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. Robert Parkey, Jr. (“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 Disabilities Act, 42 U.S.C. §12101, et seq.; the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. §2101, 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. Robert Parkey, Jr.   W. Robert Parkey, Jr.  Date: September 8, 2005

 
 

 ICO, Inc.
 
  By: /s/ C. N. O'Sullivan Name: C. N. O'Sullivan Title: Chairman  Date:
September 8, 2005

 
 
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