EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into by and between ICO,
Inc., a Texas corporation, and its subsidiaries and affiliates ("Employer"), and
Xxxxxxxxxxx X. X'Xxxxxxxx ("Employee"), to be effective on June 21, 2003 (the
"Effective Date").
WITNESSETH:
WHEREAS, Employee shall continue to be employed by Employer on the
Effective Date; and
WHEREAS, Employer 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 Employer 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, Employer and Employee agree as follows:
ARTICLE 1: EMPLOYMENT AND DUTIES:
1.1 Employer agrees to employ Employee, and Employee agrees to be employed by
Employer, beginning as of the Effective Date and continuing until the date
of termination of Employee's employment pursuant to the provisions of
Article 3 ("Employment Period"), subject to the terms and conditions of
this Agreement.
1.2 As of the Effective Date, Employee shall continue to be employed as
Chairman of the Board and President of ICO, Inc. Employee agrees to serve
in the assigned positions or in such other key contributor capacities as
may be requested from time to time by Employer, and to perform diligently
and to the best of Employee's abilities the duties and services pertaining
to such positions as reasonably determined by Employer, as well as such
additional or different duties and services appropriate to such positions
which Employee from time to time may be reasonably directed to perform by
Employer.
1.3 Employee shall at all times comply with and be subject to such policies and
procedures as Employer may establish from time to time.
1.4 The Employee agrees to devote reasonable attention and time to the business
and affairs of the Company, and, to the extent necessary to discharge the
responsibilities assigned to the Employee hereunder, to perform faithfully
and efficiently such responsibilities. 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 or is contrary
to the interest of Employer or any of its affiliated subsidiaries and
divisions, including Employer. The foregoing notwithstanding, the parties
recognize and agree that Employee may engage in active or passive personal
investments and other business activities which do not conflict with the
business and affairs of the Employer or interfere with Employee's
performance of his duties hereunder. Employee shall be permitted to retain
any compensation received for approved service on any unaffiliated
corporation's board of directors.
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 Employer and its affiliates and to do no act which would, directly
or indirectly, injure any such entity's business, interests, or reputation.
In keeping with Employee's fiduciary duties to Employer, Employee agrees
that Employee shall not knowingly become involved in a conflict of interest
with Employer or upon discovery thereof, allow such a conflict to continue.
Moreover, Employee shall not engage in any activity which might involve a
possible conflict of interest without first obtaining approval in
accordance with Employer's policies and procedures.
ARTICLE 2: COMPENSATION AND BENEFITS:
2.1 During the Term of this Agreement (as defined in Article 3.1 below), the
Employee shall receive a base salary ("Base Salary") of One Hundred and
Eight Thousand Dollars ($108,000) per annum payable bi-weekly. During the
Term, the Base Salary shall be reviewed annually and may be increased to
reflect at a minimum increases in the cost of living. Any increase in the
Base Salary shall not serve to limit or reduce any other obligation to the
Employee under this Agreement. The Base Salary shall not be reduced after
any such increase during the Term without the consent of the Employee.
2.2 In addition to the Base Salary, the Employee shall be eligible, for each
fiscal year during the Term, to receive incentive compensation in
accordance with the terms of the Senior Manager Incentive Plan to be
adopted by the Board of Directors of ICO, Inc. or the Compensation
Committee thereof. Employee acknowledges that the Board retains the
absolute discretion to adopt and from time to time to modify the Senior
Manager Incentive Plan or any other incentive plan. Any incentive
compensation shall be payable in January of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless otherwise
agreed between the Employer and the Employee. Although the Board of
Directors of ICO, Inc. has not yet approved the Senior Manager Incentive
Plan, the Board anticipates adopting a plan containing terms and conditions
similar to those set forth in the letter from Xxx X. Xxxx to Employee
attached hereto as Exhibit A.
2.3 The Employee shall be entitled to participate, during the Employment
Period, in all incentive, savings and retirement plans and programs, if
any, that may be adopted by the Board specifically for key executives of
the Company.
