-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CvgwhWiKW+0oS7HfYy0/+wnzKw9laN67iekrZgzVPvSGJRRsKUl+2QtmXkCLipyL ZeBcT2nfvBzPMY96lljl+A== 0000899243-01-500608.txt : 20010518 0000899243-01-500608.hdr.sgml : 20010518 ACCESSION NUMBER: 0000899243-01-500608 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20010517 GROUP MEMBERS: DAVID M. GERST GROUP MEMBERS: DR. AL O. PACHOLDER GROUP MEMBERS: JON C. BIRO GROUP MEMBERS: PBG ACQUISITION CORP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ICO INC CENTRAL INDEX KEY: 0000353567 STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389] IRS NUMBER: 760566682 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-34170 FILM NUMBER: 1642881 BUSINESS ADDRESS: STREET 1: 11490 WESTHEIMER RD STREET 2: STE 100 CITY: HOUSTON STATE: TX ZIP: 77067 BUSINESS PHONE: 2817214200 MAIL ADDRESS: STREET 1: 11490 WESTHEIMER STREET 2: STE 1000 CITY: HOUSTON STATE: TX ZIP: 77077 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PBG ACQUISITION CORP CENTRAL INDEX KEY: 0001140099 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 760677665 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 725 CAMELOT LANE CITY: HOUSTON STATE: TX ZIP: 77024 MAIL ADDRESS: STREET 1: 725 CAMELOT LANE CITY: HOUSTON STATE: TX ZIP: 77024 SC 13D 1 dsc13d.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934* ICO, INC. -------------------------------------------------------- (NAME OF ISSUER) COMMON STOCK, NO PAR VALUE PER SHARE -------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) 449293109 -------------------------------------------------------- (CUSIP NUMBER) DAVID M. GERST 725 CAMELOT LANE HOUSTON, TEXAS 77024 (281) 365-0923 -------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) MAY 7, 2001 -------------------------------------------------------- (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page should be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 449293109 (1) Names of Reporting Person. I.R.S. Identification Nos. of above persons (entities only) Dr. Al O. Pacholder -------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] --------------------------------------------------------------- (3) SEC Use Only -------------------------------------------------------------------- (4) Source of Funds PF, OO -------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] -------------------------------------------------------------------- (6) Citizenship or Place of Organization United States citizen -------------------------------------------------------------------- Number of Shares Beneficially owned by each reporting person with - -------------------------------------------------------------------- (7) Sole Voting Power 252,955 (See Items 5 & 6) - -------------------------------------------------------------------- (8) Shared Voting Power 1,182,143 (See Items 5 & 6) - -------------------------------------------------------------------- (9) Sole Dispositive Power 252,955 (See Items 5 & 6) - -------------------------------------------------------------------- (10) Shared Dispositive Power 807,270 (See Items 5 & 6) - -------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,435,098 (See Items 5 & 6) -------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [X] -------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 6.3% (See Items 5 & 6) -------------------------------------------------------------------- (14) Type of Reporting Person IN -------------------------------------------------------------------- 2 CUSIP NO. 449293109 (1) Names of Reporting Person. I.R.S. Identification Nos. of above persons (entities only) David M. Gerst -------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [X] (b) [ ] --------------------------------------------------------------- (3) SEC Use Only -------------------------------------------------------------------- (4) Source of Funds 00 -------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] -------------------------------------------------------------------- (6) Citizenship or Place of Organization United States citizen -------------------------------------------------------------------- Number of Shares Beneficially owned by each reporting person with - -------------------------------------------------------------------- (7) Sole Voting Power 53,350 (See Items 5 & 6) - -------------------------------------------------------------------- (8) Shared Voting Power 0 (See Items 5 & 6) - -------------------------------------------------------------------- (9) Sole Dispositive Power 53,350 (See Items 5 & 6) - -------------------------------------------------------------------- (10) Shared Dispositive Power 0 (See Items 5 & 6) - -------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 53,350 (See Items 5 & 6) -------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [X] -------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) Less Than 1% (See Items 5 & 6) -------------------------------------------------------------------- (14) Type of Reporting Person IN -------------------------------------------------------------------- 3 CUSIP NO. 449293109 (1) Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Jon C. Biro -------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group (a) [X] --------------------------------------------------------------- (b) [ ] --------------------------------------------------------------- (3) SEC Use Only -------------------------------------------------------------------- (4) Source of Funds PF, OO -------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] -------------------------------------------------------------------- (6) Citizenship or Place of Organization United States citizen -------------------------------------------------------------------- Number of Shares Beneficially owned by each reporting person with - -------------------------------------------------------------------- (7) Sole Voting Power 53,844 (See Items 5 & 6) - -------------------------------------------------------------------- (8) Shared Voting Power 12,000 (See Items 5 & 6) - -------------------------------------------------------------------- (9) Sole Dispositive Power 53,844 (See Items 5 & 6) - -------------------------------------------------------------------- (10) Shared Dispositive Power 12,000 (See Items 5 & 6) - -------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 65,844 (See Item 5 & 6) -------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] -------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) Less than 1% (See Items 5 & 6) -------------------------------------------------------------------- (14) Type of Reporting Person IN -------------------------------------------------------------------- 4 INTRODUCTORY NOTE ITEM 1. SECURITY AND ISSUER. This statement on Schedule 13D (the "Statement") relates to the common stock, no par value ("Common Stock") of ICO, Inc., a Texas corporation (the "Company"). The address and principal executive offices of the Company are at 11490 Westheimer, Suite 1000, Houston, Texas 77007. ITEM 2. IDENTITY AND BACKGROUND. This Statement is being filed by and on behalf of Dr. Al O. Pacholder ("Pacholder"), David M. Gerst ("Gerst") and Jon C. Biro ("Biro") (collectively, the "Shareholders", and the "Reporting Persons"). On June 13, 1988, Pacholder filed a Schedule 13D as a member of a group in connection with a voting agreement to which he is a party (the "Agreement") (See Items 5 or 6). On May 14, 2001, Pacholder filed Amendment No. 19 to Schedule 13D (the "Amendment") to reflect his status as a member of the group which forms the subject of this Schedule 13D filing. As reported in the Amendment, the number of shares beneficially owned by Pacholder includes those shares subject to the Agreement. Except for Pacholder, the individuals and entities party to the Agreement are not part of the group filing this Schedule 13D. Pacholder disclaims all beneficial ownership in the shares subject to the Agreement. The Reporting Persons have not acquired any shares of Common Stock in connection with the acquisition proposal set forth by PBG, and, except for shares of Common Stock vested in the Reporting Persons' employee benefit, incentive or 401(k) Plans, the Reporting Persons do not intend to acquire any additional shares of the Company's Common Stock in connection with PBG's acquisition proposal without prior authorization from the Company's Board of Directors. The present principal occupation of Pacholder is the Chairman of the Board of Directors and Chief Financial Officer of the Company. The present principal occupation of Gerst is Senior Vice President and General Counsel of the Company. The present principal occupation of Biro is the Senior Vice President, Chief Accounting Officer and Treasurer of the Company. The business address of the Shareholders is 11490 Westheimer, Suite 1000, Houston, Texas 77007. During the last five years, none of the Reporting Persons has (a) been convicted in a criminal proceeding or (b) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. 5 ITEM 3. SOURCE AND AMOUNT OF FUNDS. The aggregate amount of funds required by Biro to purchase his shares of Common Stock was $13,311. Biro also has acquired shares pursuant to the grant of options for Common Stock under the Company's various employee stock option plans and the various 401(k) plans maintained by the Company. All of the Common Stock acquired by Gerst was acquired pursuant to (i) market purchases using personal funds; (ii) the grant of options for Common Stock under the Company's various employee and nonemployee director stock option plans; or (iii) various 401(k) plans maintained by the Company. The aggregate amount of funds Pacholder used to purchase his shares of Common Stock is approximately $315,000. Pacholder has also acquired shares of Common Stock pursuant to the grant of options for Common Stock under the Company's various employee and nonemployee director stock option plans and the various 401(k) plans maintained by the Company. In addition, as discussed in Item 6 below and incorporated herein by reference, in certain Company acquisitions, certain proxies and voting agreements regarding the Common Stock were granted by the acquirors of the Company's Common Stock in those transactions. ITEM 4. PURPOSE OF TRANSACTION. PBG Acquisition Corporation ("PBG") is a newly formed Texas corporation formed to acquire the outstanding capital stock of the Company. The shareholders of PBG are Pacholder, Gerst and Biro who own 80%, 10% and 10%, respectively of the issued and outstanding Common Stock of PBG. PBG's principal office and business address is 725 Camelot Lane, Houston, Texas 77024. PBG currently anticipates that substantially all of the funds necessary to purchase the Common Stock will be obtained through financing. PBG has entered into an engagement letter with Dain Rauscher Wessels ("DRW") (attached hereto as Exhibit 7 and incorporated herein by reference) to assist PBG in obtaining such financing. In addition, DRW has delivered a letter to PBG (attached hereto as Exhibit 8 and incorporated herein by reference) indicating its belief that it will be able to arrange the financing for the purchase of the Company's Common Stock. In April, 2001, Travis Street Partners, LLC ("TSP") delivered a letter to the Company's Board of Directors setting forth in writing the last of a series of acquisition proposals under which TSP would acquire all of the Company's capital stock through a merger transaction. The Company's Board of Directors has not yet taken any definitive action with respect to TSP's acquisition proposal, nonetheless, the Company's Board of Directors believes that the proposal is deficient in many respects. Most notably, the TSP proposal is subject to a variety of conditions that are unlikely to be satisfied. The Shareholders believe that the Company's Common Stock is currently undervalued and the acceptance of the TSP acquisition proposal would not provide the Company's stockholders adequate consideration in a transaction with TSP. Therefore, the Shareholders formed PBG to increase the Company's shareholder value by offering a competing acquisition proposal for the Company's Common Stock which was at the time, at a higher per share acquisition price than that proposed by TSP, and subject to fewer conditions. On May 9, 2001, TSP delivered a letter to the Company offering a $3.10 per share acquisition price and other terms substantially similar to that as delivered to TSP by the Company as set forth below. On May 7, 2001, PBG delivered the following letter to the board of directors of the Company. May 7, 2001 ICO, Inc. 11490 Westheimer, Suite 1000 Houston, Texas 77007 Attention: Board of Directors Ladies and Gentlemen: 6 The purpose of this letter of intent is to express our mutual intention with respect to the proposed acquisition of ICO, Inc., a Texas corporation ("ICO"), by PBG Acquisition Corp., a Texas corporation ("PBG"). Although the form of the transaction (the "Transaction") may be modified to accommodate the needs of the parties, PBG presently proposes that the acquisition would be effected through a merger under which ICO's stockholders would receive $3.00 for each share of ICO Common Stock. 1. Offer to Purchase. PBG and ICO will endeavor to negotiate promptly a definitive merger agreement (the "Agreement"), which will contain such terms and conditions as herein specified or as would be customary for transactions of the type contemplated, and such other terms and conditions as may be mutually agreed upon by the parties. Thereafter, the Agreement shall be submitted to the boards of directors and the stockholders of PBG and ICO for approval. After satisfaction or compliance with all the terms, conditions, agreements, representations and warranties contained in the Agreement, the merger will be consummated and the stockholders of ICO shall receive in exchange for all the then outstanding common stock of ICO the consideration set forth above. Consummation of the Transaction shall be conditioned, among other things, upon: (i) approval of the Transaction by ICO's board of directors; (ii) approval of the Transaction by the requisite majority of ICO's stockholders; (iii) appropriate ICO board action to except the Transaction from ICO's stockholder rights plan; and (iv) the receipt of any required regulatory approvals. In addition, at or before execution of the Agreement, PBG will provide to ICO evidence of PBG's ability to finance the Transaction. In that regard, PBG has received a letter from Dain Rauscher Wessels as to their ability to arrange that financing. 2. Sale of Oilfield Services Business. PBG and ICO acknowledge and agree that the purchase price set forth in Section 1 of this letter of intent contemplates ICO's sale of its oilfield services business to Varco International Inc. ("Varco") before the Transaction. PBG's acquisition proposal assumes that ICO's transaction with Varco is consummated on terms acceptable to PBG. If a definitive agreement concerning such sale is not entered into by ICO and Varco before the execution and delivery of the Agreement, or if the sale is not consummated before the Transaction, then each of PBG and ICO shall promptly and in good faith attempt to renegotiate the consideration set forth in Section 1 of this letter. 3. Access to Information; Confidentiality. PBG and ICO each grants to the other, and its officers and authorized representatives, the right, during normal business hours, to inspect its records and to consult with its officers, employees, attorneys, and agents for the purpose of conducting such due diligence inquiries as each party may deem necessary or advisable. Each of PBG and ICO agrees that its officers and representatives shall hold all data and information obtained with respect to the other party in the same degree of confidence as it maintains with respect to similar 7 information concerning itself, and further agrees that it will not use such data or information or disclose the same to others, except to the extent such data or information either is, or becomes, published or a matter of public knowledge, through no fault of PBG or ICO, as the case may be. 4. Operation of ICO Pending Closing. ICO agrees that, pending negotiation of the Agreement, it will operate its business only in the usual, regular, and ordinary manner so as to maintain the goodwill it now enjoys, it will use all reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and employees, and preserve its relationships with customers, suppliers, jobbers, distributors and others having business dealings with it. In addition, except as otherwise contemplated herein (or as may be mutually agreed), ICO will not (i) make any change in its capital structure, (ii) purchase or redeem any outstanding shares of its capital stock, (iii) pay any dividends or other distributions on outstanding shares of its capital stock, (iv) enter into any transactions with any of its affiliates or (v) dispose of any material asset outside the ordinary course of business. Notwithstanding the foregoing, nothing in this Agreement will prohibit ICO from consummating its proposed transaction with Varco or using the proceeds from that transaction to redeem or otherwise repurchase any of ICO's outstanding preferred stock or debt securities. 5. No Shop; Break-Up Fee. ICO agrees that neither it nor any of its affiliates, directors, officers or agents shall in any way contact, discuss or negotiate, with any other corporation, individual, or entity, concerning any purchase, sale, merger, or change in status quo of the ownership of ICO during the period beginning on the date of this letter of intent through the date on which the Agreement is executed. If ICO breaches the provision of this Section 5, or if ICO accepts one or more offers during the period this letter of intent is effective to become a party to any merger, consolidation, sale of all or substantially all its assets in one or more transactions, or to any other transaction the effect of which shall be to vest in any one or more corporations, other legal entities or persons the effective control over the business, assets and/or voting securities of ICO, then ICO shall pay to PBG a "break-up" or "topping" fee of $3.0 million. 6. Failure to Consummate Agreement; Breakup-Up Fee. If the Agreement is executed and delivered, and ICO's board of directors fails to submit the Transaction to the stockholders of ICO for approval or to unqualifiedly recommend approval by its stockholders, or any person other than PBG shall, after the date hereof and before the effective date of the Transaction, acquire a majority of the outstanding shares of ICO's common stock, and in any of such events, ICO shall within one year after the date of the Agreement become a party to any merger, consolidation, sale of all or substantially all its assets in one or more transactions, or to any other transaction the effect of which shall be to vest in any one or more corporations, other legal entities or persons the effective control over the business, assets and/or voting securities of ICO, then ICO shall pay to PBG a "breakup" or "topping" fee of $3 million. 7. Reimbursement of Certain Fees. If the Agreement is executed and delivered and the requisite majority of ICO's common stock do not vote in favor of the Transaction, then ICO shall reimburse PBG's out-of-pocket expenses incurred in connection with the negotiations leading to this 8 letter of intent and the Agreement, the negotiations regarding the Agreement and the costs of all communications with the stockholders of PBG and ICO regarding the Transaction. 8. Binding Effect. ICO understands and agrees that, other than as set forth in this Section 8, no contract or agreement relating to a Transaction shall be deemed to exist between PBG and ICO unless the Agreement has been executed and delivered. For purposes of this Section 8, the term "Agreement" does not include this letter of intent or any other preliminary written agreement, nor does it include any written or verbal acceptance of an offer or bid. ICO also agrees that unless and until the Agreement has been executed and delivered, neither PBG nor ICO will be under any legal obligation of any kind whatsoever with respect to the Transaction by virtue of this letter of intent except for the matters specifically agreed to herein. Neither this Section 8 nor any other provision in this letter of intent can be waived or amended except by written consent of the parties hereto, which consent shall specifically refer to this Section 8 and explicitly make such waiver or amendment. Notwithstanding the foregoing, the provisions of Sections 3, 4, 5, 6, 7, 8, 9, 10 and 11 shall be binding on the parties hereto. 9. Termination. This letter of intent may be terminated (i) by mutual written consent of PBG and ICO; or (ii) upon written notice by either party to the other party if the Agreement has not been executed by August 31, 2001; provided, however, that the termination of this letter of intent shall not affect the liability of a party for breach of any of the binding provisions of this letter of intent set forth in Section 8. 10. Joint Announcements. PBG and ICO will make a joint announcement of the proposed Transaction upon execution of this letter of intent. The text of the announcement will be mutually agreed to by PBG and ICO before release. Thereafter, except to the extent required by law, without the prior written consent of the other party, neither PBG or ICO shall, and each shall direct its representatives not to, directly or indirectly, make any public comments, statement or communication with respect to, otherwise disclose or permit the disclosure of the existence of discussions regarding the Transaction or the conditions or other aspects related thereto. 11. Choice of Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Texas. If the foregoing constitutes a basis upon which PBG and ICO may proceed with negotiations intended to result in the execution of the Agreement, please execute one copy of this letter and return it to the undersigned at your earliest convenience. Termination of negotiations by either party prior to execution of the Agreement shall be without liability to the other party, except as otherwise provided herein, and any expenses incurred prior to such a termination shall be borne by the party incurring same. Very truly yours, PBG ACQUISITION CORP. By: ------------------------------ Dr. Al O. Pacholder, President 9 ACCEPTED: ICO, INC. By: --------------------------------- In addition, on May 7, 2001, PBG issued the following press release: May 7, 2001 PBG ACQUISITION CORP. submits acquisition proposal to ICO, Inc. board of directors. May 7, 2001, Houston, Texas - PBG Acquisition Corp. announced today that it has submitted a proposal to the board of directors of ICO, Inc. for the acquisition of all of ICO's common stock at a purchase price of $3.00 per share. Dr. Al O. Pacholder, chairman of the board and chief financial officer of ICO, Inc., today announced the formation of PBG Acquisition Corp., and the submission by PBG Acquisition of a proposal to ICO's board of directors relating to the purchase of all of the issued and outstanding common stock of ICO at a price of $3.00 per share. The terms and conditions of the offer include: . Purchase price of $3.00 per share; . Approval of the proposed transaction by ICO's board of directors; . Appropriate ICO board action to exempt the transaction from ICO's shareholder rights plan; . Negotiation of a definitive acquisition agreement with ICO; and . The receipt of all required regulatory approvals, if any. The offer also includes terms and conditions customary in transactions of this nature, including a break-up fee of $3.0 million if the proposal is accepted or a definitive agreement is executed and delivered without ICO consummating the transaction. Dr. Pacholder emphasized that the PBG Acquisition Corp. proposal differs in several respects from the latest acquisition proposal made by Travis Street Partners: . PBG Acquisition Corp.'s proposal is at a purchase share higher than Travis Street Partners'; price equal to $0.35 per . PBG Acquisition Corp.'s proposal is not subject to contained in the Travis Street Partners many of the conditions proposal, including: . the completion of due diligence; 10 . the satisfaction of certain EBITDA goals for ICO's processing division; and petrochemicals . a downward adjustment of the purchase price under certain conditions. In addition, Dr. Pacholder stated that PBG Acquisition Corp. has received a letter from Dain Rauscher Wessels, PBG Acquisition's investment banker, to the effect that Dain Rauscher Wessels believes it will have the ability to arrange the financing necessary for consummation of the acquisition. Dr. Pacholder noted that although Travis Street Partners has conditioned its offer upon providing satisfactory evidence to ICO of its ability to finance its proposed acquisition, Travis Street Partners has given ICO's board no indication of the existence of any financing commitment. The PBG Acquisition proposal also differs from the proposal made by Travis Street Partners in that the breakup fee proposed by Travis Street Partners is $3.5 million, while the breakup fee proposed by PBG Acquisition is only $3.0 million. Dr. Pacholder stated that he believed the acquisition proposal by PBG Acquisition Corp. would be more beneficial to ICO shareholders than the proposal made by Travis Street Partners because it would pay the existing ICO shareholders more for their shares, and the PBG Acquisition proposal was more likely to occur because it was subject to fewer conditions than that of Travis Street Partners. * * * * * * This press release is being issued by PBG which is a newly formed entity formed by Pacholder, Biro and Gerst. Pacholder is the Chairman and Chief Financial Officer of the Company. Biro is Senior Vice President, Chief Accounting Officer and Treasurer of the Company. Gerst is Senior Vice President and General Counsel of the Company. Information concerning their interests and security holdings in the Company can be obtained from the Company's proxy statement dated March 7, 2001 for the Company's 2001 annual meeting. PBG anticipates filing a proxy statement and other relevant documents concerning the transaction with the SEC. We urge the Company's shareholders to read the proxy statement and any other relevant documents to be filed with the SEC because they will contain important information. After it is cleared by the SEC, the proxy statement will be available free of charge on the SEC's website (www.sec.gov) or from PBG's offices. Although the foregoing represents the range of activities presently contemplated by the Reporting Persons with respect to the Company, it should be noted that the possible activities of the Reporting Persons are subject to change at any time and it should not be assumed that the Reporting Persons will take any of the foregoing actions. Except as set forth above, as of the date of this Statement none of the Reporting Persons has any plans or proposals that relate to or would result in any action set forth in (a) through (j) of Item 4. 11 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) - (b) As of May 8, 2001, the persons and entities listed below, in the aggregate, beneficially owned 1,554,292 shares (or approximately 6.9%) of the shares deemed to be outstanding of the Company's Common Stock as set forth in the following chart. Except as otherwise set forth in the notes below, each person or entity has sole voting and dispositive power with respect to the shares beneficially owned by them. The ICO 401(k) plans (the "Plans") were amended on January 26, 2001 to provide for voting of the Company's Common Stock held in the Plans at the direction of Plans' participants. Before this filing, the Plans provided for the voting of Plan shares at the direction of the Company. Except as specifically set forth in the notes below, share amounts exclude the shares of Common Stock that can be voted pursuant to the voting agreements and irrevocable proxies described in Item 6 below. The information included in Item 6 is incorporated herein by reference.
