Exhibit 10.1 EMPLOYMENT AGREEMENT

 

(i)  pro rata Base Salary through the Termination Date, and in the event that the prior fiscal year’s Annual Incentive Bonus, if any, has been earned but not yet paid, such Annual Incentive Bonus for the prior fiscal year; and

 

(ii)  payment, if any, for accrued and unused vacation days according to the Company’s current policy applicable to payment for unused vacation; and

 

(iii)  a sum equal to Employee’s current annual Base Salary; and

 

(iv)  a pro-rated portion of the Annual Incentive Bonus for the fiscal year during which the Termination Date occurs. Such pro-rated portion of the Annual Incentive Bonus will be calculated according to the following example: If the Termination Date occurs on the last day of the second quarter of the 2004 fiscal year, and EBITDA is on track to reach $12,000,000 by the end of the 2004 fiscal year (e.g. EBITDA has reached $6,000,000 as of the last day of the second quarter), Employee would be entitled to receive ½ (representing 182/364 days in the fiscal year) of the percentage of Base Salary that he would otherwise be entitled to receive if EBITDA reached $12,000,000 at the end of that fiscal year, so in this case he would be entitled to 25% (representing ½ of 50%) of his Base Salary.

 

(b)  "Good Reason" shall mean a termination of employment by Employee under any one of the following circumstances:

 

(i)  In the event of a material breach by Company of any material provision of this Agreement which remains uncorrected for thirty (30) days following written notice ("Material Breach Notice Period") of such breach by

Employee to the Board, Employee may terminate this Agreement provided that Employee provides the Board with written notice of such termination, specifying a Termination Date that is on or after the date of such written notice but within sixty (60) days after the expiration of the Material Breach Notice Period and more than forty-five (45) days prior to the expiration of the Term.

 

(ii)  In the event that there is any material diminution of Employee’s job description, job role, responsibilities, and/or scope of position during the Term, Employee may terminate this Agreement upon written notice to the Board of Directors specifying a Termination Date that is on or after the date of such written notice and more than forty-five (45) days prior to the expiration of the Term.

 

(iii)  If there is any amendment, modification, or repeal of Article Eleven of the Articles of Incorporation of the Company (as amended on or before the date hereof) and/or Article 7 of the Amended and Restated Bylaws of ICO, Inc. (as amended October 5, 2001) by the shareholders or the Board, which amendment, modification, or repeal shall have the effect of limiting or denying, except in any immaterial respect, any indemnification rights that Employee would otherwise be entitled to if such amendment, modification, or repeal had not been effectuated, then Employee may terminate this Agreement within thirty (30) days of the taking effect of suc h amendment, modification, or repeal, upon written notice to the Board.

 

In the event of such termination by Employee for Good Reason, Employee shall be entitled to an Early Termination Payment subject to and calculated in accordance with the provisions of Sections 3.2(a) and 3.2(a)(i) through (iv) above.

 

3.3.  Termination following a Change of Control

 

(a)  For the purposes of this Agreement, "Change of Control" means any of the following events: (i) a merger, share exchange or consolidation in which the Company will not be the surviving entity (or survives only as a subsidiary of an entity), (ii) the sale or exchange by the Company all or substantially all of its assets to any other person or entity, (iii) the acquisition of ownership or control (including, without limitation, power to vote) by any person or entity, including a "group" as contemplated by Section 13(d)(3) of the 1934 Act, of more than 50% of the outstanding shares of the Company's voting stock (based upon voting power); provided , however , that a Change of Control will not include (A) any reorganization, merger, consolidation, sale, exchange, or similar transaction, which involves solely the Company and one or more entities wholly-owned, directly or indirectly, by the Company immediately prior to such event; or (B) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold 50% or more of the voting

 stock (based upon voting power) of (1) any entity that owns, directly or indirectly, the stock of the Company, (2) any entity with which the Company has merged, or (3) any entity that owns an entity with which the Company has merged.

