EMPLOYMENT, CONSULTING AND SEPARATION AGREEMENT AND RELEASE
Exhibit
10.1
EMPLOYMENT,
CONSULTING AND SEPARATION
AGREEMENT
AND RELEASE
This
Employment, Consulting and Separation Agreement and Release (this “Agreement”)
is made and entered into by and between ICO, Inc. (“Company”), and W. Xxxxxx
Xxxxxx, Xx. (“Employee”) on this 8th day of September, 2005 (the “Effective
Date”).
WHEREAS,
pursuant to an employment agreement effective February 2, 2004, as amended
by
amendments dated May 10, 2004 (the “First Amendment”) and February 11, 2005 (the
“Second Amendment”) (the referenced employment agreement, as amended by the
First Amendment and Second Amendment, referred to herein as the “Employment
Agreement”), Employee is currently employed as President and Chief Executive
Officer of Company. Furthermore, Employee is also a member of the Board of
Directors of Company (the “Board”).
WHEREAS,
Employee desires to resign from his positions of Chief Executive Officer and
President of Company and as a member of the Board, effective as of 11:59 p.m.
CST on September 30, 2005 (the “Executive Resignation Date”), to better enable
him to pursue other opportunities, and to assume the position of Special Advisor
to the Company.
NOW,
therefore, the Parties agree as follows:
1. Resignation
from Current Positions and Board Membership.
(a) Employee
shall resign from his position of Chief Executive Officer and President of
Company, and as a member of the Board, and from any positions he currently
holds
as an officer or director of any of the Company’s subsidiaries, effective as of
the Executive Resignation Date.
(b) Company
will issue a mutually agreeable press release immediately following the
execution of this Agreement, announcing that Employee is resigning from the
positions of Chief Executive Officer and President, and as a member of the
Board, to pursue other business opportunities, and highlighting Employee’s
accomplishments at the Company.
2. Assumption
of Special Advisor Position.
(a) Effective
as of 12:00 a.m. CST on October 1, 2005, Employee shall assume the position
of
Special Advisor, in which capacity he shall provide advice and counsel to the
Board, and to the Chief Executive Officer and President of Company, at such
times and locations reasonably requested by Company but not for more than a
monthly average of ten hours per week, through February 1, 2006 (unless
earlier terminated as provided herein). During the period when Employee is
employed as Special Advisor, he shall receive the same compensation, benefits
and office support he would otherwise have received as President and Chief
Executive Officer under the terms of the Employment Agreement, including an
executive office and administrative support in connection with his
Company-related activities.
(b) Employee
shall be entitled to receive a Year Two Annual Incentive Bonus if one is earned
pursuant to the terms set forth in the Second Amendment. Employee shall not
be
entitled to receive any annual incentive bonus or other bonus based on Company’s
performance for periods commencing on or after October 1, 2005.
(c) Nothing
in this Agreement is intended to prevent Employee from participating in the
Company’s 401k Plan to the extent he is qualified to participate during the
period he is employed by the Company.
3. Termination
of Employment.
(a) Effective
as of 11:59 p.m. CST on February 1, 2006 (“Employment Termination Date”),
Employee shall resign from the Special Advisor position, Employee’s employment
with Company will terminate, and Company shall retain Employee as an outside
consultant through June 30, 2006 (the “Consulting Period”). During the
Consulting Period, Employee will provide further assistance to Company in
transitioning to the new Chief Executive Officer and President, and shall
include other assistance to the Board, at such times and locations mutually
agreed upon by Employee and Company, but not for more than a monthly average
of
ten hours per week during such Consulting Period; provided that the times and
location of such assistance requested by Company shall not be unreasonably
denied by Employee.
(b) During
the Consulting Period:
(i) Employee
will be paid consulting fees in the amount of $25,833.33 per month, payable
by
the 15th
of each
month (“Consulting Fees”).
