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Recent version  (BF0171.DOC;8)

HELIX TECHNOLOGY CORPORATION

EMPLOYMENT AGREEMENT

	
Mr. Robert J. Lepofsky
	
November 10, 2003

     You are presently serving as President and Chief Executive Officer of Helix Technology Corporation (the "Company").  The Company desires to set forth the terms and conditions of your continued employment by the Company.  Accordingly, the Board of Directors (the "Board") of the Company has authorized the Chairman of the Board to enter into this Employment Agreement with you, which amends and restates the agreement dated February 11, 1999 between you and the Company.

1.   Position and Responsibilities.  The Company agrees to employ you, and you agree to accept employment by the Company, for the Term of Employment hereinafter defined, in such executive capacities as the Board shall determine.  It is the present intention of the parties that during the Term of Employment you shall, subject to the right of the Board to elect and to remove officers and to reassign officers as provided by law and the By-Laws of the Company, have the titles of President and Chief Executive Officer of the Company and in such capacities shall have general charge and supervision of the Company, reporting directly to the Board.  Except as otherwise provided herein, you covenant and agree, during the Term of Employment, to devote all of your time and attention and to give your best efforts and skill exclusively to furthering the business and interests of the Company.  You shall have all powers and authority as shall be reasonably required to enable you to discharge your duties in an efficient manner, consistent with the powers and authority granted to other, senior executives of the Company.  At all times during the Term of Employment the Company shall furnish you with a private office, secretarial help, and such other facilities, services, perquisites and appointments as are suitable to your senior executive position and adequate for the performance of your duties, none of which shall be inferior in any degree to those facilities, services, perquisites and appointments to which you are presently accustomed as President and Chief Executive Officer.

2.   Term of Employment.  The "Term of Employment" as used herein shall mean the period from February 11, 1999, through February 10, 2007; provided, however, that your employment may be earlier terminated as hereinafter set forth (and only as hereinafter set forth), in which event the Term of Employment shall mean the period from February 11, 1999, through the effective date of such earlier termination.  The Term of Employment shall be so earlier terminated:  (i) on the date of your death, or (ii) on the date you become disabled for a continuous period of 180 days (as determined in good faith by the Board), or (iii) if you should voluntarily terminate your employment with the Company, on the date specified in your resignation to the Company, with the Company having the right to require you to stay up to 90 additional days after such date (by written notice changing such date of termination to a date certain within such 90 day period) or to accelerate the date of termination (by written notice changing such date of termination to a date certain), or (iv) if the Board should terminate your employment with the Company for any reason whatsoever, other than Cause (as hereinafter 

 

defined), on the date specified in the Board's written notice of termination to you which date must be at least 90 days after the date of such notice unless you otherwise agree, or (v) if the Board should terminate your employment with the Company for Cause, on the date specified in the Board's written notice of termination to you subject to the provisions of subparagraph 2A below, or (vi) if there occurs a Change in Control of the Company (as hereinafter defined), upon your termination of employment for Good Reason (as hereinafter defined) on or before the third anniversary of a Change in Control; or (vii) if the Board should terminate your employment with the Company for any reason whatsoever, other than Cause (as hereinafter defined), death or disability, in each case, on or before the third anniversary of a Change in Control, or (viii) if there occurs a Change in Control of the Company (as hereinafter defined), on the date specified in your resignation to the Company, with the Company having the right to require you to stay up to 90 additional days after such date (by written notice changing such date of termination to a date certain within such 90 day period) or to accelerate the date of termination (by written notice changing such date of termination to a date certain).

2.A.   Termination for Cause.  For purposes of this Agreement Termination for Cause shall mean termination of the Term of Employment by the Board in its sole judgment for (a) gross neglect by you of your duties hereunder after written notice and an opportunity to cure, or (b) commission by you of a material act of dishonesty or moral turpitude, or (c) your indictment for commission of a material crime on the basis of alleged facts of such a serious and heinous nature that the Board has reasonable cause to believe that you cannot effectively discharge your duties and responsibilities hereunder, or (d) your conviction for commission of a material, business-related crime.  Termination for Cause can only be effected by the Board by written notice to you, which notice must be given within 5 days following a hearing before the Board at which you will have an opportunity to answer the charges constituting Cause.  The hearing before the Board can be held only after at least 20 days written notice to you (unless you agree to a shorter period) of the date and time of the hearing and the nature of the charges constituting Cause.  At the time of the notice of the hearing or at any time thereafter but prior to the Board's decision following the hearing, the Board may immediately relieve you of your duties and responsibilities hereunder pending its decision.

2.B.   Change in Control.  For purposes of this Agreement, a "Change in Control" of the Company shall mean:

(i)  a change in control, not approved by a resolution of the Board, of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the Company is in fact required to comply therewith;

(ii)  any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the 

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Company representing 50% or more of the combined voting power of the Company's then outstanding securities;

(iii)  during any period of twenty-four (24) consecutive months (not including any period prior to the date of this Agreement), individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraphs (ii), (iv) or (v) of this Section 2B) whose election by the Board or nomination for election by the stockholders of the Company was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

(iv)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or entity, other than (A) a merger or consolidation resulting in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no "person" (as hereinabove defined) acquires 50% or more of the combined voting power of the Company's then outstanding securities; or

(iv)  the stockholders of the Company approve a plan of complete liquidation of the Company or there is consummated the sale or disposition by the Company of all or substantially all of the Company's assets.

2.C.   Termination for Good Reason. For purposes of this Agreement, "Good Reason" shall mean, without your express written consent, the occurrence of any one or more of the following events:

(i)  a material breach of this Agreement by the Company;

(ii)  a material reduction in your responsibilities, authorities or duties, all as contemplated by Paragraph 1 hereof, (including by reason of a substantial reduction in the size of the Company or other substantial change in the character or scope of the Company's operations);

(iii)  a reduction in your annual Base Salary as in effect on the date hereof or as may be increased from time to time;

(v)  a material reduction of any benefit enjoyed by you or the failure to continue your participation in any incentive compensation plan, unless a plan providing a substantially similar economic opportunity is substituted or all senior executives suffer a substantially similar reduction or failure; or

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(vi)  the relocation of your office to a location more than 40 miles from Boston, Massachusetts.