 

(b)  A "COC Termination" shall be deemed to have occurred if (i) there is a Change of Control during the Term, and (ii) within the twelve (12) month period immediately following the Change of Control (but still within the Term) (A) the Employee’s employment terminates for any reason other than the circumstances described in Sections 3.1(a) through (e) above, (B) Employee is required to relocate over 100 miles from Houston, Texas; (C) Employee is required to commute to a location over 100 miles from the Company’s current corporate offices; (D) Employee’s Base Salary is mat erially reduced or any other material benefit of the Employee’s employment is materially reduced; or (E) there is any material diminution of Employee’s job description, job role, responsibilities, and/or scope of position. In the event of a COC Termination, the Company or successor in interest shall be obligated to pay employee, within thirty (30) days after the Termination Date, and after Employee’s execution of a full release of all claims against the Company (excluding only claims for benefits and payments to be payable after Termination Date under any of the Company’s health or welfare plans, and claims for indemnification against third parties pursuant to Article 7 of the Amended and Restated Bylaws of ICO, Inc., as amended October 5, 2001), a "COC Termination Payment," in lump sum cash (subject to required taxes and withholdings), consisting of the following:

 

(i)  pro rata Base Salary through the Termination Date, and in the event that the prior fiscal year’s Annual Incentive Bonus, if any, has been earned but not yet paid, such Annual Incentive Bonus for the prior fiscal year; and

 

(ii)  a sum equal to 150% of the Employee’s current annual Base Salary; and

 

(iii)  a pro-rated portion of the Annual Incentive Bonus for the fiscal year during which the Termination Date occurs, calculated consistent with the example set forth in 3.2(a)(iv) above.

 

In addition to the COC Termination Payment, in the event of a COC Termination: (x) the Company shall pay any premiums due under COBRA (or any legal successor thereto) in order to maintain Employee’s current medical and dental insurance coverages for the 12-month period immediately following the Termination Date, and (y) with regard to any of the Company’s welfare plans (e.g. life insurance) that Employee participates in immediately prior to the Termination Date, if such plans allow for continued coverage after termination of employment, the Company shall pay the premiums that would otherwise be due from the Employee in order to maintain Employee’s coverages during the 12-month period immediately following the Termination Date.

 

3.4  Any Early Termination Payment or COC Termination Payment ("Termination Benefit") paid to Employee pursuant to Section 3.2 or 3.3 shall be in consideration of Employee’s continuing obligations under Article 4. Nothing contained in this Article 3 shall be construed to be a waiver by Employee of any benefits accrued for or due Employee under any

employee benefit plan (as such term is defined in the Employee Retirement Income Security Act of 1974, as amended), maintained by the Company except that Employee shall not be entitled to any severance benefits pursuant to any severance plan or program of the Company.

 

3.5  Termination of the employment relationship does not terminate those obligations imposed by this Agreement which are continuing obligations, including Employee’s obligations under Article 4.

ARTICLE 4:

OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY

AND CONFIDENTIAL INFORMATION;

NON-COMPETITION AGREEMENT:

4.1  All information, ideas, concepts, improvements, discoveries, and inventions, whether patentable or not, which are conceived, made, developed or acquired by Employee, individually or in conjunction with others, during Employee’s employment by the Company (whether during business hours or otherwise and whether on the Company’s premises or otherwise) which relate to the business, products or services of the Company or any of the ICO Entities (including, without limitation, all such information relating to corporate opportunities, confidential financial information, research and development activities, sales data, pricin g and trading terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or potential customers and their requirements, the identity of key contacts within the customers’ organizations or within the organizations of acquisition prospects, marketing and merchandising techniques, prospective names, and marks), and all writings or material of any type embodying any of such items, shall be the sole and exclusive property of ICO or the ICO Entities, as the case may be.

 

4.2  Employee acknowledges that the businesses of the Company and the ICO Entities are highly competitive and that their strategies, methods, books, records, and documents, their technical information concerning their products, equipment, services, and processes, procurement procedures and pricing techniques, the names of and other information (such as credit and financial data) concerning their customers and business affiliates (including but not limited to the products and/or services marketed, advertised, and/or sold to customers and prospective customers, and the prices charged or quoted to them for such products and/or service s, and the business activities, needs, and requirements for products and/or services of such customers or prospective customers) all comprise confidential business information and trade secrets which are valuable, special, and unique assets which the Company or the ICO Entities use in their business to obtain a competitive advantage over their competitors. Employee further acknowledges that protection of such confidential business information and trade secrets against unauthorized disclosure and use is of critical importance to the Company and the ICO Entities in maintaining their competitive position. Employee hereby agrees that Employee will not, at any time during or after the Employment Period, make any unauthorized disclosure of any confidential business information or trade secrets of the Company or any other ICO Entity, or make any use thereof, except in the carrying out of his employment responsibilities hereunder.

Confidential business information shall not include information in the public domain (but only if the same becomes part of the public domain through a means other than a disclosure prohibited hereunder). The above notwithstanding a disclosure shall not be unauthorized if (i) it is required by law or by a court of competent jurisdiction or (ii) it is in connection with any judicial arbitration, dispute resolution or other legal proceeding in which Employee’s legal rights and obligations as an Employee or under this Agreement are at issue; provided, however, that Employee shall, to the extent practicable and lawful in any such events, give prior notice to the Company of his intent to disclose any such confidential business information in such context so as to allow the Company or the applica ble ICO Entity an opportunity (which Employee will cooperate with and will not oppose) to obtain such protective orders or similar relief with respect thereto as may be deemed appropriate.

