall determine, including, without limitation, cash,
Shares, other securities, other Awards or other property, withholding
of Shares, cashless exercise with simultaneous sale, or any
combination thereof; provided that the combined value, as determined
by the Committee, of all cash and cash equivalents and the Fair Market
Value of any such Shares or other property so tendered to the Company,
as of the date of such tender, is at least equal to the full amount
required to be paid pursuant to the Plan or the applicable Award
Agreement to the Company.
(viii) Performance Criteria. The Committee shall establish
performance goals applicable to those Awards (other than Options) the
payment of which is intended by the Committee to qualify as
"performance-based compensation" as described in Section 162(m)(4)(C)
of the Code. The performance goals shall be based upon the attainment
of such target levels of net income, cash flows, return on equity,
profit margin or sales, stock price, return on assets, economic value
added, and/or earnings per share as may be specified by the Committee.
Which factor or factors to be used with respect to any grant, and the
weight to be accorded thereto if more than one factor is used, shall
be determined by the Committee at the time of grant.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(i) Amendments to the Plan. The Board or the Committee
may amend, alter, suspend, discontinue, or terminate the Plan without
the consent of any stockholder, Participant, other holder or
beneficiary of an Award, or other Person; provided, however,
notwithstanding any other provision of the Plan or any Award
Agreement, without the approval of the stockholders of the Company no
such amendment, alteration, suspension, discontinuation, or
termination shall be made that would increase the total number of
Shares available for Awards under the Plan, except as provided in
Section 4(c) of the Plan.
(ii) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or alter any Award
theretofore granted, provided no change in any Award shall reduce the
benefit to Participant without the consent of such Participant.
-10-
<PAGE> 11
Notwithstanding the foregoing, with respect to any Award intended to
qualify as performance-based compensation under Section 162(m) of the
Code, no adjustment shall be authorized to the extent such adjustment
would cause the Award to fail to so qualify.
SECTION 8. Change in Control.
Notwithstanding any other provision of this Plan to the contrary, in
the event of a Change in Control of the Company all outstanding Awards
automatically shall become fully vested immediately prior to such Change in
Control (or such earlier time as set by the Committee), all restrictions, if
any, with respect to such Awards shall lapse, including, without limitation,
any service, longevity or year-end employment requirements, and all performance
criteria, if any, with respect to such Awards shall be deemed to have been met
in full to the maximum extent without regard to any proration provisions in
such Award or Award Agreement.
SECTION 9. General Provisions.
(a) No Rights to Awards. No Participant or other Person shall
have any claim to be granted any Award, there is no obligation for uniformity
of treatment of Participants, or holders or beneficiaries of Awards and the
terms and conditions of Awards need not be the same with respect to each
recipient.
(b) Withholding. The Company or any Affiliate is authorized to
withhold from any Award, from any payment due or transfer made under any Award
or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Shares, other securities, Shares that would
otherwise be issued pursuant to such Award, other Awards or other property) of
any applicable taxes payable in respect of an Award, its exercise, the lapse of
restrictions thereon, or any payment or transfer under an Award or under the
Plan and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes. In addition,
the Committee may provide, in an Award Agreement, that the Participant may
direct the Company to satisfy such Participant's tax obligation through the
withholding of Shares otherwise to be acquired upon the exercise or payment of
such Award.
(c) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(d) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable federal law.
-11-
<PAGE> 12
(e) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without , in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall
be stricken as to such jurisdiction, Person or Award and the remainder of the
Plan and any such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole discretion,
it determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between the Company or any Affiliate and a Participant
or any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any
rights thereto shall be canceled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
(j) Parachute Tax Gross-Up. To the extent that the grant,
payment, or acceleration of vesting or payment, whether in cash or stock, of
any Award made to a Participant under the Plan (a "Benefit") is subject to an
excise tax under Section 4999(a) of the Code (a "Parachute Tax"), the Company
shall pay such person an amount of cash (the "Gross- up Amount") such that the
"net" Benefit received by the person under this Plan, after paying all
applicable Parachute Taxes (including those on the Gross-up Amount) and any
taxes on the Gross-up Amount, shall be equal to the Benefit that such person
would have received if such Parachute Tax had not been applicable.
-12-
<PAGE> 13
SECTION 10. Effective Date of the Plan.
The Plan shall be effective as of the date of its adoption by the
Board or approval by the stockholders of the Company, whichever is later.
SECTION 11. Term of the Plan.
No Award shall be granted under the Plan after the 10th anniversary of
the earlier the date the Plan was adopted by the Board or approved by the
stockholders. However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted prior to such termination, and
the authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under such Award, shall extend beyond such termination date.
-13-
<PAGE> 1
EXHIBIT 4.6
PIONEER COMPANIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 4th day of January, 1997, by
and between Pioneer Companies, Inc., a Delaware corporation (the "Company") and
Michael J. Ferris (the "Optionee").
W I T N E S S E T H :
WHEREAS, the Optionee is now employed by the Company or a
subsidiary of the Company and the Company desires to have him remain in such
employment and to afford him the opportunity to acquire, or enlarge, his
ownership of the Company's Class A Common Stock, par value $.01 per share
("Stock"), so that he may have a direct proprietary interest in the Company's
success;
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein, the Company hereby grants to the Optionee, during the period
commencing on the date of this Agreement and ending on January 4, 2007 (the
"Termination Date"), the right and option (the right to purchase any one share
of Stock hereunder being an "Option") to purchase from the Company an aggregate
of 191,250 shares of Stock at a price of $5.00 per share. The Options granted
hereunder shall be "nonqualified stock options" within the meaning of the
regulations adopted under Section 89 of the Internal Revenue Code of 1986, as
amended.