Your right to terminate your employment for Good Reason shall not be affected by your incapacity due to physical or mental illness.  Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

3.   Compensation.

3.A.   Base Salary.  As compensation for your services, the Company shall pay to you, in equal weekly installments, a Base Salary at the annual rate of $390,000, which rate has been effective since January 1, 1999, plus such additional amounts as may be determined from time to time by the Board in its sole discretion and designated as increases in Base Salary.  Any increase in Base Salary voted by the Board (including increases since January 1, 1999) may not be subsequently reduced or eliminated without your consent, except that your Base Salary may be reduced by the Board as part of a general reduction of executive salaries.

3.B.   Incentive Compensation.  During the Term of Employment the Company will pay you Incentive Compensation in the sole discretion of the Board.

3.C.   Fringe Benefits.  You shall be entitled to participate, during the Term of Employment, regardless of your position in the Company, in all benefits, plans, policies, programs, arrangements, customs or practices, then existing and made available generally to other senior executives of the Company, including without limitation, pension or other retirement benefits, life insurance, health insurance, stock option or stock award plans, sickness or disability plans and additional year-end or other profit-sharing, incentive or deferred compensation arrangement.  You shall also be entitled, during the Term of Employment, to the benefit of any rights of indemnification or reimbursement, in favor of senior executives of the company as the same may be in effect from time to time.  In addition, you shall be entitled to reasonable annual vacations which shall be at such time or times as shall be mutually agreed upon between you and the Company and shall be of lengths substantially equal to the lengths of vacation taken by other senior executives of the Company.  If at any time, during the Term of Employment, you shall not be serving as President and Chief Executive Officer, the Company shall nevertheless continue providing you, in your new position, with all such benefits to which you became entitled as President and Chief Executive Officer.  The amounts of any such benefits paid to you shall not be considered Base Salary or Incentive Compensation for purposes of this Agreement.

Notwithstanding anything herein to the contrary, you shall be entitled to participate in the Company's life insurance, health insurance, sickness and disability plans during any period of disability following termination of employment on account of disability pursuant to subparagraph (ii) of Paragraph 2, or during any period for which Base Salary is paid you following termination of employment pursuant to subparagraphs (iv), (vi), (vii) or (viii) of Paragraph 2.

3.D.   Spendthrift.  Notwithstanding anything to the contrary contained in this Agreement, your right to any amounts payable to you under subparagraphs 3A through 3C above shall not be

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assignable except that payments to which you are entitled after death may be made to the legal representative of your estate or to your designated beneficiaries.

4.   Non-Qualified Stock Option.  The Company has granted to you a non-qualified stock option (the "Option") under its 1996 Equity Incentive Plan to purchase two hundred thousand (200,000) shares of the Company's Common Stock at an option price of $20.8125 per share, which price was equal to the mean between the highest and lowest quoted selling prices for the Company's Common Stock on the NASDAQ National Market on February 11, 1999, the date of grant of the Option.  The Option was granted by the Company pursuant to, and is subject to the terms and conditions of, its 1996 Equity Incentive Plan (the "Plan"), a copy of which is attached hereto and made a part hereof as Exhibit A (which terms and conditions are hereby incorporated herein by reference as fully as if set forth herein, except if contrary or supplementary terms are set forth in this Employment Agreement, in which case such terms shall take precedence over those in the Plan or the related grant agreement).  The Option shall become exercisable in eight (8) equal annual cumulative installments of 25,000 shares each, beginning on the first anniversary of the date of grant with the eighth cumulative and final installment in the amount of 25,000 shares becoming exercisable on the eighth anniversary of the date of grant and with the entire option expiring on May 11, 2007, three months following the eighth anniversary of the date of grant.

5.   Treatment of Option Upon Termination After a Change in Control of the Company.  Notwithstanding any other provision of this Agreement, if following a Change in Control of the Company (as previously defined) the Term of Employment is terminated for any reason, other than by the Board pursuant to subparagraph (v) of Paragraph 2 above, the Option shall become exercisable in its entirety on the date of such termination and shall remain exercisable for 1 year thereafter in accordance with its terms.

6.   Compensation Upon Termination.  In the event your Term of Employment is terminated pursuant to Paragraph 2 above, you shall receive compensation as provided in Paragraph 3 above as follows.

(i)  Death, Disability, Voluntary Termination.  In the event your Term of Employment hereunder is terminated pursuant to subparagraphs (i) through (iii) of Paragraph 2 above, then you or the legal representatives of your estate or your designated beneficiaries shall receive your Base Salary, and a proportionate part of your Incentive Compensation up to, but not after, the date of termination of your employment with the Company.  In the case of disability the Company shall continue to pay you 60% of your Base Salary as it exists on the date of termination, less any payments to you under the Company's long-term disability protection plan or other plan, through the period beginning on termination of your employment with the Company by reason of disability and ending on your normal retirement date as defined in the Company's pension plan.

(ii)  Termination for Other than Cause.  In the event the Board should terminate your employment with the Company pursuant to subparagraph (iv) of Paragraph 2 above or you should terminate your employment with the Company pursuant to subparagraph (viii) above of Paragraph 2 above, you shall receive your Base Salary and a proportional part of your Incentive Compensation up to the date of termination of your employment with the Company, and you

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shall receive counseling and out-placement services (not to exceed $20,000) if needed, and you shall also receive Base Salary for the period through February 10, 2007, or for two years following the date of termination, whichever period is shorter. Notwithstanding the foregoing sentence, the amount of compensation received by you during such second year or part thereof if any on account of subsequent employment shall be offset dollar for dollar against the Company's obligation to pay you Base Salary during such second year period as provided above.  In the event the Board should terminate your employment with the Company pursuant to subparagraph (iv) of Paragraph 2 above prior to a Change in Control, the Option shall become exercisable on the date of such termination with respect to an additional three (3) installments but not more than the number of installments remaining to become exercisable.  For example, if your Term of Employment were terminated on February 1, 2003, with a remaining term hereof ending February 10, 2007, and with five (5) additional installments remaining to become exercisable with respect to the Option, and the Option had as of February 1, 2003, already become exercisable with respect to three (3) installments of 25,000 shares each, then your Option would become exercisable on such date of termination with respect to an additional three (3) installments of 25,000 shares each and shall remain exercisable for one year thereafter in accordance with its terms.