VOTING POWER DISPOSITIVE POWER TOTAL OWNERSHIP ------------------- --------------------------- ----------------- HOLDER SOLE SHARED SOLE BENEFICIAL SHARED OWNERSHIP %* - -------------------------------- ------- --------- ------- ----------------- --------- ----- Dr. Al O. Pacholder (1)(2)(3) 252,955 1,182,143 252,955 807,270 1,435,098 6.3% David M. Gerst (3)(4) 53,350 0 53,350 0 53,350 ** Jon C. Biro (3)(5) 53,844 12,000 53,844 12,000 65,844 **
- -------------- * Based on total beneficial ownership. ** Less than 1% of outstanding shares. (1) Share amounts include 118,200 shares of Common Stock, 125,000 shares of Common Stock that are issuable upon the exercise of stock options granted under the Company's various employee stock option plans, 6,000 shares of Common Stock issuable upon exercise of stock options granted under ICO's 1993 Stock Option Plan for Non-Employee Directors, 3,755 shares held in the Company's various plans and (a) 374,873 shares of Common Stock issued in connection with acquisitions by the Company over which Sylvia A. Pacholder and Pacholder share voting power (but exclude 20,949 shares of Common Stock in Plans owned by recipients of the Company's Common Stock in connection with the Bayshore Industrial, Inc. merger). Shares exclude amounts (b) 2,816,814 shares of the Company's Common Stock subject to the Shareholders Agreement related to the Wedco merger (included as Exhibit 8 to this Schedule 13D and incorporated herein by reference; hereinafter the "Wedco Shareholders Agreement") over which Sylvia A. Pacholder and Pacholder possess the power to vote on certain matters. Pacholder disclaims ownership of the 2,816,814 shares related to the Wedco Shareholders Agreement and the 374,873 shares related to the acquisitions. This figure excludes the following shares owned by Sylvia A. Pacholder to which Pacholder disclaims beneficial ownership: 31,400 shares of Common Stock, 125,000 shares of Common Stock issuable upon exercise of stock options granted under the Company's various employee stock option plans, 2,000 shares of Common Stock issuable upon exercise of stock options granted 12 under the 1993 Stock Option Plan for Non-Employee Directors and 4,291 shares held in the Company's Plans. (2) Share amounts include 180,000 shares of Common Stock and 63,051 shares of Common Stock that may be acquired upon conversion of Convertible Exchangeable Preferred Stock held by a limited partnership, Pacholder Heron, L.P. ("Pacholder Heron"). See Schedule II for additional information regarding Pacholder Heron. Schedule II is incorporated herein by reference. Pursuant to an Investment Advisory Agreement, Pacholder Associates has sole voting and investment power over such securities. This agreement is included as Exhibit 5 to this Schedule 13D and is incorporated herein by reference. Share amounts also include 415,461 shares of Common Stock, 102,879 shares of Common Stock that may be acquired through the exercise of warrants (such warrants have an exercise price of $5.00 and expire in July 2002; see the notes to the Company's financial statements included in the Company's Form 10-K for the year ended September 30, 2000 as filed with the SEC on December 21, 2000) and 45,879 shares of Common Stock that may be acquired upon conversion of Convertible Exchangeable Preferred Stock owned by Pacholder Associates. Pacholder, Sylvia A. Pacholder and Morgan are majority owners of Pacholder Associates. See Schedule I for additional information regarding Pacholder Associates. Schedule I is incorporated herein by reference. (3) Beneficial ownership with respect to shares held in the Company's Plans are attributed to the participants. The Plans were amended on January 26, 2001 to provide for voting of the Company's Common Stock held in the Plans at the direction of the Plans' participants. At the 2000 Annual meeting, the administrator of the Plans voted the shares held in those plans at the direction of the participants in the Plans. On April 9, 2000, a new administrator was selected for the Plans. The prototype plan documents presented by the new administrator contained two alternatives for voting the shares held in the Plans: the shares could be voted either by the Company or by the participants. The Company selected the alternative that provided for voting of the shares by the Company. This decision was made to ensure all of the shares in the Plans were voted and to enable easier administration of the Plans. However, prior to the establishment of a structure through which the Company would direct the 401(k) shares to be voted and prior to the Company actually directing the vote of any such shares, the Company determined that the 401(k) shares should continue to be voted at the direction of the Plans' participants. This determination was made on the basis of (1) concerns about possible complications under ERISA in voting these shares, particularly in the context of the proxy contest with TSP and (2) a determination that the 401(k) participants should not lose their ability to vote the 401(k) shares without their consent. Concerns about ERISA compliance were based upon the Department of Labor's past suggestion to companies that company officers should not control voting of company stock in an ERISA plan in the context of a proxy contest. (4) Share amounts include 50,000 shares of Common Stock that are issuable upon exercise of stock options granted under the Company's various employee stock option plans and 3,350 shares of Common Stock held in the Company's Plans. This figures excludes shares beneficially owned by Robin Pacholder, Gerst's spouse, as set forth in note (3) above. 13 (5) Share amounts include 12,000 shares of Common Stock that are jointly owned by Biro and his wife, 50,000 shares of Common Stock that are issuable upon exercise of stock options granted under the Company's various employee stock option plans and 3,844 shares of Common Stock held in the Company's Plans. (c) There were no transactions with respect to the Company's Common Stock in the past 60 days by any of the Reporting Persons. (d) None. (e) Not Applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. In connection with several acquisitions by the Company in which the sellers received shares of Common Stock, the sellers granted certain rights to vote those shares to members of the Company's management. See Schedule III, which is incorporated herein by reference, for certain additional information regarding these sellers. Pursuant to the Company's acquisition of Frontier Inspection Services, Inc. in April 1994, each recipient of shares of Common Stock granted an irrevocable proxy appointing the Company's Chairman of the Board and the President, or either of them, to vote all the Company shares the recipient received in connection with the acquisition on any matter on which shareholders are entitled to vote. The proxy expires upon the earliest of: (1) termination of employment of the recipient, (2) transfer of the shares to a person not affiliated with or an immediate family member of the recipient or (3) ten years. One of the recipients, Jack C. Cave ("Cave"), currently owns 78,000 shares of the Company's Common Stock that he received in the acquisition and is an employee of the Company. In addition, Cave holds, 1,590 shares of Common Stock in the Company's 401(k) plan. Cave is the beneficial owner of 28,000 shares of Common Stock issuable upon exercise of stock options granted under the Company's various employee stock option plans. Pursuant to the Company's acquisition of R. J. Dixon, Inc. in June 1995, Raymond J. Dixon, Jr. ("Dixon") granted an irrevocable proxy appointing the Company's Chairman of the Board and President, or either of them, to vote all the Company shares he received in connection with the acquisition on any matter on which shareholders are entitled to vote. The proxy expires upon the earliest of: (1) termination of employment of Dixon, (2) transfer of the shares to a person not affiliated with or an immediate family member of Dixon or (3) ten years. Dixon is an employee of the Company and currently holds 94,884 shares of Common Stock that he received in the acquisition. 14 Dixon is the beneficial owner of 1,000 shares of the Company's Common Stock issuable upon the exercise of stock options granted under the Company's various employee stock option plans. Pursuant to the Company's acquisition of Polymer Service of Indiana, Inc. in July 1996, each recipient of shares of the Company's Common Stock granted an irrevocable proxy appointing the Company's Chairman of the Board and President, or either of them, to vote all Company shares that the recipient is entitled to vote on any matter on which shareholders are entitled to vote. The proxy expires upon the earlier of the (1) transfer of the shares to a non-affiliated person or entity, or (2) ten years. One of the recipients, Joe Moore, currently owns 23,942 shares of Common Stock. Pursuant to the Company's acquisition of Bayshore Industrial, Inc. in December 1996, each recipient of shares of the Company's Common Stock granted an irrevocable proxy appointing the Company's Chairman of the Board and President of the Company, or either of them, to vote all Company shares the recipient is entitled to vote on any matter on which shareholders are entitled to vote. The proxy expires upon the earliest of: (1) transfer of the shares to a non- affiliated person or entity, (2) termination of employment of the recipient, (3) if either one or both of Pacholder and Sylvia A. Pacholder cease to serve as Chairman of the Board and President and Chief Executive Officer, respectively, of the Company, or (4) ten years. Three of the recipients, Eddie Johnson, Max Kloesel and Carol C. Munn, currently own shares of Common Stock and are employees of the Company. They hold 60,283, 116,361 and 1,403 shares of Common Stock, respectively. In addition, Eddie Johnson, Max Kloesel and Carol C. Munn hold, in the Company's Plans, 7,284, 10,660 and 3,005 shares of Common Stock, respectively. Carol C. Munn is the beneficial owner of 20,000 shares of Common Stock issuable upon the exercise of stock options granted under the Company's various employee stock option plans. Pacholder, Sylvia A. Pacholder, Robin E. Pacholder, William J. Morgan ("Morgan"), PAI and PM Delaware, Inc. (collectively the "ICO Group Shareholders"), and William E. Willoughby, Peggy S. Willoughby, William C. Willoughby (individually and as custodian for William B. Willoughby), Regina S. Willoughby (individually and as custodian for William B. Willoughby), Fred R. Feder, Theo J.M.L. Verhoeff and Catherine Willoughby Stevens (collectively the "Wedco Shareholders") (the ICO Group Shareholders and the Wedco Shareholders are collectively the "Wedco Agreement Shareholders") and the Company are parties to a shareholders agreement (the "Wedco Shareholders Agreement") covering, in the aggregate, 4,017,486 outstanding shares of ICO's Common Stock as of May 8, 2001. Pursuant to the agreement, the Wedco Agreement Shareholders agree to take all actions necessary or appropriate to cause the election of William E. Willoughby, Walter L. Leib ("Leib") and George S. Sirusas ("Sirusas") (the "Initial Wedco Directors") to the Company's Board of Directors and to cause their re-election to the Board of Directors of the Company until the earlier of: (1) the time the Wedco Shareholders, taken a whole, beneficially own less than 1,500,000 shares of Common Stock, or (2) there is a change in control (as defined below) of the Company (the "Termination Date"). Also under the Wedco Shareholders Agreement, all the ICO Group Shareholders have granted irrevocable proxies coupled with an interest to Leib to vote their shares of Common Stock in favor 15 of the slate of nominees for the Company's Board of Directors selected by the then incumbent members of the Company's Board of Directors (the "Nominated Slate") effective until the Termination Date. The Wedco Shareholders have granted irrevocable proxies coupled with an interest to Sylvia A. Pacholder and Pacholder to vote their shares of the Company's Common Stock also in favor of the Nominated Slate. The Wedco Shareholders' proxies are effective while any Wedco Shareholder owns any Company stock or until a change of control (as defined in the next paragraph). Pacholder, Sylvia A. Pacholder and Leib are only entitled, by the terms of the proxies, to exercise these proxies in connection with the election of directors, and they must vote these proxies in favor of the Nominated Slate. Pacholder, Sylvia A. Pacholder and Leib exercise no discretion in voting these proxies. One of the Wedco Shareholders, Theo J.M.L. Verhoeff, in a letter dated February 20, 2001 to the Company, expressed the opinion that he was no longer subject to provisions of the Wedco Shareholders Agreement regarding his shares because he was not included as one of the group members who signed an amendment to Schedule 13D filed with the SEC on January 31, 2001. To the Company's knowledge, Mr. Verhoeff owns 6,560 shares of the Company's Common Stock subject to the Wedco Shareholders Agreement. The Company believes that the proxy granted by Mr. Verhoeff and his other obligations under the agreement are still in effect because a Termination Date has not occurred. The proxies granted to Pacholder and Sylvia A. Pacholder are not tied to their employment with the Company. The proxies granted under the Wedco Shareholders Agreement have been voted by the named individuals in past years in accordance with the agreement. A form of both the Wedco Shareholder Proxy and ICO Group Shareholder Proxy were filed as Exhibits 99.1 and 99.2 respectively, to the Registration Statement filed on Form S-4 by the Company dated March 15, 1996 and are herein incorporated by reference. A change of control occurs under the Wedco Shareholders Agreement when (1) any person or group becomes the beneficial owner of shares of stock or other Company securities either (a) constituting in excess of 50% of the shares of voting stock of the Company or (b) entitling such person or group, either immediately or with the passage of time or the occurrence of a stated event, to exercise a majority of the voting power in the election of the directors, (2) a majority of the Board of Directors of the Company ceases to be composed of the nominees of the Wedco Agreement Shareholders (the "Continuing Directors") or of persons nominated by and elected to the Board of Directors with the consent or approval of a majority of the Continuing Directors, or (3) a sale, transfer, conveyance, assignment or other disposition of all or substantially all of the Company's assets, whether in liquidation, dissolution or otherwise. In addition, if any one of Messrs. Willoughby, Leib