2. Limitations on Exercise of Option. (a) Subject to the
terms and conditions set forth herein, the Optionee may exercise 38,250 of the
Options on January 4, 1998, with none being exercisable prior to such date, an
additional 38,250 on January 4, 1999, an additional 38,250 on January 4, 2000,
an additional 38,250 on January 4, 2001, and an additional 38,250 on January 4,
2002.
(b) Notwithstanding the limitations set forth in paragraph
2(a), 100% of the Options shall become immediately exercisable (i) in the event
of a change in control of the Company, or (ii) if Optionee's employment with
the Company or a subsidiary thereof, as the case may be, is terminated by the
Company or a subsidiary thereof, as the case may be, without Cause (as defined
in paragraph 3 hereof). For purposes of the preceding sentence, a "change of
control" shall, unless the Board of
<PAGE> 2
Directors of the Company (the "Board") otherwise directs by resolution adopted
prior thereto, be deemed to occur if (i) any "person" (as that term is used in
Sections 13 and 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act")) other than William R. Berkley or his "affiliates" (as that term is
defined in Rule 144 promulgated pursuant to the Securities Act of 1933 (the
"Securities Act")) is or becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of 30% or more of
either the outstanding shares of Common Stock or the combined voting power of
the Company's then outstanding voting securities entitled to vote generally,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or the nomination
for election by the Company's shareholders of each new director was approved by
a vote of at least three-quarters of the directors then still in office who
were directors at the beginning of the period, or (iii) the Company undergoes a
liquidation or dissolution or a sale of all or substantially all of the assets
of the Company. Any merger, consolidation or corporate reorganization in which
the owners of the combined voting power of the Company's then outstanding
securities entitled to vote generally prior to said combination, own 50% or
more of the resulting entity's outstanding securities entitled to vote
generally shall not, by itself, be considered a change in control.
3. Termination of Employment. (a) If the Optionee shall
cease to be employed by reason of Normal Termination, the Options shall remain
exercisable until the earlier of the Termination Date or the date that is three
months after the date of such Normal Termination to the extent the Options were
exercisable at the time of such Normal Termination. For purposes of this
Agreement, the term "Normal Termination" shall mean termination of Optionee's
employment with the Company or a subsidiary thereof, as the case may be, (i)
because of retirement pursuant to the qualified retirement plan of the Company
or a parent or subsidiary thereof, as the case may be; (ii) on account of
Disability; (iii) with the written approval of the Compensation Committee of
the Board (the "Committee"); or (iv) by the Company or a parent or subsidiary
thereof, as the case may be, without Cause. For purposes of the preceding
sentence, (I) "Disability" shall mean disability as defined in the Company's or
a subsidiary's, as the case may be, long term disability plan then in effect,
or, in the absence of such plan, the complete and permanent inability by reason
of illness or accident to perform the duties of the occupation at which the
Optionee was employed when such disability commenced or, if the Optionee was
retired when such disability commenced, the inability to engage in any
substantial gainful activity, as determined by the Committee based upon medical
evidence acceptable to it, and (II) "Cause" shall mean the Company or a
subsidiary thereof, as the case may be, having cause to terminate an Optionee's
employment under any existing employment agreement between the Optionee and the
Company or such parent or subsidiary or, in the absence of such an employment
agreement, upon (A) the determination by the Committee that the Optionee has
ceased to perform his duties to the Company or a parent or subsidiary thereof,
as the case may be (other than as a result of his incapacity due to physical or
mental illness or injury), which failure amounts to an intentional and extended
neglect of his duties to such party, (B) the Committee's
<PAGE> 3
determination that the Optionee has engaged or is about to engage in conduct
materially injurious to the Company or a subsidiary thereof, or (C) the
Optionee having been convicted of a felony.
(b) If the Optionee shall die on or prior to the Termination
Date or within three months of Normal Termination, the executor or
administrator of the estate of the Optionee or the person or persons to whom
the Options shall have been validly transferred by the executor or
administrator pursuant to will or the laws of descent and distribution shall
have the right, until the earlier of the Termination Date or the date that is
12 months after the date of the Optionee's death, to exercise the Options to
the extent that the Options were exercisable at the date of death, subject to
any other limitation contained herein on the exercise of the Options in effect
on the date of exercise.
(c) If the Optionee terminates employment for reasons other
than death or Normal Termination, the Options, to the extent not exercised
prior to such termination, shall lapse and be cancelled; provided, however,
that a transfer of employment directly from the Company or a subsidiary thereof
directly to another of any such entities shall not be deemed a termination of
employment for purposes of this Agreement.
(d) Any provision of paragraphs 3(a), 3(b) or 3(c) hereof to
the contrary notwithstanding, the Options may not be exercised beyond the
Termination Date.
(e) Whether employment has been or could have been terminated
for the purposes of this Agreement, and the reasons therefor, shall be
determined by the Committee, whose determination shall be final, binding and
conclusive.
(f) After the expiration of any exercise period described in
either of paragraphs 3(a), 3(b) or 3(c) hereof, the Options shall terminate
together with all of the Optionee's rights hereunder, to the extent not
previously exercised.
