You are cordially invited to attend a Special Meeting of Stockholders of Pioneer Companies, Inc. (“Pioneer”, “we”, “us” or “our”) to be held on • , • , 2007 at • local time at our offices located at 700 Louisiana Street, Suite 4300, Houston, Texas 77002. At the Special Meeting, you will be asked to consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of May 20, 2007, by and among Pioneer, Olin Corporation, a Virginia corporation (“Olin”), and Princeton Merger Corp., a wholly owned subsidiary of Olin (“Merger Sub”).

The Merger Agreement contemplates the merger of Merger Sub with and into Pioneer, with Pioneer continuing as the surviving corporation and becoming a wholly owned subsidiary of Olin (the “Merger”). If the Merger is completed, you will receive $35.00 in cash, without interest, for each share of our common stock that you own.

On May 20, 2007, after careful consideration, our Board of Directors unanimously (i) determined that the Merger and the Merger Agreement were fair to, and in the best interests of, our stockholders, and (ii) approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT.

The accompanying proxy statement provides you with information about the proposed Merger and the Special Meeting. We encourage you to read the entire proxy statement carefully.

YOUR VOTE IS VERY IMPORTANT.  The Merger cannot be completed unless the Merger Agreement is adopted by the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote at the Special Meeting. Whether or not you expect to attend the Special Meeting, please complete, date, sign and return the enclosed proxy card, or vote over the telephone or on the Internet as instructed in the enclosed materials. Even if you have voted by proxy, you may still vote in person if you attend the Special Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Special Meeting, you must obtain a proxy card issued in your name from that record holder. The failure to vote will have the same effect as voting against the adoption of the Merger Agreement.

If your shares are held in “street name” by your broker, your broker will be unable to vote your shares without instructions from you. You should instruct your broker to vote your shares by following the procedures provided by your broker. Failure to instruct your broker to vote your shares will have the same effect as voting against the adoption of the Merger Agreement.

The Board of Directors and management look forward to seeing you at the Special Meeting.

You are cordially invited to attend a Special Meeting of Stockholders of Pioneer Companies, Inc., a Delaware corporation (“Pioneer”, “we”, “us” or “our”). The meeting will be held on • , • , 2007 at • local time at our offices located at 700 Louisiana Street, Suite 4300, Houston, Texas 77002, for the following purposes:

On May 20, 2007, after careful consideration, our Board of Directors unanimously (i) determined that the Merger and the Merger Agreement were fair to, and in the best interests of, our stockholders, and (ii) approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. Our Board of Directors unanimously recommends that you vote “FOR” the adoption of the Merger Agreement and “FOR” the approval of the proposal to postpone or adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement.

Our Board of Directors has fixed the close of business on • , 2007, as the record date for the purpose of determining the stockholders entitled to receive notice of, and to vote at, the Special Meeting or any adjournment or postponement thereof.

The accompanying proxy statement, which is being mailed to stockholders on or about • , 2007, provides you with information about the proposed Merger and the Special Meeting. We encourage you to read the entire proxy statement carefully.

YOUR VOTE IS VERY IMPORTANT.  The Merger cannot be completed unless the Merger Agreement is adopted by the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote at the Special Meeting. Whether or not you expect to attend the Special Meeting, please complete, date, sign and return the enclosed proxy card, or vote over the telephone or on the Internet as instructed in the accompanying proxy statement and the enclosed proxy card. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote “FOR” the adoption of the Merger Agreement and “FOR” the proposal to postpone or adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement. If you fail to vote by proxy or in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and, if a quorum is present, will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement. If you are a stockholder of record and wish to vote in person at the Special Meeting, you may withdraw your proxy and vote in person.

Our stockholders who do not vote in favor of adoption of the Merger Agreement will have the right to seek appraisal of the fair value of their shares if the Merger is completed, but only if they submit a written demand for appraisal before the vote is taken on the Merger Agreement and comply with all of the required procedures under Delaware law, which are summarized in the accompanying proxy statement. See “Appraisal Rights” beginning on page 53 of the accompanying proxy statement.

This Summary Term Sheet highlights selected information from this proxy statement and may not contain all of the information that is important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement. We have included page references in the Summary Term Sheet to direct you to the appropriate places in this proxy statement for a more complete description of the topics presented in this Summary Term Sheet. In this proxy statement, the terms “we,” “us,” “our” and “Pioneer” refer to Pioneer Companies, Inc. We refer to Olin Corporation as “Olin” and we refer to Princeton Merger Corp. as “Merger Sub.”

The members of our Board of Directors were aware of these interests and considered them, among other matters, when deciding to approve and recommend the adoption of the Merger Agreement. For a more complete description of the interests of our executive officers and directors in the Merger, see “The Merger — Interests of Executive Officers and Directors in the Merger” beginning on page 28 and “The Merger — Treatment of Our Stock Options and Restricted Stock” beginning on page 33.

The following questions and answers are intended to address some commonly asked questions regarding the Merger and the Special Meeting. These questions and answers may not address all questions that may be important to you as our stockholder. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

Pioneer Companies, Inc. and its subsidiaries have manufactured and marketed chlor-alkali products including chlorine, caustic soda and related products in North America since 1988. Approximately 52% of our annual production capacity of chlor-alkali products is accounted for by our two Canadian chlor-alkali plants in Becancour, Quebec and Dalhousie, New Brunswick, while the remaining 48% of our production capacity is accounted for by our two U.S. plants in Henderson, Nevada and St. Gabriel, Louisiana. In addition to chlorine and caustic soda, we also manufacture bleach, hydrochloric acid and sodium chlorate.

We believe that our chlor-alkali production capacity represents approximately 5% of total chlor-alkali production capacity in the United States and Canada. Our annual production capacity is approximately 725,000 Electrochemical Units, or ECUs, which is approximately 1,500,000 aggregate tons of chlorine and caustic soda. Caustic soda and chlorine are co-products, which are produced simultaneously through the electrolysis of salt water in a fixed ratio of approximately 1.1 to 1. An ECU consists of 1.1 tons of caustic soda and 1 ton of chlorine.

We were incorporated in Delaware in 1987. We maintain our principal executive offices at 700 Louisiana Street, Suite 4300, Houston, Texas 77002 and our telephone number is (713) 570-3200.

Olin Corporation is a Virginia corporation and was incorporated in 1892. Olin is a manufacturer concentrated in three business segments: chlor-alkali products, metals and Winchester^® products. Chlor alkali products, which represent 21% of Olin’s 2006 sales, include chlorine and caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. Metals products, which represent 67% of Olin’s 2006 sales, include copper and copper alloy sheet, strip, foil, rod, welded tube, fabricated parts and stainless steel and aluminum strip. Winchester products, which represent 12% of Olin’s 2006 sales, include sporting ammunition, canister powder, reloading components, small caliber military ammunition and components and industrial cartridges. The principal executive offices of Olin are located at 190 Carondelet Plaza, Suite 1530, Clayton, Missouri 63105 and its telephone number is 314-480-1400.

Merger Sub is a wholly owned subsidiary of Olin. Merger Sub is a Delaware corporation that was formed solely for the purpose of facilitating the acquisition of Pioneer by Olin. The principal executive offices of Merger Sub are located at 190 Carondelet Plaza, Suite 1530, Clayton, Missouri 63105 and its telephone number is 314-480-1400.

This proxy statement is being furnished to you in connection with the solicitation by our Board of Directors of proxies to be used at the Special Meeting of Stockholders to be held on • , • , 2007 at • local time at our offices located at 700 Louisiana Street, Suite 4300, Houston, Texas 77002, and any adjournments or postponements thereof. This proxy statement and the accompanying proxy card are being mailed on or about • , 2007 to all stockholders of record entitled to vote at the Special Meeting.

The purpose of the Special Meeting is for our stockholders to consider and vote upon a proposal to adopt the Merger Agreement. A copy of the Merger Agreement is attached to this proxy statement as Annex A. In the event that there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement, stockholders may also be asked to vote upon a proposal to postpone or adjourn the Special Meeting, if necessary, to solicit additional proxies.

On May 20, 2007, our Board of Directors unanimously (i) determined that the Merger and the Merger Agreement were fair to, and in the best interests of, our stockholders, and (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Merger. Our Board of Directors unanimously recommends that you vote “FOR” the adoption of the Merger Agreement and “FOR” the approval of the proposal to postpone or adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement.

Our Board of Directors knows of no other matters that will be presented for consideration at the Special Meeting.

Our Board of Directors asks you to appoint Michael Y. McGovern, our Chief Executive Officer, and Gary L. Pittman, our Chief Financial Officer, as your proxy holders to vote your shares at the Special Meeting. You make this appointment by voting by proxy using one of the voting methods described below.

If appointed by you, the proxy holders will vote your shares as you direct on the matters described in this proxy statement. In the absence of your direction, they will vote your shares as recommended by our Board of Directors. Please note that your Internet or telephone vote authorizes the proxy holders to vote your shares in the same manner as if you had marked, signed and returned your proxy card. If any other matters are properly brought before the Special Meeting, it is the intention of the proxy holders to vote on such matters in accordance with their best judgment.

Only stockholders who owned shares of our common stock as of the close of business on • , 2007, the record date for the Special Meeting, are entitled to receive a notice of, and to vote at the Special Meeting. On the record date, we had • shares of our common stock outstanding and entitled to vote. Each holder of common stock is entitled to one vote for each share held as of • , 2007.

Stockholder of Record: Shares Registered in Your Name.  If on the record date, your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote in person at the Special Meeting or vote by proxy. Whether or not you plan to attend the Special Meeting, we urge you to fill out and return the enclosed proxy card or vote by proxy over the telephone or on the Internet as instructed below to ensure that your vote is counted.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank.  If on the record date, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Special Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account using instructions provided by your broker. You are also invited to attend the Special Meeting. However, if you are not the stockholder of record, you may not vote your shares in person at the Special Meeting unless you request and obtain a valid proxy from your broker or other agent.

Stockholder of Record: Shares Registered in Your Name.  If you are a stockholder of record, you may vote in person at the Special Meeting, vote by proxy using the enclosed proxy card, vote by proxy over the telephone, or vote by proxy on the Internet. Whether or not you plan to attend the Special Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Special Meeting and vote in person if you have already voted by proxy.

Beneficial Owner: Shares Registered in the Name of Broker or Bank.  If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote over the telephone or on the Internet as instructed by your broker or bank. To vote in person at the Special Meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.

If you vote your shares of our common stock by submitting a proxy, your shares will be voted at the Special Meeting as you direct. If no instructions are indicated, all of your shares of our common stock will be voted “FOR” the adoption of the Merger Agreement and “FOR” the approval of the proposal to postpone or adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement.

If you hold shares of record, you may not combine these shares with any shares you may hold in “street name” because any shares you hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record. Similarly, if you own shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for those shares because they are held in a different form of record ownership. Shares held by a corporation or business entity must be voted by an authorized officer of the entity. Shares held in an IRA must be voted under the rules governing the account.

You can revoke your proxy at any time before the vote is taken at the Special Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:

If your shares are held in “street name” through a bank, broker or other agent, you must follow instructions received from such bank, broker or other agent which were provided with this proxy statement in order to revoke your vote or to vote at the Special Meeting.

A quorum will be present if at least a majority of the outstanding shares entitled to vote are represented by stockholders at the Special Meeting or by proxy. A quorum is necessary to hold the Special Meeting. In the event that a quorum is not present at the Special Meeting, it is expected that the meeting will be adjourned or postponed to solicit additional proxies. Abstentions and broker non-votes will be counted as shares present and entitled to vote for the purpose of determining whether a quorum is present. “Broker non-votes” result when brokers are precluded

The adoption of the Merger Agreement requires the affirmative vote of the holders of at least a majority of the outstanding shares of our common stock at the close of business on the record date for the Special Meeting. Shares that are present but not voted, either by abstention or non-vote (including broker non-vote), will be counted for purposes of establishing a quorum. BECAUSE APPROVAL OF THE MERGER AGREEMENT REQUIRES THE APPROVAL OF THE HOLDERS OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF OUR COMMON STOCK ENTITLED TO VOTE, FAILURE TO VOTE YOUR SHARES, INCLUDING BY ABSTENTION OR NON-VOTE (INCLUDING BROKER NON-VOTE), WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE ADOPTION OF THE MERGER AGREEMENT.

