Document:

Exhibit 10.1 - Barmore Stock Option Grant - 20,000 Shares

    
      Exhibit
        10.1

      
 

      Summary
        Information

      Director:
        Gregory
        T. Barmore

      Date
        of
        Grant: November 18, 2005

      Stock
        Option Plan: 1993 Non-Employee Director Plan

      Exercise
        Price: $2.40/Share (FMV on date of grant)

      Expiration:
        November 18, 2012, 12:00 a.m.

      Total
        #
        Shares subject to grant: 20,000

      

      Conditions:
        Grant is subject to and conditioned upon shareholder approval of the First
        Amendment to the Third Amended and Restated 1993 Stock Option Plan for
        Non-Employee Directors of ICO, Inc. within one year after the Date of
        Grant.

      

      Vesting
        (provided that above Conditions are satisfied):

      1,666
        Shares shall be deemed 100% vested on the Date of Grant.

      1,666
        Shares vest on November 30, 2005 (provided Barmore serves as Chairman on
        that
        date)

      1,666
        Shares vest on December 31, 2005 (provided Barmore serves as Chairman on
        that
        date)

      1,666
        Shares vest on January 31, 2006 (provided Barmore serves as Chairman on that
        date)

      1,666
        Shares vest on February 28, 2006 (provided Barmore serves as Chairman on
        that
        date)

      1,666
        Shares vest on March 31, 2006 (provided Barmore serves as Chairman on that
        date)

      1,666
        Shares vest on April 30, 2006 (provided Barmore serves as Chairman on that
        date)

      1,666
        Shares vest on May 31, 2006 (provided Barmore serves as Chairman on that
        date)

      1,666
        Shares vest on June 30, 2006 (provided Barmore serves as Chairman on that
        date)

      1,666
        Shares vest on July 31, 2006 (provided Barmore serves as Chairman on that
        date)

      1,666
        Shares vest on August 31, 2006 (provided Barmore serves as Chairman on that
        date)

      1,674
        Shares vest on September 30, 2006 (provided Barmore serves as Chairman on
        that
        date)

       

      

      STOCK
        OPTION AGREEMENT

      

      This
        AGREEMENT is made and effective this 18th
        day of
        November, 2005 (the “Date of Grant”), between ICO, Inc., a Texas corporation
        (the “Company”), and Gregory T. Barmore (“Director”), Chairman of the Company’s
        Board of Directors. 

       

      1. Subject
        to Shareholder Approval of Plan Amendment.
        This
        Agreement is subject to and conditioned upon ICO, Inc. shareholder approval
        of
        the First Amendment to the Third Amended and Restated 1993 Stock Option Plan
        for
        Non-Employee Directors of ICO, Inc. (the “Amendment”) within one year after the
        Date of Grant. The Amendment was approved by the Board of Directors on November
        18, 2005, prior to the Board’s approval of this grant. In the event that the
        Company’s shareholders do not approve the Amendment as set forth in this
        paragraph, this Agreement shall be null and void, and shall have no effect.
        

      

      2. Grant
        of Option.
        To
        carry
        out the purposes of ICO, Inc.’s 1993 Stock Option Plan for Non-Employee
        Directors, (the “Plan”), by affording Director the opportunity to purchase
        shares of the common stock of the Company (“Shares”), and in consideration of
        the mutual agreements and other matters set forth herein and in the Plan,
        the
        Company and Director hereby agree to the terms of grant set forth herein.
        The
        Company hereby grants to Director the right to purchase all or any part of
        an
        aggregate of 20,000 Shares (such right to purchase 20,000 Shares at the purchase
        price set forth in paragraph 3 below being referred to herein as this “Option”),
        on the terms and conditions set forth herein and in the Plan, as such Plan
        

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      may
        be
        amended or supplemented from time to time, and which Plan is incorporated
        herein
        by reference as a part of this Agreement, and subject to the conditional
        vesting
        described below. This Option shall not
        be
        treated as an incentive stock option within the meaning of Section 422(b)
        of the
        Internal Revenue Code of 1986, as amended (the “Code”).

       

      3. Purchase
        Price.
        The
        purchase price of the Shares that may be purchased by Director pursuant to
        the
        exercise of this Option shall be $2.40 per Share, which has been determined
        to
        be not less than the fair market value of the Shares on the Date of Grant
        of
        this Option. For the purpose of this Agreement, the “fair market value” of the
        Shares shall be determined in accordance with the definition of “fair market
        value” contained in the Plan. 

       

      4. Exercise
        of Option / Vesting Schedule.
        This
        Option shall vest and may be exercised, in whole or part, according to the
        schedule described below. 