or Sirusas shall cease to serve as a director of the Company at any time prior to the Termination Date, the Wedco Agreement Shareholders are required to take all actions necessary and appropriate to ensure that the vacancy created shall be filled by a person nominated by the remaining Initial Wedco Directors or, if there are no remaining Initial Wedco Directors, by the Wedco Shareholders acting by a majority in interest, subject to the consent of a majority of the full Board of Directors of the Company. The Wedco Shareholders Agreement also provides that if one or more of the Wedco Agreement Shareholders desire to sell 500,000 or more shares of Common Stock in a single or series 16 of related transactions (other than in connection with an underwritten public offering that would not result in a transfer or transfers of 500,000 or more shares of Common Stock to any person or group of persons) such proposed sale shall not be effective unless the proposed transferee agrees to be bound as the successor to the transferor under the agreement. The Wedco Shareholders Agreement was filed as Exhibit 10.9 to the Registration Statement filed on Form S-4 by the Company dated March 15, 1996. The rationale for the Wedco Shareholders Agreement, as set forth in the preamble to the agreement, was to: - provide, through grants of irrevocable proxies, for the orderly disposition of certain matters involving the Company's internal affairs; - provide for representation of the Wedco shareholders group on the Company's Board of Directors; and - provide members of the Wedco shareholders group with certain authority regarding the ongoing management of the Company. In the Wedco merger, the Wedco shareholders, who would own a significant portion of the surviving entity, wanted to ensure that their interests were represented on the surviving entity's board of directors. The already-existing Company shareholders, who became a party to the Wedco Shareholders Agreement, wanted to ensure there was a balance of representation on the board of directors of the surviving entity and that the Wedco shareholders, by virtue of the significant number of shares they would hold once the merger was effected, would not dominate the board of directors. The parties to the Wedco Shareholders Agreement also desired to maintain board-level involvement of directors with significant experience in Wedco's business to retain their knowledge of Wedco's business and customers post-merger. Also, the controlling Wedco shareholders were concerned not only that they had a say in the business going forward, but also that they were comfortable that the new management would take care of their business, employees and customers. The Wedco Shareholders Agreement therefore provided support for continuing management of the merged business by the then- current management of the Company. The existence of the Wedco Shareholders Agreement and the agreement itself were disclosed in the proxy statement/prospectus provided to shareholders at the time of the Wedco merger. In the proxy statement/prospectus, the Company's Board of Directors recommended approval of the Wedco merger, which included, as part of the contemplated transactions, the Wedco Shareholders Agreement. The Company believes that the Wedco Shareholders Agreement did not increase the amount of consideration that the Company paid in the Wedco merger. The Board did not make a separate or specific determination regarding (1) potential conflicts of interest from the increased voting power of the executive officers that resulted from the Wedco Shareholders Agreement or (2) possible increases in consideration due to the Wedco Shareholders Agreement; however, individual directors may have considered such matters in approving the transaction. 17 The descriptions of the agreements and proxies contained above do not purport to be complete and are qualified in their entirety by the provisions of such documents, copies of which have been included as Exhibits 1 -11 hereof and which are incorporated herein by reference. Pacholder Associates, Inc. ("PAI"), which is majority-owned by Pacholder, Sylvia A. Pacholder and Morgan, may be deemed to beneficially own the following 10-3/8% Senior Notes due 2007 of the Company (the "Senior Notes"): . $1,725,000 in face value owned by Pacholder High Yield Fund, Inc. ("PHYF") for which Pacholder Associates may be deemed to possess dispositive authority; and . $2,275,000 in face value owned by three PAI clients for which PAI may be deemed to possess dispositive authority. The Senior Notes are held pursuant to customary arrangements similar to those for which PAI or PHYF (neither of which was formed with a view to investing in such securities) holds other securities. Such arrangements do not relate specifically to the Senior Notes. See the Investment Advisory Agreement between Pacholder High Yield Fund, Inc. (formerly known as Pacholder Fund, Inc.) and Pacholder & Company, LLC included as Exhibit 6 to this Schedule 13D and incorporated herein by reference. Pacholder & Company, LLC is 51%-owned by PAI and possesses the investment powers set forth in the Investment Advisory Agreement. In addition, PAI possesses dispositive and voting authority in regard to certain Common Stock and Convertible Exchangeable Preferred Stock held by Pacholder Heron pursuant to an Investment Advisory Agreement between Pacholder Heron and Pacholder Associates. A copy of this agreement is included as Exhibit 5 to this Schedule 13D and is incorporated herein by reference. See also the table of security ownership included in Item 5 above and note (2) to that table. This information is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 1. Investment Letter dated April 20, 1994, executed by Jack C. Cave relating to the Frontier Inspection Services, Inc. merger. 2. Irrevocable proxy dated June 1, 1995, executed by Raymond J. Dixon, Jr. relating to the R.J. Dixon, Inc. merger. 3. Voting Agreement and Irrevocable Proxy dated July 19, 1996, executed by Joe Moore relating to the Polymer Service of Indiana, Inc. merger. 4. Voting Agreements and Irrevocable Proxies dated December 9, 1996 executed by Eddie Johnson, Max Kloesel and Carol C. Munn relating to the Bayshore Industrial, Inc. merger. 18 5. Investment Advisory Agreement dated December 17, 1997 between Pacholder Heron, L.P. and Pacholder Associates, Inc. 6. Investment Advisory Agreement dated August 20, 1998 between Pacholder High Yield Fund, Inc. (formerly known as Pacholder Fund, Inc.) and Pacholder & Company, LLC (51%-owned by Pacholder Associates, Inc.). 7. Engagement Letter with DRW 8. Probable Belief Letter with DRW 9. Wedco Shareholders' Agreement 10. ICO Group Shareholder Proxy 11. Wedco Shareholder Proxy After reasonable inquiry and to the best knowledge and belief of the undersigned, it is hereby certified that the information set forth in this statement is true, complete and correct. Dated: May 17, 2001 /s/ Al O. Pacholder -------------------------------------- Dr. Al O. Pacholder /s/ Jon C. Biro -------------------------------------- Jon C. Biro /s/ David M. Gerst -------------------------------------- David M. Gerst 19 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PACHOLDER ASSOCIATES, INC. For each director and executive officer of Pacholder Associates, Inc. ("Pacholder Associates"), the following table sets forth the name, business address and present principal occupation or employment and the organization where such employment is conducted.
RESIDENCE OR BUSINESS ADDRESS; PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; PRINCIPAL BUSINESS AND ADDRESS OF ANY CORPORATION OR OTHER ORGANIZATION NAME POSITION WITH PACHOLDER ASSOCIATES WHICH SUCH EMPLOYMENT IS CONDUCTED (1): - ----------------------------- ---------------------------------- ------------------------------------------------- Al O. Pacholder(2) Chairman of the Board Chairman and Chief Financial Officer and Director of ICO, Inc., 11490 Westheimer, Suite 1000, Houston, Texas 77077 William J. Morgan(2) President and Director James P. Shanahan, Jr.(3) Executive Vice President and Director James E. Gibson(4) Executive Vice President Sylvia A. Pacholder(2) Director President, Chief Executive Officer, Secretary and Director of ICO, Inc., 11490 Westheimer, Suite 1000, Houston, Texas 77077
- ------------- (1) If the individual's principal employment is with Pacholder Associates, this column is left blank. The address of Pacholder Associates is 8044 Montgomery Road, Suite 480, Cincinnati, Ohio 45236, and this is the business address for each individual whose principal employment is with Pacholder Associates. (2) This individual is a signatory to the Schedule 13D filed with the Commission of June 13, 1988 (the "Original Statement") and Amendment 18 filed with the Commission on January 31, 2001 ("Amendment 18"). Information for Items 2 through 6 of Schedule 13D relating to this individual is disclosed in the Original Statement, Amendment No. 18, and this Schedule 13D. (3) Mr. Shanahan is a citizen of the United States. Mr. Shanahan has not, during the last five years, been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or been party to a civil proceeding of a judicial or administrative body of 20 competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities law or finding any violation with respect to such laws. Mr. Shanahan owns 15,000 shares of the Company's Common Stock, for which he has sole voting and dispositive power. Mr. Shanahan is the custodian of 300 shares of Convertible Exchangeable Preferred Stock for his minor child for which he may be deemed to be a beneficial owner. Mr. Shanahan was given the 15,000 shares of Common Stock by the Company for services he rendered in conjunction with the Wedco Acquisition. The shares of Convertible Exchangeable Preferred Stock were acquired with personal funds. (4) Mr. Gibson is a citizen of the United States. Mr. Gibson has not, during the last five years, been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities law or finding any violation with respect to such laws. Mr. Gibson owns 28,000 shares of the Company's Common Stock for which he has sole voting and dispositive power. This share amount includes 1,000 shares of Common Stock owned jointly by Mr. Gibson and his wife and 27,000 shares of Common Stock that are issuable upon exercise of stock options granted under the 1993 Stock Option Plan for Non-Employee Directors. 21 SCHEDULE II CERTAIN INFORMATION REGARDING PACHOLDER HERON, LP Pacholder Heron, L.P. ("Pacholder Heron") is a Delaware limited partnership. Its principal business activity is acting as an investment partnership. Pacholder Heron's business address is c/o Pacholder Associates, Inc., 8044 Montgomery Road, Suite 480, Cincinnati, Ohio 45236. Information regarding the general partners of Pacholder Heron is set forth in the table below.
RESIDENCE OR BUSINESS ADDRESS; PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; PRINCIPAL BUSINESS AND ADDRESS OF ANY CORPORATION OR NAME OTHER ORGANIZATION IN NAME WHICH SUCH EMPLOYMENT IS CONDUCTED: - ---- ---------------------------------------------------------------- Al O. Pacholder(1) Chairman and Chief Financial Officer of ICO, Inc., 11490 Westheimer, Suite 1000, Houston, Texas 77077 William J. Morgan(1) President and Director, Pacholder Associates, Inc., 8044 Montgomery Road, Suite 480, Cincinnati, Ohio 45236 Pacholder Associates, Inc.(1) Investment Advisory Firm, 8044 Montgomery Road, Suite 480, Cincinnati, Ohio 45236 James P. Shanahan, Jr.(2) Executive Vice President and Director, Pacholder Associates, Inc., 8044 Montgomery Road, Suite 480, Cincinnati, Ohio 45236
- ------------- (1) This individual is a signatory to the Schedule 13D filed with the Commission on June 13, 1988 ("Original Statement") and Amendment 18 ("Amendment 18") filed with the Commission on January 31, 2001. Information for Items 2 through 6 of Schedule 13D relating to this individual is disclosed in this Schedule 13D, the Original Statement, or Amendment No. 18. (2) Information regarding Mr. Shanahan is included on Schedule I to this Schedule 13D, and this information is incorporated herein by reference. Pacholder Heron has not, during the last five years, been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities law or finding any violation with respect to such laws. The Company's securities held by Pacholder Heron were acquired with personal funds and working capital of the partners. Pacholder Associates has been granted voting and dispositive authority over the Company's (and other) securities held by Pacholder Heron pursuant to an Investment Advisory Agreement between Pacholder Heron and Pacholder Associates. This agreement is included as Exhibit 5 to this Amendment 18 to Schedule 13D and is incorporated herein by reference. 22 SCHEDULE III CERTAIN INFORMATION REGARDING PERSONS WHO ARE PARTIES TO PROXIES AND VOTING AGREEMENTS WITH ICO RELATED TO MERGERS To the best of the knowledge of each individual and entity listed on the cover of and signatory to this Schedule 13D: (1) during the last five years, none of the following individuals has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or has been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities law or finding any violation with respect to such laws; and (2) each of the individuals listed below is a citizen of the United States.
RESIDENCE OR BUSINESS ADDRESS; PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; PRINCIPAL BUSINESS AND ADDRESS OF ANY CORPORATION OR OTHER ORGANIZATION IN NAME WHICH SUCH EMPLOYMENT IS CONDUCTED: - ---- -------------------------------------------------------------------------- Jack C. Cave Special Project Manager, ICO Worldwide, Inc., 5012 Andrews Highway, Odessa, Texas 79762. ICO Worldwide, Inc.'s principal business is oilfield services. Raymond J. Dixon, Jr. Vice President of Business Development, ICO Worldwide, Inc., Post Office Box 1107, Youngsville, Louisiana 70592. ICO Worldwide, Inc.'s principal business is oilfield services. Joe Moore 3307 Latrobe Lane, Katy, Texas 77450. Mr. Moore is a former employee, and current employment information is not known. Eddie Johnson Maintenance and Procurement Manager, Bayshore Industrial, Inc., 1300 McCabe Road, La Porte, Texas 77571. Bayshore Industrial, Inc.'s principal business is specialized petrochemical processing. Max Kloesel Senior Vice President of Sales, Bayshore Industrial, Inc., 1300 McCabe Road, La Porte, Texas 77571. Bayshore Industrial, Inc.'s principal business is specialized petrochemical processing.
23
Carol Munn Vice President - Director of Taxation, ICO, Inc., 11490 Westheimer, Suite 1000, Houston, Texas 77077. ICO is engaged in specialized petrochemical processing and oilfield services.