The approval of the proposal to postpone or adjourn the Special Meeting, if necessary, to solicit additional proxies, if there are insufficient votes to adopt the Merger Agreement, requires the affirmative vote of a majority of those shares represented in person or by proxy at the Special Meeting. Abstentions will have the same effect as votes “AGAINST” the proposal to postpone or adjourn the meeting. Broker non-votes will generally have no effect on that proposal. The persons named as proxies may propose and vote for one or more postponements or adjournments of the Special Meeting to permit further solicitations of proxies. No proxy voted against the adoption of the Merger Agreement will be voted in favor of any postponement or adjournment of the Special Meeting.

Under Delaware law, holders of shares of our common stock are entitled to appraisal rights in connection with the Merger. In order to exercise appraisal rights, you must submit a written demand for appraisal before the vote is taken on the Merger Agreement and comply with all applicable requirements of Delaware law. See “Appraisal Rights” beginning on page 53 and Annex B for information on the requirements of Delaware law regarding appraisal rights.

As of • , 2007, the record date for stockholders entitled to vote at the Special Meeting, our executive officers and directors owned, in the aggregate, 43,784 shares of our common stock, or approximately 0.4% of the outstanding shares of our common stock.

Our executive officers and directors have personal interests in the Merger that are, or may be, different from, or in addition to, the interests of our stockholders in general. Please read “The Merger — Interests of Executive Officers and Directors in the Merger” beginning on page 28.

We will pay the costs of soliciting proxies for the Special Meeting. Our officers, directors and employees may solicit proxies by telephone, mail or the Internet or in person. However, they will not be paid for soliciting proxies. We have retained D. F. King & Co., Inc. to assist us in the solicitation of proxies, using the means referred to above, and that firm will receive a fee of approximately $$12,000], plus reimbursement of out-of-pocket expenses. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

Although it is not expected, the Special Meeting may be postponed or adjourned for the purpose of soliciting additional proxies to any other time and place. You should note that the meeting could be successively postponed or adjourned to any date. If the Special Meeting is postponed or adjourned, stockholders who have already sent in their proxies will be able to revoke them at any time prior to their use. The persons named as proxies may propose and vote for one or more postponements or adjournments of the Special Meeting to permit further solicitations of proxies. No proxy voted against the proposal to adopt the Merger Agreement will be voted in favor of any postponement or adjournment of the Special Meeting.

The discussion under the sections of this proxy statement entitled “The Merger” and “The Merger Agreement” summarizes the material terms of the Merger. Although we believe that the description covers the material terms of the Merger, the summary may not contain all of the information that is important to you. We urge you to read this proxy statement, the Merger Agreement and the other documents referred to herein carefully for a more complete understanding of the Merger.

From time to time since 2005, our management and Board of Directors have considered and assessed, among other things, potential strategic acquisitions, business combinations and other alternatives that might enhance stockholder value. At various times, our management was contacted by representatives of several investment banks, including our financial advisor for the Merger, CIBC World Markets, each of whom discussed ideas for potential business combinations or acquisition targets. As a result of those meetings and other contacts, at various times during the period from 2005 to mid-2006, our management had preliminary meetings and discussions with two private equity companies and two companies in the chemical industry regarding a possible business combination with Pioneer. None of those preliminary discussions led to more substantive discussions.

In May 2006, at the direction of our Board of Directors, our management began working with an outside consulting firm to develop a strategic plan for our future, which was presented at a regularly scheduled meeting of our Board of Directors on July 31, 2006. The strategic plan included a recommendation that we consider potential acquisitions or business combinations and identified a small group of potential companies in the chemical industry which might fit this strategic plan, most of which had been previously identified by our management during prior meetings with investment bankers and other contacts. The strategic plan also concluded that we would likely not be an attractive purchase for a private equity buyer. Another conclusion of the study was the confirmation that our St. Gabriel plant, which is located in the heart of one of the largest industrial complexes of chlorine buyers in North America, was a key strategic asset. The study also focused on the current and anticipated cost increases associated with the shipment of chlorine by rail, and concluded that the three chlorine pipelines at our St. Gabriel plant would provide us with a cost advantage over other competitors who need to ship chlorine by rail into the complex. At a continuation of the Board meeting held the following day, August 1, 2006, management reviewed with the Board the preliminary results of an engineering feasibility study to expand the capacity of the St. Gabriel plant and convert it to the more energy-efficient membrane technology. Since the engineering feasibility study and a financial analysis of the expansion and conversion project was due to be completed in the Fall of 2006, our Board of Directors set a meeting for December 8, 2006 to review and decide whether to approve the project.

On July 18, 2006, Joseph D. Rupp, the Chairman, President and Chief Executive Officer of Olin, called Michael Y. McGovern, our Chairman, President and Chief Executive Officer, to request a meeting to discuss a possible acquisition of Pioneer by Olin. Mr. McGovern agreed to the request for a meeting, which was scheduled for August 2, 2006. At the Board meeting held on July 31, 2006, Mr. McGovern discussed the planned meeting with Mr. Rupp scheduled for August 2, 2006.

On August 2, 2006, Mr. McGovern and Mr. Rupp, together with an Olin in-house attorney, met in Dallas to discuss a possible acquisition of Pioneer by Olin. They agreed that an acquisition of Pioneer could be beneficial to both companies. Mr. McGovern asked for a critical path for the transaction, as well as a due diligence request list.

On August 17, 2006, Mr. Rupp sent a letter by e-mail to Mr. McGovern with a timeline for a proposed all-cash transaction, and a meeting request for our senior management to provide a high-level discussion of our business to Olin’s senior management. He also included a draft of a confidentiality agreement. On August 25, 2006, we executed a mutual confidentiality agreement with Olin.

On August 30, 2006, the senior management teams of both parties met in Houston, Texas in the offices of our outside counsel, Locke Liddell & Sapp LLP, or Locke Liddell. At the all-day meeting, members of our

On September 5 and 6, 2006, Olin’s Vice President, Environmental, Health & Safety and their outside counsel met in Houston, Texas with our Vice President, Environmental, Health & Safety, our outside counsel and a representative of our environmental consulting firm. At the meetings, our representatives provided an overview of our environmental remediation liabilities and other legal matters for the Olin group.

During September and October 2006, our senior management responded to due diligence requests from Olin. Our senior management and Olin representatives also held conference calls during September and early October to answer Olin’s due diligence questions. In mid-September 2006, we formally engaged CIBC World Markets as our exclusive financial advisor for the proposed transaction.

On October 3, 2006, Mr. McGovern contacted another potential strategic acquirer that had been identified in our strategic plan and discussed with our financial advisor, but had not been previously contacted, to assess its interest in pursuing a potential business combination with Pioneer. After preliminary discussions, the other company disclosed that it was actively pursuing another transaction, so our discussions with this company were discontinued.

On October 30, 2006, Mr. Rupp sent Mr. McGovern a written expression of interest to acquire Pioneer for $29.00 per share. The proposal was subject to satisfactory completion of Olin’s due diligence, approval by Olin’s board, and the negotiation and execution of a mutually acceptable definitive purchase agreement. The proposal also indicated that a draft merger agreement would be forwarded within a few days.

On November 1, 2006, at a regularly scheduled meeting, our Board of Directors discussed Olin’s proposal letter with management and our legal and financial advisors. Our Board of Directors agreed to continue the negotiations but expressed disappointment with the price.

On November 3, 2006, Mr. McGovern called Mr. Rupp and informed him that Olin’s proposal was disappointing because, among other reasons, the valuation for Pioneer was less than expected. Mr. McGovern suggested a meeting of each company’s financial and legal teams once Olin’s draft purchase agreement had been received. On November 6, 2006, Mr. Rupp called Mr. McGovern to discuss the proposed meeting and respond to some of Mr. McGovern’s points from the prior call.

On November 9, 2006, Olin sent an initial draft of an agreement and plan of merger, or merger agreement, prepared by its outside counsel, Cravath Swaine & Moore LLP, or Cravath. On November 10, 2006, Olin sent a list of additional due diligence requests.

On November 17, 2006, two separate meetings were held. The first meeting was held at Cravath’s offices in New York to discuss our initial comments to the draft merger agreement, and included representatives of each company, together with their respective outside legal counsel and financial advisors, but did not include either Mr. Rupp or Mr. McGovern. The second meeting was held at the Atlanta airport between other representatives of each company to discuss other due diligence matters, including the planned expansion and conversion of our St. Gabriel plant.

On both November 20 and 21, 2006, Mr. Rupp and Mr. McGovern spoke by telephone to review the open issues under the merger agreement other than price, but did not reach a resolution. A primary issue was a customary covenant in the merger agreement to restrict our capital expenditures prior to closing the merger to only those made in the ordinary course of business. While standard for most transactions, this covenant would have restricted our ability to make the capital expenditures for the planned St. Gabriel project, which concerned us due to the uncertainty of how long it would take to obtain regulatory clearance for the merger. This covenant reflected Olin’s concern that the $142 million estimated cost of the project was large relative to the purchase price for the entire company, and that Olin could legally have no control over the project prior to closing. While the St. Gabriel project had not yet been approved by our Board, it was set for review at the upcoming Board meeting on December 8, 2006.

On November 27, 2006, Mr. Rupp called Mr. McGovern to modify Olin’s proposal to acquire Pioneer. Mr. McGovern agreed to discuss Olin’s revised proposal with our Board of Directors and financial advisor.

On November 28, 2006, Mr. McGovern called a special telephonic meeting of our Board of Directors. At the meeting, Mr. McGovern reviewed Olin’s revised proposal, and the outstanding issues. He also provided an update of the St. Gabriel project in advance of the December 8, 2006 Board meeting, when it would be presented for Board approval. At the conclusion of the meeting, our Board authorized Mr. McGovern to provide a counter proposal of $32.00 per share, and request a “reverse break-up” fee to compensate us for the risk that the merger might not be completed. Our Board was concerned that a lengthy delay in obtaining regulatory clearance for the merger would unreasonably delay the St. Gabriel project and the financial benefits that we expected to accrue from it. Accordingly, the requested reverse break-up fee would be payable by Olin if the parties were unable to consummate the merger in certain circumstances.

On November 29 and December 4, 2006, Mr. McGovern and Mr. Rupp discussed our revised counter proposal and the other open issues. These discussions, together with another written proposal sent by Olin on December 6, 2006, failed to bridge the gap between the parties on the valuation or the other key terms of a potential transaction.

At the regularly scheduled Board meeting on December 8, 2006, our management made a detailed presentation to our Board on the St. Gabriel project. Our Board of Directors was supportive of the project, but decided to defer any decision until the next scheduled Board meeting on January 23, 2007, due to the need for additional information on the project and the related financing. This delay, however, was not expected to delay the desired starting or completion time of the project. Our Board then discussed Olin’s revised proposal with management and our legal and financial advisors. After considerable discussion on the purchase price and other terms of the proposal, our Board of Directors determined that negotiations could only proceed with Olin on the basis of a $32.00 purchase price with a reverse break-up fee. Mr. McGovern conveyed this to Mr. Rupp, who responded that Olin was unwilling to agree to a transaction on those terms. Accordingly, both parties agreed to terminate their discussions for a possible merger.

On January 23, 2007, at a regularly scheduled Board meeting, our Board approved the St. Gabriel project and the estimated $142 million of capital expenditures. Our Board of Directors also approved a convertible notes offering in the aggregate principal amount of up to $120 million.

On January 25, 2007, Mr. Rupp called Mr. McGovern to ask whether we would be interested in resuming discussions at a purchase price of $32.00 per share with a 3.5% reverse break-up fee. Mr. Rupp was informed that our Board of Directors had approved the St. Gabriel project, that a public announcement would be forthcoming, and that we were committed to the project. Both parties agreed to review the matter with their respective advisors and to speak again the following week. On January 29, 2007, Mr. McGovern requested that Mr. Rupp submit a written proposal confirming Olin’s earlier proposal, which Mr. Rupp did the following day.

On January 30, 2007, we publicly announced the St. Gabriel expansion and conversion project. In a filing with the SEC made the following day, we stated that when the St. Gabriel project is completed, we expect that it will provide us with an estimated $31 million of additional cash flow from operations on an annual basis.

On January 31, 2007, Mr. McGovern polled each member of our Board of Directors and received support to negotiate a definitive merger agreement with Olin on the terms outlined in Olin’s most recent proposal. Mr. McGovern was also requested by the Board to prepare for a convertible notes offering if the merger negotiations with Olin did not conclude successfully.