       

      This
        Option may be exercised in whole or part, by written notice to the Company
        at
        its principal executive office addressed to the attention of its General
        Counsel, at any time and from time to time after the Date of Grant hereof,
        provided that the Option or portion thereof has vested and may be purchased
        in
        accordance with the following schedule: 

       

      
        	
                Vesting
                  Date 

              	
                Number
                  of Shares

                That
                  Vest and May Be Purchased

                 

              
	
                Date
                  of Grant (November 18, 2005)

              	
                1,666
                  Shares*

              
	
                November
                  30, 2005

              	
                1,666
                  Shares*

              
	
                December
                  31, 2005

              	
                1,666
                  Shares*

              
	
                January
                  31, 2006

                February
                  28, 2006  

              	
                1,666
                  Shares*

                1,666
                  Shares*

              
	
                March
                  31, 2006

              	
                1,666
                  Shares*

              
	
                April
                  30, 2006

              	
                1,666
                  Shares*

              
	
                May
                  31, 2006

              	
                1,666
                  Shares*

              
	
                June
                  30, 2006

              	
                1,666
                  Shares*

              
	
                July
                  31, 2006

              	
                1,666
                  Shares*

              
	
                August
                  31, 2006

              	
                1,666
                  Shares*

              
	
                September
                  30, 2006

              	
                1,674
                  Shares*

              

      

      

      *Vesting
        is conditioned upon the conditions described in both
        clauses
        (a) and (b) below:

       

      a) Vesting
        is conditioned upon shareholder approval of the Amendment, described in
        paragraph 1 above. Therefore any options to purchase Shares that are deemed
        vested per the above schedule prior to the date of shareholder approval of
        the
        Amendment shall not be exercisable by Director unless and until shareholder
        approval of the Amendment occurs within the time frame set forth in paragraph
        1.
        In the event that shareholder approval of the Amendment does not occur within
        one year after the Date of Grant, none of the options to purchase Shares
        shall
        vest, and all of the Option shall terminate and shall not be exercisable
        by
        Director.

       

      b) Vesting
        is also conditioned upon Director continuing to serve as Chairman of the
        Board
        of Directors of the Company during the month prior to and including the
        referenced Vesting Date. In the event that Director’s tenure as Chairman
        terminates prior to a specified Vesting Date, a pro-rated number (rounded-up
        for
        any fractional Share) of Shares shall vest during the month when Director’s
        service as Chairman ends. (For example only, if Director ceases to serve
        as
        Chairman of the Board on June 15, 2006, only 833 Shares shall vest in connection
        with the month of June 2006, representing 15/30 of 1,666 Shares that would
        otherwise have vested during that month.) Any Options to purchase Shares
        that
        have not vested as of the date of the end of Director’s tenure as Chairman shall
        terminate and shall not be exercisable by Director. 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5. Binding
        Effect.
        This
        Agreement shall be binding upon and inure to the benefit of any successors
        to
        the Company and all persons lawfully claiming under Director. In the event
        of
        conflict between any of the provisions in this Agreement and provisions in
        the
        Plan, the provisions of the Plan will govern. 

       

      6. Governing
        Law and Dispute Resolution.
        This
        Agreement and the Option granted hereunder, shall be governed by, and construed
        in accordance with the laws of the State of Texas, without regard to its
        principles of conflicts of law. Any and all controversies, claims and
        differences arising out of or relating to the Option granted under this
        Agreement which cannot be settled by good faith negotiation between the parties
        will be finally settled by binding arbitration brought within three (3) months
        of the termination of the Option, with the date of termination to be governed
        by
        the provisions of the Plan and this Agreement. The binding arbitration will
        be
        conducted in accordance with the then existing rules of the American Arbitration
        Association (“AAA”), by one arbitrator. In the event of any conflict between
        such rules and this paragraph, the provisions of this paragraph shall govern.
        Upon the written demand of either party, the parties shall appoint a single
        arbitrator acceptable to both parties. Arbitration proceedings shall be held
        in
        Houston, Texas. The decision of the arbitrator shall be final and binding
        upon
        the parties hereto, not subject to appeal, and shall deal with the questions
        of
        interest, cost of the arbitration, and all matters relevant thereto. Judgment
        upon the award or decision rendered by the arbitrator may be entered in any
        court having jurisdiction thereof, or application may be made to such court
        for
        a judicial recognition of the award or any order of enforcement thereof as
        the
        case may be.

       

      IN
        WITNESS WHEREOF,
        the
        Company has caused this Agreement to be duly executed by its officer thereunto
        and duly authorized, and Director has executed this Agreement, to be effective
        as of the Date of Grant set forth above. 