 

4.3  All written materials, records, and other documents made by, or coming into the possession of, Employee during the Employment Period which contain or disclose confidential business information or trade secrets of the Company or the ICO Entities shall be and remain the property of the Company or the ICO Entities, as the case may be. Upon termination of Employee’s employment with the Company, for any reason, Employee promptly shall deliver the same and all copies thereof to the Company.

 

4.4  To enable Employee to perform the duties contemplated by this Agreement, the Company promises that it will disclose confidential information, including confidential business information and trade secrets of the nature described or referenced in Sections 4.1 – 4.3 above, during the Employment Period and before termination of the employment relationship established by this Agreement. In return for and ancillary to the promise made by the Company to make such disclosure, Employee hereby makes a reciprocal promise designed to enforce the Company’s interest in protecting its confidential information and its goodwill. Acco rdingly, Employee promises to comply with the obligations set forth in Sections 4.1 through 4.3 above, and furthermore, Employee agrees that, during Employee’s employment with the Company and/or any other ICO Entity, and for fifteen (15) months following the end of employment with the Company or any other ICO Entity for any reason, Employee will not, directly or through any other person, firm, or corporation, in any country in which the Company or any ICO Entity does business:

 

   (a)          perform services as an employee, officer, director or independent contractor for any Competing Enterprise (as defined below);

   (b)          be an owner, shareholder (except for the ownership by Employee of less than Five Percent (5%) of the equity securities of any publicly-traded company), agent, or partner of, or serve in an executive position with, any Competing Enterprise;

   (c)          call on or otherwise communicate with any customer or prior customer of the Company and/or any ICO Entity, including any respective successors and assigns, for the purpose of soliciting business for a Competing Enterprise or for someone other than the Company and/or other ICO Entities; or

 

ARTICLE 5: MISCELLANEOUS:

5.1  For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when received by or tendered to Employee or the Company, as applicable, by pre-paid courier or by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Company, to

 

ICO, Inc., To the attention of the Chairman of the Board of Directors

5333 Westheimer Road, Suite 600

Houston, Texas 77056

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

 

If to Employee, to his last known personal residence.

 

Notwithstanding the foregoing, any Notice of Termination pursuant to Article 3 may be delivered to the Employee in accordance with the above sentences in this Section 5.1, or by email to the Employee’s Company email address, and in the event of such delivery by email, the Delivery Date shall be conclusively determined to be the date when such email was received on the Company’s server regardless of the date when such email was opened by the Employee.

 

5.2  This Agreement shall be governed by and construed and enforced, in all respects in accordance with the law of the State of Texas, without regard to principles of conflicts of law, unless preempted by federal law, in which case federal law shall govern; provided, however, that

the dispute resolution process in Section 5.5 shall govern in all respects with regard to the resolution of disputes hereunder.

 

5.3  No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

5.4  It is a desire and intent of the parties that the terms, provisions, covenants, and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law. If any such term, provision, covenant, or remedy of this Agreement or the application thereof to any person, association, or entity or circumstances shall, to any extent, be construed to be invalid or unenforceable in whole or in part, then such term, provision, covenant, or remedy shall be construed in a manner so as to permit its enforceability under the applicable law to the fullest extent permitted by law. In any case, the remaining provisions of this Agreement or the application thereof to any person, association, or entity or circumstances other than those to which they have been held invalid or unenforceable, shall remain in full force and effect.

 

5.5  It is the mutual intention of the parties to have any dispute concerning this Agreement resolved out of court. Accordingly, the parties agree that any claim or controversy of whatever nature arising from or relating in any way to this Agreement or the employment of the Employee by the Company, and any continuing obligations under this Agreement, including disputes arising under the common law or federal or state statutes, laws or regulations and disputes with respect to the arbitrability of any claim or controversy, shall be resolved exclusively by final and binding arbitration before a single experienced employment arbitrator selected by the parties and conducted in accordance with the agreement of the parties or as determined by the arbitrator. If the parties are unable to agree to an arbitrator, an arbitrator will be selected in accordance with the Employment Dispute Resolution ("EDR") Rules of the American Arbitration Association ("AAA"). The arbitration will be conducted in Houston, Texas, pursuant to the EDR Rules of the AAA, and the arbitrator shall have full authority to award or grant all remedies provided by law. The judgment upon the award may be enforced by any court having jurisdiction thereof. Each party shall pay the fees of their respective attorneys, the expenses of their witnesses, and any other expenses incurred by such party in connection with the arbitration; provided, however, that the Company shall pay for the fees of the arbitrator or the administrative and filing fees charged by the AAA. However, either party, on its own behalf and on behalf of any other ICO Entities, shall be entitled to seek a restraini ng order or injunction in any court of competent jurisdiction to prevent any breach or the continuation of any breach of the provisions of herein.

