<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Com-
mission Only (as permitted by
Rule 14a-6(e) (2) )
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ICO, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
<PAGE> 2
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 3
[ICO LOGO]
11490 WESTHEIMER, SUITE 1000
HOUSTON, TEXAS 77077
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 3, 1997
The Annual Meeting of Shareholders of ICO, Inc. ("ICO" or the "Company") will
be held at the Westchase Hilton, located at 9999 Westheimer, Houston, Texas, on
Monday, March 3, 1997 at 10:00 a.m. Houston Time, for the following purposes:
1) To elect four Class III Directors to serve until the 2000
Annual Meeting of Shareholders and until their respective
successors are elected and qualified;
2) To ratify and approve the selection of Price Waterhouse LLP as
the Company's independent accountants for the ensuing fiscal
year; and
3) To consider and act upon any matters incidental to the
foregoing purposes and transact such other business as may
properly come before the meeting or any adjournment thereof.
Only holders of shares of Common Stock of record on the books of the
Company at the close of business on January 13, 1997 will be entitled to vote
at the meeting or any adjournment thereof.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED
TO COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY AT YOUR EARLIEST
CONVENIENCE. A REPLY ENVELOPE IS PROVIDED FOR THIS PURPOSE, WHICH NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES. YOUR IMMEDIATE ATTENTION IS REQUESTED
IN ORDER TO SAVE YOUR COMPANY ADDITIONAL SOLICITATION EXPENSE.
By Order of the Board of Directors
Asher O. Pacholder Sylvia A. Pacholder
Chairman of the Board and Chief Executive Officer,
Chief Financial Officer President & Secretary
Houston, Texas
January 24, 1997
<PAGE> 4
ICO, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 3, 1997
The following information is submitted concerning the enclosed Proxy
and the matters to be acted upon under authority thereof at the Annual Meeting
of Shareholders of the Company to be held at 10:00 a.m., Houston Time, on the
3rd day of March, 1997, or any adjournment thereof, pursuant to the enclosed
Notice of said meeting. The approximate date this Proxy Statement and the
enclosed form of Proxy are first being sent to Shareholders is January 24,
1997.
INFORMATION CONCERNING PROXY
The enclosed Proxy, even though executed and returned, may be revoked
at any time prior to voting of the Proxy (a) by the execution and submission of
a revised Proxy, (b) by written notice to the Secretary of the Company or (c)
by voting in person at the Annual Meeting. In the absence of such revocation,
shares represented by the Proxy will be voted at the Annual Meeting.
Unless contrary instructions are indicated on the enclosed Proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked or suspended before they are voted) will be voted
(1) for the selection of four nominees for Class III Directors named below, and
(2) for confirmation of the appointment of Price Waterhouse LLP to serve as
independent accountants for the Company for the fiscal year ending September
30, 1997. In the event a Shareholder specifies a different choice by means of
the enclosed Proxy, his shares will be voted in accordance with the
specification so made.
The cost of solicitation of Proxies will be borne by the Company. In
addition to the use of mail, employees of the Company may solicit Proxies by
telephone or other means. Upon request, the Company will reimburse brokers,
dealers, bankers, and trustees, or their nominees, for reasonable expenses
incurred by them in forwarding Proxy materials to beneficial owners of shares
of stock.
VOTING SECURITIES
The securities of the Company entitled to vote at the meeting consist,
as of January 13, 1997, of 20,900,678 shares of common stock. Only
Shareholders of record on the books of the Company on that date will be
entitled to vote at the meeting. All matters to be voted upon will be decided
by the affirmative vote of the holders of a majority of the shares of ICO
Common Stock present or represented at the meeting. In voting on such matters,
each Shareholder is entitled to one vote for each of said shares. Under Texas
law, an abstention has the same legal effect as a vote against, but broker
non-votes will not be counted for purposes of determining whether a majority
has been achieved. A broker non-vote occurs if a broker or other nominee
present in person or by proxy does not have discretionary authority and has not
received instructions with respect to a particular item or does not cast a vote
on that item for other reasons.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
OF MORE THAN 5% OF OUTSTANDING STOCK
The following table contains information based upon filings with the
Securities and Exchange Commission concerning the security ownership of
beneficial owners which beneficially own more than five percent of the
Company's Common Stock at the close of business on January 20, 1997.
