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EXHIBIT 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT is made and entered into
between Pioneer Companies, Inc., a Delaware corporation (the "Company"), and
Xxxxxxx X. Xxxxxx, (the "Executive") as of January 4, 1997.
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to accept employment with the Company, on the terms and
conditions set forth herein;
NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
SECTION 1. Employment. The Company hereby agrees to
employ the Executive and the Executive hereby accepts employment with the
Company, on the terms and subject to the conditions hereinafter set forth.
Subject to such terms and conditions, the Executive shall serve as President
and Chief Executive Officer of the Company and, in such capacity, shall report
directly to the Board of Directors of the Company (the "Board of Directors")
and shall have such duties, functions, responsibilities and authority as are
consistent with the Executive's position as the senior executive officer in
charge of the general management, business and affairs of the Company and
subsidiaries of the Company including, but not limited to, the development and
implementation of strategies and goals and internal policies and program
designed to achieve the profit, market share and product mix goals of the
Company and its subsidiaries, together with such additional duties, functions,
responsibilities and authority including, without limitation, serving as an
officer and/or director of any subsidiary of the Company, commensurate with the
Executive's position as set forth in this Agreement, as may be assigned to the
Executive from time to time by the Board of Directors. The Company shall use
best efforts to have the Executive nominated to the Board of Directors.
SECTION 2. Term. Subject to the provisions and
conditions of this Agreement (including Section 6), the Executive's employment
hereunder shall commence on the date hereof and shall continue during the
period ending on the third anniversary of the date hereof (the "Employment
Term").
SECTION 3. Compensation.
(a) Salary. As compensation for the performance of the
Executive's services hereunder, the Company shall pay to the Executive a base
salary (the "Salary") of Three Hundred Fifty Thousand Dollars ($350,000) per
annum with increases, if any, as may be approved in writing by the Board of
Directors. The Salary shall be payable in accordance with payroll
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practices of the Company as the same shall exist from time to time. In no
event shall the Salary be decreased during the Employment Term.
(b) Bonus Plan. The Executive shall be entitled to
receive bonus compensation consisting of cash, securities or property ("Bonus")
in accordance with any management incentive plan or plans (including, without
limitation, any shared earnings plan) which may be established by the Board of
Directors of the Company for its executive officers and management.
Notwithstanding the foregoing, the Executive shall be entitled to receive a
cash bonus of not less than Two Hundred Thousand Dollars ($200,000) in
consideration of services to be rendered to the Company in 1997, such bonus to
be paid quarterly in arrears during 1997.
(c) Benefits. In addition to the Salary and Bonus, the
Executive shall be entitled to participate in or to receive the same health,
insurance, pension, automobile, severance, vacation, holiday, sick leave,
disability, profit sharing, 401(k) savings and other benefits as shall be
provided to executive officers of the Company generally.
(d) Paying Entity. The Company may cause any one or more
of its subsidiaries to provide the salary and benefits to the Executive as are
required by this Agreement.
SECTION 4. Exclusivity. During the Employment Term,
the Executive shall devote substantially all of his time to the business of the
Company, shall faithfully serve the Company, shall in all respects conform to
and comply with the lawful directions and instructions given to him by the
Board of Directors or its designee in accordance with the terms of this
Agreement, shall use his best efforts to promote and serve the interests of the
Company and shall not engage in any other business activity, whether or not
such activity shall be engaged in for pecuniary profit, except that the
Executive may engage in personal investing and charitable activities that do
not interfere in any material respect with the services to be provided by the
Executive hereunder.
SECTION 5. Reimbursement for Expenses. The Company
shall promptly reimburse the Executive for all reasonable out-of-pocket travel,
entertainment and other business expenses incurred by the Executive during the
term of this Agreement and in the performance of his duties hereunder in
accordance with the Company's reimbursement policies in effect from time to
time.
SECTION 6. Termination.
(a) Death. This Agreement shall automatically terminate
upon the death of the Executive and upon such event, the Executive's estate
shall be entitled to receive the amounts specified in Section 6(f) below.
(b) Disability. If the Executive is unable to perform
the duties required of him under this Agreement because of physical or mental
disability, this Agreement shall remain in full force and effect and the
Company shall pay all compensation required to be paid to the Executive
hereunder, unless the Executive is unable to perform the duties required of him
under
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this Agreement for an aggregate of ninety (90) days (whether or not
consecutive) during any twelve (12) month period during the term of this
Agreement, in which event this Agreement (other than Sections 7, 8, 9 and 12
hereof), including, but not limited to, the Company's obligations to pay any
Salary or to provide any privileges under this Agreement, shall, upon written
notice by the Company to the Executive to such effect, terminate; provided,
however, that the foregoing shall not prejudice the Executive's rights to
continuing, existing insurance benefits for which he is otherwise eligible,
including disability benefits. In case of any dispute as to whether the
Executive is disabled within the meaning of this Section 6(b), the
determination of such disability for the period specified shall be certified by
a physician reasonably acceptable to both the Company and the Executive, which
physician's determination shall be final and binding on the parties hereto.