(iii)  Termination for Good Reason or other than Cause on or Prior to Third Anniversary of a Change in Control.  If your employment should terminate pursuant to subparagraph (vi) or (vii) of Paragraph 2 above, you shall receive the benefits provided below:

(A)  the Company shall pay you your Base Salary and a proportional part of your Incentive Compensation up to the date of termination of your employment with the Company, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due, except as otherwise provided below;

(B)  in lieu of any further salary payments to you for periods subsequent to the date of termination, the Company shall pay as severance pay to you a lump sum severance payment (together with the payments provided in paragraphs (C), (D) and (E) below, the "Severance Payments") equal to three (3) times the sum of (1) the greater of (a) your annual rate of Base Salary in effect on the date of termination or (b) your annual rate of Base Salary in effect immediately prior to the Change in Control of the Company and (2) the greater of (a) the average of your Incentive Compensation for the last three annual periods prior to the date of your termination or (b) the average of your Incentive Compensation for the last three annual periods immediately prior to the Change in Control;

(C)  for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, disability, accident and health insurance benefits substantially similar to those which you are receiving immediately prior to the date of termination.  Benefits otherwise receivable by you pursuant to this Subsection 4(iii)(C) shall be reduced to the extent comparable benefits are actually received by you from a subsequent employer during the thirty-six (36) month period following your termination, and any such benefits actually received by you shall be reported to the Company;

 

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(D)  in addition to the retirement benefits to which you are entitled under the Helix Employees' Pension Plan, any supplemental retirement or excess benefit plan maintained by the Company or any of its subsidiaries or any successor plans thereto (hereinafter collectively referred to as the "Pension Plans"), the Company shall pay you in cash a lump sum equal to the excess of (a) the actuarial equivalent of the retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at age sixty-five (65) or any earlier date, but in no event earlier than the third anniversary of the date of termination, whichever annuity the actuarial equivalent of which is greatest) which you would have accrued under the terms of the Pension Plans (without regard to the limitations imposed by Section 401(a)(17) of the Code, or any amendment to the Pension Plans made subsequent to a Change in Control of the Company and on or prior to the date of termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the date of termination) for thirty-six (36) additional months and as if you had accumulated thirty-six (36) additional months of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the sum of the amounts determined under clause (1) of Section 6(iii)(B) hereof over (b) the actuarial equivalent of the vested retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at age sixty-five (65) or any earlier date, but in no event earlier than the date of termination, whichever annuity the actuarial equivalent of which is greatest) which you had then accrued pursuant to the provisions of the Pension Plans.  For purposes of this Subsection, "actuarial equivalent" shall be determined using the same actuarial assumptions utilized in determining the amount of alternate forms of benefits under the Helix Employees' Pension Plan immediately prior to the Change in Control of the Company;

(E)  the payments provided for in Subsection (iii) shall be made not later than the fifth day following the date of termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to you on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the date of termination.  In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you payable on the fifth day after demand therefor by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code); and

(F)  You shall not be required to mitigate the amount of any payment provided for in this Section 6(iii) or 6A hereof by seeking other employment or otherwise, nor, except as specifically provided in Sections 6(iii)(C) above, shall the amount of any payment or benefit provided for in this Section 6 or Section 6A hereof be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise, except that you shall refund to the Company, without interest,

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the amount of compensation earned by you during the three years following termination up to the amount paid under subparagraph (iii)(B) of this Paragraph 6 in excess of one times the sum of Base Salary and Incentive Compensation specified therein.

(iv)  Termination for Cause.  In the event your Term of Employment hereunder is terminated by the Board pursuant to subparagraph (v) of Paragraph 2 for Cause, then the Company shall not be obligated to pay you any Base Salary or Incentive Compensation as provided above, beginning as of the date of such termination.  The Board may in its sole judgment terminate your Term of Employment hereunder for Cause following any indictment of you for commission of a material crime as provided in Paragraph 2A above.  In the event of reversal of any termination for Cause as a result of arbitration, or in the event that there is no conviction following your indictment (and subsequent termination for Cause) or that the conviction is reversed on appeal, you shall receive (A) if your employment was terminated prior to a Change in Control or after the third anniversary of a Change in Control, any amounts of Base Salary, the payment of which was suspended hereunder, beginning on the date of such termination for Cause and ending on the date of your reinstatement with the Company under this Agreement or February 10, 2007, whichever sooner shall occur, with interest computed thereon at the prime rate prevailing at Fleet National Bank during the period of such suspension or (B) if your employment was terminated on or prior to the third anniversary of a Change in Control, the benefits and payments provided in Paragraph 6(iii), with interest computed on the Severance Payments at the prime rate prevailing at Fleet National Bank during the period of such suspension.

6.A.   Taxes.

(i)  Withholding.  All payments to be made to you under this Agreement will be subject to any required withholding of federal, state and local income and employment taxes.

(ii)  Payment Limitation.  Notwithstanding anything in this Agreement to the contrary, if the Company determines, based on the opinion of its independent accountants serving as such immediately prior to the Change in Control (the "Accounting Firm"), that any of the payments provided for in this Agreement, together with any other payments that must be included in such determination would constitute an "Excess Parachute Payment" (as defined in Section 280G of the Code, and proposed and final regulations thereunder), the payments pursuant to this Agreement shall be reduced to the maximum amount that would permit a determination that you have not received an Excess Parachute Payment (the "Maximum Amount") unless the after-tax amount payable to you hereunder without regard to the foregoing limitation ("Uncapped After-Tax Amount," as defined below) exceeds the after-tax amount payable to you with regard to such limitation ("Capped After-Tax Amount," as defined below) by 10% or more.  Any such determination or reduction in amounts payable pursuant to this Agreement shall be made in accordance with the following provisions.

(A)  For purposes of determining whether the amounts payable to you pursuant to this Agreement shall be reduced to the Maximum Amount, the following terms shall have the means indicated.

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(x)  The "Uncapped After-Tax Amount" shall be equal to the sum of the amounts payable pursuant to this Agreement (without regard to this paragraph 6A(ii)) and pursuant to all benefit and compensation plans and arrangements that must be included in determining whether an Excess Parachute Payment has been made, less the Income Tax Amount on such sum and the 20% excise tax under Section 4999 of the Code that would be due on all Excess Parachute Payments.

(y)  The "Capped After-Tax Amount" shall be equal to the sum of the Maximum Amount and all amounts payable pursuant to all benefit and compensation plans and arrangements that must be included in determining whether an Excess Parachute Payment has been made, less the Income Tax Amount on such sum.