2.4 During the Employment Period, Employee shall be entitled to receive stock
options under and subject to the terms of the Company's then existing stock
option plans in an amount and under such terms as the Board of Directors or
the Compensation Committee thereof shall determine.
2.5 During the Employment Period, the Employee and/or the Employee's dependent
family, as the case may be, shall be eligible for participation in and
shall receive all benefits under each welfare benefit plan of ICO, Inc. and
its U.S. subsidiaries, including, without limitation, all medical, dental,
disability, group life, accidental death and travel accident insurance
plans and programs of the Company, as in effect immediately preceding the
Effective Date or as in effect at any time thereafter with respect to other
key employees.
2.6 During the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Employee
in accordance with the policies and procedures of the Company as in effect
immediately preceding the Effective Date or as in effect at any time
thereafter with respect to other key employees.
2.7 During the Employment Period, the Employee shall be entitled to fringe
benefits in accordance with the policies of the Company as in effect
immediately preceding the Effective Date or as in effect at any time
thereafter with respect to other key employees. In lieu of use of a Company
vehicle, and maintenance, repair, insurance, and fuel charges associated
therewith, the Employee shall receive a monthly vehicle allowance in the
sum of $1,330.00 ("Vehicle Allowance"), paid in advance on the first payday
of each month. The Vehicle Allowance shall be periodically adjusted to
reflect inflation. As reimbursement for fuel and vehicle-related charges
incurred by Employee when using Employee's personal vehicle on Company
business, Employee shall be reimbursed at the IRS reimbursement rate of
$0.365 per mile (or the prevailing rate).
2.8 During the Employment Period, the Employee shall be entitled to annual paid
vacation that in no event shall be less than four weeks per year.
2.9 During the Term, the Employer will maintain term life insurance on behalf
of the Employee for the benefit of persons designated as beneficiaries by
Employee in the amount of $1,000,000.
2.10 Employer 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: TERM; TERMINATION OF EMPLOYMENT
AND EFFECTS OF SUCH TERMINATION:
3.1 The term of this Agreement shall begin on the Effective Date and continue
until September 30, 2004 (the "Term"). The Term shall thereafter be
extended for an additional twelve months on the same terms contained herein
and in effect as of such time of renewal unless Employer or Employee gives
notice at least sixty days prior to the end of the Term or any extended
Term that one or both of them does not intend to renew the Agreement. If
such nonrenewal notice is given by the Employer, then the provisions of
Article 3.7 shall be applicable.
3.2 Employee's employment with Employer shall be terminated (i) upon the death
of Employee, (ii) upon Employee's Retirement (as defined below), (iii) upon
Employee's Permanent Disability (as defined below), or (iv) at any time by
Employer upon notice to Employee, or by Employee upon thirty (30) days
notice to Employer, for any or no reason.
3.3 If Employee's employment is terminated by reason of any of the following
circumstances, Employee shall not be entitled to receive the benefits set
forth in Article 3.4 hereof:
(a) Death.
(b) Retirement. "Retirement" shall mean either (a) Employee's retirement
at or after normal retirement age (either voluntarily or pursuant to
Employer's retirement policy) or (b) the voluntary termination of
Employee's employment by Employee in accordance with Employer's early
retirement policy for other than Good Reason (as defined below).
(c) Permanent Disability. "Permanent Disability" shall mean Employee's
physical or mental incapacity to perform his usual duties with such
condition likely to remain continuously and permanently as determined
by the Board of Directors.
(d) Voluntary Termination. "Voluntary Termination" shall mean a
termination of employment in the sole discretion and at the election
of Employee for other than Good Reason. "Good Reason" shall mean a
termination of employment by Employee because of a material breach by
Employer of any material provision of this Agreement which remains
uncorrected for thirty (30) days following notice ("notice period") of
such breach by Employee to Employer, provided such termination occurs
within sixty (60) days after the expiration of the notice period. In
the event of termination for Good Reason, Article 3.3 will apply.