On February 8, 2007, Mr. McGovern and Mr. Rupp, together with each company’s legal and financial advisors, met in St. Louis to negotiate the terms of the definitive merger agreement. On the same day, other Pioneer representatives and our outside counsel and environmental consulting firm met in Houston with Olin representatives and representatives of their outside counsel to respond to Olin’s request for updated environmental and legal due diligence information.

During the period from February 9, 2007 through February 23, 2007, representatives of Olin, Pioneer and their respective legal and financial advisors continued to discuss the terms and exchange drafts of the definitive merger agreement and to complete Olin’s due diligence review.

On February 13, 2007, Mr. Rupp sent Mr. McGovern a written proposal to resolve the issue of the capital expenditures for the St. Gabriel project that would be permitted during the period between signing and closing. Olin’s proposal would allow us to make the necessary capital expenditures prior to closing so that the project could be completed by the fourth quarter of 2008 as originally announced. Mr. McGovern responded with a letter that same day which stated that he believed that the Pioneer Board would find the Olin proposal acceptable, and provided information on two potential financing proposals for the St. Gabriel project.

On February 15, 2007, at a regularly scheduled Board meeting, our Board received an update on the status of negotiations for the proposed merger and discussed financial aspects of the transaction with our financial advisor, and legal considerations with our outside counsel. Among other matters, our Board discussed with management and our financial advisor possible reasons for the fact that few precedent transactions in the chlor-alkali industry had been consummated during the past ten years. Management explained that the chlor-alkali industry in North America has a limited number of potential strategic buyers. Management believed that the small universe of potential strategic buyers made the industry unattractive to private equity buyers since it limited the potential exit strategies for a financial buyer. Management also believed that a strategic buyer could likely pay a higher price than a financial buyer since a financial buyer would have less ability to take advantage of the synergies and/or cost savings generally available to a strategic buyer. In addition, management believed that the large capital expenditures for the St. Gabriel project, with the resulting negative impact on our free cash flows during the following two years, would further limit our appeal to a financial buyer. Management reviewed its prior discussions with other strategic and financial companies which had not been productive. For these reasons, management believed that there were few, if any, other parties which could be approached to purchase Pioneer at the present time. Therefore, management believed that the two most feasible alternatives for the Board to consider at that time were either to pursue the merger with Olin or to assume that we would continue to operate on a stand-alone basis for an indefinite period. At the end of the meeting, the consensus of our Board was to continue the negotiations with Olin and to put the convertible notes financing on hold pending the outcome of the Olin negotiations.

On Friday, February 23, 2007, our stock traded as high as $33.03, and closed at $32.86, which was higher than Olin’s proposed purchase price of $32.00 per share. During the weekend of February 24 and 25, 2007, Mr. Rupp and Mr. McGovern continued discussions of the proposed merger and the fact that our stock was trading above the proposed purchase price. Mr. Rupp communicated that Olin would not be willing to increase its proposed purchase price. Mr. McGovern called a special Board meeting for 5:00 p.m. on February 26, 2007 to discuss the merger.

On February 26, 2007, in reaction to increased demand for chlor-alkali products, we announced a price increase of $25 per ton for chlorine and $40 per ton for diaphragm grade caustic soda. This price increase was significant because CMAI, the leading industry consulting firm, had forecasted that prices for our chlor-alkaki products would decrease over the balance of the year. During that day, Pioneer’s stock traded as high as $33.75, and closed at $31.92.

On February 26, 2007, our Board held a telephonic Board meeting with management and our legal and financial advisors. At the meeting, Mr. McGovern discussed the product price increase announced that day and informed the Board that management was increasing its EBITDA forecast for the year due in part to this announced price increase. Mr. McGovern also discussed that our stock had traded above the proposed purchase price and the status of the St. Gabriel project which was moving forward. At the end of the meeting, our Board of Directors unanimously agreed to terminate the negotiations with Olin, and to proceed with a convertible notes offering. On February 27, 2007, Mr. McGovern informed Mr. Rupp of our Board’s decision to terminate the merger discussions, which Mr. McGovern confirmed in a letter sent later that day to Mr. Rupp.

On March 26, 2007, we issued $120 million of 2.75% Convertible Senior Subordinated Notes due 2027, or convertible notes. On the same day, we also announced that we would redeem the remaining $75 million balance of our 10% Senior Secured Notes due 2008. In management’s view, the balance of the proceeds from

On April 20, 2007, Mr. Rupp left a message for Mr. McGovern, and the parties subsequently spoke on April 23 and 30, 2007. Mr. Rupp asked if we would be interested in renewing negotiations for a possible merger of the companies. Mr. Rupp and Mr. McGovern agreed that any negotiations would have to be concluded quickly, and agreed to a meeting at which each of them would include an outside director.

On May 9, 2007, Mr. Rupp and Olin’s lead director, Richard Rompala, met in Atlanta with Mr. McGovern and Robert Allen, the chairman of the Strategy Committee of our Board of Directors. At the meeting, Mr. McGovern and Mr. Allen stressed that we had a more favorable long-term outlook due to our continuing progress on the St. Gabriel project and our successful completion of the convertible notes offering which provided us with long-term financing at favorable rates and the financial flexibility for varying industry market conditions. The parties discussed the make-whole premium on the Convertible Notes in the context of the potential transaction. The parties also discussed a potentially higher purchase price contingent upon resolution of certain contractual issues and an expedited process to negotiate a definitive merger agreement. Finally, the parties agreed that a reverse break-up fee was no longer necessary since the St. Gabriel project was well underway which we believed substantially mitigated any risk to us of the merger not closing.

On May 14 and 15, 2007, Mr. McGovern, Gary Pittman, our Chief Financial Officer, and Locke Liddell representatives met in Clayton, Missouri with Mr. Rupp, other senior Olin management and Cravath representatives. At the meeting, the parties agreed to a purchase price of $35.00 per share and negotiated a definitive merger agreement, subject to board approval of both companies. Mr. Rupp and Mr. McGovern agreed that they would each hold board meetings later that week to inform their respective boards of the terms of the proposed transaction, and then hold subsequent board meetings that weekend to seek approval.

On May 16 and 17, 2007, at regularly scheduled Board meetings, the other outside directors were informed of the terms of the proposed merger, and the Board discussed the transaction with management and our legal and financial advisors. Our Board discussed, among other things, the terms of the definitive merger agreement and whether the Olin offer represented the best value reasonably available for our stockholders. Management reviewed for our Board the extended negotiations with Olin, as well as the various efforts and discussions undertaken by management during the prior two years to identify potential strategic and financial partners and the results of those efforts. Management also discussed our business plan if we continued to operate as a stand-alone company. At the end of the meetings, our Board directed management to finalize the merger agreement, so that it could be considered for approval at a Board meeting on May 20, 2007. From May 18 to May 20, 2007, the parties worked to finalize the definitive merger agreement.

On May 20, 2007, our Board of Directors met telephonically with our management and legal and financial advisors to consider the proposed merger with Olin. At the meeting, a Locke Liddell representative answered questions regarding the Merger Agreement, a copy of which had been previously provided to our Board. Also at this meeting, CIBC World Markets reviewed with our Board its financial analysis of the merger consideration and rendered to our Board an oral opinion, confirmed by delivery of a written opinion, dated May 20, 2007, to the effect that, as of that date and based on and subject to the matters described in the opinion, the merger consideration to be received by holders of our common stock was fair, from a financial point of view, to such holders. After considering, among other things, the factors described below under “The Merger — Reasons for the Merger; Recommendations of Our Board of Directors,” our Board of Directors unanimously determined that the Merger Agreement and the Merger were fair to, and in the best interests of, our stockholders, and authorized, approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. After our Board meeting, and after the Olin board of directors also approved the transaction that night, the parties executed the Merger Agreement on May 20, 2007.

On May 21, 2007, before the opening of The NASDAQ Global Market, the parties announced the Merger.

Our Board of Directors unanimously determined that the Merger Agreement and the Merger were fair to, and in the best interests of, our stockholders. On May 20, 2007, our Board of Directors approved the Merger Agreement and authorized the transactions contemplated by the Merger Agreement, including the Merger, and recommended that our stockholders adopt the Merger Agreement. In reaching these conclusions, our Board of Directors considered the following factors, among others:

Our Board of Directors was aware of and also considered the following potentially adverse factors associated with the Merger, among others:

In view of the large number of factors considered by our Board of Directors in connection with the evaluation of the Merger Agreement and the Merger and the complexity of these matters, our Board of Directors did not consider it practicable to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors considered in reaching a decision, nor did our Board of Directors evaluate whether these factors were of equal importance. In addition, each director may have given different weight to the various factors.

While our Board of Directors considered potentially negative and potentially positive factors, our Board of Directors concluded that overall, the potential positive factors outweighed the potential negative factors. Our Board of Directors conducted discussions of, among other things, the factors described above, and also consulted with our management and our legal and financial advisors in evaluating the proposed Merger. Based on the factors described above and other factors that each member of the Board felt appropriate, our Board of Directors unanimously determined that the Merger Agreement and the Merger were fair to, and in the best interests of, our stockholders, approved the Merger Agreement and authorized the transactions contemplated by the Merger Agreement, including the Merger.

Our Board of Directors unanimously recommends that you vote “FOR” the adoption of the Merger Agreement.

We have engaged CIBC World Markets as our financial advisor in connection with the Merger. In connection with this engagement, our Board of Directors requested that CIBC World Markets evaluate the fairness, from a financial point of view, to the holders of our common stock of the merger consideration to be received by such holders. On May 20, 2007, at a meeting of our Board of Directors held to evaluate the Merger, CIBC World Markets rendered to our Board of Directors an oral opinion, which was confirmed by delivery of a written opinion, dated May 20, 2007, to the effect that, as of that date and based on and subject to the matters described in its opinion, the merger consideration to be received by holders of our common stock was fair, from a financial point of view, to such holders.

The full text of CIBC World Markets’ written opinion, dated May 20, 2007, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached to this proxy statement as Annex C. CIBC World Markets’ opinion was provided to our Board of Directors in connection with its evaluation of the merger consideration from a financial point of view. CIBC World Markets’ opinion does not address any other aspect of the Merger and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matters relating to the Merger. The summary of CIBC World Markets’ opinion described below is qualified in its entirety by reference to the full text of its opinion. Holders of our common stock are encouraged to read the opinion carefully in its entirety.

In arriving at its opinion, CIBC World Markets:

In rendering its opinion, CIBC World Markets relied upon and assumed, without independent verification or investigation, the accuracy and completeness of all of the financial and other information provided to or discussed with CIBC World Markets by Pioneer and its employees, representatives and affiliates or otherwise reviewed by CIBC World Markets. With respect to the financial forecasts and estimates relating to Pioneer referred to above, CIBC World Markets assumed, at the direction of Pioneer’s management, without independent verification or investigation, that such forecasts and estimates were reasonably prepared on bases reflecting the best available information, estimates and judgments of Pioneer’s management as to Pioneer’s future financial condition and operating results. CIBC World Markets assumed, with Pioneer’s consent, that the Merger would be consummated in accordance with its terms without waiver, modification or amendment of any material term, condition or agreement and in compliance with all applicable laws and other requirements and that, in the course of obtaining the necessary regulatory or third party approvals and consents with respect to the Merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Pioneer or the Merger. CIBC World Markets neither made nor obtained any independent evaluations or appraisals of the assets or liabilities, contingent or otherwise, of Pioneer. CIBC World Markets did not express any opinion as to Pioneer’s underlying valuation, future performance or long-term viability. CIBC World Markets expressed no view as to, and its opinion did not address, any terms or other aspects of the Merger (other than the merger consideration to the extent expressly specified in its opinion) or any aspect or implication of any other agreement, arrangement or understanding entered into in connection with the Merger or otherwise. In addition, CIBC World Markets expressed no view as to, and its opinion did not address, Pioneer’s underlying business decision to proceed with or effect the Merger nor did its opinion address the relative merits of the Merger as compared to any alternative business strategies that might exist for Pioneer or the effect of any other transaction in which Pioneer might engage. In connection with its engagement, CIBC World Markets was not requested to, and it did not, solicit third party indications of interest in the possible acquisition of all or a part of Pioneer. CIBC World Markets’ opinion was necessarily based on the information available to it and general economic, financial and stock market conditions and circumstances as they existed and could be evaluated by CIBC World Markets on the date of its opinion. It should be understood that, although subsequent developments may affect its opinion, CIBC World Markets does not have any obligation to update, revise or reaffirm its opinion. Except as described above, Pioneer

This summary is not a complete description of CIBC World Markets’ opinion or the financial analyses performed and factors considered by CIBC World Markets in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. CIBC World Markets arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion. Accordingly, CIBC World Markets believes that its analyses and this summary must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying CIBC World Markets’ analyses and opinion.

