Pyxus International, Inc 10-Q for FY2027 Q2
Pyxus International, Inc. (PYYX)
10-Q
2026-11-05
For: 2026-09-30
View Original
Added on
November 05, 2026
About this 10-Q
Pyxus International, Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2027 Q2).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $534.42M
- down 6.3% from $570.21M a year earlier
- Net income
- $4.15M
- compared with a net loss of $879K a year earlier
- Diluted EPS
- $0.16
- compared with -$0.03 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Commission File Number) | ||
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | ||||||||||
| | |||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(919 ) 379-4300
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 31, 2026, the registrant had 24,607,791 shares outstanding of Common Stock (no par value).
1
| Pyxus International, Inc. and Subsidiaries | |||||||||||
| Table of Contents | |||||||||||
| Page No. | |||||||||||
| Part I | Financial Information | ||||||||||
| Item 1. | Financial Statements (Unaudited) | ||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| Part II | Other Information | ||||||||||
| Item 1. | |||||||||||
| Item 1A. | |||||||||||
| Item 2. | |||||||||||
| Item 5. | |||||||||||
| Item 6. | |||||||||||
2
Part I. Financial Information
Item 1. Financial Statements
| Pyxus International, Inc. and Subsidiaries | ||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||
| Sales and other operating revenues | $ | $ | $ | $ | ||||||||||
| Cost of goods and services sold | ||||||||||||||
| Gross profit | ||||||||||||||
| Selling, general, and administrative expenses | ||||||||||||||
| Other income (expense), net | ( | ( | ||||||||||||
| Restructuring and asset impairment charges | ||||||||||||||
| Operating income | ||||||||||||||
| Interest expense, net | ||||||||||||||
| Income (loss) before income taxes and other items | ( | |||||||||||||
| Income tax expense (benefit) | ( | |||||||||||||
| Income (loss) from unconsolidated affiliates, net | ( | |||||||||||||
| Net income (loss) | ( | ( | ( | |||||||||||
| Net (loss) income attributable to noncontrolling interests | ( | ( | ||||||||||||
| Net income (loss) attributable to Pyxus International, Inc. | $ | $ | ( | $ | ( | $ | ( | |||||||
| Earnings (loss) per share: | ||||||||||||||
| Basic | $ | $ | ( | $ | ( | $ | ( | |||||||
| Diluted | $ | $ | ( | $ | ( | $ | ( | |||||||
| Weighted average number of shares outstanding: | ||||||||||||||
| Basic | ||||||||||||||
| Diluted | ||||||||||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||||||||
3
| Pyxus International, Inc. and Subsidiaries | ||||||||||||||
| Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||
| Net income (loss) | $ | $ | ( | $ | ( | $ | ( | |||||||
| Other comprehensive (loss) income, net of tax | ||||||||||||||
| Foreign currency translation adjustment | ( | ( | ( | |||||||||||
| Cash flow hedges | ( | ( | ||||||||||||
| Total other comprehensive (loss) income, net of tax | $ | ( | $ | ( | $ | $ | ||||||||
| Total other comprehensive income (loss) | ( | ( | ( | |||||||||||
| Comprehensive (loss) income attributable to noncontrolling interests | ( | ( | ||||||||||||
| Comprehensive income (loss) attributable to Pyxus International, Inc. | $ | $ | ( | $ | ( | $ | ( | |||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||||||||
4
Pyxus International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
| Restricted cash | ||||||||||||||||||||
| Trade receivables, net | ||||||||||||||||||||
| Other receivables | ||||||||||||||||||||
| Inventories, net | ||||||||||||||||||||
| Advances to tobacco suppliers, net | ||||||||||||||||||||
| Recoverable income taxes | ||||||||||||||||||||
| Prepaid expenses | ||||||||||||||||||||
| Other current assets | ||||||||||||||||||||
| Total current assets | ||||||||||||||||||||
| Investments in unconsolidated affiliates | ||||||||||||||||||||
| Intangible assets, net | ||||||||||||||||||||
| Deferred income taxes, net | ||||||||||||||||||||
| Long-term recoverable income taxes | ||||||||||||||||||||
| Other noncurrent assets | ||||||||||||||||||||
| Right-of-use assets | ||||||||||||||||||||
| Property, plant, and equipment, net | ||||||||||||||||||||
| Total assets | $ | $ | $ | |||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Notes payable | $ | $ | $ | |||||||||||||||||
| Accounts payable | ||||||||||||||||||||
| Advances from customers | ||||||||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||||||||
| Income taxes payable | ||||||||||||||||||||
| Operating leases payable | ||||||||||||||||||||
| Total current liabilities | ||||||||||||||||||||
| Long-term taxes payable | ||||||||||||||||||||
| Long-term debt | ||||||||||||||||||||
| Deferred income taxes | ||||||||||||||||||||
| Liability for unrecognized tax benefits | ||||||||||||||||||||
| Long-term leases | ||||||||||||||||||||
| Pension, postretirement, and other long-term liabilities | ||||||||||||||||||||
| Total liabilities | $ | $ | $ | |||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||
Common Stock— | ||||||||||||||||||||
Authorized shares ( | ||||||||||||||||||||
Issued and outstanding shares ( | $ | $ | $ | |||||||||||||||||
| Retained deficit | ( | ( | ( | |||||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||||||||
| Total stockholders’ equity of Pyxus International, Inc. | ||||||||||||||||||||
| Noncontrolling interests | ||||||||||||||||||||
| Total stockholders’ equity | ||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | $ | $ | |||||||||||||||||
See accompanying notes to condensed consolidated financial statements. | ||||||||||||||||||||
5
| Pyxus International, Inc. and Subsidiaries | |||||||||||||||||||||||
| Condensed Consolidated Statements of Stockholders' Equity | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Attributable to Pyxus International, Inc. | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income | |||||||||||||||||||||||
| (in thousands) | Common Stock | Retained Deficit | Currency Translation Adjustment | Pensions, Net of Tax | Derivatives, Net of Tax | Noncontrolling Interests | Total Stockholders' Equity | ||||||||||||||||
| Balance, March 31, 2026 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Net (loss) income | — | ( | — | — | — | ( | |||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive (loss) income, net of tax | — | — | ( | — | — | ||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Net income (loss) | — | — | — | — | ( | ||||||||||||||||||
| Dividends | — | — | — | — | — | ( | ( | ||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | ( | — | ( | — | ( | ||||||||||||||||
| Balance, September 30, 2026 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Net (loss) income | — | ( | — | — | — | ( | |||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
| Net loss | — | ( | — | — | — | ( | ( | ||||||||||||||||
| Dividends | — | — | — | — | — | ( | ( | ||||||||||||||||
| Equity-based compensation | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | ( | — | ( | — | ( | ||||||||||||||||
| Balance, September 30, 2025 | $ | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||
See accompanying notes to condensed consolidated financial statements.
6
Pyxus International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| September 30, | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Operating Activities: | ||||||||
| Net loss | $ | ( | $ | ( | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Debt amortization/interest | ||||||||
| (Gain) loss on foreign currency transactions | ( | |||||||
| Gain on sale of property, plant, and equipment | ( | ( | ||||||
| Income (loss) from unconsolidated affiliates, net of dividends | ||||||||
| Changes in operating assets and liabilities, net | ||||||||
| Trade and other receivables | ( | ( | ||||||
| Inventories and advances to tobacco suppliers | ( | ( | ||||||
| Deferred items | ( | |||||||
| Recoverable income taxes | ( | ( | ||||||
| Payables and accrued expenses | ( | |||||||
| Advances from customers | ( | ( | ||||||
| Prepaid expenses | ( | ( | ||||||
| Income taxes | ||||||||
| Other operating assets and liabilities | ||||||||
| Other, net | ( | ( | ||||||
| Net cash used in operating activities | $ | ( | $ | ( | ||||
| Investing Activities: | ||||||||
| Purchases of property, plant, and equipment | $ | ( | $ | ( | ||||
| Collections from beneficial interests in securitized trade receivables | ||||||||
| Other, net | ( | |||||||
| Net cash provided by investing activities | $ | $ | ||||||
| Financing Activities: | ||||||||
| Net proceeds from short-term borrowings | $ | $ | ||||||
| Proceeds from revolving loan facilities | ||||||||
| Repayment of revolving loan facilities | ( | ( | ||||||
| Debt issuance costs | ( | ( | ||||||
| Other, net | ( | |||||||
| Net cash provided by financing activities | $ | $ | ||||||
| Effect of exchange rate changes on cash | ( | ( | ||||||
| (Decrease) increase in cash, cash equivalents, and restricted cash | ( | |||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Restricted cash at beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||
| Other information: | ||||||||
| Cash paid for income taxes, net | $ | $ | ||||||
| Cash paid for interest, net | ||||||||
| Noncash investing activities: | ||||||||
| Sales of property, plant, and equipment included in notes receivable | ||||||||
| Noncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction | ||||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||
7
Pyxus International, Inc. and Subsidiaries | |||||||||||
Notes to Condensed Consolidated Financial Statements | |||||||||||
(Unaudited) | |||||||||||
| (in thousands, except per share data) | Page No. | ||||||||||
8
1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated interim financial statements represent the consolidation of Pyxus International, Inc. (the "Company," "Pyxus," "we," "us," or "our") and all companies that Pyxus directly or indirectly controls, either through majority ownership or otherwise. These condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, the normal and recurring adjustments necessary for a fair presentation of the results of operations, financial position, and cash flows have been included.
These condensed consolidated interim financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026 filed on June 4, 2026. The year-end condensed consolidated balance sheet data was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. Due to the seasonal nature of the Company’s business, the results of operations for a fiscal quarter are not necessarily indicative of the operating results that may be attained for other quarters or a full fiscal year.
Disposition of Processing Facility in South America
During the second quarter of the fiscal year ending March 31, 2027 ("fiscal 2027"), the Company's wholly owned subsidiary in Brazil, Alliance One Brasil Exportadora de Tabacos Ltda. ("AOB"), consolidated its two tobacco processing operations into its existing facility in Venâncio Aires, Brazil. This factory consolidation resulted in the sale of AOB's processing facility located in Araranguá, Brazil (the "Property") to an unaffiliated third-party purchaser pursuant to a purchase and sale agreement entered into on December 1, 2025.
In September 2026, upon the transfer of control of the Property consisting of land, buildings, and certain machinery and equipment, AOB derecognized property, plant and equipment with a net carrying value of $5,216 and recognized consideration with a present value of $9,882 related to future contractual payments due in annual installments through March 2030. Prior to the transfer of control, AOB received advance payments from the purchaser totaling $4,662 . As a result of this transaction, AOB recognized a gain on the sale of the Property totaling $9,067 , which is included in other income (expense), net for the three and six months ended September 30, 2026 within the condensed consolidated statements of operations.
2. New Accounting Standards
Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Disaggregation of Income Statement Expenses, which requires a tabular disclosure of relevant expense captions into prescribed natural expense categories. The annual disclosure requirements are effective for the Company’s fiscal year ending March 31, 2028, and the interim period disclosure requirements are effective beginning April 1, 2028. Early adoption is permitted. This new standard will result in additional disclosures within the footnotes to the financial statements, and is not expected to have an impact on the Company’s financial condition, results of operations, or cash flows.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, which replaces the existing model used to determine when cost capitalization is to occur based on various project stages of software development with a more modern approach that introduces a probable-to-complete recognition threshold. The scope of this new guidance also includes the costs an entity incurs to implement a cloud computing arrangement as a customer. This amendment is effective for the Company's annual and interim periods beginning April 1, 2028. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.
In November 2025, the FASB issued ASU No. 2025-09, Hedge Accounting Improvements, to clarify certain aspects of existing hedge accounting guidance, and to more closely align hedge accounting with the economics of an entity's risk management activities. This amendment is effective for the Company’s annual and interim periods beginning April 1, 2027 and requires adoption on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.
In December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants Received by Business Entities, to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. This new guidance is effective for the Company’s fiscal year beginning April 1, 2029, including interim periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact this new accounting standard will have on its financial condition, results of operations, and cash flows.
9
3. Revenue Recognition
Product revenues are primarily processed tobacco sold to the customer. Processing and other revenues are mainly contracts to process customer-owned green tobacco. During such processing, ownership remains with the customers. All Other revenue is primarily composed of revenue from the sale of non-tobacco agriculture products. The following disaggregates sales and other operating revenues by major source, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the condensed consolidated financial statements:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Leaf: | ||||||||||||||
| Product revenues | $ | $ | $ | $ | ||||||||||
| Processing and other revenues | ||||||||||||||
| Leaf sales and other operating revenues | ||||||||||||||
| All Other: | ||||||||||||||
| All Other sales and other operating revenues | ||||||||||||||
| Total sales and other operating revenues | $ | $ | $ | $ | ||||||||||
4. Income Taxes
The Company’s income tax expense (benefit) for the three and six months ended September 30, 2026 and 2025 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax (loss) income and adjusting for discrete items that occurred during the period.
The effective tax rate for the income tax benefit for the six months ended September 30, 2026 was 46.7 %. The effective tax rate for the six months ended September 30, 2025 was not meaningful due to near break-even income before income taxes for the period. For the six months ended September 30, 2026, the difference between the Company's effective tax rate and the U.S. statutory rate of 21.0% was primarily due to a tax benefit related to foreign currency losses and the jurisdictional mix of earnings. For the six months ended September 30, 2025, tax expense was impacted by foreign currency gains, the liability for unrecognized tax benefits, and non-deductible interest expense.
5. Earnings (Loss) Per Share
The following summarizes the computation of earnings (loss) per share:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Net income (loss) attributable to Pyxus International, Inc. | $ | $ | ( | $ | ( | $ | ( | |||||||
| Basic weighted average shares outstanding | ||||||||||||||
Plus: Dilutive equity awards(1) | ||||||||||||||
| Diluted weighted average shares outstanding | ||||||||||||||
| Earnings (loss) per share: | ||||||||||||||
| Basic | $ | $ | ( | $ | ( | $ | ( | |||||||
| Diluted | $ | $ | ( | $ | ( | $ | ( | |||||||
(1) For the three and six months ended September 30, 2026, | ||||||||||||||
10
6. Trade Receivables, Net
Trade receivables are net of an allowance for expected credit losses. The following summarizes activity in the allowance for expected credit losses:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Balance, beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
| Additions | ( | ( | ( | ( | ||||||||||
| Write-offs and other adjustments | ||||||||||||||
| Balance, end of period | ( | ( | ( | ( | ||||||||||
| Trade receivables | ||||||||||||||
| Trade receivables, net | $ | $ | $ | $ | ||||||||||
7. Inventories, Net
The following summarizes the composition of inventories, net, with the All Other category composed of non-tobacco agricultural products:
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||
| Processed tobacco | $ | $ | $ | ||||||||
| Unprocessed tobacco | |||||||||||
| Other tobacco related | |||||||||||
All Other | |||||||||||
| Total | $ | $ | $ | ||||||||
8. Equity Method Investments
The following summarizes the Company's equity method investments as of September 30, 2026:
| Investee Name | Location | Primary Purpose | Ownership Percentage | Basis Difference(1) | ||||||||||
| Adams International Ltd. | Thailand | Purchase and process tobacco | $ | ( | ||||||||||
| Alliance One Industries India Private Ltd. | India | Purchase and process tobacco | ( | |||||||||||
| China Brasil Tabacos Exportadora S.A. | Brazil | Purchase and process tobacco | ||||||||||||
| Oryantal Tütün Paketleme Sanayi ve Ticaret A.Ş. | Turkey | Process tobacco | ( | |||||||||||
| Purilum, LLC | U.S. | Produce flavor formulations and consumable nicotine products | ||||||||||||
| Siam Tobacco Export Corporation Ltd. | Thailand | Purchase and process tobacco | ( | |||||||||||
(1) Basis differences for the Company's equity method investments are due to fair value adjustments recorded during fiscal 2021. | ||||||||||||||
11
The following summarizes financial information for these equity method investments:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Statement of operations: | ||||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||
| Gross profit | ||||||||||||||
| Net income (loss) | ( | |||||||||||||
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||
| Balance sheet: | |||||||||||
| Current assets | $ | $ | $ | ||||||||
| Property, plant, and equipment and other assets | |||||||||||
| Current liabilities | |||||||||||
| Long-term obligations and other liabilities | |||||||||||
9. Variable Interest Entities
The Company holds variable interests in multiple entities that primarily procure or process inventory or are securitization entities. These variable interests relate to equity investments, receivables, guarantees, and securitized receivables. The following summarizes the Company's financial relationships with its unconsolidated variable interest entities:
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||
| Investments in variable interest entities | $ | $ | $ | ||||||||
| Receivables with variable interest entities | |||||||||||
| Guaranteed amounts to variable interest entities (not to exceed) | |||||||||||
10. Intangible Assets, Net
The gross carrying amount and accumulated amortization of intangible assets consist of the following:
| September 30, 2026 | ||||||||||||||||||||
| Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | |||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||
| Technology | ( | |||||||||||||||||||
| Trade names | ( | |||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||
12
| September 30, 2025 | ||||||||||||||||||||
| Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | |||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||
| Technology | ( | |||||||||||||||||||
| Trade names | ( | |||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||
| Weighted Average Remaining Useful Life | Gross Carrying Amount | Accumulated Amortization | Intangible Assets, Net | |||||||||||||||||
| Intangibles subject to amortization: | ||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | ||||||||||||||||
| Technology | ( | |||||||||||||||||||
| Trade names | ( | |||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||
The following summarizes amortization expense for definite-lived intangible assets:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Amortization expense | $ | $ | $ | $ | ||||||||||
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11. Debt Arrangements
The following summarizes debt and notes payable:
Interest Rate(1) | September 30, 2026 | September 30, 2025 | March 31, 2026 | ||||||||||||||
| Senior secured credit facility: | |||||||||||||||||
| ABL Credit Facility | % | $ | $ | $ | |||||||||||||
| Senior secured notes: | |||||||||||||||||
| % | |||||||||||||||||
| Senior secured term loans: | |||||||||||||||||
Intabex Term Loans(3) | % | ||||||||||||||||
Pyxus Term Loans(4) | % | ||||||||||||||||
| Other debt: | |||||||||||||||||
Notes payable(5) | % | ||||||||||||||||
| Total debt | $ | $ | $ | ||||||||||||||
Short-term(5) | $ | $ | $ | ||||||||||||||
| Long-term | |||||||||||||||||
| Letters of credit | $ | $ | $ | ||||||||||||||
(1) Weighted average stated rate for the trailing twelve months ended September 30, 2026 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding. | |||||||||||||||||
(2) Balance of $ | |||||||||||||||||
(3) Balance of $ | |||||||||||||||||
(4) Balance of $ | |||||||||||||||||
(5) Primarily foreign seasonal lines of credit. | |||||||||||||||||
Outstanding Senior Secured Debt
ABL Credit Facility
The Company’s wholly owned subsidiary, Pyxus Holdings, Inc. ("Pyxus Holdings"), certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the "Borrowers"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc. ("Pyxus Parent"), as parent guarantors, entered into an ABL Credit Agreement (as amended, the "ABL Credit Agreement"), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent, to establish an asset-based revolving credit facility (the "ABL Credit Facility"). The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $150,000 , subject to certain borrowing base limitations. The ABL Credit Facility includes a $20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of $170,000 .
The ABL Credit Facility matures on May 12, 2030 or, if earlier, 90 days prior to the earliest stated maturity date of the outstanding senior secured notes and the senior secured term loans (each currently scheduled to mature on December 31, 2027). At September 30, 2026, the Borrowers and the parent guarantors under the ABL Credit Agreement were in compliance with the covenants under the ABL Credit Agreement.
Intabex Term Loans
The Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan Credit Agreement"), is by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC ("Alter Domus"), as administrative agent and senior collateral agent. The Intabex Term Loan Credit Agreement established a term loan
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credit facility in an aggregate principal amount of approximately $189,033 (the "Intabex Credit Facility"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the "Intabex Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings, accrued and unpaid PIK interest thereon, and related fees. The Intabex Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum. The Intabex Term Loans are stated to mature on December 31, 2027. At September 30, 2026, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with all covenants under the Intabex Term Loan Credit Agreement.