Shareholders who are a party to the Shareholders Agreement described below, who
otherwise are not beneficial holders of more than five percent of the Company's
Common Stock, have not been set forth in the following table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ ---------------------- ----------------
<S> <C> <C> <C> <C>
Sylvia A. Pacholder
11490 Westheimer, Suite 1000
Houston, Texas 77077 . . . . . . . . . . . . . . . . . 3,012,272 (1)(2)(5)(6)(7) 14.0% (1)(2)(5)(6)(7)
Asher O. Pacholder
11490 Westheimer, Suite 1000
Houston, Texas 77077 . . . . . . . . . . . . . . . . . . 2,991,272 (1)(2)(5)(6)(7) 13.9% (1)(2)(5)(6)(7)
William E. Willoughby
607 U.S. Highway 202
Far Hills, New Jersey 07931 . . . . . . . . . . . . . . . 2,037,456 (1)(3) 9.7% (1)(3)
William C. Willoughby
6250 Covered Bridge
Pipersville, PA 18947-1508 . . . . . . . . . . . . . . . 1,076,923 (1)(4) 5.2% (1)(4)
</TABLE>
- --------------------
(1) ICO, Inc., Dr. Asher O. Pacholder ("AOP"), Sylvia A. Pacholder ("SAP"),
Robin E. Pacholder ("REP"), William J. Morgan ("WJM"), Pacholder
Associates, Inc. ("PAI"), PM Delaware, Inc. ("PMD") (AOP, SAP, REP, WJM,
PAI and PMD are collectively the "ICO Shareholders"), William E. Willoughby
("WEW"), Peggy S. Willoughby ("PSW"), William C. Willoughby ("WCW"),
Regina S. Willoughby ("RSW"), Fred R. Feder ("FRF"), Theo J.M.L. Verhoeff
("TV") and Catherine Willoughby Stevens ("CWS"), (WEW, PSW, WCW, RSW, FRF,
TV and CWS are collectively the "Wedco Shareholders") (the ICO Shareholders
and the Wedco Shareholders are collectively the "Shareholders") are parties
to a Shareholders Agreement, pursuant to which the Shareholders agreed to
take all actions necessary or appropriate to cause the election of William
E. Willoughby ("Willoughby"), Walter L. Leib ("Leib") and George S. Sirusas
("Sirusas") to the Board of Directors of ICO for terms ending on the date
of ICO's annual shareholders meeting in 1996 in the case of Willoughby, the
date of its annual shareholders meeting in 1997 in the case of Leib and the
date of its annual shareholders meeting in 1998 in the case of Sirusas and
to cause the reelection of Willoughby, Leib and Sirusas to the Board of
Directors of ICO until the earlier of the time the Wedco Shareholders who
are parties to the Shareholders Agreement, taken as a whole, beneficially
own less than 1,500,000 shares of Common Stock of ICO or there is a "change
in control" of ICO, when the ICO Shareholders who are parties to the
Shareholders Agreement shall no longer be obligated to cause the reelection
of such persons to the Company's Board of Directors ("Termination Date").
In addition, if Willoughby, Leib or Sirusas shall cease to serve as a
director of ICO at any time prior to the Termination Date, the Shareholders
will agree to take all actions necessary and appropriate to ensure that the
vacancy created shall be filled by a person nominated by the other Wedco
Shareholders who are parties to the Shareholders Agreement, subject to the
consent of a majority of the full Board of Directors of ICO.
In addition to the foregoing, all the ICO Shareholders who are parties to
the Shareholders Agreement have granted irrevocable proxies coupled with an
interest to Walter Leib to vote their shares of Common Stock of ICO in
favor of the slate of nominees for ICO's Board of Directors selected by the
then incumbent members of the Board of Directors of ICO (the "Nominated
Slate") and the Wedco Shareholders who are parties to the Shareholders
Agreement granted substantially identical proxies to SAP and AOP to vote
their shares of Common Stock of ICO also in favor of the Nominated Slate.