4. Method of Exercising Option. The Optionee may exercise any
or all of the Options by delivering to the Committee a written notice signed by
the Optionee stating the number of Options that the Optionee has elected to
exercise at that time and full payment of the purchase price of the shares to
be thereby purchased from the Company. Payment of the purchase price of the
shares may be made (a) by certified or bank cashier's check payable to the
order of the Company, (b) by surrender or delivery to the Company of shares of
Stock having an aggregate fair market value equal to the exercise price, or (c)
in the discretion of the Committee, by surrender or delivery to the Company
<PAGE> 4
of, (X) other property having a fair market value on the date of exercise equal
to the purchase price or (Y) a copy of irrevocable instructions to a
stockbroker to deliver promptly to the Company an amount of sale or loan
proceeds sufficient to pay the purchase price.
5. Issuance of Shares. As promptly as practical after
receipt of such written notification and full payment of such purchase price,
the Company shall issue or transfer to the Optionee the number of shares with
respect to which Options have been so exercised, and shall deliver to the
Optionee a certificate or certificates therefor, registered in the Optionee's
name.
6. Optionee. Whenever the word "Optionee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the executors, the administrators, or the
person or persons to whom the Options may be transferred by will or by the laws
of descent and distribution, the word "Optionee" shall be deemed to include
such person or persons.
7. Non-Transferability. The Options are not transferable by
the Optionee otherwise than by will or the laws of descent and distribution and
are exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Options, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except by will or
the laws of descent and distribution), shall vest in the assignee or transferee
any interest or right herein whatsoever, but immediately upon such assignment
or transfer the Options shall terminate and become of no further effect.
8. Rights as Stockholder. The Optionee or a transferee of
the Options shall have no rights as a stockholder with respect to any share
covered by the Options until he shall have become the holder of record of such
share, and no adjustment shall be made for dividends or distributions or other
rights in respect of such share for which the record date is prior to the date
upon which he shall become the holder of record thereof.
9. Recapitalizations, Reorganizations, etc. (a) The existence
of the Options shall not affect in any way the right or power of the Company or
its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Stock or the rights thereof or convertible into or exchangeable for Stock,
or the dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its
<PAGE> 5
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
(b) The shares with respect to which the Options are granted
are shares of Stock of the Company as presently constituted, but if, and
whenever, prior to the delivery by the Company of all of the shares of the
Stock with respect to which the Options are granted, the Company shall effect a
subdivision or consolidation of shares of the Stock outstanding, without
receiving compensation therefor in money, services or property, the number and
price of shares remaining under the Options shall be appropriately adjusted.
Such adjustment shall be made by the Committee, whose determination as to what
adjustment shall be made, and the extent thereof, shall be final, binding and
conclusive. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to the Options.
(c) In the event of any change in the outstanding shares of
Stock by reason of any recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than cash dividends, the Committee
shall make such substitution or adjustment, if any, as it deems to be
equitable, as to the number or kind or shares of Stock or other securities
covered by the Options and the option price thereof.
(d) Except as expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into or exchangeable
for shares of stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of options, rights or
warrants to subscribe therefor, or to purchase the same, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to the Options.
10. Compliance with Law. (a) Notwithstanding any of the
provisions hereof, the Optionee hereby agrees that he will not exercise the
Options, and that the Company will not be obligated to issue or transfer any
shares to the Optionee hereunder, if the exercise hereof or the issuance or
transfer of such shares shall constitute a violation by the Optionee or the
Company of any provisions of any law or regulation of any governmental
authority. Any determination in this connection by the Committee shall be
final, binding and conclusive. The Company shall in no event be obliged to
register any securities pursuant to the Securities Act of 1933 (as now in
effect or as hereafter amended) or to take any other affirmative action in
order to cause the exercise of the Options or the issuance or transfer of
shares pursuant thereto to comply with any law or regulation of any
governmental authority.
<PAGE> 6
(b) Upon demand by the Committee, the Optionee shall deliver
to the Committee at the time of any exercise of an Option hereunder a written
representation that the shares to be acquired upon such exercise are to be
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the
delivery of any shares issued upon exercise of an Option shall be a condition
precedent to the right of the Optionee or such other person to purchase any
shares. In the event certificates for Stock are delivered under this Agreement
with respect to which such investment representation has been obtained, the
Committee may cause a legend or legends to be placed on such certificates to
make appropriate reference to such representation and to restrict transfer in
the absence of compliance with applicable federal or state securities laws.
11. Notice. Every notice or other communication relating to
this Agreement shall be in writing, and shall be mailed to or delivered to the
party for whom it is intended at such address as may from time to time be
designated by it in a notice mailed or delivered to the other party as herein
provided; provided that, unless and until some other address be so designated,
all notices or communications by the Optionee to the Company shall be mailed or
delivered to the Company at its principal executive office, and all notices or
communications by the Company to the Optionee may be given to the Optionee
personally or may be mailed to him at the Optionee's last known address as
reflected in the Company's records.
12. Disposition of Stock. The Optionee agrees to notify the
Company in writing, within 30 days of any disposition (whether by sale,
exchange, gift or otherwise) of shares of Stock purchased under this Option,
within two years from the date of the granting of the Option or within one year
of the transfer of such shares of Stock to the Optionee.
13. Binding Effect. Subject to Section 7 hereof, this
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.
14. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas without reference
to the principles of conflicts of law thereof.
15. Restrictions in Certificate of Incorporation. The Options
and any shares acquired upon exercise thereof may be subject to certain
restrictions on transfer contained in the Certificate of Incorporation of the
Company, a copy of which may be obtained by the Optionee upon written request to
the Secretary of the Company.
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PIONEER COMPANIES, INC.