Shares of the Company's Common Stock held by the individuals listed above were acquired in the various merger transactions discussed in Item 6 of this Schedule 13D (and incorporated herein by reference), with personal funds, pursuant to the Company's Plans and pursuant to the Company's various employee stock option plans. 24 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - --------- ----------- 1. Investment Letter dated April 20, 1994, executed by Jack C. Cave relating to the Frontier Inspection Services, Inc. merger. 2. Irrevocable proxy dated June 1, 1995, executed by Raymond J. Dixon, Jr. relating to the R.J. Dixon, Inc. merger. 3. Voting Agreement and Irrevocable Proxy dated July 19, 1996, executed by Joe Moore relating to the Polymer Service of Indiana, Inc. merger. 4. Voting Agreements and Irrevocable Proxies dated December 9, 1996 executed by Eddie Johnson, Max Kloesel and Carol C. Munn relating to the Bayshore Industrial, Inc. merger. 5. Investment Advisory Agreement dated December 17, 1997 between Pacholder Heron, L.P. and Pacholder Associates, Inc. 6. Investment Advisory Agreement dated August 20, 1998 between Pacholder High Yield Fund, Inc. (formerly known as Pacholder Fund, Inc.) and Pacholder & Company, LLC (51% owned by Pacholder Associates, Inc.). 7. Engagement letter with DRW 8. Probable Belief Letter with DRW 9. Wedco Shareholders' Agreement 10. ICO Group Shareholder Proxy 11. Wedco Shareholder Proxy 25 EX-99.1 2 dex991.txt INVESTMENT LETTER EXHIBIT 1 INVESTMENT LETTER April 20, 1994 ICO, Inc. 100 Glenborough Drive Suite 250 Houston, Texas 77067 Gentlemen: In connection with the Agreement and Plan of Merger (the "Agreement") dated April 19, 1994, by and among ICO, Inc. ("ICO"), a Texas corporation, Frontier Inspection Services, Inc. (the "Company"), a New Mexico corporation, FIS ACQUISITION Corp. (the "Purchaser"), a New Mexico corporation, and each of the shareholders of Frontier Inspection Services, Inc., pursuant to which the Company will merge into the Purchaser and the undersigned will receive 138,000 shares of common stock of ICO no par value (the "Shares") in exchange for 600 shares of common stock $1.00 par value of the Company, ICO has required this letter from the undersigned as a condition and inducement to the issuance of such Shares. Accordingly, the undersigned hereby represents, warrants and covenants and agrees as follows: (1) The undersigned acknowledges that the Shares are being acquired for investment and not with a view to the distribution or further resale thereof. (2) The Shares being received under the Agreement have not been registered under the Securities Act of 1933 (the "Act") or the blue sky or securities laws of any state including Texas, where each Shareholder resides, and, therefore, must be held until they are registered under the Act and applicable state securities laws or unless an exemption from such registration is available for any such proposed sale or transfer. The undersigned further understands that Rules 144 and 145 under the Act provide a basis for making routine sales of restricted securities without registration under the Act but only upon strict compliance with the conditions set forth in such Rules and that there can be no assurances that the conditions of such Rules will be satisfied so as to allow a proposed sale. (3) The undersigned will not sell, pledge, hypothecate or otherwise transfer any of the Shares received under the Agreement except or unless there is in effect a registration statement under the Act covering such proposed disposition and the disposition is 26 made in accordance with such registration statement or the undersigned has notified ICO of the proposed disposition and shall have furnished ICO with a detailed statement of the circumstances surrounding the proposed distribution, and, if reasonably requested by ICO, the undersigned shall have furnished ICO with an opinion of counsel, reasonably satisfactory to ICO, that such disposition will not require registration of such Shares under the Act or any state or securities act. (4) The undersigned acknowledges that ICO has no obligation to register any of the shares except as set forth on the Registration Rights Agreement dated April 20, 1994. (5) The undersigned acknowledges that a legend will be placed upon certificates representing the Shares purchased in substantially the following form: The securities represented by this Certificate have not been registered under the Securities Act of 1933 or the laws of any state and may not be transferred in the absence of (a) an effective registration statement for the securities under the Securities Act of 1933 and applicable state laws, or (b) an opinion of counsel for the corporation that such registration is not required. (6) The undersigned has received and reviewed ICO's Form 10-K dated September 30, 1993, ICO's Form 10-Q dated December 31, 1993, ICO's Prospectus dated November 18, 1993 and ICO's Forms 8-K dated January 5, 1994, January 19, 1994 and February 4, 1994. (7) The undersigned and the undersigned's offeree representative, if applicable, has carefully read the documents referred to in Paragraph (6) and fully understands their content and has had an opportunity to ask questions and receive answers from executive officers of ICO with respect to this investment. (8) The undersigned, either alone or acting with the undersigned's offeree representative, has such knowledge and experience in financial and business matters in general and investments in particular that he or she is capable of evaluating the merits and risks of the investment in ICO and has obtained sufficient information from the documents provided under Paragraph (6) to evaluate the merits and risks of such investment. (9) The undersigned has received copies of the annual financial statements of the Company and other pertinent business and financial records of the Company and has been provided with current interim financial statements of the Company. The undersigned has also had an opportunity to ask questions and receive answers from executive officers of the Company with respect to the Company's business and operations and its value. 27 (10) The undersigned irrevocably appoints the Chairman of the Board and the President of ICO, or either of them, as the true and lawful proxy of the undersigned to vote all Shares of ICO acquired in the merger at any annual or special Shareholders' meeting of ICO, cumulatively or otherwise, on any matter on which shareholders are entitled to vote. THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST REGARDING SHARES PURCHASED PURSUANT TO THIS AGREEMENT. THIS PROXY SHALL EXPIRE UPON THE EARLIEST OF TERMINATION OF EMPLOYMENT OF THE UNDERSIGNED BY ICO, Inc. OR ANY DIRECT OR INDIRECT SUBSIDIARY THEREOF, THE TRANSFER OF SUCH SHARES TO A PERSON NOT AFFILIATED WITH OR AN IMMEDIATE FAMILY MEMBER OF THE UNDERSIGNED OR TEN YEARS AFTER THE DATE OF THIS AGREEMENT. The grant of this proxy shall be noted on the certificates for the shares. Very truly yours, /s/ Jack C. Cave ---------------- Jack C. Cave 28 EX-99.2 3 dex992.txt PLAN OF MERGER DATED 6/1/1995 EXHIBIT 2 June 1, 1995 ICO, Inc. 100 Glenborough Drive Suite 250 Houston, Texas 77067 Gentlemen: In connection with the Agreement and Plan of Merger (the "Agreement") dated June 1, 1995, by and among ICO, Inc. ("ICO"), a Texas corporation, R.J. Dixon, Inc. ("Company"), a Louisiana corporation, RJD ACQUISITION Corp., a Louisiana corporation (the "Purchaser"), and the undersigned, the sole shareholder of Company, pursuant to which the Company will merge into the Purchaser and the undersigned will receive 94,884 shares of the common stock of ICO, no par value (the "Shares"), in exchange for 100 shares of common stock, no par value, of the Company, ICO has required this letter from the undersigned as a condition and inducement to the issuance of such Shares. Accordingly, the undersigned hereby represents, warrants and covenants and agrees as follows: (1) The undersigned acknowledges that the Shares are being acquired for investment and not with a view to the distribution or further resale thereof. (2) The Shares being received under the Agreement have not been registered under the Securities Act of 1933 (the "Act") or the blue sky or securities laws of any state including Texas or Louisiana, where each Shareholder resides, and, therefore, must be held until they are registered under the Act and applicable state securities laws or unless an exemption from such registration is available for any such proposed sale or transfer. The undersigned further understands that Rules 144 and 145 under the Act provide a basis for making routine sales of restricted securities without registration under the Act but only upon strict compliance with the conditions set forth in such Rules and that there can be no assurances that the conditions of such Rules will be satisfied so as to allow a proposed sale. (3) The undersigned will not sell, pledge, hypothecate or otherwise transfer any of the Shares received under the Agreement except or unless there is in effect a registration statement under the Act covering such proposed disposition and the disposition is made in accordance with such registration statement or the undersigned has notified 29 ICO of the proposed disposition and shall have furnished ICO with a detailed statement of the circumstances surrounding the proposed distribution, and, if reasonably requested by ICO, the undersigned shall have furnished ICO with an opinion of counsel, reasonably satisfactory to ICO, that such disposition will not require registration of such Shares under the Act or any state or securities act. (4) The undersigned acknowledges that ICO has no obligation to register any of the Shares except as set forth in the Registration Rights Agreement dated June 1, 1995, between the undersigned and ICO. (5) The undersigned acknowledges that a legend will be placed upon certificates representing the Shares purchased in substantially the following form: The securities represented by this Certificate have not been registered under the Securities Act of 1933 or the laws of any state and may not be transferred in the absence of (a) an effective registration statement for the securities under the Securities Act of 1933 and applicable state laws, or (b) an opinion of counsel for the corporation that such registration is not required. (6) The undersigned has received and reviewed ICO's Form 10-K for the fiscal year ending September 30, 1994, ICO's Forms 10-Q for the fiscal quarters ending December 31, 1994 and March 31, 1995, ICO's Prospectus dated June 7, 1994 and ICO's Forms 8-K filed by it with the Securities and Exchange Commission since October 1, 1994. (7) The undersigned and the undersigned's offeree representative, if applicable, has carefully read the documents referred to in Paragraph (6) and fully understands their content and has had an opportunity to ask questions and receive answers from executive officers of ICO with respect to this investment. (8) The undersigned, either alone or acting with the undersigned's offeree representative, has such knowledge and experience in financial and business matters in general and investments in particular that he or she is capable of evaluating the merits and risks of the investment in ICO and has obtained sufficient information from the documents provided under Paragraph (6) to evaluate the merits and risks of such investment. (9) The undersigned has received copies of the annual financial statements of ICO and other pertinent business and financial records of ICO and has been provided with current interim financial statements of ICO. The undersigned has also had an opportunity to ask questions and receive answers from executive officers of ICO with respect to its business and operations and its value. 30 (10) The undersigned irrevocably appoints the Chairman of the Board and the President of ICO, or either of them, as the true and lawful proxy of the undersigned to vote all Shares of ICO acquired in the merger at any annual or special Shareholders' meeting of ICO, cumulatively or otherwise, on any matter on which shareholders are entitled to vote. THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST REGARDING SHARES PURCHASED PURSUANT TO THIS AGREEMENT. THIS PROXY SHALL EXPIRE UPON THE EARLIEST OF TERMINATION OF EMPLOYMENT OF THE UNDERSIGNED BY ICO, Inc. OR ANY DIRECT OR INDIRECT SUBSIDIARY THEREOF, THE TRANSFER OF SUCH SHARES TO A PERSON NOT AFFILIATED WITH OR AN IMMEDIATE FAMILY MEMBER OF THE UNDERSIGNED OR TEN YEARS AFTER THE DATE OF THIS AGREEMENT. The grant of this proxy shall be noted on the certificates for the Shares. Very truly yours, /s/ Raymond J. Dixon, Jr. ------------------------- Raymond J. Dixon, Jr. 31 EX-99.3 4 dex993.txt VOTING AGREEMENT AND IRREVOCABLE PROXY EXHIBIT 3 VOTING AGREEMENT AND IRREVOCABLE PROXY WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated of even date herewith among ICO, Inc., a Texas corporation ("ICO"), ICO ACQUISITION of Indiana, Inc., an Indiana corporation and wholly- owned subsidiary of ICO ('Sub"), Polymer Service of Indiana, Inc., an Indiana corporation ("PSI") and the shareholders of PSI (including the undersigned), PSI is to be merged with and into Sub and become a wholly-owned subsidiary of ICO (the "Merger"), and, in connection with the Merger, the undersigned shareholder of PSI will receive, among other consideration, certain shares of the Common Stock, no par value, of ICO (the "Common Stock") in exchange for the shares of common stock of PSI owned by him at the effective time of the Merger; and WHEREAS, to induce ICO and Sub to enter the Merger Agreement, the undersigned wishes to enter this agreement to grant the Chairman of the Board or the President of ICO or, either of them, as designated officers of ICO, as his proxy with respect to the voting of shares of Common Stock owned by the undersigned in the manner set forth below; NOW THEREFORE, in consideration of the foregoing, the undersigned hereby agrees as follows: 1. Agreement to Vote Shares. The undersigned hereby agrees that, except with respect to any merger, sale of all or substantially all of the assets or liquidation or dissolution of the Company, or any transaction having the same effect, with respect to all matters hereafter submitted to a vote or consent of the shareholders of ICO, he will vote all shares of Common Stock received by him pursuant to the Merger Agreement at the direction of the Chairman of the Board or the President of ICO, if so requested by either such person. 2. Grant of Proxy. The undersigned hereby revokes any prior proxies and appoints the Chairman of the Board and the President of ICO, or either of them, with or without the other, proxies, with full power of substitution, to vote in their sole discretion all shares of Common Stock that the undersigned is entitled to vote at any special or annual meeting of the shareholders of ICO (or any postponement or adjournment thereof), cumulatively or otherwise, on any matters on which the shareholders are entitled to vote. In addition, such proxies are granted the power to execute written consents with respect to any matter to which they would be entitled to vote at a meeting of the shareholders of ICO as set forth above. 3. Representations and Warranties. The undersigned represents, warrants and acknowledges that he has full power and authority to execute this Voting Agreement and Irrevocable Proxy ("Agreement"), and that this Agreement is binding and enforceable against him in accordance with its terms. 32 4. Proxy Irrevocable. THE UNDERSIGNED AGREES AND ACKNOWLEDGES THAT, AS A SHAREHOLDER OF PSI, HE WILL RECEIVE SUBSTANTIAL CONSIDERATION IN CONNECTION WITH THE MERGER, AND THAT THIS AGREEMENT IS EXECUTED BY THE UNDERSIGNED IN CONSIDERATION FOR EXECUTION OF THE MERGER AGREEMENT BY ICO AND SUB, AND THAT THE PROXY GRANTED IN PARAGRAPH 2 HEREOF SHALL BE DEEMED TO BE COUPLED WITH AN INTEREST AND IS IRREVOCABLE. THE UNDERSIGNED FURTHER AGREES THAT HE WILL NOT GRANT ANY PROXY OR PROXIES INCONSISTENT WITH THIS AGREEMENT. 5. Termination Transferability of Shares. The provisions of this Agreement shall apply to the Common Stock for as long as the Common Stock is owned by the undersigned or any person or entity related or affiliated to the undersigned or ten (10) years from the date hereof, whichever is shorter. The undersigned will not transfer any shares of Common Stock received by him in the Merger to a person or entity related or affiliated with the undersigned unless the transferee agrees that the shares transferred will remain subject to this Agreement. ICO shall have the right to refuse to transfer, and to instruct its transfer agent to refuse to transfer, any of the Common Stock unless the foregoing provisions have been satisfied. IN WITNESS WHEREOF, the undersigned has executed this Agreement as of this 19 day of July 1996. /s/ Joe Moore ------------- (Signature) Joe Moore ------------- (Name) Agreed to and Accepted by ICO By: /s/ Jon C. Biro ---------------- Name: Jon C. Biro Title: Treasurer Date: July 18, 1996 33 EX-99.4 5 dex994.txt VOTING AGREEMENT EXHIBIT 4 VOTING AGREEMENT AND IRREVOCABLE PROXY WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated of even date herewith among ICO, Inc., a Texas corporation ("ICO"), ICO ACQUISITION, Inc., a Texas corporation and wholly-owned subsidiary of ICO ("Sub"), Bayshore Industrial, Inc., a Texas corporation ("Bayshore") and the shareholders of Bayshore (including the undersigned), Bayshore is to be merged with and into Sub and become a wholly-owned subsidiary of ICO (the "Merger") and, in connection with the Merger, the undersigned shareholder of Bayshore will receive, among other consideration, certain shares of the Common Stock, no par value, of ICO (the "Common Stock") in exchange for the shares of common stock of Bayshore owned by him or her at the effective time of the Merger; and WHEREAS, to induce ICO and Sub to enter the Merger Agreement, the undersigned wishes to enter this agreement to grant the Chairman of the Board or the President of ICO or, either of them, as designated officers of ICO, as his or her proxy with respect to the voting of shares of Common Stock owned by the undersigned in the manner set forth below; NOW THEREFORE, in consideration of the foregoing, the undersigned hereby agrees as follows: 1. Agreement to Vote Shares. The undersigned hereby agrees that except with respect to any merger, sale of all or substantially all of the assets or liquidation or dissolution of the Company, or any transaction having the same effect, with respect to all matters hereafter submitted to a vote or consent of the shareholders of ICO, he or she will vote all shares of Common Stock received by him or her pursuant to the Merger Agreement at the direction of the Chairman of the Board or the President of ICO, if so requested by either such person. 2. Grant of Proxy. The undersigned hereby revokes any prior proxies and appoints the Chairman of the Board and the President of ICO, or either of them, with or without the other, proxies, with full power of substitution, to vote in their sole discretion all shares of Common Stock that the undersigned is entitled to vote at any special or annual meeting of the shareholders of ICO (or any postponement or adjournment thereof), cumulatively or otherwise, on any matters on which the shareholders are entitled to vote. In addition, such proxies are granted the power to execute written consents with respect to any matter to which they would be entitled to vote at a meeting of the shareholders of ICO as set forth above. 3. Representations and Warranties. The undersigned represents, warrants and acknowledges that he or she has full power and authority to execute this Voting Agreement and Irrevocable Proxy ("Agreement"), and that this Agreement is binding and enforceable against him or her in accordance with its terms. 34 4. Proxy Irrevocable. THE UNDERSIGNED AGREES AND ACKNOWLEDGES THAT, AS A SHAREHOLDER OF BAYSHORE, HE OR SHE WILL RECEIVE SUBSTANTIAL CONSIDERATION IN CONNECTION WITH THE MERGER, AND THAT THIS AGREEMENT IS EXECUTED BY THE UNDERSIGNED IN CONSIDERATION FOR EXECUTION OF THE MERGER AGREEMENT BY ICO AND SUB, AND THAT THE PROXY GRANTED IN PARAGRAPH 2 HEREOF SHALL BE DEEMED TO BE COUPLED WITH AN INTEREST AND IS IRREVOCABLE. THE UNDERSIGNED FURTHER AGREES THAT HE OR SHE WILL NOT GRANT ANY PROXY OR PROXIES INCONSISTENT WITH THIS AGREEMENT. 5. Termination; Transferability of Shares. The provisions of this Agreement shall apply to the Common Stock for as long. as the Common Stock is owned by the undersigned or any person or entity related or affiliated to the undersigned or ten (10) years from the date hereof, whichever is shorter. Notwithstanding the foregoing, this Agreement shall terminate at such time as i) the undersigned ceases to be an employee of Bayshore, ICO or a related entity, or ii) either one or both of Asher Pacholder and Sylvia A. Pacholder shall cease to serve ICO as Chairman of the Board and President and Chief Executive Officer, respectively. The undersigned will not transfer any shares of Common Stock received by him or her in the Merger to a person or entity related or affiliated with the undersigned unless the transferee agrees that the shares transferred will remain subject to this Agreement. ICO shall have the right to refuse to transfer, and to instruct its transfer agent to refuse to transfer, any of the Common Stock unless the foregoing provisions have been satisfied. IN WITNESS WHEREOF, the undersigned has executed this Agreement as of this 10 day of December, 1996. /s/ Eddie Johnson ----------------- Eddie Johnson Agreed to and Accepted by ICO, Inc. By: /s/ Asher O. Pacholder ---------------------- Name: Asher O. Pacholder Title: Chairman Date: December 10, 1996 35 EXHIBIT 4 VOTING AGREEMENT AND IRREVOCABLE PROXY WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger Agreement') dated of even date herewith among ICO, Inc., a Texas corporation ("ICO"), ICO ACQUISITION, Inc., a Texas corporation and wholly-owned subsidiary of ICO ("Sub"), Bayshore Industrial, Inc., a Texas corporation ("Bayshore") and the shareholders of Bayshore (including the undersigned), Bayshore is to be merged with and into Sub and become a wholly-owned subsidiary of ICO (the "Merger") and, in connection with the Merger, the undersigned shareholder of Bayshore will receive, among other consideration, certain shares of the Common Stock, no par value, of ICO (the "Common Stock") in exchange for the shares of common stock of Bayshore owned by him or her at the effective time of the Merger; and WHEREAS, to induce ICO and Sub to enter the Merger Agreement, the undersigned wishes to enter this agreement to grant the Chairman of the Board or the President of ICO or, either of them, as designated officers of ICO, as his or her proxy with respect to the voting of shares of Common Stock owned by the undersigned in the manner set forth below; NOW THEREFORE, in consideration of the foregoing, the undersigned hereby agrees as follows: 1. Agreement to Vote Shares. The undersigned hereby agrees that except with respect to any merger, sale of all or substantially all of the assets or liquidation or dissolution of the Company, or any transaction having the same effect, with respect to all matters hereafter submitted to a vote or consent of the shareholders of ICO, he or she will vote all shares of Common Stock received by him or her pursuant to the Merger Agreement at the direction of the Chairman of the Board or the President of ICO, if so requested by either such person. 