(z)  The "Income Tax Amount" shall be equal to the amount of federal, state and local income taxes and your share of Federal Insurance Contributions Act taxes that would be due on an amount (after taking into account the deductibility of state and local income taxes for federal income tax purposes) if the highest marginal federal, state and local income tax rate in effect at the time of the Change in Control were imposed on the value of the payments assuming that the amounts payable pursuant to this Agreement and all benefit and compensation plans and arrangements shall be treated as paid in full on the date of the Change in Control.

(B)  If the Accounting Firm determines that payments pursuant to this Agreement should be reduced to the Maximum Amount, the Company shall promptly give you notice to that effect and a copy of the detailed calculation thereof, and you may then elect, in your sole discretion, which and how much of the payments shall be eliminated or reduced (as long as after such election the present value of the aggregate payments equals the Maximum Amount), and shall advise the Company in writing of your election within 10 days of your receipt of notice.  If no such election is made by you within such period, the Company may elect which and how much of the payments shall be eliminated or reduced (as long as after such election the present value of the aggregate payments equals the Maximum Amount) and shall notify you promptly of such election.  All determinations made by the Accounting Firm under this paragraph 6A shall be based upon Sections 280G and 4999 of the Code and on proposed or final regulations for applying those Code sections, or on substantial authority within the meaning of Section 6662 of the Code, shall be binding upon the Company and you and shall be made within 60 days of your termination of employment.  As promptly as practicable following such determination, the Company shall pay to or distribute for your benefit such payments as are then due to you under this Agreement and shall promptly pay to or distribute for your benefit in the future such payments as become due to you under this Agreement.

(C)  As a result of possible uncertainty in the application of Section 280G of the Code at the time of the determinations by the Accounting Firm hereunder, amounts may have been paid that should not have been paid ("Overpayment"), or additional amounts may not have been paid that could have been paid ("Underpayment"), in each case, consistent with the calculations required to be made hereunder.  In the event that the Internal Revenue Service asserts a deficiency against you or the Company in such a case and the Accounting Firm determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to you from the date such Overpayment was made in an amount equal to the value of such Overpayment, which loan you shall repay to the Company together with interest at the applicable

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federal rate under Section 7872(f)(2)(B) of the Code within 60 days after receipt by you of written notice of such determination by the Accounting Firm, including the amount of the loan and interest calculation; provided, however that no such loan shall be deemed to have been made and no amount shall be payable by you to the Company if and to the extent such deemed loan and repayment with interest would not eliminate the excise tax under Section 4999 of the Code, or the disallowance of the deduction under Section 280G(a) of the Code, for the amounts previously paid to you.  In the event that the Accounting Firm determines that an Underpayment has been made, such Underpayment shall be promptly paid by the Company to you, together with interest at the applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.

7.   Non-Competition.  For the period you receive payments under subparagraph (ii) of Paragraph 6 above following termination of your Term of Employment, you agree that you will not accept or continue to hold any position in any capacity, whether as employee, agent, consultant, investor, director or otherwise, with any person, firm or corporation, whose present or planned business is competitive with the business of the Company as it exists on the date of termination of your Term of Employment.  In the event your Term of Employment is terminated pursuant to subparagraph (v), (vi) or (vii) of Paragraph 2 above, the foregoing non-competition covenant shall apply for one (1) year following the date of termination.  The foregoing non-competition covenant shall not apply to you in any given instance if the Board waives said covenant in writing with respect to that instance.  Ownership by you of less than one percent (1%) of the outstanding stock or securities in any business enterprise shall not in itself be deemed to be engaging in any activity prohibited by this paragraph.

8.   Trade Secrets.  If you have not already done so, you agree to execute and abide by the Company's standard form of agreement presently in effect protecting the Company's inventions, patents, and proprietary and confidential information, and you also agree to execute and abide by any subsequent similar agreement generally in effect for the Company's officers and key employees.

9.   Expenses.  The Company agrees that it will, during the term of Employment, reimburse you, upon submission of vouchers or other appropriate evidence of expenditure, in accordance with its policies from time to time established with respect to senior executives generally, for all travel, entertainment and other expenses reasonably incurred by you on behalf of the Company within the scope of your duties.

10.   Merger, Sale of Assets.  Your right to payments hereunder from and after termination of the Term of Employment constitutes an unsecured claim against the general assets of the Company.  The Company agrees that it will at all times from and after termination of the Term of Employment do or cause to be done all things necessary to maintain a solvent position, to preserve and keep in full force and effect its corporate existence, rights and franchises, and to conduct and carry on the Company's business.  Nothing herein contained shall prevent the Company from at any time being merged or consolidated into or with any corporation or corporations, or selling or otherwise transferring all or substantially all of its assets to any person, firm or corporation, provided that the provisions of this Agreement shall be binding upon and shall inure to the benefit of the corporation resulting from such merger or consolidation, or the person, firm or corporation to which such assets shall be sold or transferred.

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11.   Arbitration.  Any controversy or claim arising out of or in connection with this Agreement shall be settled by arbitration in accordance with the rules then obtaining of the American Arbitration Association.  Such controversies shall be submitted to three arbitrators, one arbitrator being selected by the Company, one arbitrator being selected by you, and the third being selected by the two so selected by the Company and you, or if we cannot agree upon a third, by the American Arbitration Association.  In the event that either the Company or you, within one month after notification of any demand for arbitration hereunder, shall not have selected its arbitrator and given notice thereof by registered or certified mail to the other party, such arbitrator shall be selected by the American Arbitration Association.  Confirmation of any award in any such arbitration may be had in any court having jurisdiction of the person against whom such award is rendered.  The Company shall immediately upon request pay all costs and expenses, including, without limitation, all legal fees incurred by you, whether as plaintiff or defendant, in any arbitration or legal proceeding related to such arbitration proceeding in connection with this Agreement, provided that such arbitration or legal proceeding occurs following a Change in Control of the Company.

12.   Unconditional Obligation.  The Company's obligation to pay Base Salary and Incentive Compensation (if any) to you in accordance with this Agreement shall be unconditional and absolute and shall not be subject to offset, reduction, withholding or suspension by the Company by virtue of any claims which the Company may allege against you, it being agreed that the Company's sole remedy with respect to any such claims shall be to seek redress thereof through arbitration in accordance with Paragraph 11.  Base Salary due you hereunder shall always be paid in equal weekly installments or in accordance with the policy as in effect for executive officers of the Company at the time of payment.