By: /s/ Philip J. Ablove
--------------------------------------
Philip J. Ablove
Vice President
/s/ Michael J. Ferris
-----------------------------------------
Michael J. Ferris, Optionee
<PAGE> 1
EXHIBIT 4.7
PIONEER COMPANIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 4th day of January, 1997, by
and between Pioneer Companies, Inc., a Delaware corporation (the "Company") and
Michael J. Ferris (the "Optionee").
W I T N E S S E T H :
WHEREAS, by the terms of that certain Employment Agreement,
dated January 4, 1997 (the "Employment Agreement"), between the Company and the
Optionee, the Company agreed that Optionee would receive incentive stock
options for the purchase of up to 150,000 shares of the Company's Class A
Common Stock, par value $.01 per share ("Stock"), and that Optioneer would
receive nonqualified stock options for the purchase of up to 250,000 shares of
Stock, with such nonqualified stock options to be received in accordance with
the following schedule:
<TABLE>
<CAPTION>
No. of Shares Exercise Price
------------- --------------
<S> <C> <C>
Commencement of Employment 175,000 Market price at
such date ($5.00)
First anniversary of employment 25,000 1.2 x Initial Price
(January 4, 1998) ($6.00)
Second anniversary of employment 25,000 1.4 x Initial Price
(January 4, 1999) ($7.00)
Third anniversary of employment 25,000 1.6 x Initial Price
(January 4, 2000) ($8.00)
</TABLE>
and
WHEREAS, in connection with the approval of the terms and
conditions of the Employment Agreement by the Board of Directors of the Company
on January 4, 1997, it was agreed that upon commencement of employment the
Optionee would receive nonqualified stock options for the purchase of 191,250
shares of Stock and incentive stock options for the purchase of 133,750 shares
of Stock, and that the remaining options for the purchase of 75,000 shares of
Stock would be received at the times set forth above; and
<PAGE> 2
WHEREAS, this Agreement is intended to formalize the granting
of the remainder of the options as provided in the Employment Agreement,
provided that Optionee continues to remain in the employ of the Company on the
anniversary dates as set forth above;
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. Option to Purchase Shares. In accordance with the terms
and conditions of the Employment Agreement, this Agreement, on the terms and
conditions set forth herein, confirms the right of the Optionee to purchase
(the right to purchase any one share of Stock hereunder being an "Option") from
the Company (a) during the period commencing on January 4, 1998 and ending on
January 4, 2008 (the "Termination Date"), an aggregate of 25,000 shares of
Stock at a price of $6.00 per share (collectively, the "1998 Options"), (b)
during the period commencing on January 4, 1999 and ending on January 4, 2009
(the "Termination Date"), an aggregate of 25,000 shares of Stock at a price of
$7.00 per share (collectively, the "1999 Options"), and (c) during the period
commencing on January 4, 2000 and ending on January 4, 2010 (the "Termination
Date"), an aggregate of 25,000 shares of Stock at a price of $8.00 per share
(collectively, the "2000 Options"). January 4, 2008, January 4, 2009 and
January 4, 2010 shall be deemed the "Termination Date" with respect to the 1998
Options, the 1999 Options and the 2000 Options, respectively. All such Options
are "nonqualified stock options" within the meaning of the regulations adopted
under Section 89 of the Internal Revenue Code of 1986, as amended.
2. Limitations on Exercise of Options. Subject to the terms
and conditions set forth herein, (a) the Optionee may exercise 5,000 of the
1998 Options on January 4, 1999, with none being exercisable prior to such
date, an additional 5,000 on January 4, 2000, an additional 5,000 on January 4,
2001, an additional 5,000 on January 4, 2002, and an additional 5,000 on
January 4, 2003, (b) the Optionee may exercise 5,000 of the 1999 Options on
January 4, 2000, with none being exercisable prior to such date, an additional
5,000 on January 4, 2001, an additional 5,000 on January 4, 2002, an additional
5,000 on January 4, 2003, and an additional 5,000 on January 4, 2004, and (c)
the Optionee may exercise 5,000 of the 2000 Options on January 4, 2001, with
none being exercisable prior to such date, an additional 5,000 on January 4,
2002, an additional 5,000 on January 4, 2003, an additional 5,000 on January 4,
2004, and an additional 5,000 on January 4, 2005 .
(b) Notwithstanding the limitations set forth in paragraph
2(a), the Options shall become immediately exercisable in full (i) in the event
of a change in control of the Company, or (ii) if Optionee's employment with
the Company or a subsidiary thereof, as the case may be, is terminated by the
Company or a subsidiary thereof, as the case may be, without Cause (as defined
in paragraph 3 hereof), provided, however, that such change of control or such
termination, as the case may be, occurs after (x) January 4, 1998 in the case
of the 1998 Options, (y) January 4, 1999 in the case of the 1999 Options, and
(z) January 4, 2000 in the case of the 2000 Options. For purposes of the
preceding sentence, a "change of control" shall, unless the Board of Directors
of the
2
<PAGE> 3
Company (the "Board") otherwise directs by resolution adopted prior thereto, be
deemed to occur if (i) any "person" (as that term is used in Sections 13 and
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) other
than William R. Berkley or his "affiliates" (as that term is defined in Rule
144 promulgated pursuant to the Securities Act of 1933 (the "Securities Act"))
is or becomes the beneficial owner (as that term is used in Section 13(d) of
the Exchange Act), directly or indirectly, of 30% or more of either the
outstanding shares of Common Stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally, (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for election by the
Company's shareholders of each new director was approved by a vote of at least
three-quarters of the directors then still in office who were directors at the
beginning of the period, or (iii) the Company undergoes a liquidation or
dissolution or a sale of all or substantially all of the assets of the Company.