Pyxus Term Loans
The Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "Pyxus Term Loan Credit Agreement"), is by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus, as administrative agent and senior collateral agent. It established a term loan credit facility in an aggregate principal amount of approximately $130,550 (the "Pyxus Credit Facility"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings and applicable accrued and unpaid PIK interest thereon. The Pyxus Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum. The Pyxus Term Loans are stated to mature on December 31, 2027. At September 30, 2026, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with all covenants under the Pyxus Term Loan Credit Agreement.
Pursuant to an exchange offer made by Pyxus Holdings and accepted by holders of approximately 92.7 % of the aggregate principal amount of the outstanding 10.0 % Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the "2024 Notes") pursuant to that certain Indenture, dated as of August 24, 2020 (the "2024 Notes Indenture"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $260,452 in aggregate principal amount of 8.5 % Senior Secured Notes due December 31, 2027 (the "2027 Notes") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes. The 2027 Notes were issued pursuant to the Indenture, dated as of February 6, 2023 (the "2027 Notes Indenture"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent. The 2027 Notes bear interest at a rate of 8.5 % per annum, which interest is computed on the basis of a 360-day year comprised of twelve 30-day months. At September 30, 2026, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.
Detailed descriptions of the instruments governing the Company's outstanding senior secured debt are included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Other Outstanding Debt
Foreign Seasonal Lines of Credit
Excluding long-term credit agreements, the Company typically finances its foreign operations with committed and uncommitted short-term seasonal lines of credit arrangements with a number of banks. These operating lines are generally seasonal in nature, typically extending for a term of 180 days to 365 days corresponding to the tobacco crop cycle in that location. For uncommitted facilities, the lenders have the right to cease making loans and demand repayment of loans at any time or at specified dates. These loans are generally renewed at the outset of each tobacco season. Certain of the seasonal lines of credit are secured by trade receivables and inventories as collateral and are guaranteed by the Company and certain of its subsidiaries. At September 30, 2026, the Company was permitted to borrow under foreign seasonal lines of credit up to a total $1,204,262 , subject to limitations under the ABL Credit Agreement and the agreements governing the Intabex Term Loans, the Pyxus Term Loans, and the 2027 Notes. As of September 30, 2026, the total borrowing capacity under individual foreign seasonal lines of credit range up to $149,664 . As of September 30, 2026, the aggregate amount available for borrowing under the seasonal lines of credit was $317,925 . At September 30, 2026, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term foreign seasonal lines of credit.
12. Securitized Receivables
The Company sells trade receivables to unaffiliated financial institutions under various accounts receivable securitization facilities, two of which are subject to annual renewal.
Under the first facility with Finacity Corporation (the "Finacity Facility"), the Company continuously sells a designated pool of trade receivables to a special purpose entity, which sells 100 % of the receivables to an unaffiliated financial institution. Following the sale and transfer of the receivables to the special purpose entity, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights,
15
including the right to pledge or sell the receivables. This facility requires a minimum level of deferred purchase price be retained by the Company in connection with the sales of the receivables to the unaffiliated financial institution. The Company continues to service, administer, and collect the receivables on behalf of the special purpose entity and receives a servicing fee of 0.5 % of serviced receivables per annum. The Company estimates the expected fee it receives in return for its obligation to service these receivables reflects fair value, and accordingly, no servicing assets or liabilities are recognized. Servicing fees are recorded as a reduction of selling, general, and administrative expenses within the condensed consolidated statements of operations. Under this facility, the Company may request a temporary increase in the investment limit up to an additional $40,000 , applicable only for the period from January 1, 2027 through May 31, 2027. As of September 30, 2026, the investment limit of this facility was $120,000 of trade receivables.
Under the second facility, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. Although the Company continues to service, administer, and collect the receivables on behalf of the unaffiliated financial institution, the Company does not receive a servicing fee, and as a result, has established a servicing liability based upon unobservable inputs, primarily discounted cash flow. As of September 30, 2026, the investment limit under the second facility was $160,000 of trade receivables.
As servicer for the Finacity Facility and the second facility, the Company may receive funds that are due to the unaffiliated financial institutions which are net settled on the next settlement date. As of September 30, 2026 and 2025, and March 31, 2026, trade receivables, net in the condensed consolidated balance sheets have been reduced by $313 , $4,742 , and $13,610 as a result of the net settlement, respectively. As of September 30, 2026 and 2025, and March 31, 2026, accrued expenses and other current liabilities in the condensed consolidated balance sheets include $0 , $5,463 , and $0 of net payables for the Finacity Facility. See "Note 15. Fair Value Measurements" for additional information.
Under the other facilities, the Company offers trade receivables for sale to unaffiliated financial institutions, which are then subject to acceptance by the unaffiliated financial institutions. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables. As of September 30, 2026, the investment limits under these other facilities were variable based on qualifying sales.
The following summarizes the Company’s accounts receivable outstanding in the securitization facilities, which represents trade receivables sold into the program that have not been collected from the customer, and related beneficial interests, applicable only to the first and second facilities, which represents the Company’s residual interest in receivables sold that have not been collected from the customer:
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||
| Receivables outstanding in facility | $ | $ | $ | ||||||||
| Beneficial interests | |||||||||||
Cash proceeds from the sale of trade receivables are comprised of an initial cash payment received at the time of transfer and a deferred purchase price receivable, applicable only to the first and second facilities, which represents the Company's right to receive the remaining consideration upon collection of the underlying trade receivables by the purchasers. The following summarizes the Company’s cash collections from both the initial cash proceeds and the deferred purchase price receivable:
| Six Months Ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash collections from: | ||||||||
| Initial proceeds | $ | $ | ||||||
| Deferred purchase price receivable | ||||||||
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13. Guarantees
In certain sourcing regions, the Company guarantees bank loans for suppliers to finance their crops. The Company also guarantees bank loans of certain unconsolidated affiliates. See " Note 15. Fair Value Measurements" for the fair value of the Company's guarantee liability and corresponding fair value classification. The following summarizes amounts guaranteed:
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||
| Amounts guaranteed (not to exceed) | $ | $ | $ | ||||||||
Amounts outstanding under guarantee(1) | |||||||||||
| Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing | |||||||||||
(1) The majority of the guarantees outstanding at September 30, 2026 expire within | |||||||||||
14. Derivative Financial Instruments
The Company is exposed to foreign currency exchange rate risk related to its international operations. Principal currencies hedged include the Brazilian real and the Malawian kwacha. The Company uses forward or option currency contracts to manage risks associated with changes in foreign currency exchange rates. These derivative contracts are either designated as cash flow hedges of forecasted transactions for the purchase of green tobacco, other processing-related costs, and selling, general, and administrative expenses, or are not designated as hedging instruments because they are used to partially offset the immediate earnings impact of exchange rate risk on certain foreign currency denominated transactions.
As of September 30, 2026 and March 31, 2026, the Company's derivative financial instruments outstanding were designated as cash flow hedges. As of September 30, 2025, there were no outstanding derivative financial instruments. See "Note 15. Fair Value Measurements" for the fair values of the Company's outstanding derivative assets and liabilities and corresponding fair value classifications.
The following summarizes the U.S. dollar notional amount of derivative contracts outstanding:
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||
| Foreign currency exchange contracts | $ | $ | $ | ||||||||
The following summarizes the pre-tax effects of derivative financial instruments in the condensed consolidated statements of comprehensive income (loss) and the condensed consolidated statements of operations:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Foreign currency exchange contracts designated as cash flow hedges: | ||||||||||||||
Gain (loss) recognized in accumulated other comprehensive income(1) | $ | $ | ( | $ | $ | |||||||||
Gain reclassified from accumulated other comprehensive income to earnings(2) | ||||||||||||||
Foreign currency exchange contracts not designated as hedging instruments:(3) | ||||||||||||||
Gain recognized in earnings(2) | $ | $ | $ | $ | ||||||||||
(1) Amount represents the net change in fair value of derivative financial instruments. | ||||||||||||||
(2) These net gains are recognized in cost of goods and services sold within the condensed consolidated statements of operations. | ||||||||||||||
(3) There were foreign currency exchange contracts not designated as hedging instruments outstanding during the three and six months ended September 30, 2026 and 2025, but all had expired or settled by period-end. | ||||||||||||||
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15. Fair Value Measurements
The following summarizes the financial assets and liabilities measured at fair value on a recurring basis, along with their corresponding level within the fair value hierarchy:
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||||||||||||||||||||
| Level 2 | Level 3 | Total at Fair Value | Level 2 | Level 3 | Total at Fair Value | Level 2 | Level 3 | Total at Fair Value | |||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Securitized beneficial interests | |||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||||||||
Long-term debt(1) | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Guarantees | |||||||||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
(1) This fair value measurement disclosure does not affect the condensed consolidated balance sheets. | |||||||||||||||||||||||||||||
The following summarizes the changes in Level 3 instruments measured on a recurring basis:
| Three Months Ended | ||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| Securitized Beneficial Interests | Guarantees | Securitized Beneficial Interests | Long-Term Debt | Guarantees | ||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||
| Issuances | — | |||||||||||||||||||
| Settlements | ( | ( | ( | ( | ||||||||||||||||
| Losses recognized in earnings | ( | ( | ( | ( | ||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||
| Six Months Ended | ||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| Securitized Beneficial Interests | Guarantees | Securitized Beneficial Interests | Long-Term Debt | Guarantees | ||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | $ | |||||||||||||||
| Issuances | — | |||||||||||||||||||
| Settlements | ( | ( | ( | ( | ( | |||||||||||||||
| Losses recognized in earnings | ( | ( | ( | ( | ||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | |||||||||||||||
16. Contingencies and Other Information
Brazilian Tax Credits
The government in the Brazilian State of Parana ("Parana") issued a tax assessment on October 26, 2007 with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil. At September 30, 2026, the assessment for intrastate trade tax credits taken is $2,548 and the total assessment including penalties and interest is $11,668 . The Company believes it has properly complied with Brazilian law and will contest any assessment through the judicial process. Should the Company lose in the judicial process, the loss of the intrastate trade tax credits would have a material impact on the financial statements of the Company.
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Other Matters
In addition to the above-mentioned matter, the Company or certain of its subsidiaries are involved in other litigation or legal matters incidental to their business activities, including tax matters. While the outcome of these matters cannot be predicted with certainty, they are being vigorously defended and the Company does not currently expect that any of them will have a material adverse effect on its business or financial position. However, should one or more of these matters be resolved in a manner adverse to its current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material.
17. Equity-Based Compensation
Pursuant to the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (the "Incentive Plan"), a total of 3,612 shares (which amounts are presented in thousands) have been authorized for grants of equity-based awards to certain employees and non-employee directors.
Restricted Stock Units
Restricted stock units granted under the Incentive Plan are earned ratably for certain employees, subject to their continued employment, from the date of the award to March 31, 2027, and for certain non-employee directors, subject to continued board service, from the date of the award to the Company's next annual meeting of shareholders. Restricted stock units vest upon the earlier of March 31, 2031 or the occurrence of a change-in-control event or a liquidity event as such terms are defined under the restricted stock unit award agreement. The following summarizes activity for restricted stock units:
| (in thousands, except grant date fair value) | Restricted Stock Units | Weighted Average Grant Date Fair Value Per Share | ||||||
| Nonvested, March 31, 2026 | $ | |||||||
| Granted | ||||||||
| Canceled or forfeited | ( | |||||||
| Nonvested, September 30, 2026 | $ | |||||||
The following summarizes equity-based compensation expense for restricted stock units, which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Equity-based compensation expense | $ | $ | $ | $ | ||||||||||
Unrecognized compensation cost for restricted stock units is $460 as of September 30, 2026, and is expected to be recognized over a weighted average period of 0.50 years, representing the weighted average remaining service period related to the awards, subject to adjustments for actual forfeitures.
Performance-Based Stock Units
Under the terms of the performance-based stock units, the amount of shares to be issued to certain employees (ranging from 0 % to 200 % of the number of shares to be issued at the target performance level) will be contingent upon the per share price achieved in a liquidity event (as defined under the terms of the performance-based stock unit award agreement), subject to continued employment through the date of a liquidity event. The contingent liquidity event is not probable as of September 30, 2026, and accordingly, no equity-based compensation expense has been recognized for performance-based stock units. The following summarizes activity for performance-based stock units (at the target performance level):
| (in thousands, except grant date fair value) | Performance-Based Stock Units | Weighted Average Grant Date Fair Value Per Share | ||||||
| Nonvested, March 31, 2026 | $ | |||||||
| Granted | ||||||||
| Canceled or forfeited | ( | |||||||
| Nonvested, September 30, 2026 | $ | |||||||
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18. Related Party Transactions
The Company engages in transactions with its equity method investees primarily for the procuring and processing of inventory. The following summarizes activities with the Company's equity method investees:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Sales | $ | $ | $ | $ | ||||||||||
| Purchases | ||||||||||||||
| Dividends | ||||||||||||||
The Company included the following related party balances in its condensed consolidated balance sheets:
| September 30, 2026 | September 30, 2025 | March 31, 2026 | Location in Condensed Consolidated Balance Sheet | |||||||||||
| Accounts receivable, related parties | $ | $ | $ | Other receivables | ||||||||||
| Accounts payable, related parties | Accounts payable | |||||||||||||
Transactions with Significant Shareholders
Based on a Schedule 13D/A filed with the SEC on June 13, 2024 by Glendon Capital Management, L.P. (the "Glendon Investor"), Holly Kim Olsen, Glendon Opportunities Fund, L.P. and Glendon Opportunities Fund II, L.P., the Glendon Investor reported beneficial ownership of 8,315 shares of the Company’s common stock, representing approximately 33.8 % of the outstanding shares of the Company’s common stock. A representative of the Glendon Investor serves as a director of Pyxus. Based on a Schedule 13D/A filed with the SEC on March 25, 2024, by Monarch Alternative Capital LP (the "Monarch Investor"), MDRA GP LP and Monarch GP LLC, the Monarch Investor reported beneficial ownership of 6,125 shares of the Company’s common stock, representing approximately 24.9 % of the outstanding shares of the Company’s common stock. An individual designated by the Monarch Investor serves as a director of Pyxus. Based on a Schedule 13G/A filed with the SEC on September 3, 2024 by Owl Creek Asset Management, L.P. and Jeffrey A. Altman, Owl Creek Asset Management, L.P. is the investment manager of certain funds and reported beneficial ownership of 3,865 shares of the Company’s common stock on August 31, 2024, representing approximately 15.7 % of the outstanding shares of the Company’s common stock. During the six months ended September 30, 2026, funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the "Investor-Affiliated Funds") were holders, in part, of the Intabex Term Loans, the Pyxus Term Loans, and/or the 2027 Notes, which are described in "Note 11. Debt Arrangements." Effective July 15, 2026, the Monarch Investor is no longer a holder of the Intabex Term Loans.
Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of September 30, 2026 and 2025, and March 31, 2026, include $3,711 , $1,403 , and $1,352 , respectively, of interest payable to Investor-Affiliated Funds. Interest expense as presented in the condensed consolidated statements of operations includes $4,048 and $9,230 for the three and six months ended September 30, 2026, respectively, and $5,510 and $10,976 for the three and six months ended September 30, 2025, respectively, that relates to the Investor-Affiliated Funds. With respect to the Monarch Investor, such interest expense amounts include interest on the Intabex Term Loans only for the periods in which the Monarch Investor was a holder of the Intabex Term Loans.
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19. Segment Information
The following summarizes financial information relating to the Leaf segment (the Company's sole reportable segment), with the All Other category included for purposes of reconciliation of the Leaf segment balances to the condensed consolidated financial statements:
| Three Months Ended | Six Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Sales and other operating revenues: | ||||||||||||||
| Leaf | $ | $ | $ | $ | ||||||||||
| All Other | ||||||||||||||
| Consolidated sales and other operating revenues | $ | $ | $ | $ | ||||||||||
| Cost of goods and services sold: | ||||||||||||||
| Leaf | $ | $ | $ | $ | ||||||||||
| All Other | ||||||||||||||
| Consolidated cost of goods and services sold | $ | $ | $ | $ | ||||||||||
| Selling, general, and administrative expenses: | ||||||||||||||
| Leaf | $ | $ | $ | $ | ||||||||||
| All Other | ||||||||||||||
| Consolidated selling, general, and administrative expenses | $ | $ | $ | $ | ||||||||||
Other segment items:(1) | ||||||||||||||
| Leaf | $ | $ | ( | $ | $ | ( | ||||||||
| All Other | ( | |||||||||||||
| Consolidated other segment items | $ | $ | ( | $ | $ | ( | ||||||||
| Leaf segment operating income | $ | $ | $ | $ | ||||||||||
| All Other operating (loss) income | ( | ( | ( | |||||||||||
| Restructuring and asset impairment charges | ||||||||||||||
| Consolidated operating income | $ | $ | $ | $ | ||||||||||
| Interest expense, net | ||||||||||||||
| Income (loss) before income taxes and other items | $ | $ | $ | ( | $ | |||||||||
(1) Represents the other income (expense), net caption within the condensed consolidated statements of operations. | ||||||||||||||
21
| Three Months Ended | ||||||||||||||||||||
| September 30, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Leaf | All Other | Total | Leaf | All Other | Total | |||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Capital expenditures | ||||||||||||||||||||
| Six Months Ended | ||||||||||||||||||||
| September 30, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Leaf | All Other | Total | Leaf | All Other | Total | |||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Capital expenditures | ||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | March 31, 2026 | |||||||||||||||||||||||||||
| Leaf | All Other | Total | Leaf | All Other | Total | Leaf | All Other | Total | |||||||||||||||||||||
| Assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Trade and other receivables, net | |||||||||||||||||||||||||||||
| Investments in unconsolidated affiliates | |||||||||||||||||||||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Readers are cautioned that the statements contained in this report regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements, which are based on current expectations of future events, may be identified by the use of words such as "guidance", "strategy," "expects," "continues," "plans," "anticipates," "believes," "will," "estimates," "intends," "projects," "goals," "targets," and other words of similar meaning. These statements also may be identified by the fact that they do not relate strictly to historical or current facts. If underlying assumptions prove inaccurate, or if known or unknown risks or uncertainties materialize, actual results could vary materially from those anticipated, estimated, or projected. These risks and uncertainties include those discussed in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended March 31, 2026, and in our other filings with the U.S. Securities and Exchange Commission. These risks and uncertainties include: our reliance on a small number of significant customers; continued vertical integration by our customers; global shifts in sourcing customer requirements, including as a result of the imposition of, and changes to, tariffs and other changes in international trade policies; variation in our financial results due to growing conditions, customer indications and other factors; loss of confidence in us by our customers, farmers and other suppliers; migration of suppliers who have historically grown tobacco and from whom we have purchased tobacco toward growing other crops; risks related to our advancement of inputs to tobacco suppliers to be settled upon the suppliers delivering us unprocessed tobacco at the end of the growing season; risks that the tobacco we purchase directly from suppliers will not meet our customers’ quality and quantity requirements; weather and other environmental conditions that can affect the quantity and marketability of our inventory; the impact of increased competition on our earnings; continued high inflation that may adversely affect our profitability and the demand for our leaf tobacco products; risks related to our capital structure, including risks related to our significant debt and our ability to continue to finance our non-U.S. local operations with uncommitted short-term operating credit lines at the local level, our ability to continue to access capital markets to obtain long-term and short-term financing, and our substantial debt which may adversely affect us by limiting future sources of financing, interfering with our ability to pay interest and principal on our indebtedness, and subjecting us to additional risks; potential failure of foreign banks in which our subsidiaries maintain deposits or the failure by such banks to transfer funds or honor withdrawals; the risk that, because our ability to generate cash depends on many factors beyond our control, we may be unable to generate the significant amount of cash required to service our indebtedness; our ability to refinance our current credit facilities at the same availability or at similar or reduced interest rates, including due to volatility and disruption of global credit markets; failure to achieve our stated goals, which may adversely affect our liquidity; developments with respect to our liquidity needs and sources of liquidity; failure by counterparties to derivative transactions to perform their obligations; international business risks, including unsettled political conditions, uncertainty in the enforcement of legal obligations, including the collection of accounts receivable, fraud risks, expropriation, import and export restrictions, exchange controls, inflationary economies, currency risks, risks related to the restrictions on repatriation of earnings or proceeds from liquidated assets of foreign subsidiaries and impacts of international sanctions on our ability to sell or source tobacco in certain regions; risks and uncertainties related to geopolitical conflicts, including the armed conflicts in the Middle East and disruptions in shipping in that area; risks related to our operations in jurisdictions that pose a high risk of potential violations of the Foreign Corrupt Practices Act; exposure to foreign tax regimes in which the rules are not clear, are not consistently applied and are subject to sudden change; fluctuations in foreign currency exchange and interest rates; disruption, failure or security breaches of our information technology systems and other cybersecurity risks; regulations regarding environmental matters that may substantially increase our costs and expose us to potential liability; changing sustainability regulatory requirements and expectations; exposure to product liability claims, regulatory action, and litigation in the event such products are alleged to have caused injury, harm, or death; certain shareholders have the ability to exercise controlling influence on various corporate matters; reductions in demand for cigarettes and other consumer tobacco products; legislative and regulatory initiatives that may reduce consumption of consumer tobacco products and demand for our services and increase regulatory burdens on us or our customers; government actions that significantly affect the sourcing of tobacco, including governmental actions to identify and assess crop diversification initiatives and alternatives to leaf tobacco growing in countries whose economies depend upon tobacco production; and governmental investigations into our business activities, including, but not limited to, leaf tobacco industry buying and other payment practices.