2
<PAGE> 6
The Shareholders Agreement also provides that if one or more of the ICO
Shareholders or Wedco Shareholders who are parties to the agreement desire
to sell 500,000 or more shares of ICO Common Stock (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 ICO 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 Shareholders beneficially own 6,930,373 shares of ICO Common Stock.
(2) Includes 204,380 shares of Common Stock and 180,000 shares of Common Stock
which may be acquired through the exercise of warrants and 78,372 shares of
common stock which may be acquired upon conversion of Convertible
Exchangeable Preferred Stock, in each case held by a limited partnership,
of which Dr. Pacholder and Mr. Morgan, a director of ICO, are general
partners. Pursuant to certain Investment Advisory Agreements, Pacholder
Associates, Inc., a company controlled by Dr. Pacholder and Ms. S.
Pacholder, has sole voting and investment power over such securities.
Share amounts also include 394,237 shares of Common Stock, 102,879 shares
of Common Stock which may be acquired through the exercise of warrants and
44,257 shares of Common Stock which may be acquired upon conversion of
Convertible Exchangeable Preferred Stock, in each case owned by a
wholly-owned subsidiary of Pacholder Associates, Inc.
(3) Includes 149,139 shares held jointly with spouse, 708,446 shares owned by
spouse, and 7,000 common shares which are issuable upon exercise of stock
options issuable under the 1993 Stock Option Plan for Non-Employee
Directors. Excludes the shares of any other Shareholder.
(4) Includes 91,780 shares owned by spouse, 48,640 shares either owned by minor
son or held by self or spouse as a custodian for minor son. Excludes the
shares of any other Shareholder.
(5) Includes 165,000 and 140,000 for Ms. S. Pacholder and Dr. Pacholder,
respectively, which are issuable upon exercise of stock options under the
Company's employee stock option plans. Also includes 2,000 and 6,000
common shares, respectively, which are issuable upon exercise of stock
options granted under the 1993 Stock Option Plan for Non-Employee Directors.
(6) Includes 1,829,747 shares of Common Stock issued in connection with eight
acquisitions over which Ms. S. Pacholder and Dr. Pacholder share voting
power. Ms. S. Pacholder and Dr. Pacholder disclaim beneficial ownership of
these shares.
(7) Includes 11,400 shares of Common Stock.
ELECTION OF DIRECTORS
Four Class III Directors are to be elected at the Annual Meeting to hold
office until the Company's 2000 Annual Meeting of Shareholders and until their
respective successors shall have been elected and qualified.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted FOR the election of the nominees listed below.
Although the Board of Directors does not contemplate that any of the nominees
will be unable to serve, if such a situation arises prior to the Annual
Meeting, the persons named in the enclosed proxy will vote FOR the election of
such other persons as may be nominated by the Board of Directors.
3
<PAGE> 7
THE BOARD OF DIRECTORS AND
EXECUTIVE OFFICERS OF THE COMPANY
The following is information concerning the director nominees, as well as
Class I and Class II Directors, whose terms are not expiring at the 1997 Annual
Meeting, and Executive Officers as of January 20, 1997:
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)
----------------------------------------
PRINCIPAL POSITION WITH DIRECTOR PERCENT
NAME THE COMPANY AGE SINCE SHARES OF CLASS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Class I Directors Whose Terms Will Expire in 1998
William E. Cornelius (2)(3) Director 47 1992 13,000 (6) *
Robin E. Pacholder Director 30 1993 36,822 (6)(9)(12) *
George S. Sirusas (2) Director 56 1996 22,285 (6) *
- ------------------------------------------------------------------------------------------------------------------------
Class II Directors Nominees Whose Terms Will Expire in 1999
William J. Morgan (2)(3)(4) Director 41 1992 1,019,125 (5)(6)(12) 4.8%
Sylvia A. Pacholder (4) Chief Executive Officer, 54 1993 3,012,272 (5)(6)(7)(8)(12) 14.0%
President, Secretary &
Director
Chief Executive Officer,
President & Director -
Wedco Technology, Inc. (a
wholly owned subsidiary
of ICO)
William E. Willoughby Director 75 1996 2,037,456 (6)(12) 9.7%
- ------------------------------------------------------------------------------------------------------------------------
Class III Directors Whose Terms (if re-elected) Will Expire in 2000
Asher O. Pacholder (4) Chairman of the Board & 58 1990 2,991,272 (5)(6)(7)(8)(12) 13.9%
Chief Financial Officer
Chairman of the Board &
Chief Operating Officer -
Wedco Technology, Inc.