Any merger, consolidation or corporate reorganization in which the owners of
the combined voting power of the Company's then outstanding securities entitled
to vote generally prior to said combination, own 50% or more of the resulting
entity's outstanding securities entitled to vote generally shall not, by
itself, be considered a change in control.
3. Termination of Employment. (a) If the Optionee shall
cease to be employed by reason of Normal Termination, the Options shall remain
exercisable until the earlier of the applicable Termination Date or the date
that is three months after the date of such Normal Termination to the extent
the Options were exercisable at the time of such Normal Termination. For
purposes of this Agreement, the term "Normal Termination" shall mean
termination of Optionee's employment with the Company or a subsidiary thereof,
as the case may be, (i) because of retirement pursuant to the qualified
retirement plan of the Company or a parent or subsidiary thereof, as the case
may be; (ii) on account of Disability; (iii) with the written approval of the
Compensation Committee of the Board (the "Committee"); or (iv) by the Company
or a parent or subsidiary thereof, as the case may be, without Cause. For
purposes of the preceding sentence, (I) "Disability" shall mean disability as
defined in the Company's or a subsidiary's, as the case may be, long term
disability plan then in effect, or, in the absence of such plan, the complete
and permanent inability by reason of illness or accident to perform the duties
of the occupation at which the Optionee was employed when such disability
commenced or, if the Optionee was retired when such disability commenced, the
inability to engage in any substantial gainful activity, as determined by the
Committee based upon medical evidence acceptable to it, and (II) "Cause" shall
mean the Company or a subsidiary thereof, as the case may be, having cause to
terminate an Optionee's employment under any existing employment agreement
between the Optionee and the Company or such parent or subsidiary or, in the
absence of such an employment agreement, upon (A) the determination by the
Committee that the Optionee has ceased to perform his duties to the Company or
a parent or subsidiary thereof, as the case may be (other than as a result of
his incapacity due to physical or mental illness or injury), which failure
amounts to an intentional and extended neglect of his duties to such party, (B)
the Committee's determination that the Optionee has engaged or is about to
engage in conduct materially injurious
3
<PAGE> 4
to the Company or a subsidiary thereof, or (C) the Optionee having been
convicted of a felony.
(b) If the Optionee shall die on or prior to the applicable
Termination Date or within three months of Normal Termination, the executor or
administrator of the estate of the Optionee or the person or persons to whom
the Options shall have been validly transferred by the executor or
administrator pursuant to will or the laws of descent and distribution shall
have the right, until the earlier of the applicable Termination Date or the
date that is 12 months after the date of the Optionee's death, to exercise the
Options to the extent that the Options were exercisable at the date of death,
subject to any other limitation contained herein on the exercise of the Options
in effect on the date of exercise.
(c) If the Optionee terminates employment for reasons other
than death or Normal Termination, the Options, to the extent not exercised
prior to such termination, shall lapse and be cancelled; provided, however,
that a transfer of employment directly from the Company or a subsidiary thereof
directly to another of any such entities shall not be deemed a termination of
employment for purposes of this Agreement.
(d) Any provision of paragraphs 3(a), 3(b) or 3(c) hereof to
the contrary notwithstanding, the Options may not be exercised beyond the
applicable Termination Date.
(e) Whether employment has been or could have been terminated
for the purposes of this Agreement, and the reasons therefor, shall be
determined by the Committee, whose determination shall be final, binding and
conclusive.
(f) After the expiration of any exercise period described in
either of paragraphs 3(a), 3(b) or 3(c) hereof, the Options shall terminate
together with all of the Optionee's rights hereunder, to the extent not
previously exercised.
4. Method of Exercising Option. The Optionee may exercise any
or all of the Options by delivering to the Committee a written notice signed by
the Optionee stating the number of Options that the Optionee has elected to
exercise at that time and full payment of the purchase price of the shares to
be thereby purchased from the Company. Payment of the purchase price of the
shares may be made (a) by certified or bank cashier's check payable to the
order of the Company, (b) by surrender or delivery to the Company of shares of
Stock having an aggregate fair market value equal to the exercise price, or (c)
in the discretion of the Committee, by surrender or delivery to the Company of,
(X) other property having a fair market value on the date of exercise equal to
the purchase price or (Y) a copy of irrevocable instructions to a stockbroker
to deliver promptly to the Company an amount of sale or loan proceeds
sufficient to pay the purchase price.
5. Issuance of Shares. As promptly as practical after
receipt of such written notification and full payment of such purchase price,
the Company shall issue or transfer to the
4
<PAGE> 5
Optionee the number of shares with respect to which Options have been so
exercised, and shall deliver to the Optionee a certificate or certificates
therefor, registered in the Optionee's name.
6. Optionee. Whenever the word "Optionee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the executors, the administrators, or the
person or persons to whom the Options may be transferred by will or by the laws
of descent and distribution, the word "Optionee" shall be deemed to include
such person or persons.
7. Non-Transferability. The Options are not transferable by
the Optionee otherwise than by will or the laws of descent and distribution and
are exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Options, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except by will or
the laws of descent and distribution), shall vest in the assignee or transferee
any interest or right herein whatsoever, but immediately upon such assignment
or transfer the Options shall terminate and become of no further effect.