We do not undertake to update any forward-looking statements that we may make from time to time except to the extent required by law.
Overview
Pyxus is a global agricultural company with businesses having more than 150 years of experience delivering value-added products and services to businesses and customers. The Company is a trusted provider of responsibly sourced, independently verified, sustainable, and traceable products and ingredients.
23
Executive Summary
The Company generated $4.1 million in net income attributable to Pyxus International, Inc. for the quarterly period ended September 30, 2026, which included a gain on the sale of our tobacco processing facility in Araranguá, Brazil and favorable income tax expense that benefitted from lower foreign currency volatility. Sales and other operating revenues were adversely affected by the timing of shipments during the quarter, which resulted in shipment volumes being lower than the comparable period. Gross profit was down by $8.9 million, or 10.1%, over the comparable period, and gross profit as a percent of sales was 14.8% for the three months ended September 30, 2026 compared to 15.4% for the three months ended September 30, 2025, due primarily to reduced margins for processing and other revenues, which offset strong margin performance for leaf product, particularly in Asia.
On a year-to-date basis, net loss attributable to Pyxus International, Inc. improved to $3.1 million for the six months ended September 30, 2026 from a net loss of $16.7 million for the six months ended September 30, 2025, driven in large part by the facility sale and income tax factors noted above. Similar to the quarterly period, lower shipment volumes impacted sales and other operating revenues during the first half of fiscal 2027, falling by $106.8 million, or 9.9%, due to the timing of certain customer shipments. Year-to-date gross profit decreased by $13.1 million, or 8.5%, when compared to the same period a year prior, which was mainly due to lower processing and other revenues, while gross profit as a percent of sales increased slightly from 14.2% to 14.4% over the same comparable period as a result of margin expansion primarily in Europe.
Purchases of green tobacco in our key Southern Hemisphere sourcing origins were largely completed by the end of the second quarter, concluding a prolonged buying season during which we procured tobacco at lower costs while ensuring purchases aligned with customer requirements. Our deliberate buying approach amid a second consecutive season of elevated crop sizes supported disciplined inventory management that resulted in lower overall volumes acquired across our African sourcing origins compared to the prior crop season. Total tobacco inventories were $1,030.9 million at September 30, 2026, a decrease of $71.9 million, or 6.5%, when compared to $1,102.8 million at September 30, 2025. Unprocessed tobacco decreased $140.8 million, or 35.9%, primarily due to reduced volumes on hand and lower average costs in Africa. Processed tobacco increased $68.9 million, or 9.7%, primarily due to the continued effects of higher carry-over inventory levels from the prior year crop.
South America Processing Consolidation and Sale of Facility
During the three months ended September 30, 2026, the Company's wholly owned subsidiary in Brazil, Alliance One Brasil Exportadora de Tabacos Ltda. ("AOB"), consolidated its two tobacco processing operations into its existing facility in Venâncio Aires, Brazil. Consolidating our tobacco processing operations in Brazil will create operating efficiencies through the centralization of processing and receiving activities, which we expect to improve factory utilization and provide long-term cost structure improvements.
The factory consolidation resulted in the sale of AOB's processing facility located in Araranguá, Brazil to an unaffiliated third-party purchaser pursuant to a purchase and sale agreement entered into on December 1, 2025. This transaction was completed in September 2026 and included a gain on sale of $9.1 million recognized in the three months ended September 30, 2026. Pursuant to the purchase and sale agreement, consideration from the sale is received in annual installments, which began in December 2025 and continues through March 2030. A portion of the proceeds from this sale will be used to invest in continued automation capabilities and other efficiency upgrades at our Venâncio Aires facility.
Weather Patterns and Crop Conditions
As an agricultural company, our results are inherently subject to major weather patterns, including recurring El Niño and La Niña cycles, which can affect crop size, quality, and the timing of harvesting and purchasing activities in the origins in which we operate. The current El Niño cycle continues to unfold and is expected to reach its peak effects between the Company's third and fourth quarters of fiscal 2027. This year's cycle has been characterized by certain meteorological sources as a "Super" El Niño, with an intensity expected to exceed that of previous recorded El Niño events. Historically, our origins in Africa and South America tend to be adversely affected by an El Niño cycle that typically occurs when crops are still in the fields growing, while the crop seasons in Asia, Europe, and North America have largely remained unaffected by past cycles. We continue to actively monitor this weather event, and while the ultimate impact, if any, on growing conditions and crop volumes cannot be predicted with certainty, we maintain geographically diversified sourcing and continue to assess this weather cycle's potential effect on availability, quality, and cost of leaf tobacco.
24
Results of Operations
Three Months Ended September 30, 2026 and 2025 | ||||||||||||||
| Three Months Ended September 30, | ||||||||||||||
| Change | ||||||||||||||
| (in millions, except per kilo amounts) | 2026 | 2025 | $ | % | ||||||||||
| Consolidated: | ||||||||||||||
| Sales and other operating revenues | $ | 534.4 | $ | 570.2 | (35.8) | (6.3) | ||||||||
| Cost of goods and services sold | 455.5 | 482.4 | (26.9) | (5.6) | ||||||||||
| Gross profit | 78.9 | 87.8 | (8.9) | (10.1) | ||||||||||
| Gross profit as a percent of sales | 14.8 | % | 15.4 | % | ||||||||||
| Selling, general, and administrative expenses | $ | 43.0 | $ | 40.1 | 2.9 | 7.2 | ||||||||
| Other income (expense), net | 5.5 | (0.9) | 6.4 | 711.1 | ||||||||||
| Restructuring and asset impairment charges | 1.4 | — | 1.4 | 100.0 | ||||||||||
| Operating income* | 40.0 | 46.7 | (6.7) | (14.3) | ||||||||||
| Interest expense, net | 34.8 | 37.9 | (3.1) | (8.2) | ||||||||||
| Income before income taxes and other items | 5.2 | 8.8 | (3.6) | (40.9) | ||||||||||
| Income tax expense | 1.5 | 10.3 | (8.8) | (85.4) | ||||||||||
| Income from unconsolidated affiliates, net | 0.4 | 0.6 | (0.2) | (33.3) | ||||||||||
| Net loss attributable to noncontrolling interests | (0.1) | — | (0.1) | (100.0) | ||||||||||
| Net income (loss) attributable to Pyxus International, Inc.* | $ | 4.1 | $ | (0.9) | 5.0 | 555.6 | ||||||||
| Leaf: | ||||||||||||||
| Product revenues | $ | 481.3 | $ | 511.2 | (29.9) | (5.8) | ||||||||
| Tobacco costs | 386.8 | 418.3 | (31.5) | (7.5) | ||||||||||
| Transportation, storage, and other period costs | 22.3 | 19.1 | 3.2 | 16.8 | ||||||||||
| Total product cost of goods sold | 409.1 | 437.4 | (28.3) | (6.5) | ||||||||||
| Product gross profit | 72.2 | 73.8 | (1.6) | (2.2) | ||||||||||
| Product gross profit as a percent of sales | 15.0 | % | 14.4 | % | ||||||||||
| Kilos sold | 77.0 | 91.4 | (14.4) | (15.8) | ||||||||||
| Average price per kilo | $ | 6.25 | $ | 5.59 | 0.66 | 11.8 | ||||||||
| Average cost per kilo | 5.31 | 4.79 | 0.52 | 10.9 | ||||||||||
| Average gross profit per kilo | 0.94 | 0.80 | 0.14 | 17.5 | ||||||||||
| Processing and other revenues | $ | 51.1 | $ | 55.5 | (4.4) | (7.9) | ||||||||
| Processing and other costs of services sold | 45.7 | 41.2 | 4.5 | 10.9 | ||||||||||
| Processing and other gross profit | 5.4 | 14.3 | (8.9) | (62.2) | ||||||||||
| Processing and other gross profit as a percent of sales | 10.6 | % | 25.8 | % | ||||||||||
| All Other: | ||||||||||||||
| Sales and other operating revenues | $ | 2.0 | $ | 3.6 | (1.6) | (44.4) | ||||||||
| Cost of goods and services sold | 0.7 | 3.9 | (3.2) | (82.1) | ||||||||||
| Gross profit (loss) | 1.3 | (0.3) | 1.6 | 533.3 | ||||||||||
| Gross profit (loss) as a percent of sales | 65.0 | % | (8.3) | % | ||||||||||
| * Amounts may not equal column totals due to rounding. | ||||||||||||||
25
Sales and other operating revenues decreased $35.8 million, or 6.3%, to $534.4 million for the three months ended September 30, 2026 from $570.2 million for the three months ended September 30, 2025. Shipment timing in Asia, along with smaller crops from certain origins within the region contributed to a 15.8% decline in leaf volumes sold. In addition, current crop shipments from Africa and South America were delayed due to shipping constraints and the slower cadence of our buying and processing this crop season, and were partially offset by higher carry-over crop sales from Africa.
Cost of goods and services sold decreased $26.9 million, or 5.6%, to $455.5 million for the three months ended September 30, 2026 from $482.4 million for the three months ended September 30, 2025, corresponding to the reduction in sales and other operating revenues.
Gross profit decreased $8.9 million, or 10.1%, to $78.9 million for the three months ended September 30, 2026 from $87.8 million for the three months ended September 30, 2025 as a result of lower profitability from processing and other revenues in Africa and South America. Average gross profit per kilo for leaf increased by $0.14, or 17.5%, to $0.94 for three months ended September 30, 2026 from $0.80 for three months ended September 30, 2025, primarily from improved pricing and product mix in Asia.
Other income (expense), net increased $6.4 million, or 711.1%, to income of $5.5 million for the three months ended September 30, 2026 from an expense of $0.9 million for the three months ended September 30, 2025. This increase was due to the current quarter gain of $9.1 million recognized upon the sale of our tobacco processing facility located in Araranguá, Brazil, partially offset by higher contingent losses recorded in South America for ongoing tax and legal matters.
Income tax expense decreased $8.8 million, or 85.4%, to $1.5 million for the three months ended September 30, 2026 from $10.3 million for the three months ended September 30, 2025. This decrease was primarily attributable to favorable foreign currency impacts recognized during the current-year period, and a decrease in the expense associated with unrecognized tax benefits. See "Note 4. Income Taxes" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
26
Six Months Ended September 30, 2026 and 2025 | ||||||||||||||
| Six Months Ended September 30, | ||||||||||||||
| Change | ||||||||||||||
| (in millions, except per kilo amounts) | 2026 | 2025 | $ | % | ||||||||||
| Consolidated: | ||||||||||||||
| Sales and other operating revenues | $ | 972.2 | $ | 1,079.0 | (106.8) | (9.9) | ||||||||
| Cost of goods and services sold | 831.9 | 925.6 | (93.7) | (10.1) | ||||||||||
| Gross profit | 140.3 | 153.4 | (13.1) | (8.5) | ||||||||||
| Gross profit as a percent of sales | 14.4 | % | 14.2 | % | ||||||||||
| Selling, general, and administrative expenses | 86.9 | 80.5 | 6.4 | 8.0 | ||||||||||
| Other income (expense), net | 4.2 | (5.1) | 9.3 | 182.4 | ||||||||||
| Restructuring and asset impairment charges | 2.0 | 0.1 | 1.9 | 1,900.0 | ||||||||||
| Operating income | 55.6 | 67.7 | (12.1) | (17.9) | ||||||||||
| Interest expense, net | 64.6 | 67.7 | (3.1) | (4.6) | ||||||||||
| (Loss) income before income taxes and other items | (9.0) | — | (9.0) | (100.0) | ||||||||||
| Income tax (benefit) expense | (4.2) | 15.5 | (19.7) | (127.1) | ||||||||||
| Income (loss) from unconsolidated affiliates, net | 1.8 | (0.7) | 2.5 | 357.1 | ||||||||||
| Net income attributable to noncontrolling interests | 0.1 | 0.5 | (0.4) | (80.0) | ||||||||||
| Net loss attributable to Pyxus International, Inc. | $ | (3.1) | $ | (16.7) | 13.6 | 81.4 | ||||||||
| Leaf: | ||||||||||||||
| Product revenue | $ | 874.3 | $ | 969.4 | (95.1) | (9.8) | ||||||||
| Tobacco costs | 703.7 | 794.0 | (90.3) | (11.4) | ||||||||||
| Transportation, storage, and other period costs | 44.9 | 44.2 | 0.7 | 1.6 | ||||||||||
| Total cost of goods sold | 748.6 | 838.2 | (89.6) | (10.7) | ||||||||||
| Product gross profit | 125.7 | 131.2 | (5.5) | (4.2) | ||||||||||
| Product gross profit as a percent of sales | 14.4 | % | 13.5 | % | ||||||||||
| Kilos sold | 140.5 | 158.3 | (17.8) | (11.2) | ||||||||||
| Average price per kilo | $ | 6.22 | $ | 6.12 | 0.10 | 1.6 | ||||||||
| Average cost per kilo | 5.33 | 5.30 | 0.03 | 0.6 | ||||||||||
| Average gross profit per kilo | 0.89 | 0.82 | 0.07 | 8.5 | ||||||||||
| Processing and other revenues | $ | 93.9 | $ | 105.6 | (11.7) | (11.1) | ||||||||
| Processing and other revenues costs of services sold | 81.9 | 83.8 | (1.9) | (2.3) | ||||||||||
| Processing and other gross profit | 12.0 | 21.8 | (9.8) | (45.0) | ||||||||||
| Processing and other gross profit as a percent of sales | 12.8 | % | 20.6 | % | ||||||||||
| All Other: | ||||||||||||||
| Sales and other operating revenues | $ | 4.0 | $ | 4.0 | — | — | ||||||||
| Cost of goods and services sold | 1.4 | 3.7 | (2.3) | (62.2) | ||||||||||
| Gross profit | 2.6 | 0.3 | 2.3 | 766.7 | ||||||||||
| Gross profit as a percent of sales | 65.0 | % | 7.5 | % | ||||||||||
27
Sales and other operating revenues decreased $106.8 million, or 9.9%, to $972.2 million for the six months ended September 30, 2026 from $1,079.0 million for the six months ended September 30, 2025, largely driven by shipment timing in North America that led to an 11.2% decline in leaf volumes sold. The current crop in North America was substantially shipped in the fourth quarter of fiscal year 2026, whereas comparable crop shipments in the prior year occurred during the first quarter of fiscal year 2026. Shipment timing from Asia, and current crop shipment delays from Africa and South America were also contributing factors to the decline in leaf volumes sold, partially offset by higher carry-over crop shipments from Africa.
Cost of goods and services sold decreased $93.7 million, or 10.1%, to $831.9 million for the six months ended September 30, 2026 from $925.6 million for the six months ended September 30, 2025. This decrease was mainly due to the reduction in sales and other operating revenues.
Gross profit decreased $13.1 million, or 8.5%, to $140.3 million for the six months ended September 30, 2026 from $153.4 million for the six months ended September 30, 2025 as a result of lower profitability from processing and other revenues in Africa and South America, the timing of shipments in North America, and a higher concentration of lower margin carry-over crop sales in Africa. Average gross profit per kilo for leaf increased by $0.07, or 8.5%, to $0.89 for the six months ended September 30, 2026 from $0.82 for the six months ended September 30, 2025, mainly due to improved pricing in Europe and Asia.
Selling, general, and administrative expenses increased $6.4 million, or 8.0%, to $86.9 million for the six months ended September 30, 2026 from $80.5 million for the six months ended September 30, 2025, driven by increased personnel costs and higher professional fees.
Other income (expense), net increased $9.3 million, or 182.4%, to income of $4.2 million for the six months ended September 30, 2026 from an expense of $5.1 million for the six months ended September 30, 2025. This increase was mainly due to the current quarter gain of $9.1 million recognized upon the sale of our tobacco processing facility located in Araranguá, Brazil.
Income tax (benefit) expense decreased $19.7 million, or 127.1%, to a benefit of $4.2 million for the six months ended September 30, 2026 from an expense of $15.5 million for the six months ended September 30, 2025. This decrease was primarily attributable to favorable foreign currency impacts recognized in the current period, and a decrease in the expense associated with unrecognized tax benefits. See "Note 4. Income Taxes" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
28
Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash generated from operations, short-term borrowings under our foreign seasonal lines of credit, availability under our ABL Credit Facility, and cash collections from our securitized receivables. Our liquidity requirements are affected by various factors from our tobacco leaf business, including crop seasonality, foreign currency and interest rates, green tobacco prices, customer mix, crop size, and quality. Our leaf tobacco business is seasonal, and purchasing, processing, and selling activities have several associated peaks where cash on-hand and outstanding indebtedness may vary significantly compared to year end. The first two quarters of our fiscal year generally represent the peak of our working capital requirements.
We believe that our sources of liquidity will be sufficient to fund our anticipated operating needs for the next twelve months. During such time, our liquidity needs for operations may approach the levels of our anticipated available cash and permitted borrowings under our credit facilities. Unanticipated developments affecting our liquidity needs, including with respect to the foregoing factors, and sources of liquidity, including impacts affecting our cash flows from operations and the availability of capital resources (including an inability to renew or refinance seasonal lines of credit), may result in a deficiency in liquidity. To address a potential liquidity deficiency, we may undertake plans to minimize cash outflows, which could include exiting operations that do not generate positive cash flow. It is possible that, depending on the occurrence of events affecting our liquidity needs and sources of liquidity, such plans may not be sufficient to adequately or timely address a liquidity deficiency.
Debt Financing
We continue to finance our business with a combination of short-term and long-term credit lines, the long-term debt securities, advances from customers, and cash from operations when available. See "Note 11. Debt Arrangements" to the "Notes to Condensed Consolidated Financial Statements" for a summary of our short-term and long-term debt.
We continuously monitor and, as available, adjust funding sources as needed to enhance and drive various business opportunities. From time to time we may take steps to reduce our debt or otherwise improve our financial position. Such actions could include prepayments, open market debt repurchases, negotiated repurchases, other redemptions or retirements of outstanding debt, and refinancing of debt. The amount of prepayments or the amount of debt that may be repurchased, refinanced, or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.