       

      ICO,
        INC.

      

      
        	
                By:

              	/s/
A.
                John Knapp, Jr.
	 	
                A.
                  John Knapp, Jr.

              
	 	
                President
                  and Chief Executive Officer

              

      

       

      DIRECTOR

      

       

      
        	
                /s/
                  Gregory
                  T. Barmore

              
	
                Gregory
                  T. BarmoreExhibit 10.2 - Barmore Stock Option Grant - 40,000 Shares

    
      Exhibit
        10.2

      
 

      Summary
        Information

      Director:
        Gregory
        T. Barmore

      Date
        of
        Grant: November 18, 2005

      Stock
        Option Plan: 1993 Non-Employee Director Plan

      Exercise
        Price: $2.40/Share (FMV on date of grant)

      Expiration:
        November 18, 2012, 12:00 a.m.

      Total
        #
        Shares subject to grant: 40,000

      

      Conditions:
        Grant is subject to and conditioned upon shareholder approval of the First
        Amendment to the Third Amended and Restated 1993 Stock Option Plan for
        Non-Employee Directors of ICO, Inc. within one year after the Date of
        Grant.

      

      Vesting
        (provided that above Conditions are satisfied):

      *
        20,000
        Shares vest on December 15, 2006 (provided that Barmore continues to serve
        as
        Chairman of the Board on September 30, 2006 and all of the conditions for
        vesting described in Exhibit A are satisfied. In the event that only a portion
        of the conditions described in Exhibit A are satisfied, a corresponding portion
        of the 20,000 Shares will vest in accordance with Exhibit A.)

      *
        20,000
        Shares vest on December 15, 2007 (provided that Barmore continues to serve
        as
        Chairman of the Board on September 30, 2007 and all of the conditions for
        vesting described in Exhibit B are satisfied. In the event that only a portion
        of the conditions described in Exhibit B are satisfied, a corresponding portion
        of the 20,000 Shares will vest in accordance with Exhibit B.)

       

      STOCK
        OPTION AGREEMENT

      

      This
        AGREEMENT is made and effective this 18th
        day of
        November, 2005 (the “Date of Grant”), between ICO, Inc., a Texas corporation
        (the “Company”), and Gregory T. Barmore (“Director”), Chairman of the Company’s
        Board of Directors. 

       

      1. Subject
        to Shareholder Approval of Plan Amendment.
        This
        Agreement is subject to and conditioned upon ICO, Inc. shareholder approval
        of
        the First Amendment to the Third Amended and Restated 1993 Stock Option Plan
        for
        Non-Employee Directors of ICO, Inc. (the “Amendment”) within one year after the
        Date of Grant. The Amendment was approved by the Board of Directors on November
        18, 2005, prior to the Board’s approval of this grant. In the event that the
        Company’s shareholders do not approve the Amendment as set forth in this
        paragraph, this Agreement shall be null and void, and shall have no effect.
        

      

      2. Grant
        of Option.
        To
        carry
        out the purposes of ICO, Inc.’s 1993 Stock Option Plan for Non-Employee
        Directors, (the “Plan”), by affording Director the opportunity to purchase
        shares of the common stock of the Company (“Shares”), and in consideration of
        the mutual agreements and other matters set forth herein and in the Plan,
        the
        Company and Director hereby agree to the terms of grant set forth herein.
        The
        Company hereby grants to Director the right to purchase all or any part of
        an
        aggregate of 40,000 Shares (such right to purchase 40,000 Shares at the purchase
        price set forth in paragraph 3 below being referred to herein as this “Option”),
        on the terms and conditions set forth herein and in the Plan, as such Plan
        may
        be amended or supplemented from time to time, and which Plan is incorporated
        herein by reference as a part of this Agreement, and subject to the conditional
        vesting described below. This Option shall not
        be
        treated as an incentive stock option within the meaning of Section 422(b)
        of the
        Internal Revenue Code of 1986, as amended (the “Code”).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3. Purchase
        Price.
        The
        purchase price of the Shares that may be purchased by Director pursuant to
        the
        exercise of this Option shall be $2.40 per Share, which has been determined
        to
        be not less than the fair market value of the Shares on the Date of Grant
        of
        this Option. For the purpose of this Agreement, the “fair market value” of the
        Shares shall be determined in accordance with the definition of “fair market
        value” contained in the Plan. 

       

      4. Exercise
        of Option / Vesting Schedule.
        This
        Option shall vest and may be exercised, in whole or part, according to the
        schedule described below. 