John F. Williamson (2)(3) Director 58 1995 11,024 (6) *
Walter L. Leib (2) Director 66 1996 41,195 (6)(9) *
James E. Gibson Director 31 1996 7,000 (6) *
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Executive Officers Who Are Not Directors
Theo J. M. L. Verhoeff Executive Vice President 47 n/a 131,709 (6) *
Wedco and President
of Wedco Holland B.V.
Isaac H. Joseph Executive Vice President 41 n/a 42,000 (6) *
- Oilfield Services
Jon C. Biro Senior Vice President and 30 n/a 54,000 (6) *
Treasurer
Jack Cave Senior Vice President - 62 n/a 156,000 (6)(11) *
Production Services
Richard J. Girndt Senior Vice President - 39 n/a 40,400 (6)(11) *
Exploration Services
Curtis Mathews Senior Vice President - 53 n/a 30 ,000 (6) *
Corporate Development
Kenneth L. Miller Senior Vice President - 52 n/a 30,000 (6) *
Corrosion Control
Services
All Executive Officers and Directors as a Group 5,826,163 (10) 26.6%
(17 persons)
</TABLE>
- ----------------
(1) Except as otherwise indicated, the beneficial owner listed below has sole
voting and investment powers with respect thereto.
(2) Audit Committee Member
(3) Compensation Committee Member
(4) Executive Committee Member
(5) Share amounts include 204,380 shares of Common Stock and 180,000 shares
of Common Stock which may be acquired through the exercise of warrants
and 78,372 shares of common stock which may be acquired upon conversion
of Convertible Exchangeable Preferred Stock, in each case held by a
limited partnership, of which Dr. Pacholder and Mr. Morgan are general
partners. Pursuant to certain Investment Advisory Agreements, Pacholder
Associates, Inc. has sole voting and investment power over such
securities. Share amounts also include 394,237 shares of Common Stock,
102,879 shares of Common Stock which may be acquired through the exercise
of warrants and 44,257 shares of Common Stock which may be acquired upon
conversion of Convertible Exchangeable Preferred Stock, in each case
owned by a wholly-owned subsidiary of Pacholder Associates, Inc.
(6) Share amounts for Dr. Pacholder, Ms. S. Pacholder, Ms. R. Pacholder, Mr.
Cave, Mr. Verhoeff, Mr. Joseph, Mr. Girndt, Mr. Mathews, Mr. Miller and
Mr. Biro include 140,000, 165,000, 25,000, 28,000, 50,000, 42,000,
25,500, 30,000, 30,000 and 52,500 shares of common stock, respectively,
which are issuable upon exercise of stock options under the Company's
employee stock option plans. Share amounts for Dr. Pacholder, Mr.
Morgan, Mr. Cornelius, Ms. S. Pacholder, Ms. R. Pacholder, Mr. Sirusas,
Mr. Willoughby, Mr. Leib, Mr. Gibson and Mr. Williamson include 6,000,
13,000, 13,000, 2,000, 11,000, 7,000, 7,000, 7,000, 7,000 and 9,000
shares of common stock, respectively, that are issuable upon exercise of
stock options granted under the 1993 Stock Option Plan for Non-Employee
Directors.
(7) Share amounts include 1,829,747 shares of Common Stock issued in
connection with eight acquisitions over which Ms. S. Pacholder and Dr.
Pacholder share voting power. Ms. S. Pacholder and Dr. Pacholder
disclaim beneficial ownership of these shares.
(8) Includes 11,400 shares of Common Stock.