(ii)
Company
shall pay Employee’s premiums for Employee’s and his dependants’ continued
coverage, pursuant to the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), under the Company’s medical, dental, and vision plans in which
Employee and his dependants were participants immediately prior to the
termination of Employee’s employment. (It is understood that Employee shall be
responsible for Employee’s COBRA payments for periods after June 30, 2006.)
(iii) Employee
will be provided with an executive office and administrative support in
connection with his Company-related activities.
(c) Notwithstanding
the foregoing, in the event Employee secures and commences full-time employment
as a senior executive with another company prior to or as of the Employment
Termination Date, or during the Consulting Period, as of the commencement of
such employment, Employee will no longer be retained as an outside consultant,
nor will he be required to provide consulting services, but will nevertheless
receive the items set forth in Section 3(b)(i) and 3(b)(ii), but not 3(b)(iii),
in respect of his prior services to Company.
(d) Company
shall defend and indemnify Employee in connection with any Claims and Damages
asserted by third parties arising out of or connected with Employee’s service as
a Special Advisor or consultant as set forth in this Agreement.
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4. Definitions.
(a) “Claims”
means
all theories of recovery of whatever nature, whether known or unknown, and
whether recognized by the law or equity of any jurisdiction. This term includes
causes of action, charges, indebtedness, losses, claims, liabilities, and
demands, whether arising in equity or under the common law or under any contract
or statute. This term includes any claims of discrimination, harassment,
retaliation, retaliatory discharge, or wrongful discharge, and any other claim
which is alleged or which could be alleged by a party or on that party’s behalf
in any lawsuit or other proceeding. This term includes any claims for indemnity
or reimbursement for tax liabilities incurred in connection with Employee’s
separation from the Company or in regard to any stock options granted to
Employee by Company. This term includes any claims and rights arising under
the
Age Discrimination in Employment Act of 1967, 29 U.S.C. §621, et
seq.;
Title
VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e, et
seq.;
the
Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001, et
seq.;
the
Americans with Xxxxxxxxxxxx Xxx, 00 X.X.X. §00000, et
seq.;
the
Worker Adjustment and Retraining Xxxxxxxxxxxx Xxx, 00 X.X.X. §0000,
et
seq.;
the
Family and Medical Leave Act, 29 U.S.C. §2601, et
seq.;
and
any other federal, state or local law or regulation regarding employment or
the
termination of employment. This term includes any and all rights, benefits
or
claims Employee may have under any employment contract or under any severance,
bonus, stock option or incentive compensation plan, program or agreement.
(b) “Damages”
means
all elements of relief or recovery of whatever nature, whether known or unknown,
which are recognized by the law or equity of any jurisdiction which is sought
or
which could be sought by a party or on that party’s behalf, in any lawsuit or
other proceeding. This term includes actual, incidental, indirect,
consequential, compensatory, exemplary, liquidated and punitive damages, as
well
as rescission, attorneys’ fees, interest, costs, equitable relief, and expenses.
This term also includes wages, benefits or other compensation owed, or allegedly
owed to Employee, by virtue of Employee’s employment or termination of
employment with Company, including severance, bonuses, stock option or incentive
compensation, payable pursuant to any plan, program, or agreement.
(c) “Employee”
means
and includes Employee acting individually, in any corporate or other
representative capacity, and on behalf of Employee’s heirs, executors,
administrators, legal representatives, successors, beneficiaries, and
assigns.
(d) “Released
Parties”
means
and includes Company, and its past, present and future owners, trustees,
parents, subsidiaries, affiliates, and related entities, and all of the
foregoing entities’ and persons’ past, present and future directors, officers,
employees, associates, agents, benefit plans (and each such plan’s fiduciaries,
administrators, trustees, sponsors and representatives), insurance carriers,
predecessors, successors, assigns, executors, administrators, and
representatives, in both their representative and individual capacities;
provided that this term does not include Employee. Each of the Released Parties
is an intended beneficiary of this Agreement.
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5. Consideration.
