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EXHIBIT 10.15
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
Xxxxxxx X. Xxxxxx (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.
(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
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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 Xxxxxxx X. Xxxxxxx 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 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
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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.
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
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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 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
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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.
(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.
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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. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PIONEER COMPANIES, INC.
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Vice President
/s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx, Optionee
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