In performing its analyses, CIBC World Markets considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond Pioneer’s control. No company, business or transaction used in the analyses is identical or directly comparable to Pioneer or the Merger, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, business segments or transactions analyzed.

The estimates contained in CIBC World Markets’ analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than those suggested by its analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, CIBC World Markets’ analyses are inherently subject to substantial uncertainty.

The type and amount of consideration payable in the Merger were determined through negotiation between Pioneer and Olin, and the decision to enter into the Merger was solely that of the Pioneer Board of Directors. CIBC World Markets’ opinion and financial presentation were only one of many factors considered by the Pioneer Board of Directors in its evaluation of the Merger and should not be viewed as determinative of the views of the Pioneer Board of Directors or Pioneer’s management with respect to the Merger or the merger consideration.

The following is a summary of the material financial analyses reviewed with the Pioneer Board of Directors in connection with CIBC World Markets’ opinion dated May 20, 2007. The financial analyses summarized below include information presented in tabular format. In order to fully understand CIBC World Markets’ financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of CIBC World Markets’ financial analyses.

CIBC World Markets reviewed financial and stock market information for Pioneer and the following seven selected publicly held companies in the commodity chemicals production industry:

CIBC World Markets reviewed enterprise values of the selected companies, calculated as fully-diluted market value based on closing stock prices on May 18, 2007, plus net debt, as a multiple of calendar years 2007 and 2008 estimated earnings before interest, taxes, depreciation and amortization, referred to as EBITDA. CIBC World Markets also reviewed closing stock prices of the selected companies on May 18, 2007 as a multiple of calendar years 2007 and 2008 estimated earnings per share, referred to as EPS. CIBC World Markets then applied a range of selected multiples of calendar years 2007 and 2008 estimated EBITDA and EPS derived from the selected companies to corresponding financial data of Pioneer, adjusted to exclude the financial impact of capital expenditures relating to the planned expansion of Pioneer’s St. Gabriel plant given that Pioneer does not anticipate incremental revenue attributable to the St. Gabriel plant expansion until it is completed in calendar year 2009. In deriving an implied equity reference range for Pioneer based on this analysis, CIBC World Markets also calculated the estimated present value of the projected incremental future cash flows that could be generated during fiscal years 2007 through 2011 from the St. Gabriel plant expansion and derived terminal values by applying EBITDA terminal value multiples of 6.5x to 7.5x to Pioneer’s fiscal year 2011 estimated incremental EBITDA attributable to the St. Gabriel plant expansion. These cash flows and terminal values were discounted to present value by applying discount rates ranging from 13.0% to 15.0%. Financial data for the selected companies were based on public filings, publicly available research analysts’ estimates and other publicly available information. Financial data for Pioneer were based on Pioneer’s public filings, EBITDA and capital expenditure estimates of Pioneer’s management for fiscal years 2007 through 2011, and other internal Pioneer information that was used by CIBC World Markets to derive Pioneer’s EPS for fiscal years 2007 and 2008. Based on the sum of the implied values for Pioneer derived from Pioneer’s calendar years 2007 and 2008 estimated EBITDA and EPS as adjusted to exclude the financial impact of capital expenditures relating to the St. Gabriel plant expansion and the implied values derived from discounting the projected incremental cash flows attributable to the St. Gabriel plant expansion as described above, this analysis indicated the following implied per share equity reference range for Pioneer, as compared to the per share merger consideration:

CIBC World Markets reviewed transaction values in the following seven selected transactions involving companies in the chlor-alkali production industry:

CIBC World Markets reviewed transaction values in the selected transactions, calculated as the equity value implied for the target company based on the consideration payable in the selected transaction, plus net debt, as a multiple of estimated electrochemical unit annual capacity, referred to as ECU annual capacity. CIBC World Markets then applied a range of selected ECU multiples derived from the Basic Chemical Company, LLC/Vulcan Materials Company transaction announced in October 2004, referred to as the Basic Chemical/Vulcan transaction, to Pioneer’s estimated ECU annual capacity for calendar year 2007. In deriving an implied equity reference range for Pioneer based on this analysis, CIBC World Markets focused on the Basic Chemical Company, LLC/Vulcan Materials Company transaction since, among other things, it was one of the more recent selected transactions for which ECU data was publicly available and given that the most recent selected transaction, the ERCO Worldwide (USA) Inc./Basic Chemical Company, LLC transaction announced in April 2005, was the result of a divestiture required by the Federal Trade Commission with respect to certain assets previously acquired by Basic Chemical Company, LLC in the Basic Chemical/Vulcan transaction. Financial data for the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. Financial data for Pioneer were based on Pioneer’s public filings and internal estimates of Pioneer’s management. This analysis indicated the following implied per share equity reference range for Pioneer, as compared to the per share merger consideration:

CIBC World Markets performed a discounted cash flow analysis to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that Pioneer could generate for fiscal years 2007 through 2011, based on internal estimates of Pioneer’s management after giving effect to the planned expansion of Pioneer’s St. Gabriel plant. CIBC World Markets calculated a range of estimated terminal values by applying EBITDA terminal value multiples ranging from 6.5x to 7.5x to Pioneer’s average EBITDA for fiscal years 2005 through 2011. The cash flows and terminal values were discounted to present value using discount rates ranging from 13.0% to 15.0%. This analysis indicated the following implied per share equity reference range for Pioneer, as compared to the per share merger consideration:

CIBC World Markets reviewed the premiums paid in 91 selected all-cash transactions announced since January 2004 with transaction values of between $300 million and $500 million relative to the closing stock prices of the target companies in such transactions one trading day, one week and four weeks prior to public announcement of the relevant transaction. CIBC World Markets then applied a range of selected premiums derived from the selected transactions to the closing prices of Pioneer common stock on May 18, 2007 and one week and four weeks prior to May 18, 2007. This analysis indicated the following implied per share equity reference range for Pioneer, as compared to the per share merger consideration:

Pioneer has agreed to pay CIBC World Markets for its financial advisory services in connection with the Merger an aggregate fee estimated to be approximately $4.2 million, a portion of which was payable in connection with CIBC World Markets’ engagement, a portion of which was payable upon delivery of its

CIBC World Markets and its affiliates in the past have provided services to Pioneer unrelated to the Merger, for which services CIBC World Markets and its affiliates have received compensation, including having acted as sole bookrunning manager for Pioneer’s offering in March 2007 of the Convertible Notes. CIBC World Markets makes a market in the Convertible Notes, and accordingly currently holds a portion of the Convertible Notes which, pursuant to their terms, will be repaid at a premium in connection with the Merger. See “The Merger Agreement — Convertible Notes” on page 43 of this proxy statement. On May 20, 2007, the date on which CIBC World Markets rendered its opinion, CIBC World Markets held approximately $12.25 million of the Convertible Notes. In the ordinary course of business, CIBC World Markets and its affiliates may actively trade the securities of Pioneer and Olin for its and their own accounts and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.

Pioneer selected CIBC World Markets as its financial advisor based on CIBC World Markets’ reputation and experience and its familiarity with Pioneer and its business. CIBC World Markets is an internationally recognized investment banking firm and, as a part of its investment banking business, is regularly engaged in valuations of businesses and securities in connection with acquisitions and mergers, underwritings, secondary distributions of securities, private placements and valuations for other purposes.

We do not, as a matter of course, provide financial guidance or publicly disclose projections of future revenues, earnings or other financial performance. However, in connection with the review of the proposed acquisition of Pioneer by Olin, our management prepared non-public financial projections reflecting management’s views as to our potential financial future performance for the fiscal years 2007 through 2011. The information was provided to our Board of Directors and financial advisor in connection with the proposed Merger. The projections, a subset of which are set forth below, do not give effect to the transactions contemplated by the Merger Agreement, including the Merger. These projections were not provided to Olin prior to executing the Merger Agreement, and therefore Olin did not base its purchase price on these projections, but rather on its own assumptions and projections. The inclusion of this information should not be regarded as an indication that either we, Olin or our respective advisors or other representatives considered, or now considers, it to be predictive of actual future results.

The projections were prepared by our management for our internal use, and not for public disclosure. Neither our independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the financial projections contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the financial projections. Further, the projections were not prepared with a view to compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or generally accepted accounting principles.

The projections are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and business developments. Although the projections are presented with numerical specificity, they reflect numerous assumptions and estimates relating to our business. Although our management believed that such assumptions and estimates were reasonable at the time the projections were prepared, they may not reflect the actual results achieved. In addition, factors such as industry performance, competitive uncertainties, and general business, economic, regulatory, market and financial conditions, all of which are difficult to predict and beyond our control, may cause actual results to vary materially from the

Following the Merger, our common stock will be delisted from The NASDAQ Global Market and will be deregistered under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

The Merger Agreement provides that, upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will be merged with and into us and the separate corporate existence of Merger Sub will thereupon cease, and we will be the surviving corporation and all of our rights, privileges, powers, immunities, purposes and franchises will continue unaffected by the Merger, except that all of our then outstanding common stock will be owned by Olin and all of our then outstanding options will be canceled.

The Merger will become effective when a certificate of merger is duly filed with the Secretary of State of the State of Delaware or at such later time as the parties agree to and specify in the certificate of merger. Such filing will be made as soon as practicable on the date of the closing of the Merger. See “The Merger Agreement — Conditions to the Completion of the Merger” beginning on page 47. The Merger Agreement also provides that:

In the event that the Merger Agreement is not adopted by our stockholders or if the Merger is not completed for any other reason, our stockholders would not receive any merger consideration for their shares of our common stock. Instead, we would remain an independent public company, our common stock would continue to be listed and traded on The NASDAQ Global Market and our stockholders would continue to be subject to the same risks and opportunities as they currently are with respect to their ownership of our common stock. If the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of our shares, including the risk that the market price of our common stock may decline to the extent that the current market price of our stock reflects a market assumption that the Merger will be completed. From time to time, our Board of Directors would evaluate and review our business operations, properties, dividend policy and capitalization, and, among other things, make such changes as are deemed appropriate. In addition, our Board of Directors might seek to identify strategic alternatives to maximize stockholder value. If the Merger Agreement is not adopted by our stockholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to us would be offered or that our business, prospects or results of operations would not be adversely impacted.

Pursuant to the Merger Agreement, under certain circumstances, we are permitted to terminate the Merger Agreement and recommend an alternative transaction. See “The Merger Agreement — Termination” beginning on page 51.

Under certain circumstances, if the Merger is not completed, we will be obligated to pay Olin a termination fee of approximately $15.6 million. See “The Merger Agreement — Fees and Expenses” beginning on page 52.

Each share of our common stock issued and outstanding immediately before the Merger, other than treasury shares, shares for which appraisal rights have been perfected and shares held by Olin or Merger Sub,

In considering the recommendation of our Board of Directors in favor of the Merger, you should be aware that our executive officers and directors may have personal interests in the Merger that are, or may be, different from, or in addition to, your interests as a stockholder. The members of our Board of Directors were aware of these interests and considered them, among other matters, when deciding to approve and recommend the adoption of the Merger Agreement. See “— Background of the Merger” beginning on page 13, and “ — Reasons for the Merger; Recommendation of our Board of Directors” beginning on page 18. Our stockholders should take these interests into account in deciding whether to vote “FOR” the adoption of the Merger Agreement.