 

5.6  This Agreement shall be binding upon and inure to the benefit of the Company, to the extent herein provided, the Company and any other person, association, or entity which may hereafter acquire or succeed to all or substantially all of the business or assets of the Company by any means whether direct or indirect, by purchase, merger, consolidation, or otherwise. Employee’s rights and obligations under this Agreement are personal and such rights, benefits,

and obligations of Employee shall not be voluntarily or involuntarily assigned, alienated, or transferred, whether by operation of law or otherwise, without the prior written consent of the Company.

 

5.7  This Agreement replaces and extinguishes any previous agreements and discussions pertaining to the subject matter covered herein. This Agreement constitutes the entire agreement of the parties with regard to the terms of Employee’s employment, termination of employment and severance benefits, and contains all of the covenants, promises, representations, warranties, and agreements between the parties with respect to such matters. Each party to this Agreement acknowledges that no representation, inducement, promise, or agreement, oral or written, has been made by either party with respect to the foregoing matters which is n ot embodied herein, and that no agreement, statement, or promise relating to the employment of Employee by the Company that is not contained in this Agreement shall be valid or binding, except as set forth in any applicable Employee benefit plan. It is understood that, by signing below, Employee acknowledges that this Agreement supercedes any agreements or understandings regarding the subject matter covered herein made prior to the Employee signing this document. Any modification of this Agreement will be effective only if it is in writing and signed by each party whose rights hereunder are affected thereby, provided that any such modification must be authorized or approved by the Board of Directors or its delegate, as appropriate.

IN WITNESS WHEREOF , the Company and Employee have duly executed this Agreement in multiple originals to be effective on the Effective Date.

 

ICO, Inc.

/s/ Christopher N. O’Sullivan

Christopher N. O’Sullivan

Chairman of the Board of Directors

Date: January 14, 2004

Employee

/s/ W. Robert Parkey, Jr.

W. Robert Parkey, Jr.

Date: January 14, 2004

EXHIBIT A

The ICO Entities (as defined in Section 1.4) are listed below, with country of incorporation and state (if U.S.) indicated.

Bayshore Industrial, Inc. – USA, TX

Courtenay Polymers Pty Ltd. - Australia

Fabri-Moulds Ltd. - UK

ICO Europe BV – The Netherlands

ICO Global Services, Inc. – USA, DE

ICO Holdings Australia Pty Ltd. - Australia

ICO Holdings New Zealand Ltd. – New Zealand

ICO Holland BV – The Netherlands

ICO Italia Srl - Italy

ICO Minerals, Inc. – USA, DE

ICO Offshore – Cayman Islands

ICO P&O, Inc. – USA, DE

ICO Petrochemical Cayman Islands – Cayman Islands

ICO Polymers do Brasil Ltda. - Brazil

ICO Polymers France SAS - France

ICO Polymers Hellas Ltd. - Greece

ICO Polymers North America, Inc. – USA, NJ

ICO Polymers UK Ltd. - UK

ICO Polymers, Inc. – USA, DE

ICO Scandinavia AB - Sweden

ICO Technology, Inc. – USA, DE

ICO UK Ltd. - UK

ICO Worldwide, LP – USA, TX

ICO Worldwide (UK), Ltd. - UK

ICO Worldwide Tubular Services PTE Ltd. - Singapore

Innovation Company, S.A. de C.V. - Mexico

J.R. Courtenay (N.Z.) Ltd. – New Zealand

J.R. Courtenay Sdn Bhd - Malaysia

Rotec Chemicals, Ltd. - UK

Lomic SCI - France

Soreco SAS - France

Swavasey Colours Ltd. - UK

Tecron Industries Ltd. - UK

Verplast Srl - Italy

Wedco Minerais Ltda. - Brazil

Wedco Petrochemical, Inc. – USA, DE

Wedco Technology U.K. Ltd. - UK

Wedco Technology, Inc. – USA, NJ

Worldwide GP, LLC – USA, DE

Worldwide LP, LLC – USA, DE