The following summarizes our total borrowing capacity at September 30, 2026 and 2025 under our short-term and long-term credit lines and letter of credit facilities and the remaining available amount after the reduction for outstanding borrowings and amounts reserved for outstanding letters of credit:
| September 30, 2026 | September 30, 2025 | |||||||||||||
| (in millions) | Total Borrowing Capacity | Remaining Amount Available | Total Borrowing Capacity | Remaining Amount Available | ||||||||||
| Senior secured credit facility: | ||||||||||||||
ABL Credit Facility(1) | $ | 150.0 | $ | 150.0 | $ | 150.0 | $ | 150.0 | ||||||
| Foreign seasonal lines of credit | 1,204.3 | 318.0 | 1,067.4 | 162.8 | ||||||||||
| Letters of credit | 9.5 | 0.3 | 12.3 | 3.3 | ||||||||||
| Total | $ | 1,363.8 | $ | 468.3 | $ | 1,229.7 | $ | 316.1 | ||||||
(1) The borrowing capacity and related amount available is subject to certain borrowing base limitations. | ||||||||||||||
The total borrowing capacity of our foreign seasonal lines of credit increased $136.9 million and the remaining amount available also increased by $155.2 million when compared to the prior year. Our foreign seasonal lines of credit are utilized to purchase green tobacco in our sourcing origins and provide us with purchasing flexibility. Lower purchased volumes of green tobacco, and which were purchased at lower prices have resulted in lower borrowings and a corresponding increase in the remaining amount available for borrowing under our foreign seasonal lines of credit, which remaining availability is subject to limitations based on the level of receivables and inventories as collateral and by certain restrictive covenants.
29
Net Debt
We refer to "Net debt," a non-GAAP measure, as total debt liabilities less cash and cash equivalents. We believe this non-GAAP financial measure is useful to monitor leverage and to evaluate changes to the Company's capital structure. A limitation associated with using net debt is that it subtracts cash and cash equivalents, and therefore, may imply that management intends to use cash and cash equivalents to reduce outstanding debt and that cash held in certain jurisdictions can be applied to repay obligations owing in other jurisdictions and without reduction for applicable taxes. In addition, net debt suggests that our debt obligations are less than the most comparable GAAP measure indicates. The following summarizes the computation of net debt:
| (in millions) | September 30, 2026 | September 30, 2025 | March 31, 2026 | ||||||||
| Notes payable | $ | 890.8 | $ | 908.0 | $ | 477.1 | |||||
Long-term debt(1) | 456.3 | 455.3 | 455.8 | ||||||||
| Total debt liabilities | $ | 1,347.1 | $ | 1,363.3 | $ | 932.9 | |||||
| Less: Cash and cash equivalents | 96.6 | 99.2 | 134.3 | ||||||||
| Net debt | $ | 1,250.5 | $ | 1,264.1 | $ | 798.6 | |||||
(1) Long-term debt includes outstanding indebtedness under the ABL Credit Facility. There were no outstanding amounts under the ABL Credit Facility as of each period-end shown. Weighted average borrowings outstanding under the ABL Credit Facility were $27.0 million and $34.5 million for the three and six months ended September 30, 2026, respectively. Weighted average borrowings outstanding under the ABL Credit Facility were $35.1 million and $46.3 million for the three and six months ended September 30, 2025, respectively. | |||||||||||
Net debt decreased as of September 30, 2026 when compared to September 30, 2025 primarily from reduced borrowings on our foreign seasonal lines of credit due to fewer kilos purchased and at lower green tobacco prices in Africa.
Working Capital
The following summarizes our working capital:
| (in millions except for current ratio) | September 30, 2026 | September 30, 2025 | March 31, 2026 | ||||||||
| Cash, cash equivalents, and restricted cash | $ | 101.3 | $ | 106.4 | $ | 137.7 | |||||
| Trade and other receivables, net | 293.7 | 214.2 | 264.9 | ||||||||
| Inventories and advances to tobacco suppliers, net | 1,179.7 | 1,221.7 | 854.3 | ||||||||
| Recoverable income taxes | 23.0 | 13.1 | 2.9 | ||||||||
| Prepaid expenses and other current assets | 75.9 | 71.4 | 70.8 | ||||||||
| Total current assets* | $ | 1,673.6 | $ | 1,626.9 | $ | 1,330.5 | |||||
| Notes payable | $ | 890.8 | $ | 908.0 | $ | 477.1 | |||||
| Accounts payable | 127.8 | 134.2 | 146.8 | ||||||||
| Advances from customers | 115.8 | 82.3 | 175.0 | ||||||||
| Accrued expenses and other current liabilities | 121.0 | 109.2 | 114.8 | ||||||||
| Income taxes payable | 22.3 | 12.4 | 9.1 | ||||||||
| Operating leases payable | 10.2 | 9.1 | 9.9 | ||||||||
| Total current liabilities* | $ | 1,287.9 | $ | 1,255.3 | $ | 932.8 | |||||
| Current ratio | 1.3 to 1 | 1.3 to 1 | 1.4 to 1 | ||||||||
| Working capital | $ | 385.7 | $ | 371.6 | $ | 397.7 | |||||
| * Amounts may not equal column totals due to rounding. | |||||||||||
Working capital increased $14.1 million, or 3.8%, from September 30, 2025 to September 30, 2026. The increase was due to higher trade receivables resulting from the timing of sales and customer collections near period-end, as well as reduced borrowings under our foreign seasonal lines of credit in Africa that were used to procure fewer kilos of green tobacco and at lower costs. These factors were partially offset by higher customer advances associated with our obligation to ship tobacco to certain customers at a future date.
30
Inventories
The following summarizes inventory committed to a customer and uncommitted inventory balances for processed tobacco:
| (in millions) | September 30, 2026 | September 30, 2025 | March 31, 2026 | ||||||||
| Committed | $ | 737.5 | $ | 691.5 | $ | 462.2 | |||||
| Uncommitted | 42.4 | 19.5 | 45.2 | ||||||||
| Total processed tobacco | $ | 779.9 | $ | 711.0 | $ | 507.4 | |||||
Total processed tobacco increased by $68.9 million, or 9.7%, from September 30, 2025 to September 30, 2026. This increase is primarily from larger carry-over crop volumes in Africa. The percentage of uncommitted processed tobacco at September 30, 2026 was 5.4%, compared to 2.7% at the same time a year ago, reflecting large crops across origins in the Southern Hemisphere over the past two crop cycles. See "Note 7. Inventories, Net" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
Sources and Uses of Cash
We typically finance our non-U.S. tobacco operations with committed and uncommitted short-term foreign seasonal lines of credit, normally extending for a term of 180 to 365 days, corresponding to the tobacco crop cycle in that market. For uncommitted facilities, the lenders have the right to cease making loans and demand repayment of loans. These short-term seasonal lines of credit are generally renewed at the outset of each tobacco season. We maintain various other financing arrangements to meet the cash requirements of our businesses. See "Note 11. Debt Arrangements" to the "Notes to Condensed Consolidated Financial Statements" for additional information.
We utilize capital in excess of cash flow from operations to finance accounts receivable, inventory, and advances to tobacco suppliers in foreign countries. In addition, we may periodically elect to purchase, redeem, repay, retire, or cancel indebtedness prior to stated maturity under our various foreign credit lines.
As of September 30, 2026, our cash, cash equivalents, and restricted cash was $101.3 million, of which approximately $77.4 million was held in foreign jurisdictions for working capital needs, a majority of which is subject to exchange controls and a portion of which is subject to tax consequences upon repatriation, which could limit our ability to fully repatriate these funds. Fluctuation of the U.S. dollar versus many of the currencies in which we have costs may have an impact on our working capital requirements. We will continue to monitor and hedge foreign currency costs, as needed.
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The following summarizes the sources and uses of our cash flows:
| Six Months Ended | ||||||||
| September 30, | ||||||||
| (in millions) | 2026 | 2025 | ||||||
| Net loss | $ | (3.0) | $ | (16.2) | ||||
| Trade and other receivables | (100.7) | (111.1) | ||||||
| Inventories and advances to tobacco suppliers | (325.5) | (428.0) | ||||||
| Payables and accrued expenses | (11.6) | 15.2 | ||||||
| Advances from customers | (52.2) | (54.3) | ||||||
| Other | (8.7) | 13.5 | ||||||
| Net cash used in operating activities | $ | (501.7) | $ | (580.9) | ||||
| Collections from beneficial interests in securitized trade receivables | 69.8 | 108.8 | ||||||
| Other | (11.9) | (7.0) | ||||||
| Net cash provided by investing activities | $ | 57.9 | $ | 101.8 | ||||
| Net proceeds from short-term borrowings | 417.0 | 506.0 | ||||||
| Other | (7.8) | (3.5) | ||||||
| Net cash provided by financing activities | $ | 409.2 | $ | 502.5 | ||||
| Effect of exchange rate changes on cash | (1.8) | (2.4) | ||||||
| (Decrease) increase in cash, cash equivalents, and restricted cash* | $ | (36.4) | $ | 20.9 | ||||
| * Amounts may not equal column totals due to rounding. | ||||||||
The change in cash, cash equivalents, and restricted cash for the six months ended September 30, 2026 compared to the six months ended September 30, 2025 decreased by $57.3 million due to reduced borrowings on our foreign seasonal lines of credit in Africa that were used to purchase fewer kilos and at lower green tobacco prices, and lower cash collections from beneficial interests in securitized trade receivables, corresponding to lower sales over the same comparable period. Cash used in operating activities partially offset these decreases as a result of the lower average costs to purchase green tobacco in our Southern Hemisphere origins.
Planned Capital Expenditures
Capital spend for fiscal year 2027 includes strategic projects to drive long-term efficiencies and cost optimization at our largest operations in Africa and South America. Capital expenditures are also planned for the routine replacement of machinery and equipment, and investments in other such assets to enhance our operational effectiveness and to support our ongoing sustainability efforts. For the six months ended September 30, 2026, we incurred approximately $11.8 million in capital expenditures, and are expecting to incur an additional $26.1 million for the remainder of the fiscal year ending March 31, 2027.
Pension and Postretirement Health and Life Insurance Benefits
The following summarizes cash contributions to pension and postretirement health and life insurance benefits:
| Six Months Ended | |||||
| (in millions) | September 30, 2026 | ||||
| Contributions made during the period | $ | 2.3 | |||
| Contributions expected for the remainder of the fiscal year | 2.2 | ||||
| Total | $ | 4.5 | |||
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates since March 31, 2026. For information regarding our critical accounting estimates, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our market risk exposures since March 31, 2026. For a discussion of our exposure to market risk, see Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) designed to provide reasonable assurance that the information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. Due to inherent limitations, our disclosure controls and procedures, however well designed and operated, can provide only reasonable assurance (not absolute) that the objectives of the disclosure controls and procedures are met.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as required by Rule 13a-15(b) of the Exchange Act) as of September 30, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective to provide reasonable assurance as of September 30, 2026.
Changes in Internal Control over Financial Reporting
As required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that no changes in our internal control over financial reporting occurred during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II. Other Information
Item 1. Legal Proceedings
See "Note 16. Contingencies and Other Information" to the "Notes to Condensed Consolidated Financial Statements" for additional information with respect to legal proceedings, which are incorporated by reference herein.
Item 1A. Risk Factors
In addition to the other information set forth in this report and in our other filings with the Securities and Exchange Commission, investors should carefully consider our risk factors, which could materially affect our business, financial condition, or operating results. As of the date of this report, there are no material changes or updates to the risk factors previously disclosed in Part I, Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The Company did not repurchase any of its equity securities during the three months ended September 30, 2026.
On August 15, 2024, the Board of Directors authorized a program to repurchase up to $10,000,000 plus fees and expenses of our common stock in the open market or through privately negotiated transactions, subject to limitations under the Company's debt agreements (which currently limit the aggregate amount that may be applied to repurchase shares of common stock to $1,000,000). The repurchase by the Company on August 21, 2024 of shares of its common stock for approximately $1,000,000, inclusive of brokerage fees, was applied to this limit. This program expires on August 15, 2027. If current restrictions under applicable debt agreements are modified to permit further repurchases of common stock by the Company, the number, price, structure and timing of any further share repurchases will be at the Company's sole discretion, and any such future repurchases of our common stock are dependent on market conditions, liquidity needs, and certain restrictions under our debt arrangements, among other factors.
No cash dividends on shares of common stock of Pyxus International, Inc. were paid to shareholders during the six months ended September 30, 2026. As of September 30, 2026, the payment of such dividends is restricted under the terms of our debt agreements.
Item 5. Other Information
During the three months ended September 30, 2026, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
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Item 6. Exhibits
| Exhibit No. | Description | |||||||
| Form of Restricted Stock Unit Award Agreement (2026) (filed herewith) | ||||||||
| Form of Restricted Stock Unit Award Agreement for Non-Employee Directors (2026) (filed herewith) | ||||||||
| Form of Performance-based Stock Unit Award Agreement (2026) (filed herewith) | ||||||||
| Form of Cash Compensation Agreement for Non-Employee Directors in Lieu of Restricted Stock Unit Award (2026) (filed herewith) | ||||||||
| Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (filed herewith)* | ||||||||
| Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | ||||||||
| Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | ||||||||
| Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | ||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (filed herewith) | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema (filed herewith) | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase (filed herewith) | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase (filed herewith) | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase (filed herewith) | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase (filed herewith) | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
*We are re-filing the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan to correct a typographical error included in such document as included as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on March 20, 2025 and to conform to such document as included as Appendix A to the registrant’s definitive proxy statement on Schedule 14A filed on July 9, 2025.
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| SIGNATURE | ||||||||
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. | ||||||||
| Pyxus International, Inc. | ||||||||
Date: November 5, 2026 | /s/ Christopher G. Meredith | |||||||
| Christopher G. Meredith | ||||||||
| Corporate Controller | ||||||||
| (Principal Accounting Officer) | ||||||||
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Exhibit 10.1
This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
Pyxus International, Inc.
Amended and Restated 2020 Incentive Plan
Form of Restricted Stock Unit Award Agreement
This Restricted Stock Unit Award Agreement (this “Agreement”), made effective as of the /$GrantDate$/ (the “Date of Award”), between Pyxus International, Inc., a Virginia corporation (the “Company”), and /$ParticipantName$/ (the “Participant”), is made pursuant and subject to the provisions of the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (the “Plan”), a copy of which has been made available to the Participant. All terms used herein that are defined in the Plan have the same meaning given them in the Plan.
1. Award of Stock Units. The Company grants /$AwardsGranted$/ Stock Units to the Participant as of the Date of Award specified above, subject to the terms and conditions, including the vesting requirements, set forth in the Plan and this Agreement (the “Restricted Stock Units”).
2. Terms and Conditions.
a. Time-based Vesting. Except as provided in paragraph 2(e), the Participant’s interest in the Restricted Stock Units shall be earned for vesting, and subject to the occurrence of a Liquidity Event (as defined below) shall vest and become non-forfeitable, so long as the Participant remains in the continuous employ of the Company or an Affiliate from the Date of Award, with respect to one-third of the shares of Common Stock subject to this Restricted Stock Unit on the first anniversary of the Date of Award, with respect to one-third of the shares of Common Stock subject to this Restricted Stock Unit on March 31, 2026 and with respect to the remaining one-third of the shares of Common Stock subject to this Restricted Stock Unit on the March 31, 2027; provided that no fraction of a share shall become earned for vesting on the first anniversary of the Date of Award or on March 31, 2026, with the amount of shares becoming earned for vesting on such dates being rounded down to the nearest whole number of shares that will become earned for vesting on such dates and the sum of such fractional shares not so earned for vesting on such dates becoming earned for vesting on March 31, 2027. Restricted Stock Units that have not been earned for vesting in accordance with the preceding sentence of this paragraph 2(a) shall be forfeited, and the Participant shall have no further rights with respect to the Restricted Stock Units, upon the termination of the Participant’s employment with the Company and its Affiliates, other than with respect to any Restricted Stock Units as may be determined by the Committee in its sole and absolute discretion not to be so forfeited. Restricted Stock Units that have been earned for vesting in accordance with the preceding sentences of this paragraph 2(a) shall be forfeited, and the Participant shall have no further rights with respect to the Restricted Stock Units, upon the involuntary termination of the Participant’s employment with the Company and its Affiliates at any time for Cause. For purposes of this Agreement, the Participant’s termination will be deemed to be an involuntary termination for “Cause” if prior to such termination the Committee determines that the Participant engaged in a Prohibited Activity (as defined in paragraph 2(e)) and that the Participant is being terminated for Cause.
b. Liquidity Event. Except as provided in paragraph 2(e), the Restricted Stock Units earned for vesting pursuant to paragraph 2(a) shall vest and become non-forfeitable upon the earliest to occur of the following events (the earliest of which to occur being referred to as the “Liquidity Event”): (i) March 31, 2031, (ii) an event qualifying as a Change in Control under
Section 1.05(b) of the Plan, or (iii) an event qualifying as a Change in Control under Section 1.05(c) of the Plan; provided that any such event set forth in subclause (ii) or (iii) herein qualifies as a “change in control event” within the meaning of Code Section 409A (as defined below). The Restricted Stock Units earned for vesting pursuant to paragraph 2(a) prior to the occurrence of the Liquidity Event shall vest upon the occurrence of the Liquidity Event, and Restricted Stock Units earned for vesting pursuant to paragraph 2(a) following the occurrence of the Liquidity Event shall vest upon the date such Restricted Stock Units are earned for vesting pursuant to paragraph 2(a), subject to the application of Article X of the Plan if the Liquidity Event constitutes a Change of Control.
c. Settlement. If the Participant vests in the Restricted Stock Units pursuant to paragraphs 2(a) and (b), the vested Restricted Stock Units shall be settled by the Company in shares of Common Stock, in accordance with this paragraph. As soon as practicable after any Restricted Stock Unit vests, but in any event no later than December 31 in the calendar year in which the Restricted Stock Units vest, the Company will issue to the Participant (or his or her estate, if the Participant is deceased) one whole share of Common Stock for such vested Restricted Stock Unit.
d. Transferability. The Restricted Stock Units may not be transferred before they become vested in accordance with paragraphs 2(a) and (b). Notwithstanding the preceding sentence, shares of Common Stock for such vested Restricted Stock Unit may be surrendered to, or withheld by, the Company in accordance with the procedures established by the Company to satisfy income and employment taxes attributable to the Restricted Stock Unit.
e. Misconduct. The Committee shall have the authority to cancel, rescind, cause the forfeiture of or otherwise limit or restrict any vested or non-vested Restricted Stock Units awarded under this Agreement if the Committee determines that the Participant has (i) violated the Company’s Code of Conduct (as in effect from time to time); (ii) violated any law (other than misdemeanor traffic violations) and thereby injured or damaged the business reputation or prospects of the Company or an Affiliate; or (iii) engaged in intentional misconduct that caused, or materially contributed to, the need for a substantial restatement (voluntary or required) of the Company’s financial statements filed with the Securities and Exchange Commission (the foregoing enumerated items being hereinafter referred to, individually or collectively, as a “Prohibited Activity”).
Furthermore, in the event the Committee in its discretion determines that the Participant has engaged in a Prohibited Activity at any time prior to the later of six months after the settlement of any vested Restricted Stock Units pursuant to paragraph 2(c), the Committee may rescind the settlement of any Restricted Stock Units hereunder, provided the Committee takes such action within two years after the occurrence of the Prohibited Activity. Upon such rescission, the Company at its sole option, may require the Participant to (a) deliver and convey to the Company the shares of Common Stock issued in settlement of the Restricted Stock Units awarded hereunder; (b) in the case any such shares of Common Stock have been sold in a market transaction to an unrelated party by the Participant, pay to the Company an amount equal to the proceeds from the sale of such shares; (c) in the case any such shares of Common Stock have otherwise been disposed of by the Participant, pay to the Company an amount in cash equal to the product of the number of such shares multiplied by the closing price for a share of Common Stock, as reported on the primary securities market on which the Common Stock is then traded, on the date the Committee determined that the Participant has engaged in the Prohibited Activity pursuant to paragraph 2(e) hereof, and if such date is not a day on which such securities market is open for trading shares of the Common Stock, then on the next succeeding day on which such securities market is open for trading shares of the Common Stock. The Company shall be entitled to set-off any such amount owed to the Company against any amount or benefit owed to the Participant by the Company, and the Participant shall forfeit the amount or benefit
2
applied to set-off such amount owed to the Company. Further, if the Company commences an action against such Participant (by way of claim or counterclaim and including declaratory claims), in which it is preliminarily or finally determined that such Participant engaged in a Prohibited Activity, the Participant shall reimburse the Company for all costs and fees incurred in such action, including but not limited to, the Company’s reasonable attorneys’ fees.
f. Stock Power. With respect to shares of Common Stock subject to rescission under paragraph 2(e), the Participant does hereby irrevocably constitute and appoint each of the Pyxus International, Inc. Corporate Secretary and the Senior Vice President, Chief Human Resources Officer, as the Participant’s attorney to transfer on the books of the Company, with full power of substitution in the premises, any shares of Common Stock the issuance or delivery of which is rescinded in accordance with this Agreement. Such person or persons shall use the authority granted in this paragraph 2(f) to cancel any shares of Common Stock the issuance or delivery of which is rescinded under paragraph 2(e).
