This Indemnity
Agreement (“Agreement”) is made and entered into by and
between Pioneer Companies, Inc., a Delaware corporation
(“Company”), and Charles L. Mears
(“Indemnitee”).
Indemnitee is a
director of the Company. The parties desire that the Company
provide indemnification (including advancement of expenses) to
Indemnitee against any and all liabilities asserted against
Indemnitee to the fullest extent permitted by the Delaware General
Corporation Law and any other law (including statutory law and law
established by judicial decision) of the State of Delaware
(collectively, “Law”), as the Law presently exists and
may be expanded from time to time. Based on such premise, and for
certain good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1.
Continued Service . Indemnitee will serve at the will of the
Company or under separate contract, if such exists, as a director
of the Company for so long as Indemnitee is duly elected and
qualified in accordance with the Bylaws of the Company or until
Indemnitee tenders Indemnitee’s resignation to the
Company.
2.
Indemnification . The Company shall indemnify Indemnitee as
follows:
2.1.
The Company shall indemnify Indemnitee when Indemnitee 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 Company), by reason of the fact that
Indemnitee is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company 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
Indemnitee in connection with such action, suit or proceeding
(including punitive and similar damages, to the extent permitted by
Law) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that
Indemnitee’s conduct was unlawful.
2.2.
The Company shall indemnify Indemnitee when Indemnitee 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
Company to procure a judgment in its favor by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
expenses (including attorneys’ fees) actually and reasonably
incurred by Indemnitee in connection with the defense or settlement
of such action or suit if Indemnitee acted in good faith and in a
manner that Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company and except that no
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indemnification
pursuant to this Agreement shall be made in respect of any claim,
issue or matter as to which Indemnitee shall have been adjudged to
be liable to the Company 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, Indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the Court of Chancery or such other court
shall deem proper.
2.3.
Any indemnification under Sections 2.1 and 2.2 (unless ordered
by a court) shall be made by the Company only as authorized in the
specific case upon a determination, in accordance with the
procedures set forth in Section 3, that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has
met the applicable standard of conduct set forth in such
Sections 2.1 and 2.2. Subject to Section 3.3, such
determination shall be made (1) by the board of directors of
the Company by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or
(2) if such a quorum is not obtainable, or, even if obtainable
a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders
of the Company.
2.4.
Expenses (including attorneys’ fees) incurred by Indemnitee
in defending any civil, criminal, administrative, or investigative
action, suit or proceeding shall be paid from time to time by the
Company in advance of the final disposition of such action, suit or
proceeding, within 14 days after the receipt by the Company
from Indemnitee of a Statement of Undertaking in substantially the
form set forth in Exhibit A, in which Indemnitee
(1) states that Indemnitee has reasonably incurred actual
expenses in defending a civil, criminal, administrative, or
investigative action, suit or proceeding and (2) undertakes to
repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified by the Company as
authorized in this Section 2.
2.5.
The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 2 shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled
under any bylaw, agreement, vote of stockholders or disinterested
directors, Law or otherwise, both as to action in
Indemnitee’s official capacity and as to action in another
capacity while holding such office, shall continue after Indemnitee
has ceased to be a director, officer, employee or agent of the
Company, and shall inure to the benefit of the heirs, executors and
administrators of Indemnitee.
2.6.
The termination of any action, suit or proceeding by judgment,
order, settlement or conviction or upon a plea of nolo contendere
or its equivalent shall not, of itself, create a presumption that
Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that
Indemnitee’s conduct was unlawful.
3.
Determination of Right to Indemnification . For the purpose
of making the determination of whether to indemnify Indemnitee in a
specific case under Section 2.3, the board of directors of the
Company, independent legal counsel or stockholders, as the case may
be, shall make the determination in accordance with the following
procedures:
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3.1.
Indemnitee shall submit to the board of directors a Statement of
Request for Indemnification in substantially the form set forth in
Exhibit B, in which Indemnitee states that Indemnitee has met
the applicable standard of conduct set forth in Sections 2.1
and 2.2.
3.2.
Indemnitee’s submission of a Statement of Request for
Indemnification to the board of directors shall create a rebuttable
presumption that Indemnitee has met the applicable standard of
conduct set forth in Sections 2.1 and 2.2 and, therefore, is
entitled to indemnification under Section 2. The board of
directors, independent legal counsel or stockholders, as the case
may be, shall determine, within 45 days after submission of
the Statement of Request for Indemnification, specifically that
Indemnitee is so entitled, unless it or they shall possess clear
and convincing evidence to rebut the foregoing presumption, which
evidence shall be disclosed to Indemnitee with particularity in a
sworn written statement signed by all persons who participated in
the determination and voted to deny indemnification.
3.3.
At Indemnitee’s option, Indemnitee may elect that the
determination as to indemnification is to be made by Independent
Counsel (as defined below), in which event the Independent Counsel
shall be selected by Indemnitee, and Indemnitee shall give written
notice to the Company (“Independent Counsel Notice”)
within 10 days after the delivery of the Statement of Request
for Indemnification advising it of the identity of the Independent
Counsel so selected (unless Indemnitee shall request in the
Independent Counsel Notice that such selection be made by the board
of directors of the Company), in which event the Company shall give
written notice to Indemnitee within 10 days after receipt of
Indemnitee’s Independent Counsel Notice advising Indemnitee
of the identity of the Independent Counsel so selected). In either
event, Indemnitee or the Company, as the case may be, may, within
seven days after such written notice of selection shall have been
given, deliver to the Company or to Indemnitee, as the case may be,
a written objection to such selection. Any objection to selection
of Independent Counsel pursuant to this Section 3.3 may be
asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of the definition of
“Independent Counsel” below, and the objection shall
set forth with particularity the factual basis of such assertion.
If such written objection is timely made, the Independent Counsel
so selected may not serve as Independent Counsel unless and until a
court has determined that such objection is without merit. In the
event of a timely written objection to a choice of Independent
Counsel, the party originally selecting the Independent Counsel
shall have seven days to make an alternate selection of Independent
Counsel and to give written notice of such selection to the other
party, after which time such other party shall have seven days to
make a written objection to such alternate selection. If, within
45 days after submission by Indemnitee of a Statement of
Request for Indemnification pursuant to Section 3.1 hereof, no
Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition a court of competent
jurisdiction (the “Court”) for resolution of any
objections that shall have been made by the
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