Our Chairman, President and Chief Executive Officer, Michael Y. McGovern, entered into a three-year employment agreement with us dated as of May 2, 2006. Mr. McGovern’s employment agreement provides that if his employment is terminated without cause or constructively terminated (as defined in the employment agreement), or terminated for any reason within 18 months following the occurrence of a change in control (as defined in the employment agreement), he will be entitled to certain benefits. Mr. McGovern’s employment will be terminated at the effective time of the Merger without cause, and he will be entitled to receive the following: (1) a lump sum payment equal to two times his base salary (his base salary is currently $600,000), (2) under our Management Incentive Plan, any unpaid bonus payable for any prior fiscal year, and a prorated portion of any bonus payable for the year in which his employment terminates, based on a target bonus of 60% of his base salary ($360,000), (3) under our Profit Sharing Plan, any unpaid bonus payable for any prior fiscal year, and a prorated portion of any bonus payable for the year in which his employment terminates, based on a bonus equal to 10% of his base salary ($60,000), and (4) the 10,682 shares of restricted stock received under our 2006 Long-Term Incentive Program will vest and will be converted into the right to receive the merger consideration. In addition Mr. McGovern and his dependents will be entitled to health and life insurance coverage until Mr. McGovern qualifies for Medicare, provided that he pay the annual premium charged by us for coverage under our health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986.

Upon the consummation of the Merger, the following changes to our compensation programs and severance plan, as they affect our executive officers (with the exception of Mr. McGovern whose severance arrangement is described above) will take effect.

Olin has requested that three of our executive officers, Michael Mazzarello, Larry Landry and Bruce Williams, continue after the Merger as employees of Olin. If any of them is terminated by Olin without cause within one year after the effective time of the Merger, he will receive a severance payment equal to 18 months of his base salary. After the first anniversary of the effective time of the Merger, any severance benefits for these executive officers will be determined under Olin’s severance policy.

Olin plans to terminate the employment of our executive officers other than the three executive officers listed in the prior paragraph. Within 60 days after the date of the Merger Agreement, Olin will inform such

The severance benefits described above for our executive officers (other than Mr. McGovern, whose severance benefit was set by his pre-existing employment agreement, and Mr. Mazzarello, whose severance benefit is determined under our Canadian severance policy) reflect an increase over the severance benefits that applied before our entry into negotiations with Olin. Under our prior severance policy, each of our executive officers, other than Mr. McGovern and Mr. Mazzarello, would have been entitled to a severance benefit equal to one year of his base salary if he were terminated by us without cause. The enhanced severance benefits (which, in the aggregate, are expected to be $1,088,500) were agreed to by Olin to provide an incentive for our executive officers who will be terminated to continue their employment through the effective time of the Merger, and if requested by Olin, through their individual projected termination date.

The following table summarizes the cash severance benefits, as outlined above, that would be made to each of our executive officers, subject to the conditions that are also outlined above.

For those executive officers who received restricted stock awards under our 2006 Long-Term Incentive Program, such shares of restricted stock will vest in full upon the effective time of the Merger and will be converted into the right to receive the merger consideration.

Under our 2007 Long-Term Incentive Program, only the three executive officers who we anticipate will continue after the effective time of the Merger as non-transitional employees of Olin (Messrs. Mazzarello, Landry and Williams) are expected to be entitled to any award following the closing of the Merger. Promptly following the effective time of the Merger, each of Messrs. Mazzarello, Landry and Williams will be entitled to receive a grant under a plan maintained by Olin that has a value substantially equivalent to $49,157 for Mr. Mazzarello, $59,500 for Mr. Landry and $44,223 for Mr. Williams. Such grant may be made under a cash, equity incentive or other plan of Olin (as determined by Olin) and shall vest ratably on each of the first three anniversaries of the date of grant, provided that the executive officer must be employed by Olin on the relevant vesting date. No other executive officers are currently expected to be entitled to receive any payments or benefits under our 2007 Long-Term Incentive Program.

Our Management Incentive Plan and Profit Sharing Plan have annual EBITDA thresholds which determine the amounts payable under such plans, if any. If the effective time of the Merger occurs during the 2007 fiscal year prior to December 31, 2007 or during the 2008 fiscal year prior to December 31, 2008, the EBITDA we achieve through the effective time of the Merger will be annualized to determine whether the EBITDA threshold for the relevant fiscal year has been achieved. If the applicable EBITDA threshold for the relevant fiscal year has been achieved under the Management Incentive Plan or the Profit Sharing Plan, our executive officers (as well as all other participants in such plans) will receive a prorated portion of the payment that is payable under each of such plans (which ranges from 20% to 60% of base salary for the Management Incentive Plan and is fixed at 10% of base salary for the Profit Sharing Plan ). If the closing of the Merger occurs in 2007, the proration under each of these plans will be made through the last day the executive officer continues working for us in 2007, with the full amount payable if the executive officer works through the end of 2007. If the closing of the Merger occurs in 2008, the proration under each of these plans will be made through the effective time of the Merger.

Our Management Incentive Plan and Profit Sharing Plan will no longer be in effect after the later of the effective time of the Merger and January 1, 2008. In the case of our executive officers who continue to be employed by us or Olin following the later of the effective time of the Merger and January 1, 2008 for a transitional period not to exceed six months (not including Messrs. Mazzarello, Landry and Williams), such executive officers will receive the following payments and benefits for the transition period: (a) base salary for such transition period; and (b) the aggregate amount of the awards received by such executive officer under the Company’s 2007 Profit Sharing Plan and 2007 Management Incentive Plan, multiplied by a fraction, of which (A) the numerator is the number of days in the period commencing on the later of (i) the closing of the Merger and (ii) January 1, 2008, and ending on the date of actual termination of employment of such executive officer and (B) the denominator of which is 365. Such payments are subject to the continued employment of the executive officer until the last day of the transition period requested by Olin (not to exceed six months) or termination by us or Olin without cause prior to such transition period end date. The one exception to the six month transition period maximum is Gary Sulik, who will be terminated upon the completion of the expansion and conversion of our St. Gabriel, Louisiana plant (projected to be completed during the fourth quarter of 2008).

Pursuant to the Merger Agreement, our Board of Directors and the Governance and Compensation Committee, have each adopted resolutions to do the following:

The following table indicates, as of [ • ], 2007, the outstanding options and restricted stock grants held by our executive officers and directors which were issued as compensation under our 2006 Stock Incentive Plan, and related information, as follows: (a) the number of shares of our common stock subject to outstanding vested and unvested options, (b) the value of such vested and unvested options based on the aggregate exercise price of such options and the aggregate merger consideration payable with respect thereto, (c) the number of outstanding shares of restricted stock and shares of common stock issued to our directors free of restrictions, (d) the value of such shares of restricted stock and other stock grants based on the aggregate merger consideration payable with respect thereto, and (e) the total value of all vested and unvested options and shares of restricted stock.

The Merger Agreement provides that the surviving corporation shall assume the obligations with respect to all rights to indemnification, advancement of expenses and all exculpation from liability for acts or omissions occurring at or prior to the effective time of the Merger existing in favor of our present and former officers or directors as provided in our amended and restated certificate of incorporation or bylaws or any indemnification agreement between any such person and us, in each case as in effect as of the date of the Merger Agreement , and such obligations will survive the Merger and will continue in full force and effect in accordance with their terms. The Merger Agreement also provides that Olin will obtain a prepaid “tail” officers’ and directors’ liability insurance policy for any acts or omissions occurring at or prior to the effective time of the Merger for a period of six years from the completion of the Merger, covering those persons who were, as of the date of the Merger Agreement, covered by our current officers’ and directors’ liability insurance policy, on terms with respect to coverage and amounts no less favorable than those of such policy in effect on the date of the Merger Agreement (provided that in satisfying this obligation, Olin is not required to pay more than $1,000,000 in the aggregate to obtain such coverage). In the event such coverage cannot be obtained for $1,000,000 or less in the aggregate, Olin will be obligated to provide such coverage as may be obtained for such $1,000,000 aggregate amount.

The Merger Agreement provides that, except as otherwise provided in any applicable collective bargaining agreement, for a period of one year following the effective time of the Merger, our employees employed primarily in the United States who remain in the employment of the surviving corporation and its subsidiaries (whom we refer to as “continuing employees” under this caption), including our executive officers, will receive employee benefits that are substantially comparable in the aggregate to the employee benefits provided to such continuing employees immediately prior to the completion of the Merger. However, the Merger Agreement provides that neither Olin nor the surviving corporation nor any of their subsidiaries will have any obligation to issue, or adopt any plans or arrangements providing for the issuance of, shares of capital stock, warrants, options, stock appreciation rights or other rights in respect of any shares of capital stock of any entity or any securities convertible or exchangeable into such shares pursuant to any such plans or arrangements, and none of our or our subsidiaries’ plans or arrangements providing for issuance of shares will be taken into account in determining whether employee benefits are substantially comparable in the aggregate. Any change in benefits that is adopted prior to the effective time of the Merger but becomes effective on or after the effective time of the Merger and any other change in benefits (including changes in vendors, co-payments, deductibles and life-time maximums) that would have been made by us in the ordinary course of business during the calendar year 2007 (or 2008, if the Merger is not completed on or before December 31, 2007) to reflect market conditions of the provisions of those benefits will be deemed for these purposes to have been in effect immediately prior to the effective time of the Merger.

Olin has also agreed that it will cause the surviving corporation to recognize the service of each continuing employee as if such service had been performed with Olin for certain purposes. In addition, with respect to any welfare plan maintained by Olin in which continuing employees are eligible to participate after the effective time of the Merger, Olin has agreed that it will, and will cause the surviving corporation to use reasonable efforts to waive certain limitations as to preexisting conditions and exclusions and provide each continuing employee with credit for certain co-payments and deductibles paid prior to the effective time of the Merger. See “The Merger Agreement — Employee Benefit Matters” beginning on page 44.

One of our directors, Robert E. Allen, is the Managing Director of a management consulting firm which performed consulting work for Olin before he joined our Board in January 2006 and afterwards. During the past five years, his firm performed services for Olin for which it received $35,000 of fees in 2002 and $33,900 in 2004. In addition, his company started a project for Olin in May 2006 unrelated to the chlor-alkali industry for which his firm would have received up to approximately $150,000 in fees had the project been completed. This project was terminated prior to completion in early June 2006, and his firm was paid $31,250 in fees for the work performed prior to termination. Mr. Allen’s firm has performed no further work for Olin since that time. This matter was fully disclosed to the other members of our Board of Directors when the potential of a merger with Olin first arose.

Pursuant to the Merger Agreement, our Board of Directors and the Governance and Compensation Committee, have adopted resolutions to adjust the terms of all outstanding options, including those held by our executive officers and directors, whether vested or unvested, as necessary to provide that they will become fully exercisable and may be exercised immediately prior to the effective time of the Merger, and, at the effective time of the Merger, each option outstanding immediately prior to the effective time of the Merger will be canceled and the holder will then become entitled to receive a single lump sum cash payment equal to the product of (A) the number of shares of our common stock for which the option has not been exercised and (B) the excess, if any, of the $35.00 merger consideration over the exercise price per share of the option.

Subject to any applicable withholding taxes, the payment to such option holders will be made, without interest, as soon as practicable following the effective time of the Merger. We are required to ensure that

Prior to the effective time of the Merger, we are required to take all actions necessary in order to cause any dispositions of shares of our common stock (including derivative securities with respect to shares of our common stock) resulting from the transactions contemplated by the Merger Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to us to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Pursuant to the Merger Agreement, our Board of Directors, and the Governance and Compensation Committee, adopted resolutions to adjust the terms of all outstanding shares of restricted stock to provide that each such restricted share outstanding immediately prior to the effective time of the Merger will vest in full and be converted into the right to receive the $35.00 per share merger consideration. The merger consideration received for our shares of restricted stock will be subject to any required tax withholding and will be paid without interest. We are required to ensure that following the effective time of the Merger, no holder (or former holder) of shares of our restricted stock, or any other stock-based award, has any rights to acquire the surviving corporation’s or their subsidiaries’ capital stock or other equity interests (including “phantom” stock or stock appreciation rights).

We have an existing program to issue shares of common stock to our non-employee directors on December 15 of each year equal to $60,000 divided by the closing stock price on December 15, which shares are not subject to vesting since they are issued for services previously rendered. Pursuant to the Merger Agreement, our Board of Directors, and the Governance and Compensation Committee, adopted resolutions to amend such program to clarify that if the closing of the Merger occurs during the 2007 fiscal year prior to December 15, 2007, or during the 2008 fiscal year prior to December 15, 2008, our non-employee directors immediately prior to the effective time of the Merger will each be paid on the closing date of the Merger, in lieu of any stock issuance, an amount in cash equal to (1) $60,000 multiplied by (2) a fraction, (A) the numerator of which is the number of months that have fully elapsed in the year in which the closing of the Merger occurs through the closing date of the Merger plus one, and (B) the denominator of which is 12.