3. Shareholder Rights. The Participant will have no voting, dividend or other shareholder rights with respect to Restricted Stock Units. With respect to Common Stock issued to the Participant pursuant to paragraph 2(c), the Participant will be treated as a shareholder and shall have applicable voting, dividend and other shareholder rights beginning on the actual date of issue.
4. Assignability. The Restricted Stock Units, including any interest therein, shall not be transferable or assignable, except by the Participant’s will or by the laws of descent and distribution.
5. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any benefit realized by the Participant or other person under this Agreement, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. In accordance with procedures established by the Company, the Company may withhold from Common Stock delivered to the Participant sufficient shares of Common Stock (valued as of the date of vesting) to satisfy withholding and employment taxes, or the Company shall direct the Participant to pay to the Company in cash sufficient amounts to satisfy such obligation.
6. No Right to Employment. The Plan and this Agreement will not confer upon the Participant any right with respect to the continuance of employment or other service with the Company or any Affiliate and will not interfere in any way with any right that the Company or any Affiliate would otherwise have to terminate any employment or other service of the Participant at any time. For purposes of this Agreement, the continuous employ of the Participant with the Company or an Affiliate shall not be deemed interrupted, and the Participant shall not be deemed to have ceased to be an employee of the Company or any Affiliate by reason of (a) the transfer of the Participant’s employment among the Company and its Affiliates or (b) an approved leave of absence.
7. Not Part of Regular Compensation. This Agreement shall not be construed as a guarantee that the Participant will earn or accrue a benefit. The Participant agrees and acknowledges that the Restricted Stock Units and any benefits that may be earned with respect thereto are not and shall not be treated as part of the Participant’s regular compensation for any purpose.
8. Relation to Other Benefits. Except as specifically provided, any economic or other benefit to the Participant under this Agreement or the Plan will not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or any Affiliate and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or an Affiliate.
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9. Compliance with Section 409A of the Code.
a. This Agreement shall at all times be construed in a manner to comply with Section 409A of the Internal Revenue Code (“Code Section 409A”), including, if applicable, compliance with any exemptions from Code Section 409A.
b. The parties intend that all amounts realized by or payable to Participant or any other party pursuant to this Agreement will qualify as short-term deferrals within the meaning of Treas. Reg. § 1.409A-1(b)(4) and will not be treated as “deferred compensation” for purposes of Code Section 409A.
c. In no event shall any payment required to be made pursuant to this Agreement that is considered deferred compensation within the meaning of Code Section 409A (and is not otherwise exempt from the provisions thereof) be accelerated or delayed in violation of Code Section 409A.
d. If Participant is a “specified employee” within the meaning of Code Section 409A, any amount payable upon Participant’s separation from service that is considered deferred compensation under Code Section 409A (and is not exempt from Code Section 409A) cannot be paid prior to the earlier of (i) six months after the date of Participant’s separation from service or (ii) the date of Participant’s death.
e. The Committee and the Company and its Affiliates do not represent or guarantee to any Participant that any particular federal or state income, payroll or other tax treatment will result from the Participant’s participation in the Plan. The Participant is solely responsible for the proper tax reporting and timely payment of any income tax or interest for which the Participant is liable as a result of this Agreement and the Participant’s participation in the Plan.
10. Change in Capital Structure. The terms of this Agreement are subject to adjustment by the Committee in accordance with Article XI of the Plan.
11. Impact of Change in Control. The terms of this Agreement are subject to adjustment by the Committee in accordance with Article X of the Plan.
12. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia.
13. Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the Date of Award and the provisions of this Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Date of Award.
14. Participant Bound by Plan. Participant hereby acknowledges that a copy of the Plan has been made available to the Participant and agrees to be bound by all the terms and provisions thereof.
15. Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and the successors of the Company.
16. Severability. If any provision of this Agreement should for any reason be declared invalid or unenforceable by a court of competent jurisdiction, then this Agreement and the grant of Restricted Stock Units hereunder shall be deemed invalid and unenforceable in its entirety due to failure of consideration.
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17. Committee Discretion. The Committee shall have all of the powers granted under the Plan, including but not limited to the powers granted under Article III of the Plan and the authority and discretion to interpret the provisions of this Agreement and to make any decisions or take any actions necessary or advisable for the administration of this Agreement.
18. Amendment. The Board may at any time amend, modify or terminate the Plan and the Committee may at any time amend or modify this Agreement; provided, however, that no such action of the Board or the Committee shall adversely affect the Participant’s rights under this Agreement without the consent of the Participant. The Board or the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement so that the Award qualifies for exemption from or complies with Code Section 409A; provided, however, that the Board, the Committee and the Company make no representations that the Award shall be exempt from or comply with Code Section 409A and make no undertaking to preclude Code Section 409A from applying to the Award.
19. Compensation Recovery. This Award shall be subject to any compensation recovery policy adopted by the Company, including any policy required to comply with applicable law or listing standards, as such policy may be amended from time to time in the sole discretion of the Company. As consideration for and by accepting the Award, the Participant agrees that all prior equity awards made by the Company to the Participant shall become subject to the terms and conditions of the provisions of this paragraph 19.
20. Language. If the Participant has received this Agreement or any other document related to the Plan translated into a language other than English and the translated version is different than the English version, the English version shall control.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized officer, and Participant has affixed his or her signature hereto.
PYXUS INTERNATIONAL, INC.
By: _________________________________
Participant: _____________________________
6
Exhibit 10.2
This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
Pyxus International, Inc.
Amended and Restated 2020 Incentive Plan
Restricted Stock Unit Award Agreement
This Restricted Stock Unit Award Agreement (this “Agreement”), made effective as of the /$GrantDate$/ (the “Date of Award”), between Pyxus International, Inc., a Virginia corporation (the “Company”), and /$ParticipantName$/ (the “Participant”), is made pursuant and subject to the provisions of the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (the “Plan”), a copy of which has been made available to the Participant. All terms used herein that are defined in the Plan have the same meaning given them in the Plan.
1. Award of Stock Units. The Company grants /$AwardsGranted$/ Stock Units to the Participant as of the Date of Award specified above, subject to the terms and conditions, including the vesting requirements, set forth in the Plan and this Agreement (the “Restricted Stock Units”).
2. Terms and Conditions.
a. Time-based Vesting. The Participant’s interest in the Restricted Stock Units shall be earned for vesting, and subject to the occurrence of a Liquidity Event (as defined below) shall vest and become non-forfeitable, so long as the Participant remains a member of the Board of Directors of the Company until the earlier of the August 15, 2025 or the commencement of the annual meeting of shareholders of the Company to be held in 2025 (such earlier date being referred to as the “Required Service Date”); provided that, in the event the Participant ceases to serve as a member of the Board of Directors of the Company prior the Required Service Date, the Participant’s interest in the Restricted Stock Units shall be deemed earned for vesting in a prorated amount based on the number of days elapsed from the Date of Award until the date of the Participant’s cessation of service as a member of the Company’s Board of Directors compared to an assumed duration of the period from the August 15, 2024 to the Required Service Date of 365 days and provided further that in the event of such proration no fraction of a Restricted Stock Units shall become earned for vesting, with the amount of Restricted Stock Units becoming earned for vesting being rounded down to the nearest whole number of Restricted Stock Units. Restricted Stock Units that have not been earned for vesting in accordance with the preceding sentence of this paragraph 2(a) shall be forfeited, and the Participant shall have no further rights with respect to such Restricted Stock Units, upon the cessation of the Participant’s service on the Board of Directors of the Company, other than with respect to any Restricted Stock Units as may be determined by the Committee in its sole and absolute discretion not to be so forfeited.
b. Liquidity Event. The Restricted Stock Units earned for vesting pursuant to paragraph 2(a) shall vest and become non-forfeitable upon the earliest to occur of the following events (the earliest of which to occur being referred to as the “Liquidity Event”): (i) March 31, 2031, (ii) an event qualifying as a Change in Control under Section 1.05(b) of the Plan, or (iii) an event qualifying as a Change in Control under Section 1.05(c) of the Plan; provided that any such event set forth in subclause (ii) or (iii) herein qualifies as a “change in control event” within the meaning of Code Section 409A (as defined below). The Restricted Stock Units earned for vesting pursuant to paragraph 2(a) prior to the occurrence of the Liquidity Event shall vest upon the occurrence of the Liquidity Event, and Restricted Stock Units earned for vesting pursuant to paragraph 2(a) following the occurrence of the Liquidity Event shall vest upon the date such
Restricted Stock Units are earned for vesting pursuant to paragraph 2(a), subject to the application of Article X of the Plan if the Liquidity Event constitutes a Change of Control.
c. Settlement. If the Participant vests in some or all of the Restricted Stock Units pursuant to paragraphs 2(a) and (b), the vested Restricted Stock Units shall be settled by the Company in shares of Common Stock, in accordance with this paragraph. As soon as practicable after any Restricted Stock Unit vests, but in any event no later than December 31 in the calendar year in which the Restricted Stock Units vest, the Company will issue to the Participant (or his or her estate, if the Participant is deceased) one whole share of Common Stock for such vested Restricted Stock Unit.
d. Transferability. The Restricted Stock Units may not be transferred before they become vested in accordance with paragraphs 2(a) and (b).
3. Shareholder Rights. The Participant will have no voting, dividend or other shareholder rights with respect to Restricted Stock Units. With respect to Common Stock issued to the Participant pursuant to paragraph 2(c), the Participant will be treated as a shareholder and shall have applicable voting, dividend and other shareholder rights beginning on the actual date of issue.
4. Assignability. The Restricted Stock Units, including any interest therein, shall not be transferable or assignable, except by the Participant’s will or by the laws of descent and distribution.
5. Compliance with Section 409A of the Code.
a. This Agreement shall at all times be construed in a manner to comply with Section 409A of the Internal Revenue Code (“Code Section 409A”), including, if applicable, compliance with any exemptions from Code Section 409A.
b. The parties intend that all amounts realized by or payable to Participant or any other party pursuant to this Agreement will qualify as short-term deferrals within the meaning of Treas. Reg. § 1.409A-1(b)(4) and will not be treated as “deferred compensation” for purposes of Code Section 409A.
c. In no event shall any payment required to be made pursuant to this Agreement that is considered deferred compensation within the meaning of Code Section 409A (and is not otherwise exempt from the provisions thereof) be accelerated or delayed in violation of Code Section 409A.
d. The Committee and the Company and its Affiliates do not represent or guarantee to any Participant that any particular federal or state income, payroll or other tax treatment will result from the Participant’s participation in the Plan. The Participant is solely responsible for the proper tax reporting and timely payment of any income tax or interest for which the Participant is liable as a result of this Agreement and the Participant’s participation in the Plan.
6. Change in Capital Structure. The terms of this Agreement are subject to adjustment by the Committee in accordance with Article XI of the Plan.
7. Impact of Change in Control. The terms of this Agreement are subject to adjustment by the Committee in accordance with Article X of the Plan.
8. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia.
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9. Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the Date of Award and the provisions of this Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Date of Award.
10. Participant Bound by Plan. Participant hereby acknowledges that a copy of the Plan has been made available to the Participant and agrees to be bound by all the terms and provisions thereof.
11. Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and the successors of the Company.
12. Severability. If any provision of this Agreement should for any reason be declared invalid or unenforceable by a court of competent jurisdiction, then this Agreement and the grant of Restricted Stock Units hereunder shall be deemed invalid and unenforceable in its entirety due to failure of consideration.
13. Committee Discretion. The Committee shall have all of the powers granted under the Plan, including but not limited to the powers granted under Article III of the Plan and the authority and discretion to interpret the provisions of this Agreement and to make any decisions or take any actions necessary or advisable for the administration of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized officer, and Participant has affixed his or her signature hereto.
PYXUS INTERNATIONAL, INC
By: _________________________________
Participant: _____________________________
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Exhibit 10.3
This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
Pyxus International, Inc.
Amended and Restated 2020 Incentive Plan
Form of Performance-based Stock Unit Award Agreement
This Performance-Based Stock Unit Award Agreement (this “Agreement”), made effective as of /$GrantDate$/ (the “Date of Award”), between Pyxus International, Inc., a Virginia corporation (the “Company”), and /$ParticipantName$/ (the “Participant”), is made pursuant and subject to the provisions of the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (the “Plan”), a copy of which has been made available to the Participant.
RECITAL:
The Plan provides for the grant of Performance-based Stock Unit Awards to eligible employees designated by the Committee. The Committee has determined that Performance-based Stock Unit Awards will encourage eligible employees to contribute to the profits and growth of the Company and its Affiliates, and that the Participant can be expected to make such a contribution.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Defined Terms. Capitalized terms used but not defined in this Agreement shall have the meaning set forth for those terms in the Plan.
2. Performance-based Stock Unit Award. The Company grants /$AwardsGranted$/ Stock Units to the Participant as of the Date of Award specified above, subject to the terms and conditions, including the vesting requirements, set forth in the Plan and this Agreement (the “Performance-based Stock Units”).
3. Vesting.
a. Performance Criteria. Vesting of the Performance-based Stock Units will depend on the occurrence of any of the following events prior to March 31, 2031 (the earliest of which to occur being referred to as the “Liquidity Event”): (i) an event qualifying as a Change in Control under Section 1.05(b) of the Plan (a “Merger Event”), (ii) an event qualifying as a Change in Control under Section 1.05(c) of the Plan (an “Asset Sale Event”), or (iii) the listing of Common Stock on a securities exchange that is registered with the Securities and Exchange Commission under Section 6 of the Securities Exchange Act of 1934, as amended, or on a foreign securities exchange approved by the Committee in its sole and absolute discretion (a “Listing Event”). The amount of the Performance-based Stock Units that will vest, and the amount of shares of Common Stock to be paid out with respect to vested Performance-based Stock Units, will depend on the per share price of Common Stock with respect to the Liquidity Event (the “Per Share Price”) determined as follows: (i) in the event that the Liquidity Event is a Merger Event, the Per Share Price shall be the sum of the per share value of cash consideration to be received by holders of Common Stock generally in the Merger Event plus the per share value of non-cash consideration to be received by holders of Common Stock generally in the Merger Event, as the value of such non-cash consideration is determined by the Committee in its sole
and absolute discretion; (ii) in the event that the Liquidity Event is an Asset Sale Event, the Per Share Price shall be the per share value of consideration to be distributed to holders of Common Stock generally in a dissolution of the Company following an Asset Sale Event, as the value of such consideration is determined by the Committee in its sole and absolute discretion; and (iii) in the event that the Liquidity Event is a Listing Event, the Per Share Price shall be the average per share closing price of Common Stock on such national securities exchange or foreign securities exchange over the five consecutive trading days commencing upon the occurrence of the Listing Event. Exhibit A attached hereto sets forth a target level for Performance–based Stock Units to be vested based on the specified target Per Share Price and the maximum level for Performance–based Stock Units to be vested based on the specified maximum Per Share Price. In the event that the Per Share Price of the Liquidity Event is less than the specified target level, no shares of Common Stock shall be paid out with respect thereto. In the event that the Per Share Price of the Liquidity Event equals or exceeds the specified target level, the Performance–based Stock Units will vest, with shares of Common Stock equal to 100% of the target amount of such Performance–based Stock Units to be paid out if the Per Share Price is at the specified target level and shares of Common Stock equal to 200% of the target amount of such Performance–based Stock Units if the Per Share Price is at or above the specified maximum level, with the amount of shares of Common Stock to be paid out being extrapolated by the Committee in any manner determined by it in good faith for a Per Share Price between these respective points. The payment with respect to vested Performance-based Stock Units shall be effected as provided in Section 4. If no Liquidity Event occurs prior to March 31, 2031, the Performance-based Stock Units granted hereunder shall be forfeited for no consideration on March 31, 2031.
b. Certification. As soon as practicable in connection with the Liquidity Event, the Committee shall certify the Price Per Share and the payout for the Performance-based Stock Units pursuant to Section 3(a). Any fractional share of Common Stock to be delivered in payment of a Performance-based Stock Unit shall be rounded up to the nearest whole number. The Performance-based Stock Units so certified shall be deemed to be vested as of the date of the Liquidity Event. Notwithstanding any provision of this Agreement to the contrary, the Committee in its discretion may adjust the number of shares of Common Stock payable upon settlement of Performance-based Stock Units in recognition of such performance or other factors that the Committee deems relevant.
c. Effect of Termination of Employment. Notwithstanding anything to the contrary herein, except as otherwise set forth in clauses (i) and (ii) of this Section 3(c) below, all of a Participant’s vested and unvested Performance-based Stock Units shall be forfeited, and the Participant shall not be entitled to any payment with respect to the Performance-based Stock Units awarded hereby, upon termination of the Participant from the employ of the Company and its Affiliates (including a voluntary termination of employment by the Participant or a termination of the Participant’s employment by the Company for Cause) at any time prior to the vesting of the Performance-based Stock Units.
i. Retirement, Disability or Involuntary Termination Without Cause. A Participant’s Performance-based Stock Units shall not be forfeited, and the Participant shall remain entitled to payment with respect to the Performance-based Stock Units awarded hereby, upon termination of the Participant from the employ of the Company and its Affiliates at any time within six (6) months prior to the occurrence of the Liquidity Event as a result of the Participant’s Retirement, the termination of the Participant’s active employment with the Company and its Affiliates as a result of Disability or the involuntary termination of the Participant from the employ of the Company and its Affiliates without Cause; provided that
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the number of the shares of Common Stock to be paid upon settlement of the Performance-based Stock Units that would otherwise be payable based on the certification pursuant to Section 3(b) shall instead be prorated (rounded up to the nearest whole share) based on the ratio of the number of days during the period beginning April 1, 2024, and ending the date of the occurrence of the Liquidity Event (the “Pro-Ration Period”) that the Participant remained in the continuous employ of the Company or one of its Affiliates through the date of such termination of employment due to Retirement, Disability or involuntary termination without Cause, to the total number of days in the Pro-Ration Period. The Performance-based Stock Units shall not be vested, and the Participant shall not be entitled to receive settlement of the Performance-based Stock Units until the certification is made by the Committee pursuant to Section 3(b).
ii. Death. A Participant’s Performance-based Stock Units shall not be forfeited, and the Participant shall remain entitled to payment with respect to the Performance-based Stock Units awarded hereby, upon termination of the Participant from the employ of the Company and its Affiliates at any time within six (6) months prior to the occurrence of the Liquidity Event as a result of the Participant’s death; provided that the number of the shares of Common Stock to be paid upon settlement of the Performance-based Stock Units that would otherwise be payable based on the certification pursuant to Section 3(b) shall instead be prorated (rounded up to the nearest whole share) based on the ratio of the number of days during the Pro-Ration Period that the Participant remained in the continuous employ of the Company or one of its Affiliates through the date of such termination of employment due to the Participant’s death to the total number of days in the Pro-Ration Period. The Performance-based Stock Units shall not be vested, and the Participant shall not be entitled to receive settlement of the Performance-based Stock Units until the certification is made by the Committee pursuant to Section 3(b).
iii. Definitions. For purposes of this Agreement, “Retirement” means the Participant’s voluntary termination of employment, following four (4) month’s advance notice thereof by the Participant delivered to the Chief Human Resources Officer of the Company, if at the time of such termination of employment the Participant (i) is at least age 65 and has continuously served as an employee of the Company or an Affiliate for at least the prior five (5) years, (ii) is at least age 60 and has continuously served as an employee of the Company or an Affiliate for at least the prior 15 years, or (iii) has continuously served as an employee of the Company or an Affiliate for at least the prior 30 years; provided, however, that, in any such case, if at the time of such termination of employment the Committee has determined that the Participant has engaged in a Prohibited Activity (as defined in Section 4(c)) such termination of employment shall not qualify as a “Retirement.” For purposes of this Agreement, “Disability” means that the Participant has ceased active employment with the Company and its Affiliates on account of a permanent and total disability as defined in Section 22(e)(3) of the Code. For purposes of this Agreement, the Participant’s termination will be deemed to be an involuntary termination without “Cause” unless prior to such termination the Committee determines that the Participant engaged in a Prohibited Activity (as defined in Section 4(c)) and that the Participant is being terminated for Cause.
d. Change in Control. In the event of a Change in Control of the Company (other than an event qualifying as a Change of Control under Section 1.05(b) or Section 1.05(c) of the Plan) prior to the settlement of the Performance-based Share Units, the provisions of
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Article X of the Plan shall apply with respect to the vesting of any Performance-based Stock Units, and the Committee shall determine whether and to what extent the Participant’s Performance-based Stock Units will be deemed to be vested and the time of settlement of such Performance-based Stock Units.