The Company shall be permitted to hire a replacement of the Executive, so long
as this Agreement shall remain in effect, to serve in the event and for so long
as the Executive shall be unable to perform the duties required of him
hereunder due to his disability for an aggregate of thirty (30) days during any
12-month period during the term of this Agreement.
(c) Cause. The Company may terminate this Agreement
(other than Sections 7, 8, 9 and 12 hereof) for "Cause." For purposes of this
Agreement, "Cause" shall mean: (i) the Executive's failure, neglect or refusal
to perform his duties hereunder which failure, neglect or refusal shall not
have been corrected by the Executive within thirty (30) days of receipt by the
Executive of written notice from the Company of such failure, neglect or
refusal, which notice shall set forth the nature of said failure, neglect or
refusal; (ii) any engagement by the Executive in misconduct that is materially
injurious to the reputation or business of the Company or its affiliates or
that materially impairs the ability of the Executive to perform his duties and
responsibilities hereunder; (iii) conviction of the Executive for the
commission of a felony; or (iv) the commission by the Executive of an act of
fraud or embezzlement against the Company. If the Executive's employment is
terminated for Cause, the Executive shall be entitled to receive the amounts
specified in Section 6(f) hereof. In the event of any termination pursuant to
this Section 6(c),the Company shall deliver to the Executive written notice
setting forth the basis for such termination, which notice shall set forth the
nature of the Cause, and the facts and circumstances in connection therewith,
which is the reason for such termination.
(d) Good Reason. The Executive may terminate this
Agreement for "Good Reason" following a Substantial Breach (as defined below)
if such Substantial Breach shall not have been corrected by the Company within
thirty (30) days of receipt by the Company of written notice from the Executive
of the occurrence of such Substantial Breach, which notice shall specifically
set forth the nature of the Substantial Breach which, if not corrected, will
entitle the Executive at any time after such thirty (30) day notice period and
by subsequent written notice to terminate this Agreement. In the event of
resignation by the Executive following a Substantial Breach, the Executive
shall be entitled to receive the amounts specified in Section 6(f) hereof. An
election by the Executive to terminate his employment under this paragraph
shall not be a breach of this Agreement. The term "Substantial Breach" means
any material breach by the Company of its obligations hereunder consisting of:
(i) the failure of the Company to pay the Executive the Salary or Bonus, if
any, in accordance with Section 3(a) and (b) hereof; (ii) the failure by the
Company to substantially maintain and continue the Executive's participation in
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benefit plans as provided in Section 3(c) hereof; or (iii) any material
diminishment in the duties or responsibilities of the Executive described in
Section 1; provided, however, that the term "Substantial Breach" shall not
include a termination of the Executive's employment hereunder pursuant to
Section 6(b) or (c) hereof. The date of termination of the Executive's
employment under this Section 6(d) shall be the effective date of any
resignation specified in writing by the Executive, which shall not be less than
sixty (60) days after receipt by the Company of written notice of such
resignation, provided that any resignation by the Executive shall not be
effective pursuant to this Section 6(d) if such Substantial Breach shall have
been corrected by the Company during the thirty (30) day period following
notice by the Executive of the existence thereof or if corrected thereafter
prior to the date of resignation by the Executive.
(e) Without Cause. The Company, by action of its Board
of Directors, may terminate this Agreement (other than Sections 7, 8, 9 and 12
hereof) without Cause upon the giving to the Executive of thirty (30) days'
prior written notice of such termination. If the Executive's employment is
terminated by the Company without Cause, the Executive shall be entitled to
receive the amounts specified in Section 6(f) hereof.
