EMPLOYMENT AGREEMENT
Exhibit
10.2
This
Employment Agreement (“Agreement”) is entered into by and between ICO, Inc. (the
“Company”) and A. Xxxx Xxxxx, Jr. (“Employee”), to be effective as of October 1,
2005 (the “Effective Date”).
WITNESSETH:
WHEREAS,
Employee
will become employed by Company on the Effective Date; and
WHEREAS,
the
Company desires to employ Employee from and after the Effective Date pursuant
to
the terms and conditions and for the consideration set forth in this Agreement,
and Employee desires to be employed by Company pursuant to such terms and
conditions and for such consideration.
NOW,
THEREFORE,
for and
in consideration of the mutual promises, covenants, and obligations contained
herein, the Company and Employee agree as follows:
ARTICLE
1: EMPLOYMENT AND DUTIES:
1.1 Employee’s
employment and compensation received from Company are “at-will” and, therefore,
can be terminated, with or without cause, at any time without prior notice,
at
Employee’s option or at the option of Company. The “Employment Period,” as
used herein, means the period commencing on the Effective Date, and ending
on
the last day of Employee’s employment with Company (the “Termination Date”).
1.2
Beginning as of the Effective Date, Employee shall be employed as President
and
Chief Executive Officer of the Company, and shall continue to be a member of
the
Board of Directors of the Company. Employee may also serve as an officer and/or
director of the Company’s domestic and foreign affiliated subsidiaries, and in
such other key contributor capacities as may be requested by the Employer.
Employee agrees to serve in such positions, and to perform diligently and to
the
best of Employee’s abilities the duties and services pertaining to such
positions as reasonably determined by Company, as well as such additional or
different duties and services appropriate to such positions which the Employee
from time to time may be directed to perform by the Company. Employee shall
report to the Board.
1.3 Employee
shall at all times comply with and be subject to such policies and procedures
as
the Company may establish from time to time, including, without limitation,
the
Company’s Employee Handbook, Code of Business Ethics, Group Accounting and
Finance Policy Manual, Group Legal Department Policy Manual, and Expense
Reimbursement Policy Manual.
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1.4 Employee
shall, during the Employment Period, devote at least 75% of Employee’s business
time, energy, and best efforts to the business and affairs of the Company.
Employee may not engage, directly or indirectly, in any other business,
investment, or activity that interferes with Employee’s performance of
Employee’s duties hereunder, is contrary to the interest of the Company or any
of its affiliated subsidiaries and divisions (collectively, the “ICO Entities”
or, individually, an “ICO Entity”). The ICO Entities as of the Effective Date
are listed on Exhibit A attached hereto and incorporated herein. In the event
that, during the Employment Period, any of the ICO Entities establish or
purchase a 10% or more direct or indirect equity interest in any entity not
listed on Exhibit A, such entity shall be deemed to be an ICO Entity for the
purposes of this Agreement. The foregoing notwithstanding, the parties recognize
and agree that Employee may engage in passive personal investments and other
business activities which do not conflict with the business and affairs of
the
Company or the ICO Entities or interfere with Employee’s performance of his
duties hereunder. Employee shall be eligible to serve on the board of directors
or committees thereof of entities that are not ICO Entities during Employee’s
employment by the Company, subject to the Board’s advance consideration and
approval thereof. Employee shall be permitted to retain any compensation
received for approved service on any unaffiliated corporation’s board of
directors or committees thereof.
1.5 Employee
acknowledges and agrees that Employee owes a fiduciary duty of loyalty,
fidelity, and allegiance to act at all times in the best interests of the
Company and other ICO Entities and to do no act which would, directly or
indirectly, injure any ICO Entity’s business, interests, or reputation. It is
agreed that any direct or indirect interest in, connection with, or benefit
from
any outside activities, particularly commercial activities, which interest
might
in any way adversely affect the Company, or any ICO Entity, involves a possible
conflict of interest. In keeping with Employee’s fiduciary duties to the
Company, Employee agrees that during the Employment Period Employee shall not
knowingly become involved in a conflict of interest with the Company or the
ICO
Entities, or upon discovery thereof, allow such a conflict to continue.
Moreover, during the Employment Period Employee shall not engage in any activity
which might involve a possible conflict of interest without first obtaining
approval in accordance with this Agreement and the Company’s policies and
procedures.
ARTICLE
2: COMPENSATION AND BENEFITS:
2.1 During
the Employment Period, the Employee shall receive a base salary ("Base Salary")
of Ninety-Six Thousand Dollars ($96,000) per annum, less all required
deductions, including but not limited federal withholding, social security
and
other taxes, and payable bi-weekly on the Company’s regular payroll schedule.
During the Employment Period, the Base Salary may be reviewed periodically
by
the Compensation Committee of the Board (the “Compensation Committee”). The
Compensation Committee may make recommendations to the Board to revise the
Employee’s Base Salary, which may only be revised upon approval by the Board.
Any increase in the Base Salary shall not serve to limit or reduce any other
obligation to the Employee under this Agreement.
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2.2 In
addition to the Base Salary and other benefits afforded to Employee under this
Agreement, on the first business day of Employee’s employment, Employee shall be
granted options (“Options”) to purchase 120,000 shares of the Common Stock of
the Company (“Shares”). The Options shall be granted from the Company’s 1998
Employee Stock Option Plan, and pursuant to the terms of a Stock Option
Agreement which shall include the terms described in this Section 2.2. The
Options shall be granted at an exercise price equal to the fair market value
of
the Shares (as defined in the applicable stock option plan) on the date of
grant. All of the referenced Options shall be Non Qualified Stock Options
(NQSOs).