4. Terms and Conditions.
a. Time of Settlement. Except to the extent that the Committee determines another time for settlement of Performance-based Stock Units vested pursuant to Section 3(d) (and subject to compliance with Code Section 409A (as defined below)), the Company will effect settlement of all Performance-based Stock Units (i) that are or become vested in connection with the Liquidity Event as soon as practicable after the Committee shall have certified, pursuant to Section 3(b), the number of Performance-based Stock Units deemed vested with respect to the Liquidity Event, but in any event no later than December 31 of the calendar year in which the Liquidity Event occurs, except that if the Liquidity Event occurs at any time in October, November or December, the deadline for settling such vested Performance-based Stock Units shall be March 15 of the following calendar year.
b. Manner of Settlement. Vested Performance-based Stock Units shall be settled by the Company in shares of Common Stock, or, if determined by the Committee, in cash or a combination of shares of Common Stock and cash, in accordance with this Section 4(b). At its option, and with respect to any vested Performance-based Stock Unit, the Company will:
i. issue to the Participant (or the Participant’s estate, if the Participant is deceased) a whole number of shares of Common Stock for such vested Performance-based Stock Unit based on performance as certified in accordance with Section 3(b); or
ii pay to the Participant (or the Participant’s estate, if the Participant is deceased) an amount of cash equal to the Per Share Price for the Liquidity Event.
c. Misconduct.
i. The Committee shall have the authority to cancel, rescind, cause the forfeiture of or otherwise limit or restrict any vested or nonvested Performance-based Stock Units awarded under this Agreement if the Committee determines that the Participant has (i) violated the Company’s Code of Conduct (as in effect from time to time); (ii) violated any law (other than misdemeanor traffic violations) and thereby injured or damaged the business reputation or prospects of the Company or an Affiliate; or (iii) engaged in intentional misconduct that caused, or materially contributed to, the need for a substantial restatement (voluntary or required) of the Company’s financial statements filed with the Securities and Exchange Commission (the foregoing enumerated items being hereinafter referred to, individually or collectively, as a “Prohibited Activity”).
ii. In the event the Committee in its discretion determines that the Participant has engaged in a Prohibited Activity at any time prior to six months after the settlement of any vested Performance-based Stock Units, the Committee may rescind the settlement of any Performance-based Stock Units hereunder, provided the Committee takes such action within two years after the occurrence of the Prohibited Activity. Upon such rescission, the Company at its sole option, may require the Participant to (a) deliver and convey to the Company the shares of Common Stock issued in settlement of the Performance-based Stock Units
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awarded hereunder; (b) in the case any such shares of Common Stock have been sold in a market transaction to an unrelated party by the Participant, pay to the Company an amount equal to the proceeds from the sale of such shares; (c) in the case any such shares of Common Stock have otherwise been disposed of by the Participant, pay to the Company an amount in cash equal to the product of the number of such shares multiplied by the closing price for a share of Common Stock, as reported on the primary securities market on which the Common Stock is then traded, on the date the Committee determined that the Participant has engaged in the Prohibited Activity pursuant to Section 4(c) hereof, and if such date is not a day on which such securities market is open for trading shares of the Common Stock, then on the next succeeding day on which such securities market is open for trading shares of the Common Stock; (d) pay to the Company an amount of cash equal to the amount of cash paid by the Company in settlement of any Performance-based Stock Units awarded hereunder. The Company shall be entitled to set-off any such amount owed to the Company against any amount or benefit owed to the Participant by the Company, and the Participant shall forfeit the amount or benefit applied to set-off such amount owed to the Company. Further, if the Company commences an action against such Participant (by way of claim or counterclaim and including declaratory claims), in which it is preliminarily or finally determined that such Participant engaged in a Prohibited Activity, the Participant shall reimburse the Company for all costs and fees incurred in such action, including but not limited to, the Company’s reasonable attorneys’ fees.
iii. With respect to shares of Common Stock subject to rescission under Section 4(c), the Participant does hereby irrevocably constitute and appoint each of the Pyxus International, Inc. Corporate Secretary and the Senior Vice President, Chief Human Resources Officer, as the Participant’s attorney to transfer on the books of the Company, with full power of substitution in the premises, any shares of Common Stock the issuance or delivery of which is rescinded in accordance with this Agreement. Such person or persons shall use the authority granted in this Section 4(c)(iii) to cancel any shares of Common Stock the issuance or delivery of which is rescinded under Section 4(c).
5. Assignability. The Performance-based Stock Units, including any interest therein, shall not be transferable or assignable, except by the Participant’s will or by the laws of descent and distribution.
6. Shareholder Rights. The Participant will have no voting, dividend or other shareholder right with respect to the Performance-based Stock Units. With respect to the Common Stock issued to the Participant pursuant to this Agreement, the Participant will be treated as a shareholder of the Company and shall have applicable voting, dividend and other shareholder rights beginning on the actual date of issue.
7. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by the Participant or other person under this Agreement, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. In accordance with procedures established by the Company, the Company may withhold from Common Stock delivered to the Participant, sufficient shares of Common Stock (valued as of the preceding day) to satisfy withholding and employment taxes, or the Company shall direct the Participant to pay to the
5
Company in cash or Common Stock (valued as of the day preceding the payment) sufficient amounts or shares to satisfy such obligation.
8. No Right to Employment. The Plan and this Agreement will not confer upon the Participant any right with respect to the continuance of employment or other service with the Company or any Affiliate and will not interfere in any way with any right that the Company or any Affiliate would otherwise have to terminate any employment or other service of the Participant at any time. For purposes of this Agreement, the continuous employ of the Participant with the Company or an Affiliate shall not be deemed interrupted, and the Participant shall not be deemed to have ceased to be an employee of the Company or any Affiliate by reason of (a) the transfer of his or her employment among the Company and its Affiliates or (b) an approved leave of absence.
9. Not Part of Regular Compensation. The Participant agrees and acknowledges that benefits under this Agreement are subject to the Company’s achievement of certain performance and stock listing objectives and are further subject to the Committee’s discretion to decrease the number of Performance-based Stock Units that vest. This Agreement shall not be construed as a guarantee that the Participant will earn or accrue a benefit. The Participant agrees and acknowledges that the Performance-based Stock Units and any benefits that may be earned with respect thereto are not and shall not be treated as part of the Participant’s regular compensation for any purpose.
10. Relation to Other Benefits. Except as specifically provided, any economic or other benefit to the Participant under this Agreement or the Plan will not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or any Affiliate and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or an Affiliate.
11. Compliance with Section 409A of the Code.
a. This Agreement shall at all times be construed in a manner to comply with Section 409A of the Internal Revue Code (“Code Section 409A”), including, if applicable, compliance with any exemptions from Code Section 409A.
b. The parties intend that all amounts realized by or payable to Participant or any other party pursuant to this Agreement will qualify as short-term deferrals within the meaning of Treas. Reg. § 1.409A-1(b)(4) and will not be treated as “deferred compensation” for purposes of Code Section 409A.
c. In no event shall any payment required to be made pursuant to this Agreement that is considered deferred compensation within the meaning of Code Section 409A (and is not otherwise exempt from the provisions thereof) be accelerated or delayed in violation of Code Section 409A.
d. If Participant is a “specified employee” within the meaning of Code Section 409A, any amount payable upon Participant’s separation from service that is considered deferred compensation under Code Section 409A (and is not exempt from Code Section 409A) cannot be paid prior to the earlier of (i) six months after the date of Participant’s separation from service or (ii) the date of Participant’s death.
e. The Committee and the Company and its Affiliates do not represent or guarantee to any Participant that any particular federal or state income, payroll or other tax treatment will result from the Participant’s participation in the Plan. The Participant is solely responsible for the proper tax reporting and timely payment of any income tax or interest for which the
6
Participant is liable as a result of this Agreement and the Participant’s participation in the Plan.
12. Change in Capital Structure. The terms of this Agreement are subject to adjustment by the Committee in accordance with Article XI of the Plan.
13. Impact of Change in Control. The terms of this Agreement are subject to adjustment by the Committee in accordance with Article X of the Plan.
14. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia.
15. Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the Date of Award and the provisions of this Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Date of Award.
16. Participant Bound by Plan. Participant hereby acknowledges that a copy of the Plan has been made available to the Participant and Participant agrees to be bound by all the terms and provisions thereof.
17. Binding Effect. Subject to the limitations stated herein and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and the successors of the Company.
18. Severability. If any provision of this Agreement should for any reason be declared invalid or unenforceable by a court of competent jurisdiction, then this Agreement and the grant of Performance-based Stock Units hereunder shall be deemed invalid and unenforceable in its entirety due to failure of consideration.
19. Committee Discretion. The Committee shall have all of the powers granted under the Plan, including but not limited to the powers granted under Article III of the Plan and the authority and discretion to interpret the provisions of this Agreement and to make any decisions or take any actions necessary or advisable for the administration of this Agreement.
20. Amendment. The Board may at any time amend, modify or terminate the Plan and the Committee may at any time amend or modify this Agreement; provided, however, that no such action of the Board or the Committee shall adversely affect the Participant’s rights under this Agreement without the consent of the Participant. The Board or the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify this Agreement so that the Award qualifies for exemption from or complies with Code Section 409A; provided, however, that the Board, the Committee and the Company make no representations that the Award shall be exempt from or comply with Code Section 409A and make no undertaking to preclude Code Section 409A from applying to the Award.
21. Compensation Recovery. This Award shall be subject to any compensation recovery policy adopted by the Company, including any policy required to comply with applicable law or listing standards, as such policy may be amended from time to time in the sole discretion of the Company. As consideration for and by accepting the Award, the Participant agrees that all prior equity awards made by the Company to the Participant shall become subject to the terms and conditions of the provisions of this Section 21.
22. Language. If the Participant has received this Agreement or any other document related to the Plan translated into a language other than English and the translated version is different than the English version, the English version shall control.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized officer, and Participant has affixed his or her signature hereto.
PYXUS INTERNATIONAL, INC.
By: _________________________________
Participant: _____________________________
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Exhibit 10.4
Cash Compensation Agreement (Director 2026)
This Cash Compensation Agreement (this “Agreement”), made effective as of the [ ] day of [ ], 20[ ] (the “Date of Award”), between Pyxus International, Inc., a Virginia corporation (the “Company”), and [ ] (the “Participant”), is made in lieu of an award of restricted stock units under the Pyxus International, Inc. Amended and Restated 2020 Incentive Plan (the “Plan”), a copy of which has been made available to the Participant. All terms used herein that are defined in the Plan have the same meaning given them in the Plan.
1. Award of Cash Compensation. The Company agrees to pay to the Participant [__________] subject to the terms and conditions, including the vesting requirements, set forth in this Agreement (the “Cash Compensation”).
2. Terms and Conditions.
a. Time-based Vesting. The Participant’s right to receive the Cash Compensation shall be earned for vesting, and subject to the satisfaction of the Liquidity Event (as defined below) shall vest and become non-forfeitable, so long as the Participant remains a member of the Board of Directors of the Company until the earlier of the first anniversary of the Date of Award or the commencement of the annual meeting of shareholders of the Company to be held in the calendar year following the Date of Award (such earlier date being referred to as the “Required Service Date”); provided that, in the event the Participant ceases to serve as a member of the Board of Directors of the Company prior the Required Service Date, the Participant’s interest in the Cash Compensation shall be deemed earned for vesting in a prorated amount based on the number of days elapsed from the Date of Award until the date of the Participant’s cessation of service as a member of the Company’s Board of Directors compared to an assumed duration of the period from the Date of Award to the Required Service Date of 365 days. Any amount of the Cash Compensation that has not been earned for vesting in accordance with the preceding sentence of this paragraph 2(a) shall be forfeited, and the Participant shall have no further rights with respect to such amount of Cash Compensation, upon the cessation of the Participant’s service on the Board of Directors of the Company, other than with respect to any amount of the Cash Compensation as may be determined by the Committee in its sole and absolute discretion not to be so forfeited.
b. Liquidity Event. Notwithstanding the provisions of paragraph 2(a) hereof with respect to the satisfaction of vesting criteria based on the Participant’s continuous service as a member of the Company’s Board of Directors from the Date of Award, the Participant’s right to receive the Cash Compensation shall not otherwise vest unless and until the earlier of (i) March 31, 2031, (ii) an event qualifying as a Change in Control under Section 1.05(b) of the Plan, or (iii) an event qualifying as a Change in Control under Section 1.05(c) of the Plan; provided that any such event set forth in subclause (ii) or (iii) herein qualifies as a “change in control event” within the meaning of Code Section 409A (as defined below). The condition to vesting set forth in this paragraph 2(b) is referred to as the “Liquidity Event”. The amount of the Cash Compensation earned for vesting pursuant to paragraph 2(a) prior to the satisfaction of the Liquidity Event shall vest upon the satisfaction of the Liquidity Event, and amount of the Cash Compensation earned for vesting pursuant to paragraph 2(a) following the satisfaction of the Liquidity Event shall vest upon the date such Cash Compensation is earned for vesting pursuant to paragraph 2(a).
c. Settlement. If the Participant vests in the right to receive the Cash Compensation, the Cash Compensation shall be settled by the Company in cash in accordance with this
paragraph. As soon as practicable after the Cash Compensation vests, but in any event no later than December 31 in the calendar year in which the right to payment of the Cash Compensation vests, the Company will pay to the Participant cash in an amount equal to the Cash Compensation that has vested as of the Liquidity Event.
3. Assignability. This Agreement, including any interests hereunder, shall not be transferable or assignable, except by the Participant’s will or by the laws of descent and distribution, or to the Participant’s employer or any funds or investment accounts advised by the Participant’s employer.
4. Compliance with Section 409A of the Code.
a. This Agreement shall at all times be construed in a manner to comply with Section 409A of the Internal Revenue Code (“Code Section 409A”), including, if applicable, compliance with any exemptions from Code Section 409A.
b. The parties intend that all amounts realized by or payable to Participant or any other party pursuant to this Agreement will qualify as short-term deferrals within the meaning of Treas. Reg. § 1.409A-1(b)(4) and will not be treated as “deferred compensation” for purposes of Code Section 409A.
c. In no event shall any payment required to be made pursuant to this Agreement that is considered deferred compensation within the meaning of Code Section 409A (and is not otherwise exempt from the provisions thereof) be accelerated or delayed in violation of Code Section 409A.
d. The Company and its Affiliates do not represent or guarantee to any Participant that any particular federal or state income, payroll or other tax treatment will result from the Participant’s participation in the Plan. The Participant is solely responsible for the proper tax reporting and timely payment of any income tax or interest for which the Participant is liable as a result of this Agreement and the Participant’s participation in the Plan.
5. Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia.
6. Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, personal representatives, successors and assigns of the Participant and the successors of the Company.
7. Severability. If any provision of this Agreement should for any reason be declared invalid or unenforceable by a court of competent jurisdiction, then this Agreement and the grant of Cash Compensation hereunder shall be deemed invalid and unenforceable in its entirety due to failure of consideration.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized officer, and Participant has affixed his or her signature hereto.
PYXUS INTERNATIONAL, INC
By: _________________________________
Participant: _____________________________
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Exhibit 10.5
PYXUS INTERNATIONAL, INC.
AMENDED AND RESTATED 2020 INCENTIVE PLAN
(AS AMENDED ON MARCH 19, 2025)
(i)
TABLE OF CONTENTS
SECTION PAGE
| ARTICLE I DEFINITIONS | 1 | |||||||
| 1.01. | Affiliate. | 1 | ||||||
| 1.02. | Agreement. | 1 | ||||||
| 1.03. | Award. | 1 | ||||||
| 1.04. | Board. | 1 | ||||||
| 1.05. | Change in Control. | 1 | ||||||
| 1.06. | Code. | 2 | ||||||
| 1.07. | Committee. | 2 | ||||||
| 1.08. | Common Stock. | 2 | ||||||
| 1.09. | Company. | 2 | ||||||
| 1.10. | Corresponding SAR. | 2 | ||||||
| 1.11. | Date of Exercise. | 2 | ||||||
| 1.12. | Fair Market Value. | 2 | ||||||
| 1.13. | Incentive Award. | 2 | ||||||
| 1.14. | Incentive Stock Option. | 2 | ||||||
| 1.15. | Initial Value. | 2 | ||||||
| 1.16. | Investment Manager. | 3 | ||||||
| 1.17. | Option. | 3 | ||||||
| 1.18. | Participant. | 3 | ||||||
| 1.19. | Performance Share. | 3 | ||||||
| 1.20. | Person. | 3 | ||||||
| 1.21. | Plan. | 3 | ||||||
| 1.22. | SAR. | 3 | ||||||
| 1.23. | Stock Award. | 3 | ||||||
| 1.24. | Stock Unit Award. | 3 | ||||||
| 1.25. | Substitute Award. | 3 | ||||||
| ARTICLE II PURPOSES | 4 | |||||||
| ARTICLE III ADMINISTRATION | 4 | |||||||
| 3.01. | Administrative Authority. | 4 | ||||||
| 3.02. | Agreements. | 4 | ||||||
| 3.03. | Employment or Service. | 4 | ||||||
| ARTICLE IV ELIGIBILITY | 5 | |||||||
| ARTICLE V STOCK SUBJECT TO PLAN | 5 | |||||||
| 5.01. | Source of Shares. | 5 | ||||||
| 5.02. | Maximum Number of Shares. | 5 | ||||||
(ii)
| 5.03. | Forfeitures, etc. | 5 | ||||||
| ARTICLE VI OPTIONS AND SARs | 5 | |||||||
| 6.01. | Award. | 5 | ||||||
| 6.02. | Option Price. | 6 | ||||||
| 6.03. | Maximum Period. | 6 | ||||||
| 6.04. | Nontransferability. | 6 | ||||||
| 6.05. | Transferable Options and SARs. | 6 | ||||||
| 6.06. | Exercise. | 6 | ||||||
| 6.07. | Payment of Option Price. | 7 | ||||||
| 6.08. | Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR. | 7 | ||||||
| 6.09. | Shareholder Rights. | 7 | ||||||
| 6.10. | Termination of Employment; Change in Control. | 7 | ||||||
| ARTICLE VII STOCK AND STOCK UNIT AWARDS | 7 | |||||||
| 7.01. | Award. | 7 | ||||||
| 7.02. | Vesting. | 7 | ||||||
| 7.03. | Shareholder Rights. | 7 | ||||||
| 7.04. | Termination of Employment; Change in Control. | 8 | ||||||
| ARTICLE VIII PERFORMANCE SHARE AWARDS | 8 | |||||||
| 8.01. | Award. | 8 | ||||||
| 8.02. | Earning the Award. | 8 | ||||||
| 8.03. | Issuance of Shares. | 8 | ||||||
| 8.04. | Settlement in Cash. | 8 | ||||||
| 8.05. | Shareholder Rights. | 8 | ||||||
| 8.06. | Nontransferability. | 9 | ||||||
| 8.07. | Transferable Performance Shares. | 9 | ||||||
| 8.08. | Termination of Employment; Change in Control. | 9 | ||||||
| ARTICLE IX INCENTIVE AWARDS | 9 | |||||||
| 9.01. | Award. | 9 | ||||||
| 9.02. | Terms and Conditions. | 9 | ||||||
| 9.03. | Nontransferability. | 9 | ||||||
| 9.04. | Transferable Incentive Awards. | 9 | ||||||
| 9.05. | Issuance of Shares. | 10 | ||||||
| 9.06. | Settlement in Cash. | 10 | ||||||
| 9.07. | Shareholder Rights. | 10 | ||||||
| 9.08. | Termination of Employment; Change in Control. | 10 | ||||||
(iii)
| ARTICLE X CHANGE IN CONTROL | 10 | |||||||
| 10.01. | Impact of Change in Control. | 10 | ||||||
| 10.02. | Assumption Upon Change in Control. | 10 | ||||||
| 10.03. | Cash-Out Upon Change in Control. | 10 | ||||||
| 10.04. | Cancellation of Options and SARs. | 11 | ||||||
| 10.05. | Limitation on Benefits. | 11 | ||||||
| ARTICLE XI ADJUSTMENT UPON CHANGE IN COMMON STOCK | 12 | |||||||
| ARTICLE XII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES | 12 | |||||||
| ARTICLE XIII GENERAL PROVISIONS | 13 | |||||||
| 13.01. | Effect on Employment or Service. | 13 | ||||||
| 13.02. | Unfunded Plan. | 13 | ||||||
| 13.03. | Rules of Construction. | 13 | ||||||
| 13.04. | Tax Withholding. | 13 | ||||||
| 13.05. | Governing Law. | 13 | ||||||
| 13.06. | Section 409A. | 13 | ||||||
| 13.07. | Other Compensation and Benefits. | 14 | ||||||
| ARTICLE XIV AMENDMENT | 14 | |||||||
| ARTICLE XV DURATION OF PLAN | 14 | |||||||
| ARTICLE XVI EFFECTIVE DATE OF PLAN | 14 | |||||||
(iv)
This Pyxus International, Inc. Amended and Restated 2020 Incentive Plan amends and restates the Amended and Restated Pyxus International, Inc. 2020 Incentive Plan, as approved by the Board (as defined below) on March 21, 2024, and shall be effective as of the date on which it is approved by the Board.