(f) Payments. In the event that the Executive's
employment hereunder terminates for any reason, the Company shall promptly pay
to the Executive all amounts accrued but unpaid hereunder through the date of
termination in respect of the Salary and for reimbursement of any expenses
pursuant to Section 5 hereof, and, in the case of any termination by reason of
death or physical or mental disability of the Executive pursuant to Section
6(a) or 6(b) hereof, a pro rated portion of the Bonus, if any, which the
Executive would have been otherwise entitled to receive under Section 3(b) for
the calendar year in which such termination occurs, such pro rated portion
being the portion of such Bonus corresponding to the period commencing on
January 1 of such year and ending on the date of termination. In the event
that the Executive's employment has been terminated by the Company for Cause,
the Company shall have no obligations to the Executive for Salary, Bonus or
other benefits herein provided accruing on or after the date of termination
except as set forth in the preceding sentence or as may be otherwise provided
by law. In the event that the Executive's employment hereunder is terminated
by the Company without Cause or by the Executive with Good Reason, in addition
to the amounts specified in the first sentence of this Section 6(f), the
Executive shall continue to receive the Salary at the rate in effect hereunder
on the date of such termination periodically, in accordance with the Company's
prevailing payroll practices, until the last date of the Employment Term or
until the first anniversary of the termination date, if longer, plus (i) the
cost of the Executive's premiums for health care benefits under COBRA or the
cost of the Executive's premiums under any replacement health insurance
coverage obtained by the Executive containing substantially the same coverage
as provided to the Executive at such time, which premiums shall be payable as
and when the Salary would otherwise have been payable as provided in this
Agreement; and (ii) a pro rated portion of the Bonus, if any, which the
Executive would have otherwise been entitled to receive under Section 3(b) for
the calendar year in which the Executive is terminated pro rated in the same
manner as set forth in the first sentence of this Section 6(f). Without
intending to limit the generality of Section 7, in the event that the Executive
accepts other employment or engages in his own business prior to the last date
of the Employment Term, the Executive shall forthwith notify the Company and
the Company shall be
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entitled to set off from amounts due the Executive under this Section 6(f) the
amounts paid to the Executive in respect of such other employment or business
activity. Upon any termination of this Agreement, all of the rights, privileges
and duties of the Executive hereunder shall cease except for any rights under
this Section 6(f) and any obligations under Sections 7, 8, 9 and 12 hereunder.
SECTION 7. Secrecy and Non-competition.
(a) No Competing Employment. The Executive acknowledges that
the agreements and covenants contained in this Section 7 are essential to
protect the value of the Company's business and assets and that by virtue of
his employment with the Company, the Executive will obtain Confidential
Information and there is a substantial probability that such Confidential
Information could be used to the substantial advantage of a competitor of the
Company or its subsidiaries and to the Company's or its subsidiaries'
substantial detriment. Therefore, the Executive agrees that except in
connection with his employment hereunder or as required by legal process, he
shall not disclose to any person or entity or use, during the Employment Term
or at any time thereafter, any information not in the public domain or
generally known in the industry, in any form acquired by the Executive while
employed by the Company or, if acquired following the Employment Term, such
information which, to the Executive's knowledge, has been acquired, directly,
or indirectly, from any person or entity owing a duty of confidentiality to the
Company or any of its subsidiaries or affiliates, relating to the Company, its
subsidiaries or affiliates, including but not limited to information regarding
customers, vendors, suppliers, trade secrets, training programs, manuals or
materials, technical information, contracts, systems, procedures, mailing
lists, know-how, trade names, improvements, price lists, financial or other
data (including the revenues, costs or profits associated with any of the
Company's products or services), business plans, code books, invoices and other
financial statements, computer programs, software systems, databases, discs and
printouts, plans (business, technical or otherwise), customer and industry
lists, correspondence, internal reports, personnel files, sales and advertising
material, telephone numbers, names, addresses or any other compilation of
information, written or unwritten, which is or was used in the business of the
Company or any of its subsidiaries or affiliates (collectively, "Confidential
Information"). The Executive agrees and acknowledges that all Confidential
Information, in any form, and copies and extracts thereof, are and shall remain
the sole and exclusive property of the Company and upon termination of his
employment with the Company, the Executive shall return to the Company the
originals and all copies of any Confidential Information provided to or
acquired by the Executive in connection with the performance of his duties for
the Company, and shall return to the Company all files, correspondence and/or
other communications received, maintained and/or originated by the Executive
during the course of his employment.
(b) No Interference. During the term of this Agreement and
for a period of two (2) years following the date of the termination of the
Executive's employment with the Company (the "Restricted Period"), the
Executive shall not, whether for his own account or for the account of any
other individual, partnership, firm, corporation or other business organization
(other than the Company), directly or indirectly, solicit, endeavor to entice
away from the Company, its affiliates or subsidiaries, or otherwise directly
interfere with the relationship of the Company, its affiliates or subsidiaries
with any person who, to the knowledge of the Executive,
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is employed by or otherwise engaged to perform services for the Company, its
affiliates or subsidiaries (including, but not limited to, any independent
distributor or sales representative or organization).