(a) In
consideration for Employee executing this Agreement, Company shall extend the
option exercise period to February 2, 2011, with regard to the options
previously granted to Employee by the following stock option agreements between
Employee and Company:
(i) Incentive
Stock Option Agreement dated February 2, 2004, pursuant to which options to
purchase 40,000 shares of Company’s common stock were granted from Company’s
1995 Stock Option Plan, with an exercise price of $2.16 per share;
(ii)
Incentive
Stock Option Agreement dated February 2, 2004, pursuant to which options to
purchase 70,000 shares of Company’s common stock were granted from Company’s
1996 Stock Option Plan, with an exercise price of $2.16 per share;
(iii) Incentive
Stock Option Agreement dated February 2, 2004, pursuant to which options to
purchase 10,000 shares of Company’s common stock were granted from Company’s
1996 Stock Option Plan, with an exercise price of $2.25 per share;
(iv) Incentive
Stock Option Agreement dated February 2, 2004, pursuant to which options to
purchase 60,000 shares of Company’s common stock were granted from Company’s
1998 Stock Option Plan, with an exercise price of $2.25 per share;
and
(v) Nonstatutory
Stock Option Agreement dated March 8, 2004, pursuant to which options to
purchase 130,000 shares of Company’s common stock were granted from Company’s
1998 Stock Option Plan; provided, however that the extension of the exercise
period under the Non-Statutory Stock Option Agreement described in this Section
5(a)(v) shall only apply with respect to options to purchase 20,000 shares
under
such Incentive Stock Option Agreement, with an exercise price of $2.16 per
share.
Contemporaneous
with the execution of this Agreement, Company and Employee will execute an
Amendment to Stock Option Agreements to extend the option exercise periods
of
the options referred to under the stock option agreements described in this
Section 5(a), and to effect the vesting and re-pricing set forth in Section
5(b)(ii) and (iii), referred to as the “Option Extensions.”
(b) As
further consideration for Employee executing this Agreement:
(i) Employee
shall be permitted to maintain his cell phone number, currently used by him
on
his Company cell phone.
(ii)
Company
shall contract for executive outplacement services provided by a vendor chosen
by Employee (although Employee shall be responsible for paying all fees and
expenses related to such services).
(iii) Company
shall fully vest, effective as of the Executive Resignation Date, the options
referred to in Section 5(a) that are subject to Option Extensions which have
not
vested as of the date of this Agreement and which would not otherwise have
vested prior to February 2, 2006, namely, the options referenced in clauses
5(a)(ii), 5(a)(iii), and 5(a)(iv). Notwithstanding the foregoing, as a condition
to Company fully vesting the options as provided in this Section 5(b)(iii),
Employee shall first execute the irrevocable option cancellation and release
agreement, attached hereto as Exhibit A, under which Employee forfeits all
of
his options to purchase Company’s common stock that are not options subject to
Option Extensions as provided in Section 5(a) above.
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(iv) Company
shall re-price the options to purchase 20,000 shares of ICO, Inc. common stock,
referenced in clause 5(a)(v) above, to $2.40 per share (the fair market value
of
the stock, as defined in the applicable plan, on the date of
grant).
(c) The
consideration set forth in Section 3(b)(i) and (ii), and this Section 5, is
referred to collectively as “Consideration.”
6. Release.
(a) Employee
releases and discharges the Released Parties from, and hereby waives, all Claims
and Damages related to, arising from, or attributed to actions or inactions
occurring prior to or on the Effective Date of this Agreement, including those
related to, arising from or attributed to: (i) Employee’s employment with
Company and service on Company’s Board prior
to
and including
the Effective Date, his resignation from the positions of President and Chief
Executive Officer and as a member of the Board, and the termination
of his
employment; (ii)
the
Employment Agreement;
and
(iii) all other acts or omissions related to any matter at any time
prior
to and including the Effective Date. Notwithstanding the foregoing, this release
will not affect and does not waive Employee’s rights or Claims: (x) for
benefits and payments to be payable after the Effective Date under Company’s
medical, dental, vision, or 401k plans; and (y) for defense and
indemnification against Claims or Damages by third parties (and insurance
coverage associated therewith, but not
Claims as to the adequacy of the amount of such coverage),
pursuant to Article 7 of the Amended and Restated Bylaws of ICO, Inc., as
amended August 9, 2005.