ARTICLE I
DEFINITIONS
DEFINITIONS
1.01. Affiliate.
Affiliate means any “subsidiary corporation” or “parent corporation” as such terms are defined in Section 424 of the Code or any other trade or business that would be a “parent corporation” or a “subsidiary corporation” if it was organized as a corporation.
1.02. Agreement.
Agreement means a written agreement (including any amendment or supplement thereto) between the Company and a Participant specifying the terms and conditions of an Award granted to such Participant.
1.03. Award.
Award means an Option, SAR, Stock Award, Stock Unit Award, Performance Share Award, or Incentive Award granted under this Plan.
1.04. Board.
Board means the Board of Directors of the Company.
1.05. Change in Control.
Change in Control means any of the following:
(a) Any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than (i) Glendon Capital Management LP, a Delaware limited partnership, and on any entities that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with Glendon Capital Management LP, including funds/entities managed, advised or sub-advised by the same Investment Manager of Glendon Capital Management LP or (ii) Monarch Alternative Capital LP, a Delaware limited partnership, and on any entities that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with Monarch Alternative Capital LP, including funds/entities managed, advised or sub-advised by the same Investment Manager of Monarch Alternative Capital LP, becomes the beneficial owner, directly or indirectly, of Company securities representing more than 30% of the aggregate voting power of all classes of the Company’s voting securities on a fully diluted basis, after giving effect to the conversion of all outstanding warrants, options and other securities of the Company convertible into or exercisable for voting securities of the Company (whether or not such securities are then exercisable);
(b) The Company consummates a plan of merger, consolidation or share exchange between the Company and an entity other than a direct or indirect wholly-owned subsidiary of the Company, unless the Company shareholders immediately before the completion of such transaction will continue to hold at least 50% of the aggregate voting power of all classes of voting securities of the surviving or resulting entity;
(c) The Company consummates a sale, lease, exchange or other disposition of all, or substantially all, of the Company’s property, unless the Company shareholders immediately before the completion of such transaction will continue to hold, directly or indirectly, at least 50% of the aggregate voting power of all classes of voting securities of the transferee; or
(d) During any period of two consecutive years (which period may be deemed to begin prior to the date of this Plan), individuals who at the beginning of such period constituted the Board, together with any new members of the Board whose election by the Board or whose nomination for election by the Company’s shareholders was approved by a majority of the members of the Board then still in office who either were directors at the beginning of such period or whose nomination or election was previously so approved, cease for any reason to constitute a majority of the Board.
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1.06. Code.
Code means the Internal Revenue Code of 1986, and any amendments thereto, including regulations and other authoritative guidance.
1.07. Committee.
Committee means a committee of the Board appointed to administer the Plan. The Committee shall be comprised of two or more members of the Board; all of whom shall be “non-employee directors” as defined in Securities Exchange Commission Rule 16b-3 as in effect from time to time, and, during any period in which the Common Stock is listed for trading on a national securities exchange, “independent directors” as defined in the listing standards or rule of such national securities exchange; provided, however, that the failure of the Committee to satisfy the “non-employee director” or “independent director” requirements shall not affect the validity of any Award.
1.08. Common Stock.
Common Stock means the common stock of the Company.
1.09. Company.
Company means Pyxus International, Inc.
1.10. Corresponding SAR.
Corresponding SAR means an SAR that is granted in relation to a particular Option and that can be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to which the SAR relates.
1.11. Date of Exercise.
Date of Exercise means (i) with respect to an Option, the date that the Option price is received by the Company and (ii) with respect to an SAR, the date that the notice of exercise is received by the Company.
1.12. Fair Market Value.
Fair Market Value means, on any given date, the closing price of the Common Stock as reported on an established stock exchange on which the Common Stock is listed. If the Common Stock was not traded on such exchange on such date, then the Fair Market Value is determined with reference to the preceding day that the Common Stock was so traded. If the Common Stock is not listed on an established stock exchange, then the Fair Market Value shall be determined by the Committee using any reasonable method in good faith.
1.13. Incentive Award.
Incentive Award means an award, denominated in dollars which, subject to such terms and conditions as may be prescribed by the Committee, entitles the Participant to receive a cash payment, shares of Common Stock or a combination of cash and Common Stock from the Company or an Affiliate upon the achievement of performance objectives.
1.14. Incentive Stock Option.
Incentive Stock Option means an Option designated as an Incentive Stock Option within the meaning of Code Section 422 or any successor provision thereto.
1.15. Initial Value.
Initial Value means, with respect to an SAR, the Fair Market Value of one share of Common Stock on the date of grant.
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1.16. Investment Manager.
Investment Manager means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, has the power (whether exclusive or non-exclusive) to direct or control the investment decisions of such Person.
1.17. Option.
Option means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in an Agreement. Such price shall not be lower than the Fair Market Value of one share of Common Stock on the date of grant as set forth in Section 6.02.
1.18. Participant.
Participant means an employee of the Company or of an Affiliate or member of the Board, who satisfies the requirements of Article IV and is selected by the Committee to receive an Award.
1.19. Performance Share.
Performance Share means an Award, in the amount determined by the Committee and specified in an Agreement, stated with reference to a specified number of shares of Common Stock, that entitles the holder to receive shares of Common Stock, a cash payment, or a combination of Common Stock and cash, upon achievement of performance objectives in accordance with the provisions of Article VIII. The Committee, in its discretion, will determine whether a Performance Share will be settled with shares of Common Stock, cash or a combination of Common Stock and cash.
1.20. Person.
“Person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, national, state, local, supranational or foreign government or any court of competent jurisdiction, administrative agency or commission or other national, state, local, supranational or foreign governmental authority or instrumentality or other entity.
1.21. Plan.
Plan means this Amended and Restated Pyxus International, Inc. 2020 Incentive Plan.
1.22. SAR.
SAR means a stock appreciation right that entitles the holder to receive, with respect to each share of Common Stock encompassed by the exercise of such SAR, the excess of the Fair Market Value on the Date of Exercise, payable in cash, shares of Common Stock or a combination of Common Stock and cash at the discretion of the Committee, over the Initial Value. References to “SARs” include both Corresponding SARs and SARs granted independently of Options, unless the context requires otherwise.
1.23. Stock Award.
Stock Award means Common Stock awarded to a Participant under Article VII.
1.24. Stock Unit Award.
Stock Unit Award means a right to receive one or more shares of Common Stock (or cash of an equivalent value) in the future awarded to a Participant under Article VII.
1.25. Substitute Award.
Substitute Award means an Award granted in assumption of, or in substitution or exchange for, an award previously granted, or the right or obligation to make a future award, by a corporation or other trade or business acquired by the Company or an Affiliate or with which the Company or an Affiliate combines.
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ARTICLE II
PURPOSES
PURPOSES
The Plan is intended to assist the Company in recruiting and retaining employees and members of the Board with ability and initiative by enabling such persons to participate in its future success and to associate their interests with those of the Company and its shareholders. The Plan is intended to permit the grant of Options, SARs, Stock Awards, Stock Unit Awards, Performance Share Awards, and Incentive Awards. Both Incentive Stock Options and Options not so qualifying can be granted, provided that unless this Plan satisfies the requirements under the Code for awards of Options to qualify as Incentive Stock Options any Options granted under the Plan shall not be Incentive Stock Options. No Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an Incentive Stock Option.
ARTICLE III
ADMINISTRATION
ADMINISTRATION
3.01. Administrative Authority.
Except as provided in this Article III, the Plan shall be administered by the Committee; provided, however, that awards to the Chief Executive Officer or members of the Board who are not employed by the Company or an Affiliate, the terms of such awards and the settlement of such awards shall be subject to the final approval of the Board. The Committee shall have authority to grant Awards upon such terms (not inconsistent with the provisions of this Plan) as the Committee may consider appropriate. Such terms may include conditions (in addition to those contained in this Plan) on the exercisability of all or any part of an Option or SAR or on the transferability or forfeitability of a Stock Award. Notwithstanding any such conditions (but subject to the express provisions of the Plan), the Committee, in its discretion, may accelerate the time at which any Option or SAR may be exercised or the time at which any other Award may become transferable or nonforfeitable. In addition, the Committee shall have complete authority to interpret all provisions of this Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; to prescribe the form of agreements and documents used in connection with the Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee. Any decision made, or action taken, by the Committee in connection with the administration of this Plan shall be final and conclusive. No member of the Committee shall be liable for any act done in good faith with respect to this Plan or any Agreement, or Award. All expenses of administering this Plan shall be borne by the Company.
To the extent permitted by applicable law, the Committee, in its discretion, may delegate to one or more officers of the Company all or part of the Committee’s authority and duties with respect to Participants who are not subject to the reporting and other provisions of Section 16 of the Securities Exchange Act of 1934, as in effect from time to time. In the event of such delegation, and as to matters encompassed by the delegation, references in the Plan to the Committee shall be interpreted as a reference to the Committee’s delegate or delegates. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the terms of the Plan and the prior delegation.
3.02. Agreements.
Except as provided in this Article III, all Awards granted under this Plan shall be evidenced by Agreements which shall be subject to the applicable provisions of this Plan and to such other provisions as the Committee may adopt, except that recurring Awards to members of the Board need not be evidenced by separate agreements in which case the terms of such Awards and the settlement of such Awards shall be governed by the resolutions adopted by the Board in approving such Awards pursuant to Section 3.01 of this Plan.
3.03. Employment or Service.
In the event that the terms of an Agreement provide that the Participant must complete a stated period of employment or service as a condition of exercising, earning or retaining an Award, the Committee may decide to what extent leaves of absence for government or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or service.
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ARTICLE IV
ELIGIBILITY
ELIGIBILITY
Any employee of the Company or of any Affiliate (including any corporation or trade or business that becomes an Affiliate after the adoption of this Plan) or member of the Board is eligible to participate in this Plan if the Committee, in its sole discretion, determines that such person has contributed or can be expected to contribute to the profits or growth of the Company or an Affiliate. The Committee will designate individuals to whom Awards are to be made and will specify the type of Award and the number of shares of Common Stock subject to each Award.
ARTICLE V
STOCK SUBJECT TO PLAN
STOCK SUBJECT TO PLAN
5.01. Source of Shares.
Shares of Common Stock issued under the Plan shall be authorized but unissued shares.
5.02. Maximum Number of Shares.
The maximum aggregate number of shares of Common Stock that may be issued pursuant to Awards under this Plan is 3,612,156 shares. Shares of Common Stock underlying Awards that are settled in cash, and shares of Common Stock underlying Substitute Awards, shall not reduce the number of Shares available for Awards.
The maximum aggregate number of shares of Common Stock that may be issued under this Plan shall be adjusted as provided in this Article V and Article XII.
5.03. Forfeitures, etc.
To the extent that an Award involving the issuance of shares of Common Stock is forfeited or otherwise terminates without the delivery of shares, the shares of Common Stock allocated to such Award may be reallocated to other Awards to be granted under this Plan, provided that this provision shall not be applicable with respect to (i) the cancellation of a Corresponding SAR upon the exercise of the related Option or (ii) the cancellation of an Option upon the exercise of the Corresponding SAR.
Notwithstanding the foregoing, shares of Common Stock which are tendered (actually or by attestation), by a Participant or withheld by the Company to pay the option price or satisfy the Participant’s tax withholding obligations in connection with the exercise or settlement of an Award may not be reallocated to other Awards to be granted under this Plan. Furthermore, if an SAR is exercised and settled, in whole or in part, with Common Stock then the number of shares available for grant shall be reduced by the total number of shares for which the SAR was exercised (rather than the number of shares of Common Stock issued). For avoidance of doubt, common stock repurchased by the Company on the open market using the proceeds from the exercise of an Award shares shall not be added back to the number of shares available for the future grant of Awards.
ARTICLE VI
OPTIONS AND SARs
OPTIONS AND SARs
6.01. Award.
In accordance with the provisions of Article IV, the Committee will designate each individual to whom an Option or SAR is to be granted and will specify the number of shares of Common Stock covered by the award. An Option may be granted with or without a related SAR. A SAR may be granted with or without a related Option. No Participant may be granted Incentive Stock Options or related SARs (under all incentive stock option plans of the Company and its Affiliates) which are first exercisable in any calendar year for stock having an aggregate Fair Market Value (determined as of the date an option is granted) exceeding the amount prescribed by Section 422(d) of the Code as in effect from time to time. No Participant may be granted Options in any calendar year for more than 600,000 shares of Common Stock, subject to adjustment as provided in Article XI. No Participant may be granted SARs that are not related to an Option in any calendar year for more than 600,000 shares of Common Stock , subject to adjustment as provided in Article XI. For purposes of the two preceding sentences, an Option and any Corresponding SAR related to the Option shall be treated as a single award.
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6.02. Option Price.
The price per share for Common Stock purchased on the exercise of an Option shall be determined by the Committee on the date of grant; provided, however, that the price per share for Common Stock purchased on the exercise of any Option shall not be less than the Fair Market Value on the date the Option is granted. Except for adjustments authorized under Article XI, no Option or SAR may be repriced, replaced, regranted through cancellation, repurchased, or modified without shareholder approval, if the effect would be to reduce the option price or Initial Value, as applicable, for the shares underlying such Award. In addition, at any time when the exercise price per share of an Option or SAR is above the Fair Market Value, the Company shall not, without shareholder approval, purchase such Option or SAR for cash or other consideration.
6.03. Maximum Period.
The maximum period in which an Option or SAR may be exercised shall be determined by the Committee on the date of grant except that no Option or SAR shall be exercisable after the expiration of ten years from the date the Option or SAR was granted. The terms of any Option or SAR may provide that it is exercisable for a period less than such maximum period.
6.04. Nontransferability.
Except as provided in Section 6.05, Options and SARs granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution. In the event of any such transfer, the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities. Except as provided in Section 6.05, during the lifetime of the Participant to whom the Option or SAR is granted, the Option or SAR may be exercised only by the Participant. No right or interest of a Participant in any Option or SAR shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
6.05. Transferable Options and SARs.
Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option or SAR may be transferred by a Participant to the Participant’s children, grandchildren or spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners. Options and SARs may not be transferred to third parties for consideration without shareholder approval. The holder of an Option or SAR transferred pursuant to this section shall be bound by the same terms and conditions that governed the Option or SAR during the period that it was held by the Participant; provided, however, that such transferee may not transfer the Option or SAR except by will or the laws of descent and distribution. In the event of any such transfer (by the Participant or his transferee), the Option and any Corresponding SAR that relates to such Option must be transferred to the same person or persons or entity or entities.
6.06. Exercise.
An Option or SAR granted under this Plan shall be deemed to have been exercised on the Date of Exercise. Subject to the provisions of this Article VI and Article XII, an Option or SAR may be exercised in whole at any time or in part from time to time at such times and in compliance with such requirements as the Committee shall determine. The preceding sentence to the contrary notwithstanding and except as provided in Section 6.10, an Option or SAR that becomes exercisable solely on account of the Participant’s continued employment shall not become fully exercisable before the third anniversary of the date of grant and an Option or SAR shall not become exercisable before the first anniversary of the date of grant regardless of the nature of the conditions on which the Option or SAR may become exerciseable. The preceding sentence to the contrary notwithstanding, up to five percent (5%) of the maximum aggregate number of shares of Common Stock that may be issued pursuant to Awards under this Plan may be granted without such minimum exercisable period. to Participants who are members of the Board but are not employees of the Company or an Affiliate on the date of grant. A Corresponding SAR that is related to an Incentive Stock Option may be exercised only to the extent that the related Option is exercisable and only when the Fair Market Value exceeds the option price of the related Option. An Option or SAR granted under this Plan may be exercised with respect to any number of whole shares less than the full number of whole shares for which the Option or SAR could be exercised. A partial exercise of an Option or SAR shall not affect the right to exercise the Option or SAR from time to time in accordance with this Plan and the applicable Agreement with respect to the shares remaining subject to the Option or related to the SAR. The exercise of either an Option or Corresponding SAR shall result in the termination of the other to the extent of the number of shares with respect to which the Option or Corresponding SAR is exercised.
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6.07. Payment of Option Price.
Unless otherwise provided by the Agreement, payment of the Option price shall be made in cash or a cash equivalent acceptable to the Committee. If the Agreement provides, payment of all or part of the Option price may be made by surrendering shares of Common Stock to the Company or by attesting to such ownership of shares. If Common Stock is used to pay all or part of the Option price, the shares surrendered or attested must have an aggregate Fair Market Value (determined as of the day preceding the Date of Exercise) that, together with any cash or cash equivalent paid, is not less than the option price for the number of shares for which the Option is being exercised.
6.08. Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR.
At the Committee’s discretion, the amount payable as a result of the exercise of an SAR may be settled in cash, Common Stock, or a combination of cash and Common Stock. A fractional share shall not be deliverable upon the exercise of an SAR but a cash payment will be made in lieu thereof.
6.09. Shareholder Rights.
With respect to shares subject to an Option or SAR, no Participant shall have any rights as a shareholder, including rights to receive dividends paid on Common Stock, until, and then only to the extent that, the Option or SAR is exercised and Common Stock is issued to the Participant.
6.10. Termination of Employment; Change in Control.
Section 6.06 to the contrary notwithstanding, the Committee may provide that an Option or SAR shall be or shall become exercisable, in whole or in part, upon a termination of the Participant’s employment or service or a Change in Control. The Committee’s determination under this Section 6.10 may be made at the time the Option or SAR is granted or thereafter (but before the expiration or forfeiture of the Option or SAR).
ARTICLE VII
STOCK AND STOCK UNIT AWARDS
STOCK AND STOCK UNIT AWARDS
7.01. Award.
In accordance with the provisions of Article IV, the Committee will designate each individual to whom a Stock Award or Stock Unit Award is to be made and will specify the number of shares of Common Stock covered by the Award; provided, however, that no Participant may be awarded Stock Awards or Stock Unit Awards in any calendar year for more than 600,000 shares of Common Stock, subject to adjustment as provided in Article XI.