(c) Inventions. The Executive hereby sells, transfers and
assigns to the Company, or to any person or entity designated in writing by
the Company, all of the right, title and interest of the Executive in and to
all inventions, sales materials, software, training materials, disclosures and
improvements, whether patented or unpatented, and copyrightable material, made
or conceived by the Executive, solely or jointly, in whole or in part, during
his employment with the Company which are not generally known to the public or
the industry or recognized as standard practice and which (i) relate to
services, trade names, methods, ideas, apparatus, designs, products, processes
or devices which may be sold, leased, used or under construction or development
by the Company, or any franchise affiliated with the Company and (ii) arise
(wholly or partly) from the efforts of the Executive during and in the course
of his employment with the Company (an "Invention"). The Executive shall
communicate promptly and disclose to the Company, in such form as the Company
reasonably requests, all information, details and data pertaining to any such
Invention. With respect to all Inventions which are to be assigned pursuant to
this Section 7, the Executive will assist the Company in any reasonable manner
to obtain for the Company's benefit patents thereon, including, but not limited
to, executing patent applications, transfers or assignments thereof to the
Company and any and all other documents reasonably deemed necessary by the
Company. The Company shall pay all costs incident to the preparation,
execution and delivery of such patent applications, transfers, assignments and
other documents. Any Invention by the Executive within six (6) months
following the termination of his employment hereunder shall be presumed to fall
within the provisions of this Section 7(c) unless the Executive bears the
burden of proof of showing that the Invention was first conceived and made
following such termination.
SECTION 8. Injunctive Relief. Without intending to limit
the remedies available to the Company, the Executive acknowledges that a
breach of any of the covenants contained in Section 7 hereof may result in
material irreparable injury to the Company or it subsidiaries or affiliates for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to seek a temporary
restraining order and/or a preliminary or permanent injunction, restraining the
Executive from engaging in activities prohibited by Section 7 hereof or such
other relief as may be required specifically to enforce any of the covenants in
Section hereof.
SECTION 9. Extension of Restricted Period. In addition
to the remedies the Company may seek and obtain pursuant to Section 8
of this Agreement, the Restricted Period shall be extended by any and all
periods during which the Executive shall be found by a court to have been in
violation of the covenants contained in Section 7 hereof.
SECTION 10. Successors and Assigns; No Third-Party
Beneficiaries. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and assigns,
including, but not limited to, the Executive's heirs and
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personal representatives of the Executive's estate; provided, however, that
neither party shall assign or delegate any of the obligations created under
this Agreement without the prior written consent of the other party.
Notwithstanding the foregoing, the Company shall have the unrestricted right to
assign this Agreement and to delegate all or any part of its obligations
hereunder to any of its subsidiaries, so long as such assignment does not
diminish the duties, function, responsibility or authority of the Executive or
result in any assignment of duties or responsibilities materially inconsistent
with those set forth in this Agreement (unless consented to by the Executive)
but in such event such assignee shall expressly assume all obligations of the
Company hereunder and the Company shall remain fully liable for the performance
of all such obligations in the manner prescribed in this Agreement. Nothing in
this Agreement shall confer upon any person or entity not a party to this
Agreement, or (unless otherwise expressly provided herein) the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of Agreement.
SECTION 11. Waiver and Amendments. Any waiver, alteration,
amendment or modification of any of the terms of this Agreement shall be valid
only if made in writing and signed by the parties hereto. No waiver by either
of the parties hereto of their rights hereunder shall be deemed to constitute a
waiver with respect to any subsequent occurrences or transactions hereunder
unless such waiver specifically states that it is to be construed as a
continuing waiver.
SECTION 12. Severability and Governing Law. The Executive
acknowledges and agrees that the covenants set forth in Section 7 hereof are
reasonable and valid in all respects. Each party hereto acknowledges and
agrees that if any of such covenants or other provisions of this Agreement are
found to be invalid or unenforceable by a final determination of a court of
competent jurisdiction (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid and unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO THE
CHOICE OF LAW PROVISIONS THEREOF.
SECTION 13. Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made if delivered personally or sent by registered or
certified mail (postage prepaid, return receipt requested), or sent by
facsimile transmission or overnight courier service, addressed in the case of
the Company, to Pioneer Companies, Inc., 4200 NationsBank Center, 000 Xxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: President, fax: (000) 000-0000 with a
copy to Interlaken Capital, Inc., 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000, Attention: Chairman of the Board, fax: (000) 000-0000 and, in the case
of the Executive, to Xxxxxxx X. Xxxxxx, 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxx 00000 or, in each case, to such other address as may be designated to
the other party from time to time as provided above. All notices so given
shall be effective when received at the designated address.
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SECTION 14. Captions and Section Headings. Captions and
section headings herein are solely for convenience of reference and shall
not affect the meaning or interpretation of this Agreement or of any term or
provision hereof.
SECTION 15. Entire Agreement. This Agreement constitutes the
entire understanding and agreement of the parties hereto regarding the
employment of the Executive. This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements
between the parties relating to the subject matter of this Agreement, all of
which are merged into this Agreement.
SECTION 16. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which together shall be considered one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
PIONEER COMPANIES, INC.
By: /s/ XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
Title: Vice President
EXECUTIVE
/s/ XXXXXXX X. XXXXXX
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