(e) Termination for Cause. Termination of Employee's employment by
Employer for cause. The term "for cause" includes (i) any act or acts
of dishonesty or fraud; (ii) knowing violations of any written policy
of the Company or applicable to Employer's operations; (iii)
violations of applicable laws, rules or regulations that expose the
Company to damages or liability; (iv) any material breach by Employee
of any material provision of this Agreement which remains uncorrected
for thirty (30) days following notice of such breach by Employer to
Employee; and (v) breach of fiduciary duty.
In the event Employee's employment is terminated under any of the foregoing
circumstances, all future compensation to which Employee is otherwise entitled
and all future benefits for which Employee is eligible shall cease and terminate
as of the date of termination, except as specifically provided in this Article
3.3. Employee, or his Estate in the case of Employee's death, shall be entitled
to pro rata base salary through the date of such termination and shall be
entitled to any individual bonuses or individual incentive compensation declared
but not yet paid but payable under Employer's plans for years prior to the year
of Employee's termination of employment, and any bonus or incentive compensation
declared and payable but not yet paid for the year in which Employee terminates
employment. Any other payments or benefits by or on behalf of Employer are
limited to those which may be payable pursuant to the terms of Employer's
employee benefit plans (as defined in Article 3.5), incentive plans, or the
applicable agreements underlying such plans.
3.4 If Employee's employment is terminated by Employer or Employee for any
reason other than as set forth in Article 3.3 above, Employer shall pay to
Employee a severance benefit consisting of a single lump sum cash payment
equal to one half of the Employee's Base Salary. The lump sum payment shall
be made no later than sixty (60) days following the date of the applicable
termination of employment. Furthermore, Employee shall be entitled to any
individual bonuses or individual incentive compensation declared and
payable but not yet paid under Employer's plans for years prior to the year
of Employee's termination of employment for any reasons other than as set
forth in Article 3.3 above. Such amounts shall be paid to Employee in a
single lump sum cash payment along with the payment of the lump sum
severance payment described in this Article.
3.5 The severance benefit paid to Employee pursuant to Article 3.4 shall be in
consideration of Employee's continuing obligations hereunder after such
termination, including, without limitation, Employee's obligations under
Article 4. Further, as a condition to the receipt of such severance
benefit, Employee agrees that any and all claims and any and all causes of
action of any kind or character, including, but not limited to, all claims
and causes of action arising out of Employee's employment with Employer and
any of its affiliates or the termination of such employment or any actions
by the officers, directors, employees, and agents of Employer shall be
resolved through a dispute resolution process as provided in Article 5.5
hereof. Employee shall not be under any duty or obligation to seek or
accept other employment following a termination of employment pursuant to
which a severance benefit payment under Article 3.4 is owing, and the
amount due Employee pursuant to Article 3.4 shall not be reduced or
suspended if Employee accepts subsequent employment or earns any amounts as
a self-employed individual. Employee's rights under Article 3.4 are
Employee's sole and exclusive rights against the Employer or its affiliates
and the Employer's sole and exclusive liability to Employee under the
Agreement, in contract, tort, or otherwise, for the termination of
Employee's employment relationship with Employer. Employee agrees that all
disputes relating to Employee's termination of employment, including,
without limitation, any dispute as to "cause" or "voluntary termination"
and any claims or demands against Employer based upon Employee's employment
for any monies other than those specified in Article 3.4, shall be resolved
through a dispute resolution process as provided in Article 5.5 hereof. The
decisions as to whether and as of what date Employee has become permanently
disabled are delegated to the Board of Directors for determination, and any
dispute of Employee with any such decision shall be limited to whether the
Board of Directors reached such decision in good faith. 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 Employees' Retirement Income Security Act of
1974, as amended) maintained by Employer except that Employee shall not be
entitled to any severance benefits pursuant to any severance plan or
program of the Employer.
3.6 Termination of the employment relationship does not terminate those
obligations imposed by this Agreement that are continuing obligations,
including Employee's obligations under Article 4.