(b)
Company releases and discharge Employee from, and hereby waives, all Claims
and
Damages related to, arising from, or attributed to actions or inactions
occurring prior to or on the Effective Date of this Agreement, including those
related to, arising from or attributed to: (i) Employee’s employment with
Company and service on Company’s Board prior
to
and including the Effective Date, his resignation from the positions of
President and Chief Executive Officer and as a member of the Board, and the
termination of his employment; (ii) the Employment Agreement;
and
(iii) all other acts or omissions related to any matter at any time
prior
to and including the Effective Date. Notwithstanding the foregoing, this release
will not affect and does not waive any Claims Company may theoretically have:
(x) arising from unlawful conduct on the part of Employee currently unknown
to
the Company, if any; or (y) arising from breach, if any, of Article 4 of the
Employment Agreement (entitled “Ownership and Protection of Intellectual
Property and Confidential Information; Non-Competition Agreement”).
(c)
Employee and Company understand and expressly agree that their respective
releases in Section 6(a) and 6(b) extend to all Claims of every nature and
kind,
known or unknown, suspected or unsuspected, past or present (but not future),
which Claims are arising from, attributable to, or related to Employee’s
employment with Company, including his resignation from the positions of
President and Chief Executive Officer and as a member of the Board, and the
termination of his employment, the Employment Agreement, or
any alleged action or inaction of the Released Parties prior
to
and including the Effective Date,
and
that
all such Claims are hereby expressly settled or waived,
except
as expressly excluded from this release by Section 6(a)(y) and (z) and 6(b)(y)
and (z).
Employee further understands and expressly agrees that the release in
Section 6(a) includes the waiver of any Claims and rights Employee may
have
against any of the Released Parties under the Age Discrimination in Employment
Act, the Older Workers Benefit Protection Act, or under any other law
prohibiting age discrimination, arising prior to and including the date of
Employee’s execution of this Agreement.
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(d)
Employee and Company respectively agree not to bring or cause to be brought
any
of the Claims waived in Sections 6(a) and 6(b) in any court or before any
arbitral authority, and represent and warrant to one another that they have
not
brought or caused to be brought any such Claims in any court or before any
arbitral authority as of the Effective Date of this Agreement.
(e) None
of
the foregoing releases or waivers in this Section 6 by any party hereto are
intended to release or waive any rights arising under this Agreement, the
Amendment to Stock Option Agreements, the provisions of applicable Stock Option
Plans as they apply to vested options held by Employee
following
the parties' execution of this Agreement and the Amendment to Stock Option
Agreements, or rights specifically referenced herein as surviving the
execution of this Agreement or the Amendment to Stock Option
Agreements.
7. Cooperation
in Litigation.
Employee
agrees that Employee shall cooperate with and assist Company in defense of
any
claim, litigation or administrative proceeding brought against Company or any
other Released Party, as reasonably requested by Company. Such cooperation
and
assistance shall include: (a) interviews of Employee by legal counsel
for
Company or other Released Party as reasonably requested by Company’s counsel;
(b) Employee providing documents (or copies thereof) and executing
affidavits as reasonably requested by Company’s counsel; and (c) Employee
appearing for depositions, trials, and other proceedings as reasonably requested
by Company’s counsel. Furthermore, Employee shall not communicate with any party
adverse to Company, or with a representative, agent or legal counsel for any
such party, concerning any pending or future claims or litigation or
administrative proceedings, except solely through legal counsel for Company.