8. Rights as Stockholder. The Optionee or a transferee of
the Options shall have no rights as a stockholder with respect to any share
covered by the Options until he shall have become the holder of record of such
share, and no adjustment shall be made for dividends or distributions or other
rights in respect of such share for which the record date is prior to the date
upon which he shall become the holder of record thereof.
9. Recapitalizations, Reorganizations, etc. (a) The existence
of the Options shall not affect in any way the right or power of the Company or
its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Stock or the rights thereof or convertible into or exchangeable for Stock,
or the dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) The shares with respect to which the Options are granted
are shares of Stock of the Company as constituted on January 4, 1997, but if,
and whenever, prior to the delivery by the Company of all of the shares of the
Stock with respect to which the Options are granted, the Company shall effect a
subdivision or consolidation of shares of the Stock outstanding, without
receiving compensation therefor in money, services or property, the number and
price of shares remaining under the Options shall be appropriately adjusted.
Such adjustment shall be made by the Committee, whose determination as to what
adjustment shall be made, and the extent thereof, shall be final, binding and
conclusive. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to the Options.
5
<PAGE> 6
(c) In the event of any change in the outstanding shares of
Stock by reason of any recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than cash dividends, the Committee
shall make such substitution or adjustment, if any, as it deems to be
equitable, as to the number or kind or shares of Stock or other securities
covered by the Options and the option price thereof.
(d) Except as expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into or exchangeable
for shares of stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of options, rights or
warrants to subscribe therefor, or to purchase the same, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to the Options.
10. Compliance with Law. (a) Notwithstanding any of the
provisions hereof, the Optionee hereby agrees that he will not exercise the
Options, and that the Company will not be obligated to issue or transfer any
shares to the Optionee hereunder, if the exercise hereof or the issuance or
transfer of such shares shall constitute a violation by the Optionee or the
Company of any provisions of any law or regulation of any governmental
authority. Any determination in this connection by the Committee shall be
final, binding and conclusive. The Company shall in no event be obliged to
register any securities pursuant to the Securities Act of 1933 (as now in
effect or as hereafter amended) or to take any other affirmative action in
order to cause the exercise of the Options or the issuance or transfer of
shares pursuant thereto to comply with any law or regulation of any
governmental authority.
(b) Upon demand by the Committee, the Optionee shall deliver
to the Committee at the time of any exercise of an Option hereunder a written
representation that the shares to be acquired upon such exercise are to be
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the
delivery of any shares issued upon exercise of an Option shall be a condition
precedent to the right of the Optionee or such other person to purchase any
shares. In the event certificates for Stock are delivered under this Agreement
with respect to which such investment representation has been obtained, the
Committee may cause a legend or legends to be placed on such certificates to
make appropriate reference to such representation and to restrict transfer in
the absence of compliance with applicable federal or state securities laws.
11. Notice. Every notice or other communication relating to
this Agreement shall be in writing, and shall be mailed to or delivered to the
party for whom it is intended at such address
6
<PAGE> 7
as may from time to time be designated by it in a notice mailed or delivered to
the other party as herein provided; provided that, unless and until some other
address be so designated, all notices or communications by the Optionee to the
Company shall be mailed or delivered to the Company at its principal executive
office, and all notices or communications by the Company to the Optionee may be
given to the Optionee personally or may be mailed to him at the Optionee's last
known address as reflected in the Company's records.
12. Binding Effect. Subject to Section 7 hereof, this
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.
13. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas without reference
to the principles of conflicts of law thereof.
14. Restrictions in Certificate of Incorporation. The
Options and any shares acquired upon exercise thereof may be subject to certain
restrictions on transfer contained in the Certificate of Incorporation of the
Company, a copy of which may be obtained by the Optionee upon written request
to the Secretary of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this the 4th day of January, 1998, but with effect as of the day and year first
above written.
PIONEER COMPANIES, INC.
By: /s/ Philip J. Ablove
-----------------------------------
Philip J. Ablove
Vice President
/s/ Michael J. Ferris
-----------------------------------
Michael J. Ferris, Optionee
7
<PAGE> 1
EXHIBIT 4.8
PIONEER COMPANIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 15th day of May, 1997, by and
between Pioneer Companies, Inc., a Delaware corporation (the "Company") and
Andrew M. Bursky (the "Optionee").
W I T N E S S E T H :
WHEREAS, the Optionee is a director of the Company of the
Company and in such capacity provides services to the Company and its
subsidiaries, and the Company desires to have him continue to provide such
services and to afford him the opportunity to acquire, or enlarge, his
ownership of the Company's Class A Common Stock, par value $.01 per share
("Stock"), so that he may have a direct proprietary interest in the Company's
success;
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto hereby agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein, the Company hereby grants to the Optionee, during the period
commencing on the date of this Agreement and ending on May 15, 2007 (the
"Termination Date"), the right and option (the right to purchase any one share
of Stock hereunder being an "Option") to purchase from the Company an aggregate
of 100,000 shares of Stock at a price of $5.56 per share. The Options granted
hereunder shall be "nonqualified stock options" within the meaning of the
regulations adopted under Section 89 of the Internal Revenue Code of 1986, as
amended.
2. Limitations on Exercise of Option. (a) Subject to the
terms and conditions set forth herein, the Optionee may exercise 40,000 of the
Options on May 15, 1998, with none being exercisable prior to such date, an
additional 20,000 on May 15, 1999, an additional 20,000 on May 15, 2000, and an
additional 20,000 on May 15, 2001.