(9) Share amounts for Ms. R. Pacholder and Mr. Leib include 822 and 274
shares of Common Stock, respectively, which may be acquired upon
conversion of Convertible Exchangeable Preferred Stock.
5
<PAGE> 9
(10) Share amounts include 636,500 shares of Common Stock issuable upon
exercise of stock options granted to certain officers and Directors under
the Company's various stock option plans. 282,879 shares of Common Stock
issuable upon exercise of warrants and 123,725 shares of Preferred Stock
that are deemed to be beneficially owned by certain Directors as
indicated in (5) and (9) above. Share amounts also include 1,829,747
shares of Common Stock over which certain Directors and officers share
voting power as indicated in (7) above.
(11) Includes 78,000 and 14,400 shares of Common Stock owned by Mr. Cave and
Mr. Girndt, respectively, over which Ms. S. Pacholder and Dr. Pacholder
share voting power pursuant to an irrevocable proxy.
(12) Director or Executive Officer is a Party to the Shareholders Agreement
described in note (1) of "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
OF MORE THAN 5% OF OUTSTANDING STOCK". Except as set forth above and in
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF MORE THAN 5% OF
OUTSTANDING COMMON STOCK", share amounts do not include the shares of
common stock beneficially owned by other parties to the Shareholders
Agreement.
* Less than 1% of outstanding shares.
Asher O. Pacholder has been Chairman of the Board of Directors and Chief
Financial Officer of the Company since February 1995 and Chief Operating
Officer and a Director of Wedco Technology, Inc. since May of 1996. Dr.
Pacholder has been Chairman of the Board and a Managing Director of Pacholder
Associates, Inc. since 1983. He is Chairman of the Board of Directors of
USF&G Pacholder Fund, Inc., a closed-end investment company, and he serves on
the boards of: Southland Corporation, which owns and operates convenience
stores and Trump's Castle Associates, which owns and operates the Trump's
Castle Casino Resort in Atlantic City, New Jersey.
Sylvia A. Pacholder has been Chief Executive Officer of the Company since
February 1995, President since November 1994, and Chief Executive Officer,
President, and a Director of Wedco Technology, Inc. since May of 1996. From
July 1994 to November 1994, Ms. Pacholder served as Executive Vice President -
Operations, and from January 1994 to July 1994 she served as Vice President -
Corporate Development of the Company. During 1993, Ms. S. Pacholder was Senior
Vice President of Pacholder Associates, Inc. Prior to that time, Ms. S.
Pacholder was a member of the faculty at the University of Cincinnati from 1984
to 1993, most recently as the head of the Department of Mathematics and Applied
Sciences.
William E. Cornelius has been an independent manufacturing consultant
since 1991. For more than five years prior to 1991, Mr. Cornelius was Vice
President/Partner of Young & Klein Technicraft, Inc, a printing company.
Robin E. Pacholder has been Senior Vice President and General Counsel of
the Company since October 1996. From 1994 to October 1996, Ms. Pacholder was
Senior Vice President and Associate General Counsel of Pacholder Associates,
Inc. Ms. Pacholder was an Associate with the law firm of Pachulski, Stang,
Ziehl & Young from 1992 to 1994. Prior to such time, Ms. Pacholder attended
and graduated with honors from the UCLA School of Law and was admitted to
practice law in California in 1992.
George S. Sirusas has been continuously employed by New Jersey Savings
Bank, Somerville, New Jersey from 1983 and until the bank's merger with United
Jersey Bank on September 22, 1995. He served as senior lending officer of the
merged bank since 1986 and presently holds the position of Vice President and
Commercial Lending Officer with the United Jersey Bank, now known as Summit
Bank. Mr. Sirusas was a Wedco Technology, Inc. Director from 1984 until the
April 1996 acquisition by ICO.
William J. Morgan has been President and a Managing Director of Pacholder
Associates, Inc., an investment advisory firm, for more than five years. He
serves on the Board of Directors of USF&G Pacholder Fund, Inc., Duckwall-Alco
Stores, Inc., a midwestern retailer, PremiumWear, Inc., an apparel
manufacturing company, and Kaiser Ventures, Inc., an environmental resources
company.