Nothing in this Section 7 precludes Employee from providing testimony
or
documents pursuant to a subpoena or court order, or is intended to cause
Employee to testify other than truthfully in any proceeding or
affidavit.
8. Non-Disparagement.
Neither
party to this Agreement shall make disparaging or negative remarks or comments
about the other to any third party. Without limiting the foregoing, the Board
shall provide positive feedback about Employee if contacted by third parties
in
connection with such third parties’ consideration of Employee for employment.
9. Warranties.
(a) Employee
agrees, represents and warrants that:
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(i) The
Consideration set forth in Sections 3(b)(i) and (ii) and Section 5 of this
Agreement is not something to which Employee or Company is otherwise
indisputably entitled except in exchange for execution of this Agreement, and
are each, standing alone, good and sufficient consideration for Employee's
and
Company’s execution of this Agreement, and each and all are granted or paid by
or on behalf of Company and the other Released Parties, or provided by Employee,
in full satisfaction and settlement of any Claims and Damages;
(ii) Employee
is legally and mentally competent to sign this Agreement;
(iii) Employee
is the sole owner of any Claims that have been or could have been asserted,
Employee has the requisite capacity and authority to make this Agreement, and
no
portion of any existing or potential Claims has been sold, assigned, pledged
or
hypothecated by Employee to any third party; and
(iv) Employee
presently possesses the exclusive right to receive all of the Consideration
granted or paid in consideration for this Agreement.
(b) Company
agrees, represents, and warrants that it has obtained all authorization
necessary to enter into and give effect to this Agreement and the Amendment
to
Stock Option Agreement.
10. Choice
of Law. This
Agreement shall be
interpreted and construed in accordance with and shall be governed by the laws
of the State of Texas, without reference to principles of conflict of law of
Texas or any other jurisdiction, and, when applicable, the laws of the United
States.
11. Entire
Agreement / Company Property.
(a) This
Agreement (including Exhibit A) and the Amendment to Stock Option Agreements
constitute the entire agreement of the parties relating to the subject matter
hereof, and supersedes any obligations of Company and the other Released Parties
under any previous agreements (including the Employment Agreement), except
as
otherwise provided in this Agreement, the Amendment to Stock Option Agreements,
and applicable Stock Option Plans. Notwithstanding the foregoing, Employee’s
obligations under Article 1.5 of the Employment Agreement (relating to
Employee’s fiduciary duties to the Company), Article 4 of the Employment
Agreement (entitled “Ownership and Protection of Intellectual Property and
Confidential Information; Non-Competition Agreement”), and Article 5.5 of the
Employment Agreement (relating to resolution of disputes arising under the
Employment Agreement) shall remain in full force and effect as would otherwise
have been required pursuant to the Employment Agreement. No term, provision
or
condition of this Agreement may be modified in any respect except by a writing
executed by both Employee and Company. No person has any authority to make
any
representation or promise on behalf of any of the parties not set forth in
this
Agreement. This Agreement has not been executed in reliance upon any
representation or promise except those contained herein.
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(b) Without
limiting the breadth of the Ownership and Protection of Intellectual Property
and Confidential Information, Non-Competition Agreement (in Article 4 of the
Employment Agreement), Employee agrees that on the later of the date when
Employee ceases to be employed by the Company or on the last day of the
Consulting Period, he: (i) shall return to Company all originals and copies
of
all Company files, documents and forms, including those maintained in electronic
form or in any other manner or medium; (ii) shall delete any such Company
property in electronic form (“Electronic Documents”) maintained on his personal
computer or other personal communication systems or electronic data storage
devices (“Personal Devices”) if copies of such Electronic Documents are
currently stored on the Company-owned computer that had been assigned to
Employee, but with regard to any such Electronic Documents that are only stored
on Personal Devices, shall furnish copies (either printed copies or electronic
copies) to Company’s General Counsel prior to deleting; and (iii) shall not
maintain, disclose to others, or use any such Company property without the
written permission of Company's General Counsel.