2. Grant of Proxy. The undersigned hereby revokes any prior proxies and appoints the Chairman of the Board and the President of ICO, or either of them, with or without the other, proxies, with full power of substitution, to vote in their sole discretion all shares of Common Stock that the undersigned is entitled to vote at any special or annual meeting of the shareholders of ICO (or any postponement or adjournment thereof), cumulatively or otherwise, on any matters on which the shareholders are entitled to vote. In addition, such proxies are granted the power to execute written consents with respect to any matter to which they would be. entitled to vote at a meeting of the shareholders of ICO as set forth above. 3. Representations and Warranties. The undersigned represents, warrants and acknowledges that he or she has full power and authority to execute this Voting Agreement and Irrevocable Proxy ("Agreement"), and that this Agreement is binding and enforceable against him or her in accordance with its terms. 36 4. Proxy Irrevocable. THE UNDERSIGNED AGREES AND ACKNOWLEDGES THAT, AS A SHAREHOLDER OF BAYSHORE, HE OR SHE WILL RECEIVE SUBSTANTIAL CONSIDERATION IN CONNECTION WITH THE MERGER, AND THAT THIS AGREEMENT IS EXECUTED BY THE UNDERSIGNED IN CONSIDERATION FOR EXECUTION OF THE MERGER AGREEMENT BY ICO AND SUB, AND THAT THE PROXY GRANTED IN PARAGRAPH 2 HEREOF SHALL BE DEEMED TO BE COUPLED WITH AN INTEREST AND IS IRREVOCABLE. THE UNDERSIGNED FURTHER AGREES THAT HE OR SHE WILL NOT GRANT ANY PROXY OR PROXIES INCONSISTENT WITH THIS AGREEMENT. 5. Termination; Transferability of Shares. The provisions of this Agreement shall apply to the Common Stock for as long. as the Common Stock is owned by the undersigned or any person or entity related or affiliated to the undersigned or ten (10) years from the date hereof, whichever is shorter. Notwithstanding the foregoing, this Agreement shall terminate at such time as i) the undersigned ceases to be an employee of Bayshore, ICO or a related entity, or ii) either one or both of Asher Pacholder and Sylvia A. Pacholder shall cease to serve ICO as Chairman of the Board and President and Chief Executive Officer, respectively. The undersigned will not transfer any shares of Common Stock received by him or her in the Merger to a person or entity related or affiliated with the undersigned unless the transferee agrees that the shares transferred will remain subject to this Agreement. ICO shall have the right to refuse to transfer, and to instruct its transfer agent to refuse to transfer, any of the Common Stock unless the foregoing provisions have been satisfied. IN WITNESS WHEREOF, the undersigned has executed this Agreement as of this 10 day of December, 1996. /s/ Max Kloesel --------------- MAX KLOESEL Agreed to and Accepted by ICO, Inc. By: /s/ Asher O. Pacholder ---------------------- Name: Asher O. Pacholder Title: Chairman Date: December 10, 1996 37 EXHIBIT 4 VOTING AGREEMENT AND IRREVOCABLE PROXY WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger Agreement') dated of even date herewith among ICO, Inc., a Texas corporation ("ICO"), ICO ACQUISITION, Inc., a Texas corporation and wholly-owned subsidiary of ICO ("Sub"), Bayshore Industrial, Inc., a Texas corporation ("Bayshore") and the shareholders of Bayshore (including the undersigned), Bayshore is to be merged with and into Sub and become a wholly-owned subsidiary of ICO (the "Merger") and, in connection with the Merger, the undersigned shareholder of Bayshore will receive, among other consideration, certain shares of the Common Stock, no par value, of ICO (the "Common Stock") in exchange for the shares of common stock of Bayshore owned by him or her at the effective time of the Merger; and WHEREAS, to induce ICO and Sub to enter the Merger Agreement, the undersigned wishes to enter this agreement to grant the Chairman of the Board or the President of ICO or, either of them, as designated officers of ICO, as his or her proxy with respect to the voting of shares of Common Stock owned by the undersigned in the manner set forth below; NOW THEREFORE, in consideration of the foregoing, the undersigned hereby agrees as follows: 1. Agreement to Vote Shares. The undersigned hereby agrees that except with respect to any merger, sale of all or substantially all of the assets or liquidation or dissolution of the Company, or any transaction having the same effect, with respect to all matters hereafter submitted to a vote or consent of the shareholders of ICO, he or she will vote all shares of Common Stock received by him or her pursuant to the Merger Agreement at the direction of the Chairman of the Board or the President of ICO, if so requested by either such person. 2. Grant of Proxy. The undersigned hereby revokes any prior proxies and appoints the Chairman of the Board and the President of ICO, or either of them, with or without the other, proxies, with full power of substitution, to vote in their sole discretion all shares of Common Stock that the undersigned is entitled to vote at any special or annual meeting of the shareholders of ICO (or any postponement or adjournment thereof), cumulatively or otherwise, on any matters on which the shareholders are entitled to vote. In addition, such proxies are granted the power to execute written consents with respect to any matter to which they would be. entitled to vote at a meeting of the shareholders of ICO as set forth above. 3. Representations and Warranties. The undersigned represents, warrants and acknowledges that he or she has full power and authority to execute this Voting Agreement and Irrevocable Proxy ("Agreement"), and that this Agreement is binding and enforceable against him or her in accordance with its terms. 38 4. Proxy Irrevocable. THE UNDERSIGNED AGREES AND ACKNOWLEDGES THAT, AS A SHAREHOLDER OF BAYSHORE, HE OR SHE WILL RECEIVE SUBSTANTIAL CONSIDERATION IN CONNECTION WITH THE MERGER, AND THAT THIS AGREEMENT IS EXECUTED BY THE UNDERSIGNED IN CONSIDERATION FOR EXECUTION OF THE MERGER AGREEMENT BY ICO AND SUB, AND THAT THE PROXY GRANTED IN PARAGRAPH 2 HEREOF SHALL BE DEEMED TO BE COUPLED WITH AN INTEREST AND IS IRREVOCABLE. THE UNDERSIGNED FURTHER AGREES THAT HE OR SHE WILL NOT GRANT ANY PROXY OR PROXIES INCONSISTENT WITH THIS AGREEMENT. 5. Termination; Transferability of Shares. The provisions of this Agreement shall apply to the Common Stock for as long. as the Common Stock is owned by the undersigned or any person or entity related or affiliated to the undersigned or ten (10) years from the date hereof, whichever is shorter. Notwithstanding the foregoing, this Agreement shall terminate at such time as i) the undersigned ceases to be an employee of Bayshore, ICO or a related entity, or ii) either one or both of Asher Pacholder and Sylvia A. Pacholder shall cease to serve ICO as Chairman of the Board and President and Chief Executive Officer, respectively. The undersigned will not transfer any shares of Common Stock received by him or her in the Merger to a person or entity related or affiliated with the undersigned unless the transferee agrees that the shares transferred will remain subject to this Agreement. ICO shall have the right to refuse to transfer, and to instruct its transfer agent to refuse to transfer, any of the Common Stock unless the foregoing provisions have been satisfied. IN WITNESS WHEREOF, the undersigned has executed this Agreement as of this 10 day of December, 1996. /s/ Carol C. Munn ----------------- CAROL C. MUNN Agreed to and Accepted by ICO, Inc. By: /s/ Asher O. Pacholder ---------------------- Name: Asher O. Pacholder Title: Chairman Date: December 10, 1996 39 EX-99.5 6 dex995.txt INVESTMENT ADVISORY AGREEMENT EXHIBIT 5 INVESTMENT ADVISORY AGREEMENT AGREEMENT ("Agreement") made as of the 17 day of December, 1997 by and between Pacholder Heron, L.P., a Delaware limited partnership, (hereinafter called the "Fund"), and Pacholder Associates, Inc. (hereinafter called the "Advisor"), WHEREAS, The Advisor is registered as an investment advisor under the Investment Advisers Act of 1940 (the "Act"), and engages in the business of acting as investment advisor; and WHEREAS, The Fund desires to retain the Advisor to render management and investment advisory services in the manner and on the terms and conditions hereafter set forth; and WHEREAS, The Advisor desires to be retained to perform services on said terms and conditions; NOW, THEREFORE, in consideration of the promises and the mutual covenants hereinafter contained, the Fund and the Advisor agree as follows: 1. Duties and Responsibilities of Advisor. A. Investment Advisory Services. The Fund hereby retains the Advisor to act as investment manager of the Fund and, subject to the supervision of the Fund's General Partner's Board of Managers, to supervise the investment activities of the Fund as hereinafter set forth. Without limiting the generality of the foregoing, the Advisor: (i) shall obtain and evaluate such information and advice relating to the economy, securities market and Securities as it deems necessary or useful to discharge its duties hereunder; (ii) shall continuously manage the assets of the Fund in a manner consistent with the investment objectives and policies of the Fund; (iii) shall determine the securities to be purchased, sold or otherwise disposed of by the Fund and the timing of such purchases, sales and dispositions; and (iv) shall take such further action, including the placing of purchase and sale orders on behalf of the Fund, as the Advisor shall deem necessary or appropriate. The Advisor shall also furnish to or place at the disposal of the Fund such of the information, evaluations, analyses and opinions formulated or obtained by the Advisor in the discharge of its duties as the Fund may, from time to time, reasonably request. 40 B. Reports. The Advisor shall furnish monthly portfolio valuations, quarterly reports to partners and such other information, reports, evaluations, analyses and opinions as the Fund may, at any time or from time to time, reasonably request or as the Advisor may deem helpful to the Fund. C. Fund Personnel. The Advisor agrees to permit individuals who are officers or employees of the Advisor to serve as managers of the Fund's General Partner without remuneration from or other cost to the Fund. D. Personnel, Office Space, and Facilities of Advisor. The Advisor at its own expense shall furnish or provide and pay the cost of such office space, office equipment, office personnel, and office services as the Advisor requires in the performance of its investment advisory and other obligations under this Agreement. E. Accounting and Recordkeeping Services. (i) The Advisor shall be responsible for (i) accounting relating to the Fund and investment transactions of the Fund, (ii) the determination of net asset value of the outstanding partners' interests in the Fund as of the last day of each calendar month and in the manner described in the Fund's Private Offering memorandum ("pricing"), and the timely communication of such information to the Fund's General Partner, (iii) maintaining the books of account of the Fund and (iv) monitoring, in conjunction with the Fund's custodian (the "Custodian"), all corporate actions taken by companies whose securities are held by the Custodian for the Fund which affect such securities. (ii) The Advisor shall create and maintain all necessary records in accordance with all applicable laws, rules and regulations, and those records pertaining to the various functions performed by it hereunder. All records shall be the property of the Fund at all times and shall be available for inspection and use by the Fund. (iii) The Advisor shall make available during regular business hours all records and other data created and maintained pursuant to this Agreement for reasonable audit and inspection by the Fund, any person retained by the Fund, or any regulatory agency having authority over the Fund. Upon notice by the Fund, the Advisor shall make available during regular business hours its facilities and premises employed in connection with its performance of this Agreement for visitation by any person designated by the Fund, or any regulatory agency having authority over the Fund. 41 2. Allocation of Expenses. A. Expenses Paid by Advisor. The Advisor shall bear the cost of rendering the investment management and supervisory services to be performed by it under this Agreement. Notwithstanding the foregoing, Advisor shall not be responsible for the costs of retaining professional consultants in the legal, accounting, investment banking or other specialized areas in connection with the review, analysis or due diligence of investments or potential investments on behalf of the Fund or in connection with capital restructurings, bankruptcy proceedings or other transactions involving issuers of securities or similar instruments in which the Fund has invested. B. Expenses Paid by Fund. The Fund assumes and shall pay or cause to be paid all other expenses of the Fund, including, without limitation; the charges and expenses of any registrar, any custodian or depository appointed by the Fund for the safekeeping of its cash, portfolio securities and other property; brokers' commissions chargeable to the Fund in connection with portfolio transactions to which the Fund is a party; all taxes, including securities issuance and transfer taxes, and fees payable by the Fund to federal, state or other governmental agencies; charges and expenses of any outside service used for pricing of the securities and other investments held by the Fund; charges and expenses of legal counsel and accountants of the Fund in connection with any matter relating to the Fund; insurance premiums relating to the property or activities of the Fund and its Partners which inure to the Fund's benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); fees and expenses of counsel accountants and investment bankers retained in connection with the Fund's investments; and all other charges and costs of the Fund's operation unless otherwise explicitly provided herein. 3. Advisory Fee. A. In return for its services pursuant to this Agreement, Advisor will receive an annual fee equal to .50% of the fair market value of the net assets of the Partnership, including accrued interest, on the day immediately prior to the date on which the fee is to be paid (the "Advisory Fee"). Fees will be payable quarterly in advance from Partnership assets, based on the value of the Partnership assets on the day immediately preceding such payment date. For any period less than three (3) full months for which an Advisory Fee is paid, the Advisory Fee will be prorated on the basis of the actual number of days in that period and the Advisor will return to the Partnership, based upon such proration, the excess portion of the Advisory Fee paid at the beginning of such period. B. Any fees paid to the Advisor or to any of its Affiliates by any portfolio company or by any creditors committee or board of directors of any portfolio company shall not be required to be paid by the Advisor or any of its Affiliates to the partnership or any Partner and shall not be available as an offset or credit against the Advisory Fee. 42 4. Brokerage. Subject to the approval of the Board of Managers of the General Partner of the Fund, the Advisor, in carrying out its duties under Paragraph 1.A., may cause the Fund to pay a broker-dealer which furnishes brokerage or research services, as such services are defined under Section 28(e) of the Securities Exchange Act of 1934, as amended (the "34 Act"), a higher commission than that which might be charged by another broker-dealer which does not furnish brokerage or research services or which furnishes brokerage or research services deemed to be of lesser value, if such commission is deemed reasonable in relation to the brokerage and research services provided by the broker-dealer, viewed in terms of either that particular transaction or the overall responsibilities of the Advisor with respect to the accounts as to which it exercises investment discretion (as such term is defined under Section 3(a) (35) of the 34 Act). 5. Advisor's Use of the services of Others. The Advisor may employ, retain or otherwise avail itself of the services or facilities of other persons or organizations for the purpose of providing the Advisor or the Fund with such statistical and other factual information, such advice regarding economic factors and trends, such advice as to occasional transactions in specific securities or such other information, advice or assistance as the Advisor may deem necessary, appropriate or convenient for the discharge of its obligations hereunder or otherwise helpful to the Fund, or in the discharge of Advisor's overall responsibilities with respect to the other accounts which it serves as investment advisor. 6. Limitation of Liability of Advisor. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations hereunder, the Advisor shall not be liable to the Fund or any of its investors for any error of judgment or mistake of law or for any act or omission by the Advisor or for any losses sustained by the Fund or its investors. 7. Services to Other Clients. Nothing contained in this Agreement shall prevent the Advisor or any affiliated person of the Advisor from acting as investment advisor or manager for any other person, firm or corporation and shall not in any way bind or restrict the Advisor or any such affiliated person from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom they may be acting. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of the Advisor to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business whether of a similar or dissimilar nature. 8. Term of Agreement. This Agreement shall remain in effect until terminated by written agreement duly executed by both the Advisor and the Fund, or as follows: (a) the Fund may, at any time and without the payment of any penalty, terminate this Agreement upon thirty days' written notice to the Advisor; (b) this Agreement shall immediately terminate in the event of its assignment (to the extent required by law or regulation); and (c) the Advisor may terminate this Agreement without payment of penalty on one hundred eighty (180) days' written notice to the Fund. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed post-paid, to the other party at the principal office of such party. 43 9. Amendment; Entire Agreement. This Agreement may be amended modified or supplemented only by means of a writing duly executed by both the Advisor and the Fund. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written agreements, understandings or assumptions. 10. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Ohio and the applicable provisions of the Act. To the extent the applicable law of the State of Ohio, or any of the provisions herein, conflict with the applicable provisions of the Act, the latter shall control 11. Custody of Partnership Assets. Neither the Advisor nor any of its Affiliates shall have physical custody of the assets or funds of the Partnership and all transactions with respect to such assets or funds shall be carried out through such entities ("Custodians") other than the Advisor or its Affiliates as the Advisor shall appoint in writing. Each such Custodian shall be either (i) a broker-dealer subject to and in compliance with Rules 15c3-1 and 15c3-3 under the Securities Exchange Act of 1934 (the "Exchange Act"); or (ii) a bank as defined in Section 3(a)(6) of the Exchange Act. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the day and year first above written. PACHOLDER HERON LIMITED PARTNERSHIP BY: OP GENERAL PARTNER LLC BY: /s/ JAMES P. SHANAHAN, JR. -------------------------- MANAGER PACHOLDER ASSOCIATES, INC. BY: /s/ JAMES P. SHANAHAN, JR. -------------------------- ITS: MANAGING DIRECTOR AND GENERAL COUNSEL 44 EX-99.6 7 dex996.txt INVESTMENT ADVISORY AGREEMENT EXHIBIT 6 INVESTMENT ADVISORY AGREEMENT AGREEMENT made as of the 20th day of August, 1998, by and between Pacholder Fund, Inc., a Maryland corporation (hereinafter called the "Fund"), and Pacholder & Company, LLC, an Ohio limited liability company (hereinafter called the "Adviser"). WHEREAS, the Fund is engaged in business as a diversified, closed-end management investment company and is registered as such under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Adviser is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and engages in the business of acting as investment adviser; and WHEREAS, the Fund desires to retain the Adviser to render management and investment advisory services in the manner and on the terms and conditions hereinafter set forth; and WHEREAS, the Adviser desires to be retained to perform services on said terms and conditions; NOW, THEREFORE, in consideration of the promises and the mutual covenants hereinafter contained, the Fund and the Adviser agree as follows: 1. Duties and Responsibilities of Adviser. A. Investment Advisory Services. The Fund hereby retains the Adviser to act as investment manager of the Fund and, subject to the supervision of the Fund's Board of Directors, to supervise the investment activities of the Fund as hereinafter set forth giving due consideration to the policies of the Fund as expressed in the Fund's Registration Statement on Form N-2 under the 1940 Act and under the Securities Act of 1933, as amended, as well as to the factors affecting the status of the Fund as a "regulated investment company" under the Internal Revenue Code of 1986, as amended. Without limiting the generality of the foregoing, the Adviser: (i) shall obtain and evaluate such information and advice relating to the economy, securities market and securities as it deems necessary or useful to discharge its duties hereunder; (ii) shall continuously manage the assets of the fund in a manner consistent with the investment objectives and policies of the Fund; 45 (iii) shall determine the securities to be purchased, sold or otherwise disposed of by the Fund and the timing of such purchases, sales and dispositions; and (iv) shall take such further action, including the placing of purchase and sale orders on behalf of the Fund, as the Adviser shall deem necessary or appropriate. The Adviser shall also furnish to or place at the disposal of the Fund such of the information, evaluations, analyses and opinions formulated or obtained by the Adviser in the discharge of its duties as the Fund may, from time to time, reasonably request. B. Reports to Fund. The Adviser shall furnish to or place at the disposal of the Fund such information, reports, evaluations, analyses and opinions as the Fund may, at any time or from time to time, reasonably request or as the Adviser may deem helpful to the Fund. C. Fund Personnel. The Adviser agrees to permit individuals who are officers or employees of the Adviser to serve (if duly elected or appointed) as officers, directors, members of any committee of directors, members of any advisory board, or members of any other committee of the Fund, without remuneration from or other cost to the Fund. D. Personnel, Office Space, and Facilities of Adviser. The Adviser at its own expense shall furnish or provide and pay the cost of such office space, office equipment, office personnel, and office services as the Adviser requires in the performance of its investment advisory and other obligations under this Agreement. 2. Allocation of Expenses. A. Expenses Paid by Adviser. The Adviser shall bear the cost of rendering the investment management and supervisory services to be performed by it under this Agreement, and shall, at its own expense, pay the compensation of the officers and employees of the Fund who are employees of the Adviser or any corporate affiliate of the Adviser, if any, and provide such office space, facilities and equipment and such clerical help and bookkeeping services as the Fund shall reasonably require in the conduct of its business. The Adviser shall also bear the cost of telephone service, heat, light, power and other utilities provided to the Fund. B. Expenses Paid by Fund. The Fund assumes and shall pay or cause to be paid all other expenses of the Fund, including without limitation: the charges and expenses of any registrar, any custodian or depository appointed by the Fund for the safekeeping of its cash, portfolio securities and other property, and any stock transfer or dividend agent or agents appointed by the Fund; brokers, commissions chargeable to the Fund in connection with portfolio transactions to which the Fund is a party; all taxes, including securities issuance and transfer taxes, and fees payable by the Fund to federal, state or other governmental agencies; the cost and expense of engraving or printing of certificates representing shares of the Fund; all costs and expenses in connection with the registration and maintenance of registration of the Fund and its shares with the Securities and Exchange Commission and various states and 46 other jurisdictions (including filing fees and legal fees and disbursements of counsel and the costs and expenses of preparation, printing (including typesetting) and distributing a prospectus for such purposes); all expenses of stockholders' and directors' meetings and of preparing, printing and mailing proxy statements and reports to stockholders; fees of directors or members of any advisory board or committee who are not employees of the Adviser or any corporate affiliate of the Adviser; travel expenses of directors; all expenses incident to the payment of any dividend reinvestment program; charges and expenses of any outside service used for pricing of the Fund's portfolio securities; charges and expenses of legal counsel, including counsel to the directors of the Fund who are not "interested persons" (as defined in the 1940 Act) of the Fund or the Adviser, and of independent accountants, in connection with any matter relating to the Fund; membership dues of industry associations; interest payable on Fund borrowings; fees and expenses incident to the listing of the Fund's shares on any stock exchange; postage; insurance premiums on property or personnel (including officers and directors) of the Fund which inure to its benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); fees and expenses of counsel, accountants and investment bankers; and all other charges and costs of the Fund's operation unless otherwise explicitly provided herein. 3. Compensation. A. Fulcrum Fee. As full compensation for the services provided, facilities furnished and expenses paid by the Adviser under this Agreement, the Fund agrees to pay the Adviser an annual investment advisory fee, which increases and decreases proportionately based on the investment performance of the Fund in relation to the investment record of the CS First Boston High Yield Index/TM/ (the "Index"). The advisory fee shall be accrued at least weekly and paid quarterly as soon as practicable after the end of each calendar quarter, as follows: (i) If the Fund's investment performance for the twelve months immediately preceding the end of the quarter is equivalent to the investment record of the Index for the same 12-month period, then the advisory fee shall be computed at the annual rate of 0.90% of the Fund's average net assets. The rate at which the advisory fee is computed shall be increased or decreased from the 0.90% fulcrum fee by 10% of the amount by which the investment performance of the Fund exceeds or is less than the investment record of the Index, up to a maximum of 1.40% and down to a minimum of 0.40%. For purposes of calculating the amount of the advisory fee, the Fund's average net assets shall be determined by taking the average of all determinations of such net assets during the applicable 12-month period. The investment performance of the Fund and the investment record of the Index shall be determined in accordance with the Advisers Act and the rules and regulations promulgated thereunder. 47 (ii) The compensation payable to the Adviser after the end of each quarter shall be equal to the amount of the annual advisory fee calculated as provided in sub-paragraph (i) above reduced by the compensation previously paid by the Fund to the Adviser and/or to Pacholder & Company in respect of the applicable 12-month period. In the event that such prior payments should exceed the amount of the annual advisory fee payable hereunder, the Adviser shall remit to the Fund such excess as soon as practicable after the end of the quarter. B. Proration. If the Adviser shall serve for less than the whole of any quarter, the investment advisory fee shall be prorated on the basis of twelve-month period immediately preceding the date of termination of this Agreement. 4. Brokerage. Subject to the approval of the Board of Directors of the Fund, the Adviser, in carrying out its duties under Section 1.A., may cause the Fund to pay a broker-dealer which furnishes brokerage and research services within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), a higher commission than that which might be charged by another broker-dealer, if such commission is deemed reasonable in relation to the brokerage and research services provided by the broker-dealer, viewed in terms of either that particular transaction or the overall responsibilities of the Adviser with respect to the accounts as to which it exercises investment discretion (as such term is defined under Section 3(a)(35) of the Exchange Act). 5. Adviser's Use of the Services of Others. The Adviser may (at its cost except as contemplated by Sections 2 and 4 of this Agreement) employ, retain or otherwise avail itself of the services or facilities of other persons or organizations for the purpose of providing the Adviser or the Fund with such statistical and other factual information, such advice regarding economic factors and trends, such advice as to occasional transactions in specific securities or such other information, advice or assistance as the Adviser may deem necessary, appropriate or convenient for the discharge of its obligations hereunder or otherwise helpful to the Fund, or in the discharge of Adviser's overall responsibilities with respect to the other accounts which it serves as investment adviser. 6. Ownership of Records. All records required to be maintained and preserved by the Fund pursuant to the provisions of rules or regulations of the Securities and Exchange Commission under Section 31(a) of the 1940 Act and maintained and preserved by the Adviser on behalf of the Fund are the property of the Fund and will be surrendered by the Adviser promptly on request by the Fund. 7. Limitation of Liability of Adviser. The Adviser will use its best efforts in the supervision and management of the investment activities of the Fund, but in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations hereunder the Adviser shall not be liable to the Fund or any of its shareholders for any error of judgment or mistake of law or for any act or omission by the Adviser or for any losses sustained by the Fund or its shareholders. 48 8. Services to Other Clients. Subject to Section 12 of this Agreement, nothing contained in this Agreement shall prevent the Adviser or any affiliated person of the Adviser from acting as investment adviser or manager for any other person, firm or corporation and shall not in any way bind or restrict the Adviser or any such affiliated person from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom they may be acting. Nothing in this Agreement shall limit or restrict the right of any director, officer or employee of the Adviser to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business whether of a similar or dissimilar nature. 9. Use of Adviser's Name. The Fund may include the name "Pacholder" or any other name derived from the name "Pacholder" only for so long as this Agreement or any extension, renewal or amendment hereof remains in effect, connected with the Adviser, or with any organization which shall have succeeded to the Adviser's business as investment adviser. At such time as this Agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, the Fund will (by corporate action, if necessary) cease to use any name derived from the name "Pacholder", any name similar thereto or any other name indicating that it is advised or otherwise connected with the Adviser, or with any organization which shall have succeeded to the Adviser's business as investment adviser. 10. Term of Agreement. This Agreement shall become effective as of the date first written above and, unless sooner terminated as provided herein shall continue in effect until June 30, 1999. Thereafter, if not terminated, this Agreement shall continue in effect for successive periods of 12 months each ending on June 30 of each year, provided such continuance is specifically approved at least annually by the vote of holders of "a majority of the outstanding voting securities" (as defined in the 1940 Act) of the Fund or by the Board of Directors of the Fund, and, in either event, by the vote of a majority of the directors of the Fund who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, (a) the Fund may, at any time and without the payment of any penalty, terminate this Agreement upon 30 days' written notice to the Adviser, either by majority vote of the directors of the Fund or by the vote of the holders of a majority of the outstanding voting securities of the Fund; (b) this Agreement shall immediately terminate in the event of its assignment (to the extent required by the 1940 Act and the rules thereunder) unless such automatic termination shall be prevented by an exemptive order of the Securities and Exchange Commission; and (c) the Adviser may terminate this Agreement without payment of penalty on 180 days' written notice to the Fund. In the event the Adviser elects to terminate this Agreement, the advisory fee payable during the 180-day period will be the lesser of the fee payable under this Agreement or the fee which will be payable to the Adviser under any new advisory agreement with the Fund. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed post-paid, to the other party at the principal office of such party. 11. Amendment. This Agreement may be amended by the parties without the vote or consent of the stockholders of the Fund to supply any omission, to cure, correct or supplement any ambiguous, defective or inconsistent provision hereof, or if they deem it necessary to conform this 49 Agreement to the requirements of applicable federal laws or regulations, but neither the Fund nor the Adviser shall be liable for failing to do so. 12. Allocation of Services. The Adviser reserves the right to manage other investment accounts, including those with investment objectives similar to the Fund. Securities considered as investments for the Fund may also be appropriate for other investment accounts managed by the Adviser. Subject to applicable laws and regulations, the Adviser will attempt to allocate equitably portfolio transactions among the portfolios of its other investment accounts whenever decisions are made to purchase or sell securities by the Fund and one or more of such other accounts simultaneously. In making such allocations, the main factors to be considered by the Adviser will be the respective investment objectives of the Fund and such other accounts, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment by the Fund and such other accounts, the size of investment commitments generally held by the Fund and such accounts, and the opinions of the persons responsible for recommending investments to the Fund and such other accounts. 13. Governing Law. This Agreement shall be construed in accordance with the laws of the State of Ohio and the applicable provisions of the 1940 Act and the Advisers Act. To the extent the applicable law of the State of Ohio, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act or the Advisers Act, the latter shall control. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the day and year first above written in Cincinnati, Ohio. WITNESS PACHOLDER FUND, INC. By: - -------------------------- ----------------------------------- James E. Gibson Senior Vice President WITNESS PACHOLDER & COMPANY, LLC By: - -------------------------- ----------------------------------- William J. Morgan President 50 EX-99.7 8 dex997.txt ENGAGEMENT LETTER WITH DRW EXHIBIT 7 [LETTERHEAD OF DAIN RAUSCHER WESSELS] May 7, 2001 CONFIDENTIAL Dr. Al O. Pacholder Chairman and Chief Executive Officer PBG Acquisition Corp 725 Camelot Lane Houston, TX 77077 Dear Al: The purpose of this letter is to set forth the terms of the exclusive engagement by PBG Acquisition Corp, a Texas corporation, including its parent, subsidiaries, affiliates and successors, and any successor acquisition entity or group controlled by you (any or all of the above hereafter referred to as "you," "your," or "yourselves," except as the context otherwise requires) of Dain Rauscher Wessels, a division of Dain Rauscher Incorporated ("DRW") to provide certain financial advisory and investment banking services with respect to a possible Transaction (as defined below) involving ICO, Inc., or any of its divisions, subsidiaries or affiliates (together, the "Company"), it being understood that the investment banking services covered in this engagement shall include all financing necessary or ancillary to the Transaction. 1. SERVICES TO BE PROVIDED BY DRW. In undertaking this assignment, if requested by you, and reasonably appropriate to the assignment, DRW will provide the following services to you in connection with the Transaction: (a) formulate a strategy for consummating a Transaction, and develop procedures and timetables for executing a Transaction; (b) formulate negotiation strategies and assist in negotiations with the Company regarding a Transaction; (c) assist you in the preparation of marketing memorandum (or description material) describing you, the Company and the proposed transaction, as well as other materials requested by interested parties; and (d) introduce you and the Company to potential investors in a Private Placement (as defined below), formulate negotiation strategies, and assist in all negotiations. - -------------------------------------------------------------------------------- 5700 Williams Tower (713) 403-5600 Dain Rauscher Incorporated 2800 Post Oak Boulevard Fax (713) 403-5626 Member NYSE/SIPC Houston, TX 77056 2. YOUR AGREEMENTS. You agree that: (a) you shall furnish to DRW the names of all parties (i) with which you or the Company has had discussions or contacts concerning a possible Transaction, and (ii) of which you or the Company is aware had, or currently have an interest in entering into a possible Transaction; (b) you shall make available to DRW all publicly available information concerning the business, assets, operations and financial condition of the Company which DRW reasonably requests in connection with the performance of its services hereunder and, to the extent permitted by applicable law, immediately notify DRW of any material change, or development that may lead to a material change, in the business, properties, operations or financial condition or prospects of the Company; (c) DRW will be relying, without assuming responsibility for independent verification, on the accuracy and completeness of all financial and other information that is and will be furnished to it by you or any other party or potential party to any Transaction, and you will be solely responsible for the accuracy and completeness of such information; (d) you shall be responsible to make all necessary notifications of and filings with all state and federal securities regulatory agencies; (e) DRW shall have the right (but not the obligation) to act as lead or co-manager, lead or co-underwriter in connection with any public offering of securities by you during the Term (as defined below) or within twelve months following the Term; (f) you shall undertake to have each acquisition company created or controlled by you for the purpose of entering into a Transaction execute this agreement, including Appendix A, no later than such time that any such entity becomes a potential acquisition entity. In addition, in the event that you or any acquisition company controlled by you enter into an agreement in principle with respect to a Transaction involving the Company, you shall immediately undertake to have the Company execute this agreement, including Schedule A; and (g) you shall provide DRW with the opportunity to review and approve any provision in any purchase agreement or similar document relating to a Transaction that DRW reasonably believes could potentially expose DRW to material liability. 2 3. DEFINITIONS. For purposes of this engagement letter: "SECURITYHOLDERS" shall mean any persons holding shares of capital stock of the Company or rights to acquire shares of capital stock of the Company or stock appreciation or similar rights, whether or not vested, and any persons holding any other class of security of the Company. "TERM" shall mean the term of this engagement, which shall run for a period of one year from the date of this letter unless otherwise terminated by one or both of the parties in accordance with the provisions below. "TRANSACTION" shall mean any transaction or series or combination of related transactions, whereby directly or indirectly, a controlling ownership interest in the Company, its capital stock or its assets is transferred from the Company and/or its Security holders to you for consideration, including, without limitation, a sale or exchange of capital stock or assets, a merger, a tender offer, a plan of exchange or consolidation, the formation of a joint venture, a minority investment or partnership, a stock repurchase, a recapitalization or any similar transaction. "PRIVATE PLACEMENT" shall mean any transaction in which any securities, extensions of credit (up to the face amount of the related aggregate credit commitment), notes, warrants or other equity ownership interests of the Company, Procs, Inc., or any acquisition company created or controlled by you, are sold, issued or resold in a private placement, private sale or private resale in a transaction or series of transactions that are exempt from registration under the Securities Act of 1933. 