7.02. Vesting.
As provided in this Section 7.02, but subject to Section 7.04, the Committee, on the date of the award, shall prescribe that a Participant’s rights in a Stock Award or Stock Unit shall be forfeitable or otherwise restricted for a period of time set forth in the Agreement. By way of example and not of limitation, the restrictions may postpone transferability of the shares or may provide that the shares will be forfeited if the Participant separates from the employ or service of the Company and its Affiliates before the expiration of a stated term or if the Company, the Company and its Affiliates or the Participant fail to achieve stated objectives. Stock Awards and Stock Units that become vested and transferable solely on account of the Participant’s continued employment or service shall not become vested and transferable before the first anniversary of the date of grant. The preceding sentence to the contrary notwithstanding, up to five percent of the maximum aggregate number of shares of Common Stock that may be issued pursuant to Awards under this Plan may be granted without such minimum vesting requirement to Participants who are members of the Board but are not employees of the Company or an Affiliate on the date of grant. A Stock Award or Stock Unit Award shall become vested and nontransferable only to the extent that the Committee first certifies that any restrictions or objectives have been satisfied.
7.03. Shareholder Rights.
Prior to their forfeiture in accordance with the terms of the Agreement and while Stock Awards are nonvested, nontransferable or both, a Participant will have all rights of a shareholder with respect to a Stock Award, including the right to receive dividends and vote the shares; provided, however, that (i) a Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of a Stock Award, (ii) the Company shall retain
7
custody of the certificates evidencing shares of Common Stock issued as a Stock Award, and (iii) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set forth in the preceding sentence shall not apply after the shares become vested and transferable.
No Participant shall, as a result of receiving a Stock Unit Award, have any rights as a shareholder, including the right to receive dividends on the underlying shares of Common Stock, until, and then only to the extent that, the Stock Unit Award is earned and Common Stock is issued to the Participant. A Stock Unit Award may not include the right to receive dividend equivalent payments (whether payable before or at the time the Stock Unit Award is earned) with respect to dividends paid on Common Stock prior to the date the Stock Unit Award is earned and Common Stock is issued to the Participant.
7.04. Termination of Employment; Change in Control.
Section 7.02 to the contrary notwithstanding, the Committee may provide that a Stock Award or Stock Unit shall be or shall become vested and transferable, in whole or in part, upon a termination of the Participant’s employment or service or a Change in Control. The Committee’s determination under this Section 7.04 may be made at the time a Stock Award or Stock Unit is granted or thereafter (but before the forfeiture of the Stock Award of Stock Unit).
ARTICLE VIII
PERFORMANCE SHARE AWARDS
PERFORMANCE SHARE AWARDS
8.01. Award.
In accordance with the provisions of Article IV, the Committee will designate individuals to whom an award of Performance Shares is to be granted and will specify the number of shares of Common Stock covered by the Award; provided, however, that no Participant may be awarded Performance Shares in any calendar year for more than 600,000 shares of Common Stock, subject to adjustment as provided in Article XI.
8.02. Earning the Award.
Subject to Section 8.08, the Committee, on the date of the grant of Performance Shares, shall prescribe that the Performance Shares, or a portion thereof, will be earned, and the Participant will be entitled to receive payment pursuant to the award of Performance Shares, only upon the satisfaction of performance objectives or such other criteria as may be prescribed by the Committee and set forth in the Agreement. For any Performance Share Award, a performance period of at least one-year will be established for any Performance Shares. No payments will be made with respect to Performance Shares unless, and then only to the extent that, the Committee certifies that such objectives have been achieved.
8.03. Issuance of Shares.
To the extent that a Performance Share Award is settled with Common Stock, the shares of Common Stock earned shall be issued to the Participant as soon as practicable after the Committee certifies the number of Performance Shares earned by the Participant. A fractional share shall not be issuable under this Article VIII but instead will be settled in cash.
8.04. Settlement in Cash.
To the extent that a Performance Share Award is settled in cash, the payment will be made in a single sum as soon as practicable after the Committee certifies the number of Performance Shares earned by the Participant. To the extent that a Performance Share Award is settled in cash, the amount of cash payable under a Performance Share Award shall equal the Fair Market Value of the number of shares of Common Stock equal to the number of Performance Shares earned on the date that the Committee certifies the Participant’s right to receive the payment.
8.05. Shareholder Rights.
No Participant shall, as a result of receiving an award of Performance Shares, have any rights as a shareholder until and then only to the extent that the Performance Shares are earned and Common Stock is issued to the Participant. A Performance Share Award may not include the right to receive dividend equivalent payments (whether payable before or at the time the Performance Share Award is earned) with respect to dividends paid on
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Common Stock prior to the date the Performance Share Award is earned and Common Stock is issued to the Participant.
8.06. Nontransferability.
Except as provided in Section 8.07, a Participant may not transfer a Performance Share award or the right to receive payment thereunder other than by will or by the laws of descent and distribution. No right or interest of a Participant in any Performance Share award shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
8.07. Transferable Performance Shares.
Section 8.06 to the contrary notwithstanding, the Committee may grant Performance Shares that are transferable to the Participant’s children, grandchildren or spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners; provided however, that the Participant may not receive any consideration for the transfer without shareholder approval. The holder of a Performance Share transferred pursuant to this section shall be bound by the same terms and conditions that governed the Performance Share award during the period that it was held by the Participant; provided, however, that such transferee may not transfer the Performance Share award except by will or the laws of descent and distribution.
8.08. Termination of Employment; Change in Control.
Section 8.02 to the contrary notwithstanding, the Committee may provide that a Performance Share Award shall be or shall become earned, in whole or in part, upon a termination of the Participant’s employment or service or a Change in Control. The Committee’s determination under this Section 8.08 may be made at the time a Performance Share is awarded or thereafter (but before the forfeiture of the Performance Share Award).
ARTICLE IX
INCENTIVE AWARDS
INCENTIVE AWARDS
9.01. Award.
The Committee shall designate Participants to whom Incentive Awards are made. All Incentive Awards shall be finally determined exclusively by the Committee. For any Incentive Award, a performance period of at least one-year will be established for any Incentive Award. With respect to an Incentive Award based on a performance period of one year, no Participant may receive an Incentive Award payment in any calendar year that exceeds $2,000,000. With respect to an Incentive Award based on a performance period of more than one year, no Participant may receive an Incentive Award payment in any calendar year that exceeds the product of (i) $125,000 and (ii) the number of months in the performance period.
9.02. Terms and Conditions.
The Committee, at the time an Incentive Award is made, shall specify the terms and conditions which govern the award. Such terms and conditions shall prescribe that the Incentive Award shall be earned only to the extent that the Company achieves performance objectives or such other criteria as may be prescribed by the Committee and set forth in the Agreement. Except as provided in Section 9.08, the performance period of an Incentive Award shall be at least one year.
9.03. Nontransferability.
Except as provided in Section 9.04, a Participant may not transfer an Incentive Award or the right to receive payment thereunder other than by will or by the laws of descent and distribution. No right or interest of a Participant in an Incentive Award shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
9.04. Transferable Incentive Awards.
Section 9.03 to the contrary notwithstanding, the Committee may grant Incentive Awards that are transferable to the Participant’s children, grandchildren or spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners; provided, however that the Participant may not receive any consideration for the transfer without shareholder approval. The holder of an
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Incentive Award transferred pursuant to this section shall be bound by the same terms and conditions that governed the Incentive Award during the period that it was held by the Participant; provided, however, that such transferee may not transfer the Incentive Award except by will or the laws of descent and distribution.
9.05. Issuance of Shares.
To the extent that an Incentive Award is settled with Common Stock, the shares of Common Stock shall be issued to the Participant as soon as practicable after the Committee certifies the extent to which the Incentive Award has been earned. The issuance of Common Stock in full or partial settlement of an Incentive Award shall be based on the Fair Market Value on the date the Committee certifies the extent to which the Incentive Award has been earned.
9.06. Settlement in Cash.
To the extent that an Incentive Award is settled in cash, the payment will be made in a single sum as soon as practicable after the Committee certifies the extent to which the Incentive Award has been earned.
9.07. Shareholder Rights.
No Participant shall, as a result of receiving an Incentive Award, have any rights as a shareholder of the Company or any Affiliate on account of the Incentive Award until, and then only to the extent that, the Incentive Award is earned and settled with the issuance of Common Stock. An Incentive Award may not include the right to receive dividend equivalent payments (whether payable before or at the time the Incentive Award is earned) with respect to dividends paid on Common Stock prior to the date the Stock Unit Award is earned and Common Stock is issued to the Participant.
9.08. Termination of Employment; Change in Control.
Section 9.02 to the contrary notwithstanding, the Committee may provide that an Incentive Award shall be or shall become earned, in whole or in part, upon a termination of the Participant’s employment or service or a Change in Control. The Committee’s determination under this Section 9.08 may be made at the time an Incentive Award is granted or thereafter (but before the forfeiture of the Incentive Award).
ARTICLE X
CHANGE IN CONTROL
CHANGE IN CONTROL
10.01. Impact of Change in Control.
In accordance with Sections 6.10, 7.04, 8.08, and 9.08 and to the extent provided by the Committee thereunder, but subject to Sections 10.02, 10.03 and 10.04, upon a Change in Control, each outstanding Award will be treated as the Committee determines, and in making any such determination the Committee will not be required to treat Awards and Participants similarly with respect to any event constituting a Change in Control.
10.02. Assumption Upon Change in Control.
In the event of a Change in Control the Committee, in its discretion and without the need for a Participant’s consent, may provide that an outstanding Option, SAR, Stock Award, Stock Unit, Performance Share or Incentive Award shall be assumed by, or will be replaced by a substitute award granted by, the surviving entity in the Change in Control. Such assumed or substituted award shall be of the same type of award as the original Option, SAR, Stock Award, Stock Unit, Performance Share or Incentive Award being assumed or substituted. The assumed or substituted award shall have a value, as of the completion of the Change in Control, that is substantially equal to the value of the original award (or the difference between the Fair Market value and the option price or Initial Value in the case of Options and SARs) as the Committee determines is equitably required and such other terms and conditions as may be prescribed by the Committee.
10.03. Cash-Out Upon Change in Control.
In the event of a Change in Control, the Committee, in its discretion and without the need for a Participant’s consent, may provide that an outstanding Option, SAR, Stock Award, Stock Unit, Performance Share and Incentive Award shall be cancelled in exchange for a payment. The payment may be in cash, shares of Common Stock or other securities or consideration received by shareholders in the Change in Control transaction. The amount of the
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payment shall be an amount that is substantially equal to (i) the amount by which the price per share received by stockholders in the Change in Control exceeds the Option price or Initial Value in the case of an Option and SAR, or (ii) the price per share received by stockholder for each share of Common Stock subject to a Stock Award, Stock Unit and Performance Shares.
10.04. Cancellation of Options and SARs.
In the event of a Change in Control, the Committee, in its sole discretion and without the need for a Participant’s consent, may provide that an outstanding Option or SAR that is exercisable on or before the completion of the Change in Control shall be cancelled and forfeited if not exercised on or before completion of the Change in Control.
10.05. Limitation on Benefits.
The benefits that a Participant may be entitled to receive under this Plan and other benefits that a Participant is entitled to receive under other plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as “Payments”), may constitute Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Article X, the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow a Participant to receive a greater Net After Tax Amount than a Participant would receive absent a reduction.
The Accounting Firm will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm also will determine the Net After Tax Amount attributable to the Participant’s total Parachute Payments.
The Accounting Firm will next determine the largest amount of Payments that may be made to the Participant without subjecting the Participant to tax under Code Section 4999 (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.
The Participant will receive the total Parachute Payments or the Capped Payments, whichever provides the Participant with the higher Net After Tax Amount. If the Participant will receive the Capped Payments, the total Parachute Payments will be adjusted in the following order:
(i) First, by reducing Payments (other than Low Ratio Benefits) that are not subject to section 409A of the Code (in the order that Participant elects);
(ii) Next, if further reduction is necessary, from Payments (other than Low Ratio Benefits) that are subject to section 490A of the Code, which Payments shall be reduced in the order of lowest to highest value and, if more than one Payment has the same value, the reduction shall be in the order the such Payments would have been paid or provided beginning with the last such Payment to be paid or provided and ending with the first such Payment to be paid or provided and if the Payments would have been provided at the same time, the reduction will be made first from cash benefits and next from non-cash benefits;
(iii) Next, if further reduction is necessary, from Low Ratio Benefits that are subject to section 409A of the Code, which Low Ratio Benefits shall be reduced in the order of lowest to highest value and if a Low Ratio Benefit has the same value, the reduction shall be in the order that such Low Ratio Benefits would be paid or provided beginning with the last Low Ratio Benefit to be paid or provided and ending with the first such Low Ratio Benefit to be paid or provided and if the Low Ratio Benefits would have been provided at the same time, the reduction will be made first from cash benefits and next from non-cash benefits; and,
(iv) Finally, if further reduction is necessary, from Low Ratio Benefits that are not subject to section 409A of the Code (in the order that Participant elects).
The Accounting Firm will notify the Participant and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send the Participant and the Company a copy of its detailed calculations supporting that determination.
As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Article X, it is possible that amounts will have been paid or distributed to the Participant that should not have been paid or distributed under this Article X (“Overpayments”), or that additional amounts should be paid or distributed to the Participant under this Article X (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, the Participant must repay the Overpayment to the Company, without interest; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Participant to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Participant is subject to tax under Code
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Section 4999 or generate a refund of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that determination and the amount of that Underpayment, without interest, will be paid to the Participant promptly by the Company.
For purposes of this Article X, the term “Accounting Firm” means the independent accounting firm engaged by the Company immediately before the Change in Control. For purposes of this Article X, the term “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Participant on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Article X, the term “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder. For purposes of this Article X, the term “Low Ratio Benefit” means a payment or benefit which is taken into account for purposes of calculating excise tax and which has a value for purposes of calculating excise tax that is less than the actual value of such payment or benefit such that the ratio of the value of the payment or benefit for purposes of calculating the excise tax to the actual value of the payment or benefit is less than one hundred percent (100%).
Notwithstanding any other provision of this Section 10.05, the limitations and provisions of this Section 10.05 shall not apply to any Participant who, pursuant to an agreement with the Company or the terms of another plan maintained by the Company, is entitled to indemnification for any liability that the Participant may incur under Code Section 4999.
ARTICLE XI
ADJUSTMENT UPON CHANGE IN COMMON STOCK
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares that may be issued pursuant to Awards, the per individual limitations on Awards, and the terms of outstanding Awards (including the option price or Initial Value) shall be adjusted, as the Committee shall determine to be equitably required in the event that (a) the Company (i) effects one or more stock dividends, extraordinary cash dividends, stock split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which Section 424 of the Code applies or (b) there occurs any other event which, in the judgment of the Committee necessitates such action. Any determination made under this Article XI by the Committee shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the maximum number of shares as to which Awards may be granted, the per individual limitations on Awards or the terms of outstanding Awards.
The Committee may issue Substitute Awards in substitution for stock awards, stock options, stock appreciation rights, or similar awards held by an individual who becomes an employee of the Company or an Affiliate or whose employer becomes an Affiliate in connection with a transaction described in the first paragraph of this Article XI. Notwithstanding any provision of the Plan, the terms of such Substitute Awards shall be as the Committee, in its discretion, determines is appropriate.
ARTICLE XII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option or SAR shall be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements) and the rules of all domestic stock exchanges on which the Company’s shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to evidence Common Stock for which an Award was made or settled may bear such legends and statements as the Committee may deem advisable to assure compliance with federal and state laws and regulations. No Option or SAR shall be exercisable, no Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall be
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made under this Plan until the Company has obtained such consent or approval as the Committee may deem advisable from regulatory bodies having jurisdiction over such matters.
ARTICLE XIII
GENERAL PROVISIONS
GENERAL PROVISIONS
13.01. Effect on Employment or Service.
Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof) shall confer upon any individual any right to continue in the employ or service of the Company or an Affiliate or in any way affect any right and power of the Company or an Affiliate to terminate the employment or service of any individual at any time with or without assigning a reason therefor.
13.02. Unfunded Plan.
The Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.
13.03. Rules of Construction.
Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.
13.04. Tax Withholding.
The Participant shall be responsible for payment of any taxes or similar charges required by law to be withheld from an Award or an amount paid in satisfaction of an Award, which shall be paid by the Participant on or prior to the payment or other event that results in taxable income in respect of an Award. The Agreement may specify the manner in which the withholding obligation shall be satisfied with respect to the particular type of Award, which may include procedures to permit or require a Participant to satisfy such obligation in whole or in part but only up to such amount permitted under current accounting rules without causing the Award to become a “liability-classified” award, by having the Company withhold shares of Common Stock from the shares to which the Participant is entitled. The number of shares to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld is determined as nearly equal as possible to (but not exceeding) the amount of such obligations being satisfied. Notwithstanding the foregoing, the Company, in its sole discretion, may withhold all such required taxes from any amount otherwise payable to a Participant.
13.05. Governing Law.
The Plan and all rights hereunder shall be subject to and interpreted in accordance with the laws of the Commonwealth of Virginia, without reference to the principles of conflicts of laws, and to applicable Federal securities laws.
13.06. Section 409A.
Notwithstanding any provision in the Plan or an Agreement, if any provision of this Plan or an Agreement contravenes any regulations or guidance promulgated under Section 409A of the Code or would cause an Award to be subject to additional taxes, accelerated taxation, interest and/or penalties under Section 409A of the Code, such provision may be modified by the Committee without consent of the Participant in any manner the Committee deems reasonable or necessary. In making such modifications the Committee shall attempt, but shall not be obligated, to maintain, to the maximum extent practicable, the original intent of the applicable provision without contravening the provisions of Section 409A of the Code. Moreover, any discretionary authority that the Committee may have pursuant to the Plan shall not be applicable to an Award that is subject to Section 409A of the Code to the extent such discretionary authority would contravene Section 409A of the Code or the guidance promulgated thereunder.
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13.07. Other Compensation and Benefits.
The adoption of this Plan shall not affect any other compensation plans in effect for the Company or any Affiliate, nor preclude the Company or any Affiliate from establishing any other compensation plan.
ARTICLE XIV
AMENDMENT
AMENDMENT
Subject to applicable laws, rules and regulations, the Board may at any time terminate or, from time to time, amend, modify or suspend the Plan; provided, however, that, at any time after the approval of this Plan by the shareholders of the Company, no amendment or modification will be effective without the approval of the shareholders of the Company if such approval is required under applicable laws or the rules of the exchange on which the Common Stock is then listed. No Plan amendment shall, without a Participant’s consent, adversely affect any rights of such Participant under any Award outstanding at the time such amendment is made.
ARTICLE XV
DURATION OF PLAN
DURATION OF PLAN
No Awards may be awarded or granted under this Plan after November 17, 2030. Awards granted before that date shall remain valid in accordance with their terms.
ARTICLE XVI
EFFECTIVE DATE OF PLAN
EFFECTIVE DATE OF PLAN
Options, SARs, Stock Unit Awards, Performance Share Awards, and Incentive Awards may be granted under this Plan upon its adoption by the Board.
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Exhibit 31.1
CERTIFICATION
I, J. Pieter Sikkel, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Pyxus International, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| /s/ J. Pieter Sikkel | ||
| J. Pieter Sikkel President and Chief Executive Officer | ||
November 5, 2026 | ||
Exhibit 31.2
CERTIFICATION
I, Dustin L. Styons, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Pyxus International, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| /s/ Dustin L. Styons | ||
| Dustin L. Styons Executive Vice President and Chief Financial Officer | ||
November 5, 2026 | ||
Exhibit 32
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
In connection with the Quarterly Report on Form 10-Q of Pyxus International, Inc. (the "Company") for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), to their knowledge, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2026
| /s/ J. Pieter Sikkel | ||
| J. Pieter Sikkel President and Chief Executive Officer | ||
| /s/ Dustin L. Styons | ||
| Dustin L. Styons Executive Vice President and Chief Financial Officer | ||