12. Acknowledgment
of Terms. Employee
acknowledges
that Employee has carefully read this Agreement; that Employee has had the
opportunity for review of it by Employee’s attorney; that Employee fully
understands its final and binding effect; that neither Company nor Employee
admits to wrongdoing in connection with Employee’s employment, the Employment
Agreement, the termination of Employee’s employment, or any other matter covered
by the releases in Section 6(a) or 6(b); that this Agreement is intended as
a
compromise of all Claims released by the parties in Section 6(a) and 6(b)
respectively; that the only promises or representations made to Employee to
sign
this Agreement are those stated herein; and that Employee is signing this
Agreement voluntarily.
13. Waiver. The
failure of Company or
Employee to enforce or to require timely compliance with any term or provision
of this Agreement shall not be deemed to be a waiver or relinquishment of rights
or obligations arising hereunder, nor shall this failure preclude the
enforcement of any term or provision or avoid the liability for any breach
of
this Agreement.
14. Severability. Each
part, term or
provision of this Agreement is severable from the others. Notwithstanding any
possible future finding by a duly constituted authority that a particular part,
term or provision is invalid, void or unenforceable, this Agreement has been
made with the clear intention that the validity and enforceability of the
remaining parts, terms and provisions shall not be affected
thereby.
15. Costs
and Attorneys’ Fees. If
any action is initiated to enforce this Agreement, the prevailing party shall
be
entitled to recover from the other party its reasonable costs and attorneys’
fees.
16. Construction.
This Agreement shall be deemed drafted equally by all the parties. Its language
shall be construed as a whole and according to its fair meaning. Any presumption
or principle that the language is to be construed against any party shall not
apply. The headings in this Agreement are only for convenience and are not
intended to affect construction or interpretation. This Agreement represents
a
compromise of disputed Claims and is not to be construed as an admission, direct
or indirect, against any interest of the parties. Any references to paragraphs,
subparagraphs, or sections are to those parts of this Agreement, unless the
context clearly indicates to the contrary. Also unless the context clearly
indicates to the contrary, (a) the plural includes the singular and the singular
includes the plural; (b) “and” and “or” are each used both conjunctively and
disjunctively; (c) “any,”“all,”“each,” or “every” means “any and all, and each
and every”; (d) “includes” and “including” are each “without limitation;” and
(e) “herein,”“hereof,”“hereunder” and other similar compounds of the word “here”
refer to the entire Agreement and not to any particular paragraph, subparagraph,
section or subsection.
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17. Timing.
Employee
acknowledges: (a) Employee has 21 days to consider this Agreement before
executing it, although Employee may execute this Agreement before the 21 days
expires; (b) Employee may revoke this Agreement within 7 days after
Employee executes it; (c) such revocation must be in writing (and may
be
transmitted by facsimile pursuant to Section 18 below) and received by Company’s
General Counsel within this 7-day period; (d) if Employee revokes this
Agreement, it will not be effective or enforceable; and (e) Employee’s
acceptance of any of the Consideration after expiration of the 7-day period
shall constitute Employee’s acknowledgment that Employee did not revoke this
Agreement during the 7-day period.
18. Delivery
and Signatures by Facsimile.
All
signatures of the parties to this Agreement may be transmitted by facsimile,
and
such facsimile will, for all purposes, be deemed to be the original signature
of
such party whose signature it reproduces, and will be binding upon such party.
19. Advice
to Consult Counsel.
Company hereby advises Employee to consult with an attorney prior to executing
this Agreement.
AGREED
AND ACCEPTED:
| EMPLOYEE |
|
|
| /s/ W. Xxxxxx Xxxxxx, Xx. |
| W. Xxxxxx Xxxxxx, Xx. |
| Date: September 8, 2005 |
| ICO, Inc. |
|
|
| By: /s/ C. N. X'Xxxxxxxx |
| Name: C. N. X'Xxxxxxxx |
| Title: Chairman |
| Date: September 8, 2005 |
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