4. COMPENSATION. You hereby agree to pay DRW, as compensation for its services hereunder, the following fees in accordance with the following terms. (a) Transaction Fee If either during the Term or within 12 months following the Term, (i) a Transaction is consummated, or (ii) a definitive agreement or letter of intent or other evidence of commitment is entered into which subsequently results in a Transaction being consummated, you agree to pay DRW a Transaction fee, payable in cash at the closing of the Transaction, in an amount equal to $1,000,000. (b) Private Placement Fee If either during the Term within 12 months following the Term, (i) a Private Placement is consummated or (ii) a definitive agreement or letter of intent or other evidence of commitment is entered into which subsequently results in a Private Placement being consummated, you agree to pay DRW a Private Placement fee, payable in cash at the closing of the Transaction, in an amount equal to: 3 (1) in the event of a Private Placement of debt securities, you will pay to DRW, as placement agent, a cash fee in an amount equal to 4.00% of the aggregate amount raised, payable at the closing of each such sale, whether through one or multiple tranches; (2) in the event of a Private Placement of equity or equity-related securities, you will pay to DRW, as placement agent, a cash fee in an amount equal to 7.50% of the aggregate amount raised, payable at the closing of each such sale, whether through one or multiple tranches. (c) Termination Fee If any purchase agreement or similar document related to a Transaction provides for a break-up, topping or termination fee (any or all of which shall be referred to as a "Termination Fee"), and such Termination Fee is paid to you, you agree to pay DRW in cash 50 percent of such Termination Fee. You agree that you shall use your reasonable best efforts to negotiate a Termination Fee that is at least $3 million. 5. EXPENSES. In addition to any fees that may be payable hereunder and regardless of whether any proposed Transaction is consummated, you hereby agree from time to time, upon request, to reimburse DRW for all reasonable travel, legal and other out-of-pocket expenses incurred in performing the services described herein (including reasonable fees and disbursements of DRW's legal counsel); provided however, that any out-of-pocket expenses (including reasonable fees and disbursements of DRW's legal counsel, but not including Blue Sky fees and expenses) that are attributable solely to a Private Placement shall be paid out of an allowance in the amount of $50,000, provided by you to DRW in advance of marketing efforts. 6. TERM AND TERMINATION. This letter may be terminated on either your or DRW's written request with three (3) days notice, provided that such termination shall not affect your exculpation, indemnification and contribution obligations, or the right of DRW to receive any fees payable pursuant to this agreement including during the 12 month period after termination of this letter, (or the right of DRW to receive reimbursement for its out-of-pocket expenses described above). It is expressly understood that neither DRW nor you shall have any continuing obligation or liability to each other under this engagement letter upon termination hereof, except in respect of the matters specifically referenced in this Section. 7. BROKERS OR FINDERS. You represent to DRW that there are no brokers, finders, representatives or other persons that have an interest in compensation due to DRW from any transaction contemplated herein. 4 8. DISCLOSURE. You agree that, except as required by applicable law, any advice to be provided by DRW under this Agreement shall not be disclosed publicly or made available to third parties without the prior approval DRW, which approval shall not be unreasonably withheld. 9. PUBLICITY. You acknowledge and agree that DRW may, subsequent to the closing of a Transaction, make public its involvement with you and the Company in the Transaction, including the right of DRW at its own expense to place advertisements describing its services to you in financial, news or business publications. 10. COMPLETE AND BINDING AGREEMENT. This engagement letter, including Schedule A, incorporates the entire agreement of the parties with respect to the subject matter of this agreement, and may not be amended or modified except in writing. You acknowledge and understand that this agreement shall be binding upon your successors or assigns. 11. INDEMNIFICATION. Schedule A is hereby incorporated into this agreement by reference and made a part hereof. 12. MISCELLANEOUS. The invalidity or unenforceability of any provision of this agreement shall not effect the validity or enforceability of any other provision of this agreement which shall remain in full force and effect. You are sophisticated business persons and sophisticated business enterprises that have retained DRW for the limited purposes set forth in this agreement, and the parties acknowledge and agree that their respective rights and obligations are contractual in nature. Each party disclaims an intention to impose fiduciary or other non-contractual obligations on the other by virtue of the engagement contemplated by this agreement. This agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof. Each of you and DRW (on your and DRW's own behalf and, to the extent permitted by applicable law, you, on behalf of your shareholders and DRW, on behalf of its shareholders) hereby irrevocably waives any right that either may have to a trial by jury in respect of any claim, counter- claim or action based on or arising out of this engagement letter, DRW's performance under this engagement letter or the transactions contemplated hereby. 13. CONFIDENTIALITY. DRW agrees not to disclose any Confidential Information (defined below) to any third party, provided that DRW may disclose Confidential Information with your prior written consent, and DRW may disclose Confidential Information to any of its employees who need to know information for the sole purposes of the Transaction. For purposes of this Agreement, "Confidential Information" means any information that you provide to DRW pursuant to this Agreement that is not publicly available, and any notes, analyses, compilations, studies, interpretations or other documents prepared by DRW that contain, reflect or are based upon, in whole or in part, such information. Confidential Information does not include information that (i) is or becomes generally available to the public other than as a result of disclosure by DRW, (ii) was within DRW's possession 5 before being furnished to DRW under this Agreement, provided that the source of the information was not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to you or any other party with respect to such information or (iii) becomes available to DRW on a nonconfidential basis from a source other than you or any of your representatives, provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to you or any other party with respect to such information. Please confirm that the foregoing is in accordance with our understandings and agreements by signing and returning to DRW the duplicate of this letter enclosed herewith. Very truly yours, DAIN RAUSCHER WESSELS a division of Dain Rauscher Incorporated By: /s/ JOHN SINDERS ------------------------------------- Mr. John Sinders Managing Director Accepted and Agreed to: PBG ACQUISITION CORP. /s/ AL O. PACHOLDER - ------------------------------------ Dr. Al O. Pacholder Chairman and Chief Executive Officer 6 SCHEDULE "A" INDEMNITY ENGAGEMENT LETTER BETWEEN DAIN RAUSCHER WESSELS AND PROCS, INC., DATED MAY 7, 2001 Recognizing that transactions of the type contemplated in the attached Engagement Letter sometimes results in litigation and that DRW's role is advisory, you agree, jointly and severally, to indemnify and hold harmless DRW, its partners, employees, directors, officers, consultants, agents, affiliates and persons deemed to be in control of DRW within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (collectively, the "Indemnified Parties" and individually an "Indemnified Party"), from and against any claims,losses, expenses, damages and liabilities, joint or several, as they may be incurred, related to or arising in any manner out of any transaction, proposal or any other matter contemplated by the engagement of DRW under the Engagement Letter (the "Matters"). You also agree that neither DRW nor any other Indemnified Party shall have any liability to you or your affiliates, partners, directors, officers, consultants, agents, employees, controlling persons, creditors or securityholders for any losses, claims, damages, liabilities or expenses related to or arising out of any Matters. You will promptly reimburse any Indemnified Party for all expenses as reasonably incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim related to or arising in any manner out of any Matter, or any action or proceeding arising therefrom. You may assume the defense of any litigation or proceeding in respect of which indemnity may be sought hereunder, including the employment of counsel and experts reasonably satisfactory to DRW and the payment of the fees and expenses of such counsel and experts, in which event, except as provided below, you shall not be liable for the fees and expenses of any other counsel or expert retained by any Indemnified Party in connection with such litigation or proceeding. In any such litigation or proceeding the defense of which you shall have so assumed, any Indemnified Party shall have the right to participate in such litigation or proceeding and to retain its own counsel and experts, but the fees and expenses of such counsel and experts shall be at the expense of such Indemnified Party unless (i) you and such Indemnified Party shall have mutually agreed in writing to the retention of such counsel or experts, (ii) you shall have failed in a timely manner to assume the defense and employ counsel or experts reasonably satisfactory to DRW in such litigation or proceeding, or (iii) the named parties to any such litigation or proceeding (including any impeded parties) include you and such Indemnified Party and representation of you and any Indemnified Party by the same counsel or experts would, in the reasonable opinion of DRW, be inappropriate due to actual or potential differing interests between you and any such Indemnified Party. You also hereby agree to pay DRW an additional per diem payment, per person, at its customary rates and to reimburse DRW for all reasonable travel, legal and other out-of-pocket expenses incurred in assisting you to prepare for, or defend against, any action, suit, proceeding or claim brought or threatened to be brought against you, arising out of or relating to the Transaction or 7 our services hereunder and in providing evidence, producing documents or otherwise participating in any such action, suit, proceeding or claim. You shall not, without the prior written consent of DRW, settle any litigation relating to the Engagement Letter or any Matter unless such settlement includes an express, complete and unconditional release of DRW and its affiliates (and their respective control persons, partners, directors, officers, employees, consultants and agents) with respect to all claims asserted in such litigation or relating to the Engagement Letter or any Matter; such release to be set forth in an instrument signed by all parties to such settlement. Notwithstanding any provision herein to the contrary, you shall not be liable hereunder for indemnification to an Indemnified Party, and the Indemnified Party shall not be exculpated, in respect of any claims, damages, losses, liabilities or expenses that are finally judicially determined to have resulted primarily and directly from the gross negligence or willful misconduct of such Indemnified Party. In no event, regardless of the legal theory advanced, shall any Indemnified Party be liable for any consequential, indirect, incidental or special damages of any nature. You agree that the exculpation, indemnification and reimbursement commitments set forth herein shall apply whether or not such Indemnified Party is a formal party to any such claim, action or proceeding. You agree that if any exculpation, indemnification or reimbursement sought pursuant to this letter were for any reason not to be available to any Indemnified Party or insufficient to hold any Indemnified Party harmless as and to the extent contemplated hereby, then you shall contribute to the amount paid or payable by the Indemnified Party as a result of the claims, damages, losses, expenses and liabilities in such proportion as is appropriate (i) to reflect the relative benefits to you (and your securityholders on the one hand, and DRW on the other hand, in connection with the transaction to which such exculpation, indemnification or reimbursement relates or (ii) if the allocation on that basis is not permitted by applicable law, to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of each such Indemnified Party, respectively, and you as well as any other relevant equitable considerations. You and DRW agree that it would not be just and equitable if the contribution provided for herein were determined by pro rata allocation or any other method which does not take into account the equitable considerations referred to above. It is hereby agreed that the relative benefits to you, on the one hand, and DRW, on the other hand, with respect to this engagement shall be deemed to be in the same proportion as (i) the aggregate purchase price of the Transaction (whether or not consummated and including all Private Placement proceeds) bears to (ii) the fees paid to DRW in connection with such engagement. In no event shall DRW contribute in excess of the fees actually received by DRW pursuant to the terms of the Engagement Letter. Your exculpation, indemnity, reimbursement and contribution obligations shall survive the termination of the Engagement Letter, shall be in addition to any liability which you may otherwise have and shall be binding upon and inure to the benefit of any of your successors, assigns, heirs and personal representatives or those of an Indemnified Party. 8 The exculpation, indemnity, reimbursement and contribution provided herein shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any party hereto or any person controlling (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act or 1934, as amended) any party hereto. DATED as of May 7, 2001 PBG ACQUISITION CORP. /s/ AL O. PACHOLDER - ------------------------------------ Dr. Al O. Pacholder Chairman and Chief Executive Officer DAIN RAUSCHER WESSELS, A DIVISION OF DAIN RAUSCHER INCORPORATED By: /s/ JOHN SINDERS ------------------------------------ Mr. John Sinders Managing Director 9 EX-99.8 9 dex998.txt PROBABLE BELIEF LETTER WITH DRW EXHIBIT 8 [LETTERHEAD OF EQUITY CAPITAL MARKETS] PRIVATE AND CONFIDENTIAL - ------------------------ May 7, 2001 Mr. Al O. Pacholder PBG Acquisition Corp. 725 Camelot Lane Houston, TX 77024 Re: Financing for a bid to acquire ICO Inc. ("ICOC") Dear Mr. Pacholder: Based on the financial models and other information you have provided, which incorporate the bid price you have disclosed to us to be proposed by a new entity, formed by you individually or on behalf of any acquisition company created or controlled by you or any acquisition management group of which you are a part, for all of the outstanding shares of ICOC, we have proceeded on an expedited basis to evaluate the feasibility of arranging sufficient financing to complete your bid. Due to the short time available to us, we have not been able to complete our due diligence and subsequent formal review and approval by the appropriate parties within Dain Rauscher Wessels (DRW). We expect to be able to complete our due diligence and internal approval process concurrently and within your intended review period. Subject to, among other things, the other conditions of the bid which you have provided to us, satisfactory completion of our due diligence and approval by DRW and satisfactory market conditions at the intended time of the transaction, we believe that it is probable that we will be able to raise sufficient debt and equity financing for you to complete your bid at the target bid price you indicated to our firm within the time period you required. We are prepared to commence our formal due diligence process immediately, subject to your signing and returning to us a satisfactory engagement and indemnification agreement. If you have any questions concerning this letter, please give me a call. Yours very truly, /s/ John W. Sinders John W. Sinders Managing Director Dain Rauscher Wessels cc: Max Homes, RBCDS EX-99.9 10 dex999.txt WEDCO. SHAREHOLDERS' AGREEMENT EXHIBIT 9 WILLOUGHBY INTERNATIONAL STOCKHOLDERS AGREEMENT THIS WILLOUGHBY INTERNATIONAL STOCKHOLDERS AGREEMENT ("Agreement") is made effective as of ___________, 199_ by and among WILLOUGHBY INTERNATIONAL, INC., a Texas corporation, formerly known as ICO, Inc. (the "Corporation"), and each of the holders of common stock, no par value, of the Corporation ("Corporation Common Stock") set forth on the signature pages hereof, in their capacity as a stockholder as set forth herein (such holders collectively, the "Stockholders"; individually, a "Stockholder"). R E C I T A L S: WHEREAS, in furtherance of the transactions contemplated by the Merger Agreement dated as of December ___, 1995 (the "Merger Agreement") by and among the Corporation, W Acquisition Corp., a New Jersey corporation, and Wedco Technology, Inc., a New Jersey corporation ("Wedco"), the parties hereto desire to provide, through grants of irrevocable proxies, for the orderly disposition of certain matters involving the Corporation's internal affairs and also for the representation of the W-F Group (as defined hereinafter) on the Board of Directors of the Corporation; and WHEREAS, the parties desire to provide members of the W-F Group certain authority with respect to the on going management of the Surviving Corporation (as defined hereinafter). NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained hereinafter, the parties hereto hereby agree as follows: 1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings indicated below: (a) "W-F Group" shall mean William E. Willoughby, Peggy S. Willoughby, William C. Willoughby, Regina S. Willoughby, Fred R. Feder, Theo J.M.L. Verhoeff, Catherine Willoughby Stevens, William C. Willoughby, as custodian for William B. Willoughby, and Regina S. Willoughby, as custodian for William B. Willoughby. (b) "P Group" shall mean Pacholder Associates, Inc. and its Subsidiaries, Sylvia A. Pacholder, Dr. Asher O. Pacholder, Robin E. Pacholder and William J. Morgan. (c) "Change in Control of the Corporation" shall mean the occurrence of any of the following: 2 (i) any "person" (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) or "group" (as defined in Section 13(d)(3) of the 1934 Act) of "persons" becomes the "beneficial owner" (as defined in Rule 13d- 3 promulgated under the 1934 Act) of shares of stock or other securities of the Corporation either (i) constituting in excess of 50% of the shares of voting stock of the Corporation, or (ii) entitling such "person," either immediately or with the passage of time or the occurrence of a stated event, to exercise a majority of the voting power in the election of directors of the Corporation; or (ii) a majority of the Board of Directors of the Corporation ceases to be composed of the nominees of the Stockholders (the "Continuing Directors") or of persons nominated by and elected to the Board of Directors of the Corporation with the consent or approval of a majority of the Continuing Directors; or (iii) a sale, transfer, conveyance, assignment or other disposition by the Corporation of all or substantially all its assets, whether in liquidation, dissolution or otherwise. (d) "Initial W-F Group Board Representatives" shall mean the three (3) persons, viz, William E. Willoughby, Walter L. Leib and George S. Sirusus, designated by Wedco to represent the interests of the W-F Group on the Board of Directors of the Corporation immediately after the Effective Time. (e) "Successor W-F Group Board Representatives" shall mean the W-F Group Board Representatives succeeding to the offices of the Initial W-F Group Board Representatives. (f) "W-F Group Board Representatives" shall mean the Initial W-F Group Board Representatives and the Successor W-F Group Board Representatives, collectively. (g) Capitalized terms used in this Agreement without specific definition shall have the meanings respectively ascribed thereto in the Merger Agreement. 2. INITIAL BOARD REPRESENTATION OF THE W-F GROUP. (a) The W-F Group hereby confirms the designation of William E. Willoughby, Walter L. Leib and George S. Sirusus as the Initial W-F Group Board Representatives and acknowledges that the Initial W-F Group Board Representatives shall constitute three (3) members of a nine (9) member classified Board of Directors. 54 (b) The Stockholders hereby covenant to take (or to cause to be taken) all actions necessary or appropriate to cause the election or other designation of the Initial W-F Group Board Representatives as members of the Corporation's Board of Directors for terms beginning immediately after the Effective Time and ending, respectively, on the date of the Corporation's annual stockholders meeting in 1996 (William E. Willoughby), the date of the Corporation's annual stockholder's meeting in 1997 (Walter L. Leib) and the date of the Corporation's annual stockholders meeting in 1998 (George S. Sirusus). Irrespective of the amount of Corporation Common Stock held by the W-F Group, the Stockholders further covenant that they shall take (or cause to be taken) all actions necessary or appropriate to renominate and re-elect William E. Willoughby and Walter L. Leib for additional three (3) year terms as members of the Corporation's Board of Directors when their initial terms expire, respectively, on the date of the Corporation's annual stockholders meeting in 1996 (William E. Willoughby) and 1997 (Walter L. Leib). For all purposes of this Agreement, the service of William E. Willoughby and Walter L. Leib as members of the Corporation's Board of Directors for the additional three (3) year terms described in the immediately preceding sentence shall be deemed to constitute service as an Initial W-F Group Board Representative. 