At the earlier of the closing of the Merger and the effective time of the Merger, Olin will deposit for the benefit of our stockholders the aggregate merger consideration into an exchange fund with American Stock Transfer & Trust Company or another comparable institution, as paying agent. At the effective time of the Merger, shares of our common stock (except for shares for which appraisal rights have been perfected, as described in “Appraisal Rights” below):

No interest will accrue or be paid with respect to the merger consideration. Until holders of certificates previously representing shares of our common stock have surrendered those certificates to the paying agent for

As soon as practicable after the effective time of the Merger, the paying agent will mail to each holder of record of shares of our common stock a letter of transmittal and instructions for its use in delivering certificates or shares represented by book entry to the paying agent in exchange for the merger consideration due in respect of the shares formerly represented by such certificates or by book entry, as the case may be. After receipt of a stockholder’s certificates by the paying agent, or compliance with the instructions in the letter of transmittal for shares held in book entry form, together with a properly executed letter of transmittal, the paying agent will deliver to such stockholder the $35.00 per share merger consideration multiplied by the number of shares formerly represented by book entry or formerly represented by the certificate(s) surrendered by such stockholder. In the event of a transfer of ownership of our common stock which is not registered in the transfer records of our transfer agent, payment of the merger consideration may be made to a person other than the person in whose name a surrendered certificate is registered if:

If any certificate representing shares of our common stock is lost, stolen or destroyed, the paying agent will deliver the applicable merger consideration due in respect of the shares formerly represented by that certificate if:

Any portion of the exchange fund which remains undistributed to our stockholders after the nine month anniversary of the effective time of the Merger will be delivered by the paying agent to Olin, upon demand, and any of our stockholders who have not previously surrendered their stock certificates will only be entitled to look to Olin for payment of the merger consideration due in respect of the shares formerly represented by their certificates. Subject to the other terms of the Merger Agreement, Olin will remain liable for the payment of the merger consideration to these stockholders.

General.  The following is a general summary of certain anticipated material U.S. federal income tax consequences of the Merger to our stockholders whose common stock is converted into cash in the Merger. This summary is based upon provisions of the Internal Revenue Code of 1986, as amended, or the Code, applicable U.S. Treasury Regulations, judicial authority and administrative rulings and practice, all as in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Any such change could materially alter the tax consequences to our stockholders as described herein. This discussion is not binding on the IRS, and there can be no assurance that the IRS (or a court, in the event of an IRS challenge)

This discussion may not address all aspects of U.S. federal income taxation that may be relevant to a particular stockholder in light of that stockholder’s particular circumstances, or to those stockholders that may be subject to special treatment under the U.S. federal income tax laws (including, for example, life insurance companies, tax-exempt organizations, financial institutions, regulated investment companies, U.S. expatriates, persons that are not U.S. persons, dealers or brokers in securities or currencies, pass-through entities (e.g., partnerships or limited liability companies) and investors in such entities, or stockholders who hold shares of our common stock as part of a hedging, “straddle,” conversion, constructive sale or other integrated transaction, who hold our common stock which constitutes qualified small business stock for purposes of Section 1202 of the Code, who are subject to the alternative minimum tax or who acquired their shares of our common stock through the exercise of director or employee stock options or in connection with employee stock purchase plans or other compensation arrangements). The discussion does not address the U.S. federal income tax consequences applicable to any stockholders who exercise their appraisal rights under Delaware law. In addition, the discussion does not address any aspect of foreign, state or local taxation or estate and gift taxation that may be applicable to our stockholders. This discussion does not address the tax consequences of transactions effectuated prior to or after completion of the Merger (whether or not such transactions occur in connection with the Merger), including, without limitation, any exercise of a stock option or the acquisition or disposition of shares of our common stock other than pursuant to the Merger.

Consequences of the Merger to Our Stockholders.  The receipt of cash in exchange for shares of our common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, a stockholder who surrenders shares of our common stock in exchange for cash pursuant to the Merger will recognize gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received and such stockholder’s adjusted basis in the shares surrendered (which is usually the stockholder’s original cost for the stock). Gain or loss will be calculated separately for each block of shares surrendered in the Merger (i.e., shares acquired at the same cost in a single transaction). Such gain or loss will generally be capital gain or loss, and will generally be long-term gain or loss provided that a stockholder has held such shares for more than one year as of the closing date of the Merger. In the case of stockholders who are individuals, long-term capital gain is currently eligible for reduced rates of federal income tax. There are limitations on the deductibility of capital losses for both individuals and corporations.

Backup Withholding Tax.  Generally, under the U.S. federal income tax backup withholding rules, a stockholder or other payee that exchanges shares of our common stock for cash may be subject to backup withholding at a rate of 28%, unless the stockholder or other payee (i) provides a taxpayer identification number or “TIN” (i.e., a social security number, in the case of individuals, or an employer identification number, in the case of other stockholders), and (ii) certifies under penalties of perjury that (A) such TIN is correct, (B) such stockholder is not subject to backup withholding and (C) such stockholder is a U.S. person. Each of our stockholders and, if applicable, each other payee should complete and sign the substitute Form W-9 included as part of the letter of transmittal and return it to the paying agent in order to provide information and certification necessary to avoid backup withholding, unless an exemption applies and is otherwise established in a manner satisfactory to the paying agent. Some stockholders (including, among others, some foreign individuals) are not subject to these backup withholding and reporting requirements. Stockholders who fail to provide their correct TIN and the appropriate certifications or to establish an exemption as described above will be subject to backup withholding on cash amounts received in the Merger (at a current rate of 28%). If any withholding on a payment to a stockholder results in an overpayment of taxes, a refund may be obtained from the IRS.

The foregoing discussion of certain U.S. federal income tax consequences is not tax advice. Tax matters are very complicated, and the tax consequences of the Merger to a particular stockholder will

Transactions such as the Merger are subject to review by the United States Department of Justice and the United States Federal Trade Commission to determine whether they comply with applicable antitrust laws. Under the provisions of the HSR Act, the Merger may not be completed until the expiration or termination of a waiting period following the filing of notification reports with the Department of Justice and the Federal Trade Commission by Olin and Pioneer. Olin and Pioneer have filed notification reports with the Department of Justice and the Federal Trade Commission under the HSR Act.

The Department of Justice and the Federal Trade Commission frequently scrutinize the legality under the antitrust laws of transactions such as the Merger. At any time before or after the Merger, either the Department of Justice or the Federal Trade Commission could take action under the antitrust laws as it deems necessary or desirable in the public interest, including by seeking to enjoin the Merger or by seeking the divestiture of substantial assets of Olin and Pioneer or their subsidiaries. Private parties and state attorneys general may also bring actions under the antitrust laws under certain circumstances. While the parties believe that the proposed Merger does not violate antitrust laws, there can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if a challenge is made, of the result.

The Merger will be accounted for as a “purchase transaction” for financial accounting purposes.

On June 4, 2007, we were served with a petition naming us and members of our Board of Directors and Olin as defendants in a complaint filed in the District Court of Harris County, Texas, 129^th Judicial District. The case is captioned Richard Denton, Derivatively on Behalf of Pioneer Companies, Inc. v. Michael Y. McGovern, Robert E. Allen, Marvin E. Lesser, Charles L. Mears, David A. Scholes. Richard L. Urbanowski and Olin Corporation, Defendants, and Pioneer Companies, Inc., Nominal Defendant, Cause No. 2007-32730. This is a stockholder derivative action brought by one of our shareholders on behalf of our Company, against members of the our Board of Directors for alleged breaches of fiduciary duty and/or other violations of state law arising out of the proposed Merger. The petition alleges that in entering into the proposed transaction with Olin, the defendants have breached their fiduciary duties of loyalty, due care, independence, candor, good faith and fair dealing, and/or has aided and abetted such breaches. The plaintiff seeks, among other things, to enjoin the Merger and attorney’s fees. An unfavorable outcome in this lawsuit could prevent or delay the consummation of the Merger, result in substantial costs to us, or both. It is also possible that other, similar derivative or other lawsuits may yet be filed and we cannot estimate any possible loss from this or future litigation at this time. We believe the lawsuit is without merit and intend to defend it vigorously.

The following summarizes material provisions of the Merger Agreement, a copy of which is attached to this proxy statement as Annex A and which we incorporate by reference into this document. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read carefully the Merger Agreement in its entirety, as the rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this proxy statement.

The description of the Merger Agreement in this proxy statement has been included to provide you with information regarding its terms. The Merger Agreement contains representations and warranties made by and to us, Olin and Merger Sub as of specific dates. The statements embodied in those representations and warranties were made for purposes of that contract between the parties and are subject to qualifications and limitations agreed by the parties in connection with negotiating the terms of that contract. In addition, certain representations and warranties were made as of a specified date, may be subject to contractual standards of materiality different from those generally applicable to stockholders, or may have been used for the purpose of allocating risk between the parties rather than establishing matters as facts.

The Merger Agreement contains customary representations and warranties that we made to Olin and Merger Sub relating to, among other things:

The Merger Agreement provides that a “material adverse change” or “material adverse effect” on us means any change, effect, event, occurrence, state of facts or development which individually or in the aggregate (1) is materially adverse to our and our subsidiaries’ business, financial condition, properties, assets, liabilities (contingent or otherwise) or results of operations, taken as a whole, or (2) will prevent or materially impede, interfere with, hinder or delay the consummation by us of the Merger or the other transactions contemplated by the Merger Agreement subject to the limitation that none of the following will be deemed, either alone or in combination, to constitute, and none of the following will be taken into account in determining whether there has been or will be, a material adverse effect or a material adverse change:

The Merger Agreement also contains customary representations and warranties that Olin and Merger Sub made to us relating to, among other things:

Under the Merger Agreement, we have agreed that, from the date of the Merger Agreement to the effective time of the Merger, subject to certain exceptions, we will and we will cause our subsidiaries to carry on our business (including making maintenance expenditures) in the ordinary course consistent with past practice and in compliance in all material respects with all applicable laws, rules, regulations and treaties, and, to the extent consistent therewith use all commercially reasonable efforts to preserve intact our current business organizations, keep available the services of our current officers, employees and consultants and preserve our relationships with customers, suppliers, others having business dealings with us, with the intention that our goodwill and ongoing business will be unimpaired at the effective time of the Merger. In addition, we have agreed, subject to certain exceptions, to specific restraints relating to the following:

Under the Merger Agreement, the parties have also agreed that:

Olin has agreed to provide to us, on or before July 19, 2007, the dates on which it expects to terminate the employment of certain specified employees, primarily in our Houston office, including certain of our executive officers, on or following the closing of the Merger. Any such termination date will be (1) subject to certain agreed exceptions, no later than six months after the closing of the Merger and (2) determined by Olin in good faith based on Olin’s reasonable expectation as to the amount of time for which Olin will require such employee’s services after the closing of the Merger in connection with the transition of ownership. Each such employee shall be entitled to the severance pay on the earlier of the termination date provided in Olin’s notice to us or the termination of such employee’s employment following the Closing of the Merger by us or Olin other than for cause. As a condition to receiving any such severance pay, each such terminated employee may be required by Olin to continue his or her service with us up to his or her termination date provided in Olin’s notice to us and to sign a waiver and release of claims against us, Olin and our respective affiliates for any claims incurred prior to his or her termination.

Olin has provided to us the following information with respect to a specified group of employees in our accounting and information technology departments in our Houston office: (a) the employees whom Olin reasonably and in good faith expects to continue to employ following six months after the closing of the Merger and (b) the dates on which Olin expects to terminate the employment of the remaining employees in the group following the Closing of the Merger by us or Olin. The termination dates for such remaining employees will be (1) no later than six months after the closing of the Merger and (2) determined by Olin in good faith based on Olin’s reasonable expectation as to the amount of time for which Olin will require such employee’s services after the closing of the Merger in connection with the transition of ownership. Each such employee shall be entitled to severance pay on the earlier of the termination date provided in Olin’s notice to us or the termination of such employee’s employment following the closing of the Merger by us or Olin other than for cause. As a condition to receiving any such severance pay, each such terminated employee may be required by Olin to continue his or her service with us up to his or her projected termination date provided in Olin’s notice to us and to sign a waiver and release of claims against us, Olin and our respective affiliates for any claims incurred prior to his or her termination.