(b) Notwithstanding the limitations set forth in paragraph
2(a), 100% of the Options shall become immediately exercisable (i) in the event
of a change in control of the Company, or (ii) if Optionee's service as a
director of the Company is terminated by the Company or a subsidiary thereof,
as the case may be, without Cause (as defined in paragraph 3 hereof). For
purposes of the preceding sentence, a "change of control" shall, unless the
Board of Directors of the Company (the "Board") otherwise directs by resolution
adopted prior thereto, be deemed to occur if (i) any "person" (as that term is
used in Sections 13 and 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act")) other than William R. Berkley or his "affiliates" (as that
term is defined in Rule 144 promulgated pursuant to the Securities Act of 1933
(the "Securities Act")) is or becomes
<PAGE> 2
the beneficial owner (as that term is used in Section 13(d) of the Exchange
Act), directly or indirectly, of 30% or more of either the outstanding shares
of Common Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute at least a majority thereof,
unless the election or the nomination for election by the Company's
shareholders of each new director was approved by a vote of at least
three-quarters of the directors then still in office who were directors at the
beginning of the period, or (iii) the Company undergoes a liquidation or
dissolution or a sale of all or substantially all of the assets of the Company.
Any merger, consolidation or corporate reorganization in which the owners of
the combined voting power of the Company's then outstanding securities entitled
to vote generally prior to said combination, own 50% or more of the resulting
entity's outstanding securities entitled to vote generally shall not, by
itself, be considered a change in control.
3. Termination as a Director. (a) If the Optionee's service
as a director shall cease by reason of Normal Termination, the Options shall
remain exercisable until the earlier of the Termination Date or the date that
is three months after the date of such Normal Termination to the extent the
Options were exercisable at the time of such Normal Termination. For purposes
of this Agreement, the term "Normal Termination" shall mean termination of
Optionee's service as a director of the Company (i) on account of Disability;
(ii) with the written approval of the Board of Directors of the Company (the
"Board"); or (iii) by the Board without Cause. For purposes of the preceding
sentence, (I) "Disability" shall mean the complete and permanent inability by
reason of illness or accident to perform the duties of a member of the Board,
and (II) "Cause" shall mean the Board having cause to terminate the Optionee's
service as a director upon (A) the determination by the Board that the Optionee
has ceased to perform his duties to the Company (other than as a result of his
incapacity due to physical or mental illness or injury), which failure amounts
to an intentional and extended neglect of his duties to the Company, (B) the
Board's determination that the Optionee has engaged or is about to engage in
conduct materially injurious to the Company or a subsidiary thereof, or (C) the
Optionee having been convicted of a felony.
(b) If the Optionee shall die on or prior to the Termination
Date or within three months of Normal Termination, the executor or
administrator of the estate of the Optionee or the person or persons to whom
the Options shall have been validly transferred by the executor or
administrator pursuant to will or the laws of descent and distribution shall
have the right, until the earlier of the Termination Date or the date that is
12 months after the date of the Optionee's death, to exercise the Options to
the extent that the Options were exercisable at the date of death, subject to
any other limitation contained herein on the exercise of the Options in effect
on the date of exercise.
(c) If the Optionee terminates his service as a director for
reasons other than death or Normal Termination, the Options, to the extent not
exercised prior to such termination, shall lapse and be cancelled.
2
<PAGE> 3
(d) Any provision of paragraphs 3(a), 3(b) or 3(c) hereof to
the contrary notwithstanding, the Options may not be exercised beyond the
Termination Date.
(e) Whether the Optionee's service as a director has been or
could have been terminated for the purposes of this Agreement, and the reasons
therefor, shall be determined by the Board, whose determination shall be final,
binding and conclusive.
(f) After the expiration of any exercise period described in
either of paragraphs 3(a), 3(b) or 3(c) hereof, the Options shall terminate
together with all of the Optionee's rights hereunder, to the extent not
previously exercised.
4. Method of Exercising Option. The Optionee may exercise any
or all of the Options by delivering to the Board a written notice signed by the
Optionee stating the number of Options that the Optionee has elected to
exercise at that time and full payment of the purchase price of the shares to
be thereby purchased from the Company. Payment of the purchase price of the
shares may be made (a) by certified or bank cashier's check payable to the
order of the Company, (b) by surrender or delivery to the Company of shares of
Stock having an aggregate fair market value equal to the exercise price, or (c)
in the discretion of the Board, by surrender or delivery to the Company of, (X)
other property having a fair market value on the date of exercise equal to the
purchase price or (Y) a copy of irrevocable instructions to a stockbroker to
deliver promptly to the Company an amount of sale or loan proceeds sufficient
to pay the purchase price.
5. Issuance of Shares. As promptly as practical after
receipt of such written notification and full payment of such purchase price,
the Company shall issue or transfer to the Optionee the number of shares with
respect to which Options have been so exercised, and shall deliver to the
Optionee a certificate or certificates therefor, registered in the Optionee's
name.
6. Optionee. Whenever the word "Optionee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the executors, the administrators, or the
person or persons to whom the Options may be transferred by will or by the laws
of descent and distribution, the word "Optionee" shall be deemed to include
such person or persons.
7. Non-Transferability. The Options are not transferable by
the Optionee otherwise than by will or the laws of descent and distribution and
are exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Options, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except by will or
the laws of descent and distribution), shall vest in the assignee or transferee
any interest or right herein whatsoever, but immediately upon such assignment
or transfer the Options shall terminate and become of no further effect.
3
<PAGE> 4
8. Rights as Stockholder. The Optionee or a transferee of
the Options shall have no rights as a stockholder with respect to any share
covered by the Options until he shall have become the holder of record of such
share, and no adjustment shall be made for dividends or distributions or other
rights in respect of such share for which the record date is prior to the date
upon which he shall become the holder of record thereof.