13.   Binding Agreement.  The provisions of this Agreement shall be binding upon you, your executors, administrators, and legal representatives, and upon the Company, its successors and assigns.  This Agreement is not assignable by you without the Company's written consent.

14.   Construction.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.

15.   Severability.  In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to time, duration, geographical scope, activity or subject, it shall be construed, by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

16.   Waivers and Modifications.  No waiver by either party of any breach by the other of any provision hereof shall be deemed to be a waiver of any later or other breach hereof, or a waiver of any other provision of this Agreement.  This Agreement sets forth all of the terms of the understandings between the parties with reference to the subject matter set forth herein (except with respect to those matters set forth in Section 17 of the employment agreement dated February 11, 1999 between you and the Company) and may not be waived, changed, amended,

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discharged or terminated orally or by any course of dealing between the parties, but only by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought to be enforced.

17.   Legal Effect; Prior Stock Option.  This Agreement shall supersede all prior negotiations, commitments, understandings and agreements between you and the Company as to the terms of your employment (except with respect to those matters set forth in Section 17 of the employment agreement dated February 11, 1999 between you and the Company) and shall be effective in accordance with its terms.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative and its corporate seal to be hereunto affixed and you have hereunto set your hand and seal effective as of the 10th day of November, 2003.

	 	 	
HELIX TECHNOLOGY CORPORATION

	 	 	 
	 	 	 
	 	 	 
	 	
By:
	
/s/Marvin G. Schorr

	
	
	

	 	 	
Marvin G. Schorr

	 	 	
Chairman of the Board

	 	 	 
	 	 	
ACCEPTED AND AGREED TO:

	 	 	 
	 	 	 
	 	 	 
	 	
By:
	
/s/Robert J. Lepofsky

	
	
	

	 	 	
Robert J. Lepofsky

- 12 -Exhibit 10.1 - Parkey Employment Agmt

 

Exhibit 10.1 

EMPLOYMENT AGREEMENT 

This Employment Agreement ("Agreement") is entered into by and between ICO, Inc. (the "Company") and W. Robert Parkey, Jr. ("Employee"), to be effective as of February 2, 2004 (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  The Company agrees to employ Employee, and Employee agrees to be employed by the Company, beginning as of the Effective Date and continuing until the date of termination of Employee’s employment ("Termination Date"), subject to the terms and conditions of this Agreement. The "Employment Period," as used herein, shall mean the period commencing on the Effective Date, and ending on the Termination Date. The "Term," as used herein, shall mean the initial two years of the Employment Period, expiring at midnight of the day before the second anniversary of the Effective Date. At least six (6) weeks prior to the expiration of the Term, the board of directors ("Board") of the Company shall notify the Employee, in writing pursuant to Section 5.1, of the Board’s desire to continue Employee’s employment beyond the end of the Term. If the Board desires to retain the Employee, then a new employment agreement shall be negotiated, prepared, and put into effect prior to the end of the Term of this Agreement; however if the parties cannot agree to the terms of a new agreement by the expiration of the Term (or any mutually agreed to extension thereof), then Employee’s employment shall terminate at the end of the Term (or any mutually agreed to extension thereof), and shall be subject to 3.1(d). The Company shall be responsible for payment of up to $5,000 of Employee’s legal and accounting advisory expenses incurred in connection with the negotiation and execution of a new employment agreement between Employee and the Company. 

 

1.2  Beginning as of the Effective Date, Employee shall be employed as President and Chief Executive Officer of the Company, and shall be a member of the Board. 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. 

	
 

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    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 and Code of Business Ethics. 

 

1.4  Employee shall, during the Employment Period, devote Employee’s full 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"), or requires any significant portion of Employee’s business time. 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 such 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. 

	
 

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ARTICLE 2: COMPENSATION AND BENEFITS: 

2.1  During the Employment Period, the Employee shall receive a base salary ("Base Salary") of Three Hundred and Ten Thousand Dollars ($310,000) 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. During the Term, the Base Salary shall not be reduced. 

 

2.2  In addition to the Base Salary, the Employee shall be eligible, upon the conclusion of each fiscal year during the Employment Period, to receive an annual bonus (an "Annual Incentive Bonus"), pursuant to an Annual Incentive Bonus structure and formula that has been established and pre-approved by the Board. The Annual Incentive Bonus earned for a given fiscal year, if any, shall be paid in lump sum cash (subject to all legally required withholdings) on or before the last day of the first quarter of the following fiscal year (during or after the Term). Any Annual Incentive Bonus will be considered earned only if the Employee is employed on the October 1 st immediately following the fiscal year on which the bonus is calculated, unless a pro-rata bonus is due as specifically provided for in this Agreement. 

 

(a)  The bonus for the first fiscal year during the Employment Period (which shall be a partial year, ending on September 30, 2004) ("the "Year One Annual Incentive Bonus"), shall be calculated as follows: 

 

(i)   If EBITDA is less than $9.8 million, no Year One Annual Incentive Bonus shall be earned. 

 

(ii)   If EBITDA is greater than or equal to $9.8 million, but less than $12 million, the Year One Annual Incentive Bonus will be X% of Base Salary, where 

 

X = (EBITDA – 7,600,000)/ 88,000 

 

(iii)  If EBITDA is greater than or equal to $12 million, the Year One Annual Incentive Bonus will be Y % of Base Salary, where 

 

Y = (EBITDA – 6,000,000) /120,000 

 

For the purposes of the above formula, "EBITDA" is defined as the consolidated operating income or loss from continuing operations plus: (i) depreciation and amortization; (ii) impairment, restructuring, and other 

	
 

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costs, and (iii) stock option compensation expense. EBITDA is calculated and determined based on the Company’s audited financial statements. 

 

(b)   The Board, subject to the mutual agreement between the Employee and the Board, shall approve the structure and formula for calculating the Year Two Annual Incentive Bonus (for the fiscal year commencing on October 1, 2004), and for calculating the Annual Incentive Bonus for each fiscal year thereafter. The structure for calculating the Year Two Annual Incentive Bonus shall be similar to the structure for calculating the Year One Annual Incentive Bonus, but the formula shall be based on the Year Two business plan, as presented to and accepted by the Board. 