Between the date of the Merger Agreement and the effective time of the Merger, we have agreed that we will and we will cause our subsidiaries to:

We have also agreed that we will deliver to Olin at or prior to the closing of the Merger a certificate certifying that the payment of the merger consideration and any payment made in respect of the appraisal shares pursuant to the terms of the Merger Agreement are exempt from withholding pursuant to the Foreign Investment in Real Property Tax Act.

Finally, to the extent that Section 6043A of the Internal Revenue Code of 1986 applies to the transactions contemplated by the Merger Agreement, the parties agreed to cooperate with each other and provide each other with all information reasonably necessary to satisfy the reporting obligations under this Section 6043A of the Code.

We, Olin and Merger Sub have each agreed to take the actions required to be taken to complete the Merger pursuant to the indenture governing our 2.75% Convertible Senior Subordinated Notes due 2027. The indenture requires that we execute a supplemental indenture to adjust the conversion provisions of the indenture and the Convertible Notes as a result of the Merger. If consummated, the Merger is expected to constitute a “fundamental change” under the indenture. As a result, upon the effectiveness of the Merger, the holders of the Convertible Notes will be entitled to an increase in the conversion rate of their Convertible Notes, provided that, the Convertible Notes are presented for conversion within the time periods specified in the indenture. Assuming that the Merger is consummated prior to March 1, 2008, the increase in the conversion rate is expected to be approximately 6.5 shares per $1,000 principal amount of the Convertible Notes, resulting in a potential additional payment to the converting holders from the increase in the conversion rate for all of the Convertible Notes of up to approximately $26 million if all of the Convertible Notes are tendered for conversion during the specified time periods.

We have agreed, as permitted by applicable law and the terms of our confidentiality agreement with Olin dated August 25, 2006, as amended, to afford to Olin and its officers, employees, accountants, counsel, financial advisors and other representatives, reasonable access during normal business hours and upon reasonable prior notice during the period prior to the effective time of the Merger or the termination of the Merger Agreement, to all of our and our subsidiaries’ properties, books, contracts, personnel and records. During this period, as permitted by applicable law and the terms of our confidentiality agreement with Olin, we have also agreed to furnish promptly to Olin (1) a copy of each report, schedule, registration statement and other document that we file during this period pursuant to the requirements of federal or state securities laws, (2) a copy of each correspondence or written communication, with any U.S. federal or state governmental entity and (3) all other information concerning us or our subsidiaries’ business, properties and personnel as Olin may reasonably request.

Except for disclosures permitted by the terms of our confidentiality agreement with Olin, between us and Olin, Olin has agreed to hold and shall cause its officers, employees, accountants, counsel, financial advisors and other representatives to hold all information received from us, directly or indirectly, in confidence or otherwise in accordance with the terms of the confidentiality agreement.

No investigation pursuant to the terms described above under this caption or information provided or received by any party pursuant to the Merger Agreement will affect any representations or warranties of the parties in the Merger Agreement or the conditions to the obligations of the parties.

Olin has agreed to cause the surviving corporation to assume the obligations with respect to all rights to indemnification, advancement of expenses and all exculpation from liability for acts or omissions occurring at or prior to the effective time of the Merger existing in favor of our current or former officers or directors as provided in our fourth amended and restated certificate of incorporation, or our amended and restated bylaws or any indemnification agreement between any such person and us, in each case as in effect as of the date of the Merger Agreement, without further action, as of the effective time of the Merger and such obligations will survive the Merger and will continue in full force and effect in accordance with their terms. In the event that the surviving corporation or any of its successors or assigns consolidates with or merges into any other person and is not the continuing or surviving corporation of such consolidation or merger, or transfers or conveys all or substantially all of its properties and other assets to any person, then Olin will cause proper provision to be made so that the successors and assigns of the surviving corporation will expressly assume these obligations of indemnification. Olin will obtain at the effective time of the Merger, prepaid “tail” directors’ and officers’ liability insurance for a period of six years from the effective time of the Merger to cover any acts or omissions occurring at or prior to the effective time of the Merger covering those persons who were, as of the date of the Merger Agreement, covered by that policy, on terms with respect to coverage and amounts no less

The Merger Agreement provides that except as otherwise provided in any applicable collective bargaining agreement, for a period of one year following the effective time of the Merger, our employees employed primarily in the United States who remain in the employment of the surviving corporation and its subsidiaries (whom we refer to as “continuing employees” under this caption) will receive employee benefits that are substantially comparable in the aggregate to the employee benefits provided to such continuing employees immediately prior to the completion of the Merger. However, the Merger Agreement provides that neither Olin nor the surviving corporation nor any of their subsidiaries will have any obligation to issue, or adopt any plans or arrangements providing for the issuance of, shares of capital stock, warrants, options, stock appreciation rights or other rights in respect of any shares of capital stock of any entity or any securities convertible or exchangeable into such shares pursuant to any such plans or arrangements, and none of our or our subsidiaries’ plans or arrangements providing for issuance of shares will be taken into account in determining whether employee benefits are substantially comparable in the aggregate. In addition, Olin has agreed that any change in benefits that is adopted prior to the effective time of the Merger but becomes effective on or after the effective time of the Merger and any other change in benefits (including changes in vendors, co-payments, deductibles and life-time maximums) that would have been made by us or our subsidiaries in the ordinary course of business during calendar year 2007 (or 2008, if the closing of the Merger occurs after December 31, 2007) to reflect market conditions of the provision of those benefits will be deemed, for these purposes, to have been in effect immediately prior to the effective time of the Merger.

Olin has agreed that it will cause the surviving corporation to recognize the service of each continuing employee as if such service had been performed with Olin as follows:

In addition, with respect to any welfare plan maintained by Olin in which continuing employees are eligible to participate after the effective time of the Merger, Olin has agreed that it will, and will cause the surviving corporation to:

Olin has agreed that it and its subsidiaries will provide our employees who are employed outside of the United States with employee benefits in accordance with applicable law following the effective time of the Merger.

Except with respect to certain specified arrangements relating to our incentive compensation and severance plans described below, nothing in the Merger Agreement requires, nor have we agreed to take any action that would have the effect of requiring, Olin or the surviving corporation to establish, maintain or continue any specific plans or to continue the employment of any specific person, nor does the Merger Agreement confer any rights or remedies of any kind or description upon any continuing employee or any other person other than us, Olin and our respective successors and assigns.

Furthermore, except with respect to such specified arrangements, no provision of the Merger Agreement will be construed as prohibiting or limiting Olin or the surviving corporation’s ability to amend, modify or terminate any of our, Olin’s or the surviving corporation’s plans, programs, policies, arrangements, agreements or understandings.

With respect to our 2007 Long-Term Incentive Program, any participants in such program who will continue as non-transitional Olin employees after the effective time of the Merger will be eligible to receive an award under the 2007 Long-Term Incentive Program upon the effective time of the Merger. Such grant shall have a value substantially equivalent to specified dollar values and may be made under a cash, equity incentive or other plan of Olin (as determined by Olin) and shall vest ratably on each of the first three anniversaries of the date of grant, provided that the participant must be employed by Olin on the relevant vesting date. Those participants in our 2007 Long-Term Incentive Program whose employment will terminate at the effective time of the Merger, or are transitional employees whose employment will terminate within a set time period after the effective time of the Merger, will not be entitled to receive any payments or benefits under our 2007 Long-Term Incentive Program.

In connection with the execution of the Merger Agreement, and as provided in the Merger Agreement, we have made changes to several of our incentive compensation plans. Our Management Incentive Plan, Profit Sharing Plan and Sales Incentive Plan have annual EBITDA thresholds which determine the amounts payable under such plans, if any, which ranges from 10% to 60% of base salary for the Management Incentive Plan, and is fixed at 10% of base salary for non-union participants and 5% for union participants for the Profit Sharing Plan and 20% of base salary for the Sales Incentive Plan. We have amended such plans so that if the effective time of the Merger occurs at any time other than the end of our fiscal year, the EBITDA we achieve through the effective time of the Merger will be annualized to determine whether the EBITDA threshold for the relevant fiscal year has been achieved. Further, we have amended such plans so that prorated payments shall be made depending on when the effective time of the Merger occurs. If the closing of the Merger occurs in 2007, the proration under each of these plans will be made through the last day the participant continues working for us in 2007, with the full amount payable if the participant works through the end of 2007. If the closing of the Merger occurs in 2008, the proration under each of these plans will be made through the effective time of the Merger.

Our Management Incentive Plan, Profit Sharing Plan and Sales Incentive Plan will no longer be in effect after the later of the effective time of the Merger and January 1, 2008. In the case of certain of our employees who are designated by Olin to be terminated after the effective time of the Merger, but at Olin’s request continue to be employed by us or Olin following the later of the effective time of the Merger and January 1, 2008 for a transitional period not to exceed six months (with limited exceptions), such transitional employees will receive the following payments and benefits for the transition period: (a) their base salary for such transition period; and (b) the aggregate amount of the awards received by such transitional employee under the Company’s 2007 Management Incentive Plan, 2007 Profit Sharing Plan, and 2007 Sales Incentive Plan , multiplied by a fraction, of which (A) the numerator is the number of days in the period commencing on the later of (i) the closing of the Merger and (ii) January 1, 2008, and ending on the date of actual termination of employment of such transitional employee and (B) the denominator of which is 365. Such payments are subject to the continued employment of the transitional employee until the last day of the transition period

Each party has agreed to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing all things necessary, proper or advisable, to complete and make effective, in the most expeditious manner practicable the Merger and the other transactions contemplated by the Merger Agreement, including using commercially reasonable efforts to accomplish the following:

Each party has also agreed to duly file with the U.S. Federal Trade Commission and the Antitrust Division of the Department of Justice the notification and report form required under the HSR Act and with the applicable Canadian governmental entities any filings required under the Competition Act (Canada) and the Investment Canada Act (Canada), in each case, with respect to the transactions contemplated by the Merger Agreement. Each party has agreed to cooperate with the other party to the extent necessary to assist the other party in the preparation of its HSR filing and any required Canadian filings, to request early termination of the waiting period required by the HSR Act and, if requested, to promptly amend or furnish additional information thereunder. Each party has also agreed to furnish to each other’s counsel such necessary information and reasonable assistance as the other party may reasonably request with its preparation of any filing or submission that is necessary in connection with the HSR filing and any required Canadian filings and with any inquiry or communication from any governmental entity in connection with such filings.

In addition, we and our Board of Directors have agreed to take all action necessary to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to the Merger Agreement, the Merger or any of the transactions contemplated by the Merger Agreement, and if a state takeover statute or similar statute becomes applicable, we have agreed to take all action necessary to ensure that the Merger and the other transactions contemplated by the Merger Agreement may be completed as promptly as practicable on the terms set forth in the Merger Agreement and otherwise to minimize the effect of such statute or regulation on the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Nothing in the Merger Agreement, however, requires the parties to the Merger Agreement or their respective subsidiaries to agree to, or proffer to, divest or hold separate any assets or any portion of their business. Further, neither we nor our subsidiaries will, without Olin’s written consent, agree to, or proffer to, divest or hold separate any assets or any portion of our business; provided that at Olin’s request, we or any of our subsidiaries will agree to, or proffer to, divest or hold separate any assets or any portion of our business so long as the divestiture or holding separate occurs no earlier than, and be conditioned upon the occurrence of, the consummation of the Merger.

Each party’s obligation to effect the Merger is subject to the satisfaction or (to the extent permitted by law) waiver of various conditions which include, in addition to other customary closing conditions, the following:

The obligations of Olin and Merger Sub to effect the Merger are further subject to the satisfaction or (to the extent permitted by law) waiver of the following additional conditions:

Our obligation to effect the Merger is further subject to satisfaction or waiver of the following additional conditions:

We can provide no assurance that all of the conditions precedent to the Merger will be satisfied or waived by the party permitted to do so. We cannot at this point determine whether the waiver of any particular condition would materially change the terms of the Merger. If we determine that a waiver of a condition would materially change the terms of the Merger, or we would otherwise be required by applicable law, we will resolicit proxies. In making our determination of whether the waiver of a particular condition would materially change the terms of the Merger, we would consider, among other factors:

The Merger Agreement provides that we will not, nor will we authorize or permit any of our subsidiaries or any of our respective directors, officers, or employees or any investment banker, financial advisor, attorney, accountant or other advisor, agent or representative retained by us or any of our affiliates to, directly or indirectly through another person:

The Merger Agreement also provides that we will, and we will cause our subsidiaries to immediately cease and cause to be terminated all existing discussions or negotiations with any person conducted prior to the date of the Merger Agreement, with respect to any takeover proposal, and request the prompt return or destruction of all confidential information previously furnished.