The
Options shall vest as follows: Options to purchase 10,000 of the Shares shall
vest upon the conclusion of each of the Employee’s first twelve months of
employment as President and Chief Executive Officer. In the event that
Employee’s employment as President and Chief Executive Officer terminates, for
any reason, within twelve months after the Effective Date, vesting shall be
pro-rated for the last month of service. All of the Options shall expire and
shall not be exercisable on the seventh anniversary of the date of grant. The
total number of Options to purchase Shares that have vested as of the first
anniversary of the Effective Date shall be referred to herein as the “FY 2006
Vested Options.”
Example
#1:
Employee’s employment as President and Chief Executive Officer terminates
five-and-a-half months after the Effective Date. In this scenario, Options
to
purchase 50,000 Shares shall have vested as of the end of the fifth month of
employment, and with regard to the final half-month of employment, Options
to
purchase an additional 5,000 Shares shall vest. In this scenario an aggregate
of
Options to purchase 55,000 Shares shall have vested as of the Termination Date;
therefore, the “FY 2006 Vested Options” is 55,000.
Example
#2:
Employee continues to be employed as of December 31, 2006. In this scenario,
Options to purchase 120,000 Shares shall have vested as of the anniversary
of
the Effective Date; therefore, the “FY 2006 Vested Options” is
120,000.
2.3 During
the Employment Period, the Employee shall be entitled to participate in
incentive, savings, and retirement plans, and other standard benefit plans
afforded to other employees of the Company, including, without limitation,
all
medical, dental, disability, group life, accidental death, D&O indemnity,
and travel accident insurance plans and programs of the Company, to the extent
Employee is otherwise eligible under the terms and conditions of the applicable
plan or policy, and as such plans or policies may be from time to time be
amended, modified or terminated by the Company without prior notice. Dependants
of Employee may participate in such plans to the extent allowed for other
dependants of employees of the Company as allowed by the applicable plan. This
Agreement shall not be construed to limit in any respect the Company’s right to
establish, amend, modify, or terminate any benefit plan or policy. Furthermore,
the Company shall not by reason of this Article 2 be obligated to institute,
maintain, or refrain from changing, amending, or discontinuing, any incentive
compensation, employee benefit, or stock or stock option program or plan, so
long as such actions are similarly applicable to covered employees
generally.
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2.4 During
the Employment Period, the Company shall pay or reimburse Employee for all
actual, reasonable, and customary expenses incurred by Employee in the course
of
his employment in accordance with the Company’s policies and procedures in
effect at the time.
2.5 During
the Employment Period, the Employee shall be entitled to four weeks of vacation,
fully paid, per calendar year.
2.6 The
Company may withhold from any compensation, benefits, or amounts payable under
this Agreement all federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
ARTICLE
3: TERMINATION OF EMPLOYMENT AND
EFFECTS
OF SUCH TERMINATION
3.1 As
Employee’s employment is “at will,” either Party (Company or Employee) may
terminate this Agreement, with or without cause, upon providing written notice
to the other party pursuant to Section 5.1 below. On the Termination Date,
all
future compensation to which Employee would otherwise be entitled and all future
benefits for which Employee is eligible shall cease and terminate as of the
Termination Date. Employee shall not be entitled to receive payment, if any,
for
accrued and unused vacation days.
3.2 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, pricing 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.
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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 services, 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 applicable 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 the later of the termination of Employee’s employment with
the Company, for any reason, and the last day of Employee’s service on the
Board, Employee promptly shall deliver the same and all copies thereof to the
Company.
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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. Accordingly, 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 later of the Termination Date and the last day when Employee serves on
the
Board, 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
(d) do
anything to interfere with the normal operation of the businesses of the Company
or any other ICO Entity, including, without limitation, make any effort
personally or through others to recruit, hire, or solicit any employee or
independent contractor of the Company or another ICO Entity to leave the Company
or such ICO Entity, or to interfere in any way with any ICO Entity’s
relationships with its customers or suppliers.
For
purposes of this Section, the term “Competing Enterprise” shall mean: any person
or any business organization of whatever form, excluding the Company and/or
any
other ICO Entity, engaged directly or indirectly in any business or enterprise
whose business activities specifically relate to or involve: (i) grinding,
processing, blending, and/or compounding of polymer products for (a) the
rotational molding industry, or (b) any other industry that ICO Polymers North
America, Inc. or any other ICO Entity specifically services or sells to; or
(ii)
the production of concentrates or compounds or other processing services related
to polymer products as conducted by Bayshore Industrial, Inc. or any other
ICO
Entities.
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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
0000
Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
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.
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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 restraining 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.
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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 not 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.
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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/
Xxxxxxx X.
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx
|
Chairman
of the Board of Directors
|
Date:
10/07/05
|
Employee
|
/s/ A. Xxxx Xxxxx,
Jr.
|
A. Xxxx Xxxxx, Jr.
|
Date:
10/06/05
|
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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 GP, L.L.C - USA, DE
Bayshore
Industrial LP, L.L.C. - USA, DE
Bayshore
Industrial, L.P. - USA, TX
Bayshore
RE Holdings, Inc. - USA, DE
China
RE
Holdings, Inc. - USA, DE
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
Minerals, Inc. - USA, DE
ICO
P&O, Inc. - USA, DE
ICO
Petrochemical Cayman Islands - Cayman Islands
ICO
Polymers Cayman Islands - Cayman Islands
ICO
Polymers do Brasil Ltda. - Brazil
ICO
Polymers France SAS - France
ICO
Polymers Hellas Ltd. - Greece
ICO
Polymers Italy S.r.l. - Italy
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
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
The
Innovation Company, S.A. de C.V. - Mexico
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
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