 

  2.3.  In addition to the Base Salary and other benefits afforded to Employee under this Agreement, on the Effective Date Employee shall receive options ("Options") to purchase 600,000 shares of the Common Stock of the Company ("Shares"). 

 

The Options shall be granted, vest, and, have an exercise price as follows:

 

(a)  Options to purchase 200,000 Shares, which shall be 100% fully vested on the first anniversary of the Effective Date, shall be granted at an exercise price of $1.25 per Share. Options to purchase 70,000 of the Shares referenced in this clause (a) shall be granted on the Effective Date, and to the extent permitted under the Internal Revenue Code (the "Code"), shall be Incentive Stock Options ("ISOs"). Options to purchase 130,000 of the Shares referenced in this clause (a) shall be granted within five (5) business days after the Company’s 2004 Annual Meeting of Shareholders, and in any event no later than April 1, 2004. 

(b)  Options to purchase 200,000 Shares, which shall be 100% fully vested on the second anniversary of the Effective Date, shall be granted at an exercise price of $1.75 per Share. Options to purchase 70,000 of the Shares referenced in this clause (b) shall be granted on the Effective Date, and to the extent permitted under the Code, shall be ISOs. Options to purchase 130,000 of the Shares referenced in this clause (b) shall be granted within five (5) business days after the Company’s 2004 Annual Meeting of Shareholders, and in any event no later than April 1, 2004. 

(c)  Options to purchase 200,000 Shares, which shall be 100% fully vested on the third anniversary of the Effective Date, shall be granted at an exercise price of $2.25 per Share. Options to purchase 70,000 of the Shares referenced in this clause (c) shall be granted on the Effective Date, and to the extent permitted under the Code, shall be ISOs. Options to purchase 130,000 of the Shares referenced in this clause (c) shall be granted within five (5) business days after the Company’s 2004 Annual Meeting of Shareholders, and in any event no later than April 1, 2004. 

	
 

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Notwithstanding the exercise prices outlined above, in the event that the Fair Market Value (as defined in the applicable stock option plan under which the options are granted) of the Common Stock on the last trading day immediately preceding the Effective Date is greater than the exercise price stated in any of clauses (a), (b), or (c) above, the exercise price for the referenced Options shall be the Fair Market Value of such Shares on the last trading day before the Effective Date. 

 

The Options shall expire on the seventh anniversary of the Effective Date. Notwithstanding the foregoing, upon termination of Employee’s employment for any reason then the options shall expire upon the first business day following the expiration of the three (3) month period after Employee’s Termination Date. 

 

The Options shall be granted under the terms of the Company’s 1994, 1995, 1996, and/or 1998 Employee Stock Option Plans, at the Company’s discretion, or on terms substantially identical to the terms in such plans, and subject to the Employee’s execution of option agreements in compliance with all terms and conditions of the applicable plans.

 

2.4  During the Employment Period, the Employee shall be entitled to participate in incentive, savings, and retirement plans, and other standard benefit plans afforded to executive-level 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 executive level 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.

 

2.5  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. Such expenses paid or reimbursed by the Company shall include, but not be limited to, the following: 

 

(a)  In lieu of use of a Company vehicle, and maintenance, repair, and insurance expenses associated therewith, the Employee shall receive a monthly vehicle 

	
 

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allowance in the sum of $700.00 ("Vehicle Allowance"), paid on the first payday of each month.

 

(b)  The Company shall pay or reimburse Employee for all business-related air travel. It is understood that all international travel shall be business class, and that the Employee’s spouse may accompany Employee on such international travel on an occasional basis through use of Platinum American Express "partner flies free" plan, or similar plans providing for the spouse to fly free when accompanying Employee. All domestic travel shall be coach class. 

 

(c)  The Company shall pay all costs associated with the Employee’s cellular telephone and cellular telephone service.

 

(d)  The Company shall pay for or reimburse Employee for all business-related expenses to attend, from time to time, President and CEO-related seminars or conferences that will serve to benefit the Company; and for the maintaining and/or increasing the level of contemporary executive management skills, that will serve to benefit the Company. 

 

2.6  During the Employment Period, the Employee shall be entitled to four weeks of vacation, fully paid, per calendar year. 

 

2.7  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. 

 

2.8  Following the end the of the Company’s 2004 fiscal year, the Board shall review the Employee’s performance to allow, within ninety days after the end of the 2004 fiscal year and subject to the Board’s conclusions in its performance review, for negotiations regarding increases in the Employee’s Base Salary, bonus structure, equity compensation, severance payment terms, and/or benefits. 

 

2.9  No amendment, modification, or repeal of Article Eleven of the Articles of Incorporation of the Company (as amended on or before the date hereof) or Article 7 of the Amended and Restated Bylaws of ICO, Inc., as amended October 5, 2001, shall have the effect of limiting or denying any indemnification rights with respect to actions of Employee occurring, or proceedings arising, prior to such amendment, modification, or repeal, which indemnification rights Employee would otherwise have been entitled to if such amendment, modification, or repeal had not been effectuated, and the provisions of Article 7 of the Amended and Restated Bylaws of ICO, Inc., as amended October 5, 2001, shall continue to apply to Employee with respect to actions taken or proceedings arising prior to such amendment, modification, or repeal, as if such amendment, modification or repeal had not been effectuated. Notwithstanding the foregoing, nothing in this Section 2.9 shall entitle Employee to indemnification (i) to any extent not permitted by the Texas Business Corporation Act, as amended from time to time, and (ii) 

	
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with respect to actions occurring at or after (but not as to actions of Employee occurring prior to) the time of such amendment, modification, or repeal that are the basis for Employee’s claim for indemnity to any extent that indemnity for such later actions of Employee is not permitted by such Articles of Incorporation or Bylaws as so amended, modified, or repealed. Employee’s rights to indemnification shall continue in effect after the termination of this Agreement, regardless of the cause of termination, for a period of five (5) years thereafter, and as to any claim for indemnification raised or in existence during that five-year period, Employee’s rights and the Company’s obligations under this Section 2.9 shall continue until such claim is resolved without further right of appeal . 

ARTICLE 3: TERMINATION OF EMPLOYMENT AND EFFECTS OF SUCH TERMINATION: 

3.1  (a) Employee’s employment shall be terminated during the Employment Period by reason of the following circumstances: 

 

(i)        Death of Employee.

 

(ii)     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. 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. 