3. CONTINUED BOARD REPRESENTATION OF THE W-F GROUP. The P Group hereby covenants that, until the earlier of: (i) the time that the W-F Group, taken as a whole, beneficially owns (as defined in Rule 13d-3 promulgated under the 1934 Act) less than 1,500,000 shares ("Minimum Share Level") of issued and outstanding Corporation Common Stock; provided, however, if and whenever the outstanding shares of Corporation Common Stock shall be combined by reverse stock split or similar transaction into a smaller number of shares of Corporation Common Stock, the Minimum Share Level shall be proportionately reduced, such reduction to become effective immediately on the day upon which such combination becomes effective; or (ii) there is a Change in Control of the Corporation, they shall (in conjunction with the W-F Group) take (or cause to be taken) any and all actions necessary or appropriate to have the W-F Group's interests represented on the Corporation's Board of Directors by the Initial W-F Group Board Representatives as and after the respective terms of service of the Initial W-F Group Board Representatives expire. 4. VACANCIES, ETC. If any of the Initial W-F Group Board Representatives shall cease to serve as a member of the Corporation's Board of Directors or if, at any time when the P Group is obligated under Section 3 above to ensure W-F Group representation on the Board of Directors through W-F Group Board Representatives, an Initial or Successor W-F Group Board Representative shall cease to serve as a member of the Corporation's Board of Directors, the Stockholders shall take (or cause to be taken) any and all actions necessary or appropriate to ensure that the vacancy created by the non-serving W-F Group Board Representative shall be filled by a person nominated by the remaining W-F Group Board Representatives or, if there shall be only one remaining W-F Group Board Representative, then that representative, subject 56 to the consent of a majority of the full Board of Directors, such consent not to be unreasonably withheld and, provided, such consent shall not be deemed to have been unreasonably withheld to the extent necessary to act in accordance with the fiduciary duties of such Board of Directors under applicable laws (as determined by such Board of Directors in good faith after consultation with and based upon advice of counsel). However, if there are no remaining W-F Group Board Representatives the vacancy (or vacancies) shall be filled in accordance with the directions of the W-F Group acting by a majority in interest (as to beneficial ownership of Corporation Common Stock), subject to the consent of a majority of the full Board of Directors as set forth above herein. If the consent by a majority of the full Board of Directors in accordance with Sections 3 or 4 hereof is not obtained, the failure to obtain such consent shall not affect the rights of the then-incumbent W-F Group Board Representatives or W-F Group, as the case may be, to designate additional person(s) to serve as W-F Group Board Representatives in accordance with the terms hereof. 5. GRANTS OF PROXY. (a) EFFECTIVE DURING THE TERMS OF THE INITIAL W-F GROUP BOARD REPRESENTATIVES AND DURING THE PERIOD IN WHICH THE P GROUP IS OBLIGATED TO ENSURE W-F GROUP REPRESENTATION ON THE BOARD OF DIRECTORS THROUGH W-F GROUP BOARD REPRESENTATIVES (THE "P GROUP PROXY PERIOD"), EACH MEMBER OF THE P GROUP HEREBY IRREVOCABLY GRANTS TO AND APPOINTS, WALTER L. LEIB AND EDWARD N. BAROL, OR ANY ONE (1) OF THEM, SUCH STOCKHOLDER'S PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) FOR AND IN THE NAME, PLACE AND STEAD OF SUCH STOCKHOLDER, TO VOTE SUCH STOCKHOLDER'S SHARES OF CORPORATION COMMON STOCK, OR GRANT CONSENTS IN RESPECT OF SUCH SHARES OF CORPORATION COMMON STOCK, IN FAVOR OF THE SLATE OF NOMINEES FOR THE CORPORATION'S BOARD OF DIRECTORS SELECTED BY THE THEN-INCUMBENT MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS (THE "NOMINATED SLATE"). EACH SUCH MEMBER OF THE P GROUP AFFIRMS THAT THIS IRREVOCABLE PROXY IS COUPLED WITH AN INTEREST AND MAY UNDER NO CIRCUMSTANCES BE REVOKED DURING THE P GROUP PROXY PERIOD. SUCH IRREVOCABLE PROXY IS EXECUTED AND INTENDED TO BE IRREVOCABLE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 2.29 OF THE TEXAS BUSINESS CORPORATION ACT (THE "TEXAS ACT"). (b) EFFECTIVE WHILE ANY W-F GROUP MEMBERS OWNS CORPORATION COMMON STOCK AND UNTIL THERE SHALL HAVE OCCURRED A CHANGE IN CONTROL OF THE CORPORATION (THE "W-F GROUP PROXY 57 PERIOD"), EACH MEMBER OF THE W-F GROUP HEREBY IRREVOCABLY GRANTS TO, AND APPOINTS, SYLVIA A. PACHOLDER AND DR. ASHER O. PACHOLDER, OR ANY ONE (1) OF THEM, SUCH STOCKHOLDER'S PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) FOR AND IN THE NAME, PLACE AND STEAD OF SUCH STOCKHOLDER, TO VOTE SUCH STOCKHOLDER'S SHARES OF CORPORATION COMMON STOCK, OR GRANT CONSENTS IN RESPECT OF SUCH SHARES OF CORPORATION COMMON STOCK, IN FAVOR OF THE NOMINATED SLATE. EACH SUCH MEMBER OF THE W-F GROUP AFFIRMS THAT THIS IRREVOCABLE PROXY IS COUPLED WITH AN INTEREST AND MAY UNDER NO CIRCUMSTANCES BE REVOKED DURING THE W- F GROUP PROXY PERIOD. SUCH IRREVOCABLE PROXY IS EXECUTED AND INTENDED TO BE IRREVOCABLE IN ACCORDANCE WITH ARTICLE 2.29 OF THE TEXAS ACT. 6. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. Sylvia A. Pacholder shall be President and Chief Executive Officer ("CEO") of the corporation surviving the merger of Wedco with and into W Acquisition and any successor through which the merged corporation operates its business in the United States (the "Surviving Corporation") from and after the Effective Time. Dr. Asher O. Pacholder shall be Chairman of the Board and Chief Operating Officer ("COO") of the Surviving Corporation from and after the Effective Time. The Articles of Incorporation of the Surviving Corporation shall provide that: the President, Chairman of the Board, CEO, COO, or any person who shall hold any other office, position or title having similar functions or authority to the functions of Chairman of the Board, CEO, President or COO, or who shall have equivalent operating authority of the Surviving Corporation, shall be elected by a unanimous vote of the Board of the Surviving Corporation. The Corporation (Willoughby International, Inc.) hereby agrees to elect as a Director of the Surviving Corporation (as defined in this Section) William E. Willoughby and if William E. Willoughby shall be unable or shall, for any reason, cease to serve, the Corporation shall elect Walter L. Leib, Esquire, as Director. In the event that Walter L. Leib shall be unable or shall cease for any reason to act as a Director, the Corporation shall elect Edward N. Barol, Esquire, to act as Director of the Surviving Corporation. If Edward N. Barol, Esquire, shall be unable or shall cease for any reason to act as a Director, then the Corporation shall elect as a Director of the Surviving Corporation such person as is nominated by the W-F Group Representatives on the Board of Directors of the Corporation. It is the intent of the parties to this Agreement, in consideration of this Agreement and of the Merger Agreement, with the exception of the election of Dr. Asher O. Pacholder and Sylvia A. Pacholder any person holding the office or title of President, CEO, Chairman, COO, or who shall hold any other office, position or title having similar functions or authority to the 58 functions of Chairman of the Board, CEO, President or COO, or who shall have equivalent operating authority of the Surviving Corporation or Wedco, Inc. (or any successor through which the Surviving Corporation operates its business in the United States), will not be elected without the approval of the W-F Group Board Representative. 7. RESTRICTION ON BLOCK TRANSFERS OF W-F GROUP AND P GROUP SHARES OF CORPORATION COMMON STOCK. Except as expressly set forth in this Section 7, nothing in this Agreement shall be deemed to constitute a restriction on the right, power or authority of any member of the W-F Group or P Group, as the case may be, to sell, convey or otherwise transfer, after the Effective Time, any shares of Corporation Common Stock owned by him, her or it. However, if any one (1) or more members of the W-F Group or P Group, as the case may be, desire to sell, convey or otherwise transfer Five Hundred Thousand (500,000) or more shares of Corporation Common Stock to any person (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) or group of persons (as defined in Rule 13d-5 promulgated under the 1934 Act), other than to an underwriter or underwriter group in connection with an underwritten public offering that would not result in a transfer or transfers of Five Hundred Thousand (500,000) or more shares of Corporation Common Stock, to any person (as defined in Section 13(d) of the 1934 Act) or group of persons (as defined in Rule 13d-5 promulgated under the 1934 Act), in a single transaction or series of related transactions, such proposed sale, conveyance or other transfer shall not be effective, and the Corporation shall have no obligation to register the transfer of such shares of Corporation Common Stock unless and until the proposed vendee or transferee agrees to be bound as regards the obligations (but not the rights) of a W-F Group member or P Group member, as the case may be, by this Agreement as though an original member of the W-F Group or P Group, as the case may be. The members of the W-F Group and P Group (and each of them) agree that the foregoing limited restriction on transfer is necessary to achieve the purposes of this Agreement and that the other Stockholders and the Corporation shall be entitled to obtain injunctive relief (including, without limitation, a permanent mandatory injunction) and specific performance in the event of a breach or threatened breach of the foregoing limited restriction on transfer. The certificates evidencing the shares of Corporation Common Stock held by the members of the W-F Group and P Group shall bear a legend referring to the provisions of this Section 7. Notwithstanding the foregoing, the restrictions set forth above shall not apply to transfers of Corporation Common Stock by the holders of partnership interests of P M Special Fund, Limited Partnership and O P Limited Partnership upon the termination or expiration of such partnerships in accordance with the terms of their respective partnership agreements. 8. ENDORSEMENT ON STOCK CERTIFICATES. It is understood that all of the Certificates representing shares of Corporation Common Stock owned by the W-F Group or the P Group will be endorsed as follows: 59 "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED UNLESS EITHER A REGISTRATION STATEMENT WITH RESPECT THERETO IS IN EFFECT UNDER THE SECURITIES ACT OF 1933 OR, IN THE OPINION OF THE CORPORATION'S COUNSEL, AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SAID ACT IS THEN AVAILABLE UNDER SAID ACT OR ANY RULE OR REGULATION OF THE SECURITIES AND EXCHANGE COMMISSION THEREUNDER OR SIMILAR ENDORSEMENT." The removal of such endorsement requires the opinion of counsel of the Corporation. Any transfer which comes to the attention of counsel for the Corporation which shall reasonably appear to be in violation of Section 7 hereof may be held up by said counsel provided said counsel shall, by the end of the next business day after the receipt of the request for an opinion for the transfer of the shares, contract the transferor questioning whether the transfer of the Corporation Common Stock is in violation of Section 7 and said counsel shall give to the transferor the basis upon which said counsel shall reasonably believe that the transfer is in violation of Section 7 hereof. The transferor of the shares of Corporation Common Stock shall advise said counsel whether, to the best of transferor's knowledge, taking into consideration the information given by counsel to the transferor, said transfer is in violation of Section 7 and if it is not, said transferor will forward to said counsel a letter which shall include the following: "The transfer of the shares of Willoughby International, Inc. Common Stock being made by me and subject to your inquiry of [date] are not, to the best of my knowledge, taking into consideration facts supplied by you in the said inquiry, being transferred in violation of Section 7 of the Willoughby International Stockholders Agreement dated the _____ day of ______________, 1995. "It is understood that the transfer is being approved in reliance upon this statement. ____________________________________ Transferor" The receipt of such statement by corporate counsel shall constitute conclusive evidence to the said corporate counsel that the transfer is not in violation of Section 7 hereof and 60 said corporate counsel shall, without further delay, give the opinion required for the transfer of the shares. Until such time as corporate counsel receives the foregoing statement signed by the transferor, corporate counsel may deem that the shares are in violation of Section 7 and corporate counsel shall not be required to complete the transfer. The parties subject to Section 7 shall keep corporate counsel advised of their address and facsimile numbers so that all inquiries to be made hereunder may be made quickly. All inquiries and responses shall be made by either facsimile or overnight private couriers. It is the intention hereof that there shall be no unreasonable delay in the transfer of the said shares of Corporation Common Stock if the said transfer is not in violation of Section 7. Counsel for the Corporation shall not question transfers of 100,000 shares or less unless the same appears to be part of a series which could reasonably be believed to be in violation of Section 7 hereof. 9. SPECIFIC PERFORMANCE. The parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the parties shall be entitled to specific performance of the terms thereof, in addition to any other remedy at law or equity. 10. SEVERABILITY. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, and as a result thereof, the economic or legal substance of this Agreement is affected in a manner materially adverse to a party hereto, the materially adversely affected party may terminate this Agreement upon notice to the other parties hereto. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, and, as a result thereof, the economic or legal substance of this Agreement is not affected in a manner materially adverse to a party hereto, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties in order that the terms of this Agreement remain as originally contemplated to the fullest extent possible. 11. MISCELLANEOUS. This Agreement shall be construed under and governed by the internal substantive laws of the State of Texas applicable to contracts negotiated, executed and wholly performed within the State of Texas except for matters pertaining to Section 6 hereof, to which the laws of the State of New Jersey shall be applicable in the same manner as contracts negotiated, executed and wholly performed within the State of New Jersey. This Agreement may not be amended or modified without the prior written consent of all the parties hereto. If any court or other tribunal of competent jurisdiction should find any provision of this Agreement to be unenforceable, said court or other tribunal shall sever the unenforceable provision and enforce the remaining provisions as originally executed and delivered. 61 12. COUNTERPARTS. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective as to any Stockholder when one or more counterparts have been signed by each of the Corporation and such Stockholder and delivered to the Corporation and such Stockholder. 13. INTERPRETATION. The descriptive headings contained herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. 14. LEGAL OPINION. Prior to or simultaneous with the execution of this Agreement, the Stockholders and the Corporation shall have received an opinion from Vinson & Elkins in form and substance reasonably satisfactory to them, substantially to the effect that, this Agreement creates legal, valid and binding obligations of the parties hereto and is enforceable in accordance with its terms under the laws of the State of Texas. 15. TERMINATION. This Agreement shall terminate: (i) with the consent of the Corporation and the Stockholders party to this Agreement; or (ii) upon the occurrence of an event described in Section 3(i) or (ii). IN WITNESS WHEREOF, the undersigned have hereunto set their respective hands effective as of the date and year first above written. WILLOUGHBY INTERNATIONAL, INC. By:________________________________ Name: Title: THE STOCKHOLDERS: ________________________________________ WILLIAM E. WILLOUGHBY ________________________________________ PEGGY S. WILLOUGHBY 62 ________________________________________ WILLIAM C. WILLOUGHBY ________________________________________ REGINA S. WILLOUGHBY ________________________________________ FRED R. FEDER ________________________________________ THEO J.M.L. VERHOEFF ________________________________________ WILLIAM C. WILLOUGHBY, AS CUSTODIAN FOR WILLIAM B. WILLOUGHBY ________________________________________ REGINA S. WILLOUGHBY, AS CUSTODIAN FOR WILLIAM B. WILLOUGHBY ________________________________________ CATHERINE WILLOUGHBY STEVENS ________________________________________ SYLVIA A. PACHOLDER ________________________________________ DR. ASHER O. PACHOLDER 63 ________________________________________ ROBIN E. PACHOLDER ________________________________________ WILLIAM J. MORGAN PACHOLDER ASSOCIATES, INC. By:_____________________________________ Its:____________________________________ P M DELAWARE, INC. By:_____________________________________ Its:____________________________________ 64 EX-99.10 11 dex9910.txt ICO GROUP SHAREHOLDER PROXY EXHIBIT 10 ICO, INC. PROXY The undersigned hereby appoints ASHER O. PACHOLDER and SYLVIA FOR A. PACHOLDER, or any one of them, proxies of the undersigned, each SPECIAL with the power of substitution, to vote all shares of common stock MEETING which the undersigned would be entitled to vote at the Special Meeting of Shareholders of ICO, Inc. to beheld in Houston, Texas on Monday, April 29, 1996, and any adjournment of such meeting on the matters specified and in their discretion with respect to such other business as may come before the meeting or any adjournment thereof. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS: 1. Approval of the Issuance of ICO, Inc. Common Stock in connection with the Merger Agreement among ICO, Inc., W Acquisition Corp. and Wedco Technology, Inc. FOR _______ AGAINST _______ ABSTAIN _______ 2. Approval of an amendment to ICO, Inc.'s Articles of Incorporation to change ICO, Inc.'s name to "Willoughby International, Inc.", if the Merger provided for in the Merger Agreement among ICO, Inc., W Acquisition Corp. and Wedco Technology, Inc. is consummated. FOR _______ AGAINST _______ ABSTAIN _______ YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES WITH AN "X", BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS UNLESS A CONTRARY CHOICE IS SPECIFIED. (This proxy is continued and is to be signed on the reverse side) 65 PROXY Change of address FOR SPECIAL ______________________________ MEETING ______________________________ (CONTINUED) ______________________________ ______________________________ Attend Meeting Yes _____ No ______ Date_____________________, 1996 ______________________________ Signature(s) ______________________________ Signature(s) (Important: Please sign exactly as name appears hereon indicating, where proper, official position or representative capacity. In the case of joint holders, all should sign.) THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 66 EX-99.11 12 dex9911.txt WEDCO SHAREHOLDER PROXY EXHIBIT 11 FORM OF PROXY WEDCO TECHNOLOGY, INC. ----- PLEASE MARK VOTES [X] AS IN THIS EXAMPLE ----- SPECIAL MEETING OF STOCKHOLDERS--APRIL 29, 1996 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The Board of Directors recommends a vote FOR the following proposal: PROPOSAL 1. To approve and adopt the Merger Agreement dated as of December 8, 1995, as amended, among the Company, ICO, Inc. and W Acquisition Corp., as described in the Proxy Statement. For Against Abstain [_] [_] [_] The undersigned, revoking any contrary proxy previously given hereby appoints William E. Willoughby, Walter L. Leib, Edward N. Barol and all or any one of them as attorneys and proxies, with power of substitution to vote all shares of common stock of Wedco Technology, Inc. (the "Company"), which the undersigned would be entitled to vote if personally present at the Special Meeting of Stockholders (the "Special Meeting"), to be held at the Company's Executive Offices located at Route 173, West Portal, New Jersey, on Monday, April 29, 1996, at 10:00 A.M., E.S.T., and any postponements or adjournments thereof, upon the following matters set forth in the Notice of Special Meeting and Proxy Statement, receipt of which is hereby acknowledged. This proxy when properly executed will be voted as specified. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. In their discretion, the above-named proxies are authorized to vote upon such other business as may properly come before the Special Meeting. The powers hereby conferred may be exercised by a majority of said proxies (or their respective substitutes) as shall be present at the Special Meeting or any postponement or adjournment or, if only one shall be present, by that one. Please date and sign exactly as name appears hereon. When signing as an attorney, executor, administrator, trustee or guardian, give full title. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by an authorized person. Please be sure to sign and date this Proxy in the box below. - -------------------------------------------------------------------------------- Date - -------------------------------------------------------------------------------- Stockholder sign above - -------------------------------------------------------------------------------- Co-holder (if any) sign above DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. WEDCO TECHNOLOGY, INC. - -------------------------------------------------------------------------------- PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY CARD TODAY - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----