       

      This
        Option may be exercised in whole or part, by written notice to the Company
        at
        its principal executive office addressed to the attention of its General
        Counsel, at any time and from time to time after the Date of Grant hereof,
        provided that the Option or portion thereof has vested and may be purchased
        in
        accordance with the following schedule:

       

      
        	
                Vesting
                  Date

              	
                Number
                  of Shares

                That
                  Vest and May Be Purchased

                 

              
	
                December
                  15, 2006

              	
                Up
                  to 20,000 Shares, contingent upon achieving the objectives described
                  in
                  clause (a) below and Exhibit A

              
	
                December
                  15, 2007

              	
                Up
                  to 20,000 Shares, contingent upon achieving the objectives described
                  in
                  clause (b) below and Exhibit B

              

      

      

      (a) Options
        to purchase 20,000 Shares vest based on the Company’s fiscal year (“FY”) 2006
        performance/service:
        5,000
        of these Options vest on December 15, 2006, provided that Director continues
        to
        serve as the Company’s Chairman of the Board through September 30, 2006. All or
        a portion of the remaining 15,000 of these Options will vest on December
        15,
        2006 based on the Company’s performance against target in FY 2006 on the three
        measurements described in Exhibits A and C, and also conditioned upon Director’s
        continued service as Chairman of the Board through September 30,
        2006.

      

      (b) Options
        to purchase 20,000 Shares vest based on FY 2007
        performance/service:
        5,000
        of these Options vest on December 15, 2007, provided that Director continues
        to
        serve as the Company’s Chairman of the Board through September 30, 2007. All or
        a portion of 15,000 of these Options will vest on December 15, 2007 based
        on the
        Company’s performance against target in FY 2007 on the three measurements
        described in Exhibits B and C, and also conditioned upon Director’s continued
        service Chairman of the Board through September 30, 2007.

      

      In
        the
        event that all or a portion of the Option does not vest because the conditions
        set forth herein or in Exhibits A and/or B are not satisfied, the portion
        of the
        Option that does not vest will automatically terminate on the date when it
        would
        otherwise vest, and shall not be exercisable by Director. 

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      No
        portion of this Option shall not be exercisable in any event after November
        18,
        2012 at 12:00 a.m. 

      

      5. Binding
        Effect.
        This
        Agreement shall be binding upon and inure to the benefit of any successors
        to
        the Company and all persons lawfully claiming under Director. In the event
        of
        conflict between any of the provisions in this Agreement and provisions in
        the
        Plan, the provisions of the Plan will govern. 

       

      6. Governing
        Law and Dispute Resolution.
        This
        Agreement and the Option granted hereunder, shall be governed by, and construed
        in accordance with the laws of the State of Texas, without regard to its
        principles of conflicts of law. Any and all controversies, claims and
        differences arising out of or relating to the Option granted under this
        Agreement which cannot be settled by good faith negotiation between the parties
        will be finally settled by binding arbitration brought within three (3) months
        of the termination of the Option, with the date of termination to be governed
        by
        the provisions of the Plan and this Agreement. The binding arbitration will
        be
        conducted in accordance with the then existing rules of the American Arbitration
        Association (“AAA”), by one arbitrator. In the event of any conflict between
        such rules and this paragraph, the provisions of this paragraph shall govern.
        Upon the written demand of either party, the parties shall appoint a single
        arbitrator acceptable to both parties. Arbitration proceedings shall be held
        in
        Houston, Texas. The decision of the arbitrator shall be final and binding
        upon
        the parties hereto, not subject to appeal, and shall deal with the questions
        of
        interest, cost of the arbitration, and all matters relevant thereto. Judgment
        upon the award or decision rendered by the arbitrator may be entered in any
        court having jurisdiction thereof, or application may be made to such court
        for
        a judicial recognition of the award or any order of enforcement thereof as
        the
        case may be.

       

      IN
        WITNESS WHEREOF,
        the
        Company has caused this Agreement to be duly executed by its officer thereunto
        and duly authorized, and Director has executed this Agreement, to be effective
        as of the Date of Grant set forth above. 

       

                                     

      

      
        	ICO,
                INC.	 
	 	 
	
                By:

              	
                /s/
A.
                  John Knapp, Jr.