 

(iii)      Voluntary Termination. "Voluntary Termination" shall mean a termination of employment at the election of Employee (other than for Good Reason, as defined in Section 3.2(b) below)). Employee will provide the Company with six (6) weeks advance notice of his intent to terminate his employment voluntarily. Employee shall continue to remain an employee of the Company through the six week notice period and will perform such duties, if any, assigned to him by the Company during the notice period. Notwithstanding the foregoing, the Company may, at its option, waive the Employee’s obligation to remain an employee during all or any portion of the six week notice period, in which case Employee’s employment shall cease immediately.

 

(iv)      Termination by Company for Cause. "Termination for Cause" shall mean a termination of employment immediately upon notice to the Employee from the Company that an event constituting "Cause" has occurred. For purposes 

	
 

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            of this Agreement, the term "Cause" shall be defined as: (a) an act of dishonesty or fraud; (b) a knowing and material violation of any written policy of the Company or applicable to the Company’s operations; (c) a knowing and material violation of an applicable law, rule, or regulation that exposes the Company to damages or liability; (d) a material breach of fiduciary duty; or (e) conviction of a felony. In the event that Employee is terminated for Cause, Employee shall be provided with notice of such termination in accordance with Section 5.1 below. 

 

(b)  In the event Employee’s employment terminates as a result of any of the circumstances described in 3.1(a)(i) through (iv) above, 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, except as specifically provided in this Section 3.1, and Employee shall receive payment, if any, for accrued and unused vacation days according to the Company’s current policy applicable to payment for unused vacation. In the event of termination for any of the reasons set forth in 3.1(a)(i) through (iv) above, Employee shall not be entitled to receive an Annual Incentive Bonus for the fiscal year in which the termination occurs, but shall be entitled to receive an Annual Incentive Bonus, if any, that has been earned but not yet paid to Employee for the fiscal year prior to the fiscal year in which the termination occurs. 

 

(c)  Notwithstanding anything contained in 3.1(b), in the event that Employee’s employment terminates as a result of death or permanent disability resulting from any accident or incident beyond Employee’s control that occurs while Employee is traveling on Company business or is in the course and scope of employment (excluding any accident or incident occurring when Employee is traveling within Houston and to or from his normal place of business or his residence), the preceding paragraph shall not apply, and instead Employee (or his Estate, as the case may be) shall be entitled to receive payment subject to and calculated in accordance with the provisions of Sections 3.2(a) and 3.2(a)(i) through (iv) below. 

 

(d)  In the event that Employee’s employment terminates upon the expiration of the Term because (i) the Board does not desire to continue Employee’s employment beyond the Term, (ii) the Employee does not desire to continue his employment beyond the Term, and/or (iii) after the Board has provided the Employee of notice of its desire to the retain the Employee beyond the end of the Term, the parties are unable to agree to the terms of a new agreement by the expiration of the Term (or any mutual extension thereof), then the Termination Date shall be the last day of the Term, and all future compensation to which Employee would otherwise be entitled and all future benefits for which Employee might otherwise be eligible shall cease and terminate as of the Termination Date (other than claims for benefits and payments to be payable after Termination Date under any of the Company’s health or welfare plans), and Employee shall receive payment, if any, for accrued and unused vacation days according to the Company’s current policy applicable to payment for unused vacation. Furthermore, if Employee’s employment ceases at the end of the Term pursuant to this Section 3.1(d), then Employee shall be entitled to receive the Year Two Annual Incentive Bonus, if any, in the event that it has been 

	
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earned but has not yet been paid to Employee, and shall be entitled to receive a pro-rated Annual Incentive Bonus calculated based on the first quarter (October 1 – December 31) of the Company’s 2006 fiscal year, to be paid within thirty (30) business days following the end of the Term.

 

3.2  The Company reserves the right to terminate Employee’s employment without cause. If the Company decides to terminate Employee without cause, it shall provide him with written notice of termination ("Notice of Termination"). The Notice of Termination shall specify the Termination Date. 

 

(a)  If the Termination Date occurs during the Term, Company shall pay Employee, within thirty (30) days after the Termination Date, and after Employee’s execution of a full release of all claims against the Company (excluding only claims for benefits and payments to be payable after Termination Date under any of the Company’s health or welfare plans, and claims for indemnification against third parties pursuant to Article 7 of the Amended and Restated Bylaws of ICO, Inc., as amended October 5, 2001), an "Early Termination Payment," in lump sum cash (subject to required taxes and withholdings) consisting of the following: 

 

(i)  pro rata Base Salary through the Termination Date, and in the event that the prior fiscal year’s Annual Incentive Bonus, if any, has been earned but not yet paid, such Annual Incentive Bonus for the prior fiscal year; and 

 

(ii)  payment, if any, for accrued and unused vacation days according to the Company’s current policy applicable to payment for unused vacation; and 

 

(iii)  a sum equal to Employee’s current annual Base Salary; and 

 

(iv)  a pro-rated portion of the Annual Incentive Bonus for the fiscal year during which the Termination Date occurs. Such pro-rated portion of the Annual Incentive Bonus will be calculated according to the following example: If the Termination Date occurs on the last day of the second quarter of the 2004 fiscal year, and EBITDA is on track to reach $12,000,000 by the end of the 2004 fiscal year (e.g. EBITDA has reached $6,000,000 as of the last day of the second quarter), Employee would be entitled to receive 1⁄2 (representing 182/364 days in the fiscal year) of the percentage of Base Salary that he would otherwise be entitled to receive if EBITDA reached $12,000,000 at the end of that fiscal year, so in this case he would be entitled to 25% (representing 1⁄2 of 50%) of his Base Salary. 

 

(b)  "Good Reason" shall mean a termination of employment by Employee under any one of the following circumstances: 

 

(i)  In the event of a material breach by Company of any material provision of this Agreement which remains uncorrected for thirty (30) days following written notice ("Material Breach Notice Period") of such breach by 

	
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Employee to the Board, Employee may terminate this Agreement provided that Employee provides the Board with written notice of such termination, specifying a Termination Date that is on or after the date of such written notice but within sixty (60) days after the expiration of the Material Breach Notice Period and more than forty-five (45) days prior to the expiration of the Term. 

 

(ii)  In the event that there is any material diminution of Employee’s job description, job role, responsibilities, and/or scope of position during the Term, Employee may terminate this Agreement upon written notice to the Board of Directors specifying a Termination Date that is on or after the date of such written notice and more than forty-five (45) days prior to the expiration of the Term. 