9. Recapitalizations, Reorganizations, etc. (a) The existence
of the Options shall not affect in any way the right or power of the Company or
its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Stock or the rights thereof or convertible into or exchangeable for Stock,
or the dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) The shares with respect to which the Options are granted
are shares of Stock of the Company as presently constituted, but if, and
whenever, prior to the delivery by the Company of all of the shares of the
Stock with respect to which the Options are granted, the Company shall effect a
subdivision or consolidation of shares of the Stock outstanding, without
receiving compensation therefor in money, services or property, the number and
price of shares remaining under the Options shall be appropriately adjusted.
Such adjustment shall be made by the Board, whose determination as to what
adjustment shall be made, and the extent thereof, shall be final, binding and
conclusive. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to the Options.
(c) In the event of any change in the outstanding shares of
Stock by reason of any recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other corporate change, or any
distributions to common shareholders other than cash dividends, the Board shall
make such substitution or adjustment, if any, as it deems to be equitable, as
to the number or kind or shares of Stock or other securities covered by the
Options and the option price thereof.
(d) Except as expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into or exchangeable
for shares of stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of options, rights or
warrants to subscribe therefor, or to purchase the same, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to the Options.
10. Compliance with Law. (a) Notwithstanding any of the
provisions hereof, the
4
<PAGE> 5
Optionee hereby agrees that he will not exercise the Options, and that the
Company will not be obligated to issue or transfer any shares to the Optionee
hereunder, if the exercise hereof or the issuance or transfer of such shares
shall constitute a violation by the Optionee or the Company of any provisions
of any law or regulation of any governmental authority. Any determination in
this connection by the Board shall be final, binding and conclusive. The
Company shall in no event be obliged to register any securities pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to take
any other affirmative action in order to cause the exercise of the Options or
the issuance or transfer of shares pursuant thereto to comply with any law or
regulation of any governmental authority.
(b) Upon demand by the Board, the Optionee shall deliver to
the Board at the time of any exercise of an Option hereunder a written
representation that the shares to be acquired upon such exercise are to be
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the
delivery of any shares issued upon exercise of an Option shall be a condition
precedent to the right of the Optionee or such other person to purchase any
shares. In the event certificates for Stock are delivered under this Agreement
with respect to which such investment representation has been obtained, the
Board may cause a legend or legends to be placed on such certificates to make
appropriate reference to such representation and to restrict transfer in the
absence of compliance with applicable federal or state securities laws.
11. Notice. Every notice or other communication relating to
this Agreement shall be in writing, and shall be mailed to or delivered to the
party for whom it is intended at such address as may from time to time be
designated by it in a notice mailed or delivered to the other party as herein
provided; provided that, unless and until some other address be so designated,
all notices or communications by the Optionee to the Company shall be mailed or
delivered to the Company at its principal executive office, and all notices or
communications by the Company to the Optionee may be given to the Optionee
personally or may be mailed to him at the Optionee's last known address as
reflected in the Company's records.
12. Disposition of Stock. The Optionee agrees to notify the
Company in writing, within 30 days of any disposition (whether by sale,
exchange, gift or otherwise) of shares of Stock purchased under this Option,
within two years from the date of the granting of the Option or within one year
of the transfer of such shares of Stock to the Optionee.
13. Binding Effect. Subject to Section 7 hereof, this
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.
14. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas without reference
to the principles of conflicts of law thereof.
5
<PAGE> 6
15. Restrictions in Certificate of Incorporation. The
Options and any shares acquired upon exercise thereof may be subject to certain
restrictions on transfer contained in the Certificate of Incorporation of the
Company, a copy of which may be obtained by the Optionee upon written request
to the Secretary of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PIONEER COMPANIES, INC.
By: /s/ Michael J. Ferris
-----------------------------------
Michael J. Ferris
President and Chief
Executive Officer
/s/ Andrew M. Bursky
-----------------------------------
Andrew M. Bursky, Optionee
6
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Andrews & Kurth L.L.P.]
[Houston, Texas 77002]
April 17, 1998
Board of Directors
Pioneer Companies, Inc.
700 Louisiana, Suite 4300
Houston, Texas 77002
Gentlemen:
We have acted as counsel to Pioneer Companies, Inc. (the "Company") in
connection with the Company's Registration Statement on Form S-8 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of the issuance of 1,750,562 shares (the "Shares") of the
Company's Class A common stock, par value $0.01 per share, pursuant to the
Pioneer Companies, Inc. 1998 Stock Plan, the Pioneer Companies, Inc. 1995 Stock
Incentive Plan, the Non-Qualified Stock Option Agreement for Michael J. Ferris
and the Non-Qualified Stock Option Agreement for Andrew M. Bursky (collectively,
the "Options").
In connection therewith, we have examined copies of such statutes,
regulations, corporate records and documents, certificates of public and
corporate officials and other agreements, contracts, documents and instruments
as we have deemed necessary as a basis for the opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. We have
also relied, to the extent we deem such reliance proper, upon information
supplied by officers and employees of the Company with respect to various
factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that such Shares will, when issued in accordance with
the terms of the Options, be legally issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Andrews & Kurth L.L.P.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Pioneer Companies, Inc. on Form S-8 of our report dated February 17, 1998,
appearing in the Annual Report on Form 10-K of Pioneer Companies, Inc. for the
year ended December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
Houston, Texas
April 14, 1998