              
	 	
                A.
                  John Knapp, Jr.

              
	 	
                President
                  and Chief Executive Officer

              

      

       

                                    

       

      
        	DIRECTOR
	 
	
                /s/
Gregory
                  T. Barmore

              
	
                Gregory
                  T. Barmore

              

      

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
        A to Stock Option Agreement

       

      Matrix
        for Vesting of FY 2006 Options

      

      
        	
                Measurement

              	
                Weighting

              	
                FY
                  '06 Minimum

              	
                FY
                  '06 Target

              	
                CEO
                  pay-out at target

              
	
                ICO,
                  Inc. Consolidated Operating Income

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                ICO,
                  Inc. Consolidated Investment Turnover

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                ICO,
                  Inc. Consolidated ROE 

              	 	 	 	 
	
                Vesting
                  Over Time

              	
                 

              	 	
                 

              	
                 

              
	
                Total

              	
                 

              	 	 	
                 

              

      

      

      

      

      See
        Exhibit C for explanation of measurement definitions, vesting calculation
        information, and additional provisions regarding vesting.

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Exhibit
        B to Stock Option Agreement

       

      Matrix
        for Vesting of FY 2007 Options

       

      
        
          	
                  Measurement

                	
                  Weighting

                	
                  FY
                    '07 Minimum

                	
                  FY
                    '07 Target

                	
                  CEO
                    pay-out at target

                
	
                  ICO,
                    Inc. Consolidated Operating Income

                	
                   

                	
                   

                	
                   

                	
                   

                
	
                  ICO,
                    Inc. Consolidated Investment Turnover

                	
                   

                	
                   

                	
                   

                	
                   

                
	
                  ICO,
                    Inc. Consolidated ROE 

                	 	 	 	 
	
                  Vesting
                    Over Time

                	
                   

                	 	
                   

                	
                   

                
	
                  Total

                	
                   

                	 	 	
                   

                

        

         

         

      

      

      See
        Exhibit C for explanation of measurement definitions, vesting calculation
        information, and additional provisions regarding vesting.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Exhibit
        C to Stock Option Agreement

      

      Explanation
        of Measurement Definitions and Summary of Terms of Proposed Option
        Grants

      

      

      Measurement
        definitions

      

      
        	·  	
                “Operating
                  Income”:
                  Earnings before interest and taxes, excluding non-recurring charges.
                  Note
                  that Operating Income shall include expenses for bonuses payable
                  to the
                  CEO, Group Presidents and CFO pursuant to the incentive plans applicable
                  to them. Non-recurring charges that are excluded from the calculation
                  of
                  Operating Income shall consist of impairment, restructuring and
                  other
                  charges included in ICO's audited financial statements. Additionally,
                  Operating Income shall exclude, on a pro-forma basis, the effect
                  of
                  discontinued operations (including plants that are shut
                  down).

              

      

      

      
        	·  	
                “Investment
                  turnover”: Trailing
                  twelve months revenue divided by the “Average Invested Capital Base” for
                  the previous thirteen month-end periods. “Average Invested Capital Base”
                  is defined as the average total assets minus current liabilities,
                  excluding funded debt (i.e. interest bearing debt.), calculated
                  using the
                  previous thirteen month-end
                  periods.

              

      

      

      
        	·  	
                “ROE”:
                  Net income from continuing operations, minus preferred dividends
                  (whether
                  paid or accrued towards Convertible Preferred Stock liquidation
                  preference), divided by Stockholders' equity, less the liquidation
                  preference of Convertible Preferred Stock. For purposes of this
                  calculation, Stockholders' equity and liquidation preference balances
                  shall be averaged using the previous four (4) quarter-end balances,
                  plus
                  the prior year-end balance (e.g. for FY 2006 calculation the FY
                  2005
                  previous year end-balance plus the four quarter-end balances of
                  fiscal
                  year 2006).

              

      

      

      

      Additional
        Terms of Option Grants

      

      
        	·  	
                Actual
                  results between the "minimum" and "target" are interpolated assuming
                  zero
                  Options vest if the actual results equal the results described
                  in the
                  "minimum" column, and 100% of the Options in a given measurement
                  row vest
                  if the results equal or exceed the “target” column (therefore the midpoint
                  between the "minimum" and the "target" results in any given measurement
                  row result in 50% of the Options at target being vested).
                  

              

      

      

      
        	·  	
                Upon
                  the circumstances described in Section 6.3 (pertaining to sale
                  or merger
                  of the Company) of the Company’s 1998 Employee Stock Option Plan (“1998
                  Plan”), unvested Options shall vest in accordance with Section 6.3 of
                  the
                  1998 Plan, as if such unvested Options were Options granted under
                  the 1998
                  Plan, with the following exception: the Options referenced in the
                  row in
                  both Exhibits A and B entitled "Vesting over time" above shall
                  only vest
                  in proportion to service as Chairman of the Board as of the date
                  of the
                  sale or merger (e.g. if a sale or merger was to close on January
                  1, 2007,
                  only 3/12ths of the Director’s 5,000 Options referenced in the row
                  entitled “Vesting over time” for FY 2007 would
                  vest).

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