 

(iii)  If there is any amendment, modification, or repeal of Article Eleven of the Articles of Incorporation of the Company (as amended on or before the date hereof) and/or Article 7 of the Amended and Restated Bylaws of ICO, Inc. (as amended October 5, 2001) by the shareholders or the Board, which amendment, modification, or repeal shall have the effect of limiting or denying, except in any immaterial respect, any indemnification rights that Employee would otherwise be entitled to if such amendment, modification, or repeal had not been effectuated, then Employee may terminate this Agreement within thirty (30) days of the taking effect of such amendment, modification, or repeal, upon written notice to the Board.

 

In the event of such termination by Employee for Good Reason, Employee shall be entitled to an Early Termination Payment subject to and calculated in accordance with the provisions of Sections 3.2(a) and 3.2(a)(i) through (iv) above.

 

3.3.  Termination following a Change of Control 

 

(a)  For the purposes of this Agreement, "Change of Control" means any of the following events: (i) a merger, share exchange or consolidation in which the Company will not be the surviving entity (or survives only as a subsidiary of an entity), (ii) the sale or exchange by the Company all or substantially all of its assets to any other person or entity, (iii) the acquisition of ownership or control (including, without limitation, power to vote) by any person or entity, including a "group" as contemplated by Section 13(d)(3) of the 1934 Act, of more than 50% of the outstanding shares of the Company's voting stock (based upon voting power); provided , however , that a Change of Control will not include (A) any reorganization, merger, consolidation, sale, exchange, or similar transaction, which involves solely the Company and one or more entities wholly-owned, directly or indirectly, by the Company immediately prior to such event; or (B) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold 50% or more of the voting

	 
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 stock (based upon voting power) of (1) any entity that owns, directly or indirectly, the stock of the Company, (2) any entity with which the Company has merged, or (3) any entity that owns an entity with which the Company has merged.

 

(b)  A "COC Termination" shall be deemed to have occurred if (i) there is a Change of Control during the Term, and (ii) within the twelve (12) month period immediately following the Change of Control (but still within the Term) (A) the Employee’s employment terminates for any reason other than the circumstances described in Sections 3.1(a) through (e) above, (B) Employee is required to relocate over 100 miles from Houston, Texas; (C) Employee is required to commute to a location over 100 miles from the Company’s current corporate offices; (D) Employee’s Base Salary is materially reduced or any other material benefit of the Employee’s employment is materially reduced; or (E) there is any material diminution of Employee’s job description, job role, responsibilities, and/or scope of position. In the event of a COC Termination, the Company or successor in interest shall be obligated to pay employee, within thirty (30) days after the Termination Date, and after Employee’s execution of a full release of all claims against the Company (excluding only claims for benefits and payments to be payable after Termination Date under any of the Company’s health or welfare plans, and claims for indemnification against third parties pursuant to Article 7 of the Amended and Restated Bylaws of ICO, Inc., as amended October 5, 2001), a "COC Termination Payment," in lump sum cash (subject to required taxes and withholdings), consisting of the following: 

 

(i)  pro rata Base Salary through the Termination Date, and in the event that the prior fiscal year’s Annual Incentive Bonus, if any, has been earned but not yet paid, such Annual Incentive Bonus for the prior fiscal year; and 

 

(ii)  a sum equal to 150% of the Employee’s current annual Base Salary; and 

 

(iii)  a pro-rated portion of the Annual Incentive Bonus for the fiscal year during which the Termination Date occurs, calculated consistent with the example set forth in 3.2(a)(iv) above. 

 

In addition to the COC Termination Payment, in the event of a COC Termination: (x) the Company shall pay any premiums due under COBRA (or any legal successor thereto) in order to maintain Employee’s current medical and dental insurance coverages for the 12-month period immediately following the Termination Date, and (y) with regard to any of the Company’s welfare plans (e.g. life insurance) that Employee participates in immediately prior to the Termination Date, if such plans allow for continued coverage after termination of employment, the Company shall pay the premiums that would otherwise be due from the Employee in order to maintain Employee’s coverages during the 12-month period immediately following the Termination Date.

 

3.4  Any Early Termination Payment or COC Termination Payment ("Termination Benefit") paid to Employee pursuant to Section 3.2 or 3.3 shall be in consideration of Employee’s continuing obligations under Article 4. 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 

	
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employee benefit plan (as such term is defined in the Employee Retirement Income Security Act of 1974, as amended), maintained by the Company except that Employee shall not be entitled to any severance benefits pursuant to any severance plan or program of the Company.

 

3.5  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. 

 

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. 

	
 

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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 termination of Employee’s employment with the Company, for any reason, Employee promptly shall deliver the same and all copies thereof to the Company.

 

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 end of employment with the Company or any other ICO Entity for any reason, 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 

	
 

		Page 13 of 18	 
	

	 

    (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. 

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 

5333 Westheimer Road, Suite 600 

Houston, Texas 77056 

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 

	
 

		Page 14 of 18	 
	

	 

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.

 

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, 

	
 

		Page 15 of 18	 
	

	 

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. 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. 

	
 

	 	Page 16 of 18	 
	

	 

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/ Christopher N. O’Sullivan 

	

Christopher N. O’Sullivan
	
 Chairman of the Board of Directors 

	
	
	
 

	
Date: January 14, 2004

	
 

	
	
 Employee 

	
	
 

	
/s/ W. Robert Parkey, Jr. 

	

W. Robert Parkey, Jr.
	
 

	
Date: January 14, 2004 

	
 

	
 

	 	Page 17 of 18	 
	

	 

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, Inc. – USA, TX 

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 Italia Srl - Italy 

ICO Minerals, Inc. – USA, DE 

ICO Offshore – Cayman Islands 

ICO P&O, Inc. – USA, DE 

ICO Petrochemical Cayman Islands – Cayman Islands 

ICO Polymers do Brasil Ltda. - Brazil 

ICO Polymers France SAS - France 

ICO Polymers Hellas Ltd. - Greece 

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 

ICO Worldwide Tubular Services PTE Ltd. - Singapore 

Innovation Company, S.A. de C.V. - Mexico 

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 

Verplast Srl - Italy 

Wedco Minerais Ltda. - Brazil 

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 

	
 

	 	Page 18 of 18

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