The Merger Agreement provides that, notwithstanding the anything in the Merger Agreement to the contrary, if at any time prior to the time that our stockholders approve the adoption of the Merger Agreement:

The Merger Agreement provides that:

The Merger Agreement further provides that neither our Board of Directors nor any committee of our Board of Directors will:

Notwithstanding anything summarized in the preceding two bullets, at any time prior to the time stockholder approval of the adoption of the Merger Agreement is obtained, the parties have agreed that our Board of Directors may (1) if it determines in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) that it is required to do so in order to comply with its fiduciary duties to our stockholders under applicable law, make a company adverse recommendation change, and (2) in respect to a superior proposal that was not solicited after the date of the Merger Agreement and did not otherwise result from a breach of our obligations described in the preceding text under this section “No Solicitation,” cause us to terminate the Merger Agreement and concurrently with or after such termination enter into an acquisition agreement; provided, however, that no company adverse recommendation change may be made and no termination of the Merger Agreement pursuant to the terms described in the preceding sentence may be made, in each case, until after the fourth business day following Olin’s receipt of written notice from us advising it that our Board of Directors intends to take such action. Such notice must state the reasons for this proposed action, including the terms and conditions of any superior proposal that is the basis of the proposed action by our Board of Directors (it being understood and agreed that any amendment to the financial terms or any other material term of such superior proposal shall require a new notice and a new four business day period). In determining whether to make a company adverse recommendation change, our Board of Directors shall take into account any changes to the terms of the Merger Agreement proposed by Olin in response to such notice or otherwise If we terminate the Merger Agreement in this circumstance, we agreed to pay Olin a fee in the amount of approximately $15.6 million. See “— Termination” beginning on page 51 and “— Fees and Expenses” beginning on page 52.

The Merger Agreement also provides that we must promptly advise Olin orally and in writing of any takeover proposal, the material terms and conditions of any such takeover proposal and the identity of the person making such takeover proposal. We must also keep Olin fully informed of the status and details of such takeover proposal (including any change to the terms) and any discussions and negotiations concerning the material terms and conditions of such takeover proposal and we must provide Olin with copies of all correspondence and other written materials, as soon as practicable after their receipt or delivery, relating to such takeover proposal that is exchanged between us or any of our subsidiaries or our respective representatives and the person making the takeover proposal, or its representatives.

Nothing contained in the Merger Agreement and prohibits us from taking and disclosing to our stockholders a position contemplated by tender offer rules under the Exchange Act, or making any disclosure to our stockholders if, in the good faith judgment of our Board of Directors, after consulting with outside counsel, failure to so disclose is reasonably likely to be inconsistent with its obligations under applicable law, including our Board of Directors’ duty of candor to our stockholders; provided however, that in no event shall

If our Board of Directors, or any committee of our Board of Directors, makes a company adverse recommendation change prior to the time that our stockholders approve the adoption of the Merger Agreement, Olin is entitled to terminate the Merger Agreement. If Olin terminates the Merger Agreement in this circumstance, we agreed to pay Olin a fee in the amount of approximately $15.6 million. See “— Termination” beginning on page 51 and “— Fees and Expenses” beginning on page 52.

Pursuant to the Merger Agreement, our Board of Directors, and the Governance and Compensation Committee, have adopted resolutions to effect the actions described in “The Merger — Treatment of Our Stock Options and Restricted Stock” beginning on page 33.

The Merger Agreement may be terminated at any time prior to the effective time of the Merger, whether before or after our stockholders have approved the adoption of the Merger Agreement:

The Merger Agreement generally provides that each party will pay its own fees and expenses in connection with the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement, whether or not the Merger is completed. However, we agreed to pay Olin a termination fee of approximately $15.6 million if:

The Merger Agreement may be amended by mutual consent of the parties in writing signed on behalf of each of the parties at any time, at any time before or after receipt of stockholder approval of the adoption of the Merger Agreement; provided that after such approval has been obtained, no amendment that by law requires further approval by our stockholders may be entered into unless such further approval is obtained.

At any time prior to the effective time of the Merger, the parties may, by written instrument signed on behalf of each such party, (1) extend the time for performance of the obligations or other acts of any other party to the Merger Agreement, (2) to the extent permitted by applicable law, waive inaccuracies in representations and warranties of any other party contained in the Merger Agreement or in any related document or (3) subject to the conditions to amend the Merger Agreement after it has been adopted by our stockholders and to the extent permitted by applicable law, waive compliance by any other party with any agreement or condition in the Merger Agreement. The failure of any party to the Merger Agreement to assert any of its rights under the Merger Agreement or otherwise shall not constitute a waiver of such rights.

The Merger Agreement provides that neither the Merger Agreement nor any of the rights, interests, or obligations under it may be assigned, in whole or in part, by operation of law or otherwise by any of the parties to the Merger Agreement, without the prior written consent of the other parties, and any assignment without such consent shall be null and void. However, Merger Sub, upon prior written notice to us, may assign any or all of their respective rights, interests and obligations under the Merger Agreement to Olin or any of Olin’s direct or indirect wholly owned subsidiaries. However, the Merger Agreement provides that no such assignment will relieve Merger Sub of any of its obligations under the Merger Agreement. Subject to the preceding terms, the Merger Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

The discussion of the provisions set forth below is not a complete summary regarding your appraisal rights under Delaware law and is qualified in its entirety by reference to the text of the relevant provisions of Delaware law, which are attached to this proxy statement as Annex B. Stockholders intending to exercise appraisal rights should carefully review Annex B. Failure to follow precisely any of the statutory procedures set forth in Annex B may result in a termination or waiver of these rights.

Under Section 262 of the Delaware General Corporation Law, or DGCL, any holder of our common stock who does not wish to accept the $35.00 per share merger consideration may dissent from the Merger and elect to exercise appraisal rights. Even if the Merger is approved by the holders of the requisite number of shares of our common stock, you are entitled to exercise appraisal rights and obtain payment of the “fair value” for your shares, exclusive of any element of value arising from the expectation or accomplishment of the Merger.

Under Section 262 of the DGCL, when a Merger is submitted for approval at a meeting of stockholders, as in the case of the Merger Agreement, not less than 20 days prior to the Special Meeting, we must notify each of our stockholders that appraisal rights are available and include in the notice a copy of Section 262 of the DGCL. This proxy statement constitutes the notice, and we attach the applicable statutory provisions to this proxy statement as Annex B.

In order to exercise your appraisal rights effectively, you must satisfy each of the following primary requirements:

If you fail to strictly comply with any of the above requirements or otherwise fail to strictly comply with the requirements of Section 262 of the DGCL, you will have no appraisal rights with respect to your shares. You will receive no further notices from us regarding your appraisal rights.

Neither voting (in person or by proxy) against, abstaining from voting on or failing to vote on the proposal to adopt the Merger Agreement will constitute a written demand for appraisal within the meaning of Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote.

The address for purposes of making an appraisal demand is:

Only a holder of record of shares of our common stock, or a person duly authorized and explicitly purporting to act on his or her behalf, is entitled to assert an appraisal right for the shares of our common stock registered in his or her name. Beneficial owners who are not record holders and who wish to exercise appraisal rights are advised to consult with the appropriate record holders promptly as to the timely exercise of appraisal rights. A record holder, such as a broker, who holds shares of our common stock as a nominee for others, may exercise appraisal rights with respect to the shares of our common stock held for one or more beneficial owners, while not exercising such rights for other beneficial owners. In such a case, the written demand should set forth the number of shares as to which the demand is made. Where no shares of our common stock are expressly mentioned, the demand will be presumed to cover all shares of our common stock held in the name of such record holder.

A demand for the appraisal of shares of our common stock owned of record by two or more joint holders must identify and be signed by all of the holders. A demand for appraisal signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity must so identify the persons signing the demand.

An appraisal demand may be withdrawn by a former stockholder within 60 days after the effective time of the Merger, or thereafter only with our approval. Upon withdrawal of an appraisal demand, the former stockholder will be entitled to receive the $35.00 per share merger consideration referred to above, without interest.

If we complete the Merger, we will give written notice of the effective time of the Merger within 10 days after the effective time of the Merger to each of our former stockholders who did not vote in favor of the Merger Agreement and who made a written demand for appraisal in accordance with Section 262 of the DGCL. Within 120 days after the effective time of the Merger, but not later, either the surviving corporation or any dissenting stockholder who has complied with the requirements of Section 262 of the DGCL may file a petition in the Delaware Court demanding a determination of the value of the shares of our common stock. Stockholders who desire to have their shares appraised should initiate any petitions necessary for the perfection of their appraisal rights within the time periods and in the manner prescribed in Section 262 of the DGCL.

Within 120 days after the effective time of the Merger, any stockholder who has complied with the provisions of Section 262 of the DGCL up to that point may receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares not voted in favor of the Merger Agreement and with respect to which we have received demands for appraisal, and the aggregate number of holders of those shares. The surviving corporation must mail this statement to the stockholder within 10 days of receipt of the request or within 10 days after expiration of the period for delivery of demands for appraisals under Section 262 of the DGCL, whichever is later.

If a hearing on the petition is held, the Delaware Court is empowered to determine which dissenting stockholders are entitled to an appraisal of their shares. The Delaware Court may require dissenting stockholders who hold stock represented by certificates to submit their certificates representing shares for notation thereon of the pendency of the appraisal proceedings, and the Delaware Court is empowered to dismiss the proceedings as to any dissenting stockholder who does not comply with this request. Accordingly, dissenting stockholders are cautioned to retain their share certificates, pending resolution of the appraisal proceedings.

After determination of the dissenting stockholders entitled to an appraisal, the Delaware Court will appraise the shares held by such dissenting stockholders at their fair value as of the effective time of the Merger. When the value is so determined, the Delaware Court will direct the payment by the surviving corporation of such value, with interest thereon if the Delaware Court so determines, to the dissenting stockholders entitled to receive the same, upon surrender to the surviving corporation by such dissenting stockholders of the certificates representing such shares.

In determining fair value, the Delaware Court will take into account all relevant factors. The Delaware Supreme Court has stated that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered.

Stockholders should be aware that the fair value of their shares as determined under Section 262 of the DGCL could be greater than, the same as, or less than the $35.00 per share merger consideration. Stockholders also should be aware that investment banking opinions as to the fairness from a financial point of view of the consideration payable in a merger are not opinions as to fair value under Section 262 of the DGCL.

The Delaware Court may also, on application, (1) assess costs among the parties as the Delaware Court deems equitable and (2) order all or a portion of the expenses incurred by any dissenting stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal. Determinations by the Delaware Court are subject to appellate review by the Delaware Supreme Court.

No appraisal proceedings in the Delaware courts shall be dismissed as to any dissenting stockholder without the approval of the Delaware court, and this approval may be conditioned upon terms which the Delaware court deems just.

From and after the effective time of the Merger, former holders of our common stock are not entitled to vote their shares for any purpose and are not entitled to receive payment of dividends or other distributions on the shares (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective time of the Merger).

A stockholder who wishes to exercise appraisal rights should carefully review the foregoing description and the applicable provisions of Section 262 of the DGCL which is set forth in its entirety in Annex B to this proxy statement and is incorporated herein by reference. Any stockholder considering demanding appraisal is advised to consult legal counsel because the failure strictly to comply with the procedures required by Section 262 of the DGCL could result in the loss of appraisal rights.

The following table sets forth certain information regarding the beneficial ownership of the Company’s common stock at [ • ], 2007, by (i) all current directors, (ii) the Chief Executive Officer, (iii) the Chief Financial Officer (iv) the next three most highly compensated executive officers, and (iv) all directors and all executive officers as a group. Except as indicated in the footnotes to this table, each person has sole voting and investment power with respect to all shares attributable to such person. The address of each of the individuals below is c/o Pioneer Companies, Inc., 700 Louisiana Street, Suite 4300, Houston, Texas 77002.

The following table sets forth certain information regarding the beneficial ownership of our common stock at [ • ], 2007, by each stockholder who is known by Pioneer to own beneficially more than five percent of our outstanding common stock. As required by the Commission, the ownership percentages shown reflect beneficial ownership by a stockholder as if no other stockholder has exercised options. Except as noted, each person or entity has sole voting and investment power over the shares shown in the table.