3.7 In the event this Agreement is not renewed as a consequence of a
termination notice from the Employer to Employee (other than for cause)
pursuant to Article 3.1, then the Employee would upon such termination be
entitled to receive a severance payment in the amount of one half of the
annual Base Salary immediately prior to such termination. If either the
Employer or Employee wish to continue their employment relationship after
the Term or extended Term but on terms and conditions that differ from
those set forth in this Agreement, the Employer or Employee shall send
notice of non-renewal and the employment relationship will continue after
the Term as an at-will employment relationship while the Employer and
Employee attempt in good faith to reach agreement concerning the terms and
conditions of a new employment agreement.
ARTICLE 4:
OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY
AND CONFIDENTIAL INFORMATION:
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 Employer or any of its affiliates (whether during
business hours or otherwise and whether on Employer's premises or
otherwise) which relate to the business, products or services of Employer
or its affiliates (including, without limitation, all such information
relating to corporate opportunities, research, financial and sales data,
pricing and trading terms, evaluations, opinions, interpretations,
acquisition prospects, the identity of customers or their requirements, the
identity of key contacts within the customer's organizations or within the
organization of acquisition prospects, or 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 Employer or its affiliates, as the case may be.
4.2 Employee acknowledges that the businesses of Employer and its affiliates
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, all
comprise confidential business information and trade secrets which are
valuable, special, and unique assets which Employer or its affiliates 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 Employer and its affiliates in maintaining their
competitive position. Employee hereby agrees that Employee will not, at any
time during or after his employment by Employer, make any unauthorized
disclosure of any confidential business information or trade secrets of
Employer or its affiliates, 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
Employer of his intent to disclose any such confidential business
information in such context so as to allow Employer or its affiliates an
opportunity (which Employee 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 period of Employee's employment by
Employer which contain or disclose confidential business information or
trade secrets of Employer or its affiliates shall be and remain the
property of Employer, or its affiliates, as the case may be. Upon
termination of Employee's employment by Employer, for any reason, Employee
shall promptly deliver the same and all copies thereof, to Employer.
4.4 For purposes of this Article 4 only, "affiliates" shall mean entities in
which Employer has a 10% or more direct or indirect equity interest.
4.5 This Article 4 does not prohibit employment or consultation with any other
organization after termination from Employer or any of its affiliates, but
defines the obligations of confidentiality and protection of the
intellectual property owned by Employer or its affiliates agreed to and
imposed on Employee by this Agreement.
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 Employer, as
applicable, by prepaid courier or by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Employer, to the attention of the Compensation Committee
of the Board of Directors of ICO, Inc.
0000 Xxxxxxxxxx, 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.
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 Article 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 in accordance with the
Employment Dispute Resolution ("EDR") Rules of the American Arbitration
Association ("AAA"). The arbitration will be conducted 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 Employer shall pay for the fees of the
arbitrator and the administrative and filing fees charged by the AAA.
However, either party, on its own behalf and on behalf of any other
employer, 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. The parties agree
that an injunction shall be in effect until the subject matter of the
dispute can be resolved through mutual agreement or binding arbitration.
5.6 This Agreement shall be binding upon and inure to the benefit of Employer,
to the extent herein provided, and any other person, association, or entity
which may hereafter acquire or succeed to all or substantially all of the
business or assets of Employer 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 Employer, other than in the
case of death or incompetence of Employee.
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 not embodied herein, and that no
agreement, statement, or promise relating to the employment of Employee by
Employer 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. By signing this
Agreement Employee is relying solely on his own judgment, and states that
he has been represented by his own legal counsel in connection with this
Agreement, who has read and explained to Employee the entire contents of
this Agreement, as well as explained the legal consequences pertaining to
this Agreement.
IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement
in multiple originals to be effective on the Effective Date.
EMPLOYER:
ICO, Inc.
BY: /s/ Xxx X. Xxxx
-----------------------------------------
Xxx X. Xxxx
Chief Financial Officer and Treasurer
EMPLOYEE:
/s/ Xxxxxxxxxxx X. X'Xxxxxxxx
-----------------------------------------
Xxxxxxxxxxx X. X'Xxxxxxxx