William E. Willoughby founded Wedco and was employed by Wedco as its
Chairman of the Board and President from 1960 through April 1996. He has been
a Director of ICO since May 1996. He is also a Director TDT, Inc., which in
1988 acquired from Wedco the assets of Tri-Delta Technology, Inc. (formerly the
Bottle Division of Wedco, Inc.).
6
<PAGE> 10
John F. Williamson has been Chairman and President of Williamson
Associates, Inc., an investment management company, since January 1997. From
May of 1995 to January 1997, Mr. Williamson was Executive Vice President and
Chief Financial Officer of Asset Allocation Concepts, Inc., an investment
management company. From 1993 to 1994, Mr. Williamson was Vice
President/Manager of Investments for American Life and Casualty Insurance
Company. From 1990 to 1993, he was a financial consultant. Mr. Williamson
serves on the Board of Directors of USF&G Pacholder Fund. Mr. Williamson was
appointed by the Board of Directors in June 1995 to fill the vacancy on the
Board resulting from the death of John R. Howard.
Walter L. Leib has been Senior Partner in the law firm of Leib, Kraus,
Grispen & Roth, in Scotch Plains, New Jersey since its inception in 1971. Mr.
Leib served as a Director of Wedco from 1970 and General Counsel to Wedco from
its inception in 1960, until the acquisition of Wedco by ICO in April 1996.
James E. Gibson has been employed as Senior Vice President of Pacholder
Associates, Inc. since 1988.
Theo J.M.L. Verhoeff became Executive Vice President of Wedco in July
1996 and is President of Wedco Europe B.V. For more than 5 years prior to that
time, he served as Vice President of European Operations of Wedco.
Isaac H. Joseph has been principally employed as Executive Vice President
- - Oilfield Services of ICO since November 1996. From July 1996 to November
1996 Mr. Joseph served as Senior Vice President - Corporate Administration and
Sales. From March 1995 to June 1996, Mr. Joseph was employed as Senior Vice
President - Sales. From November 1994 to March 1995, he was ICO's Louisiana
Division Manager. Mr. Joseph was ICO's Division Sales Manager for Louisiana
from June 1994 to November 1994. From March 1992 to June 1994, Mr. Joseph was
the Louisiana Sales Manager for Tuboscope Vetco International. From September
1991 to March 1994, he was a sales representative for Completion Accessories,
Inc., an oilfield service company, in Louisiana. Prior to that time, he was
Senior Sales Representative for Baker Hughes Vetco Services, an oilfield
service company.
Jon C. Biro, a certified public accountant, has been principally employed
as Controller of ICO since October 1994, as Treasurer and Controller of ICO
since April 1995, and as Senior Vice President and Treasurer since September
1996. Prior to that time, Mr. Biro was a certified public accountant with
Price Waterhouse LLP.
Jack C. Cave has been principally employed as Senior Vice President -
Production Services of ICO since January 1996. From August 1995 to January
1996, Mr. Cave was Director of Asset Utilization for ICO. From April 1994 to
August 1995 he was Division Manager of Frontier Inspection Services for ICO.
Prior to April 1994 Mr. Cave was President and General Manager of Frontier
Inspection Services.
Richard J. Girndt has been principally employed as Senior Vice President
- - Exploration Services since April 1996. From December 1994 to May 1996, he
was Vice President - Research and Engineering. From October 1994 to December
1994, he was Assistant Vice President - Research and Engineering. From
November 1993 to October 1994, he was Director of Engineering. Mr. Girndt
started with ICO in November 1993 as Assistant Manager of UT Development.
Prior to that time, he was Vice President and a shareholder of Tubular
Ultrasound Corporation.
Curtis Mathews has been principally employed as Senior Vice President -
Corporate Development of the Company since July 1995. From October 1994 to
June 1995, Mr. Mathews was Vice President - Exploration Services of the
Company. From October 1992 to September 1994, Mr. Mathews was employed as
Regional Manager. For more than five years prior to that time, Mr. Mathews
served as Domestic Inspection Manager for Baker Hughes Tubular Services, Inc.
Kenneth Miller has been principally employed as Senior Vice President -
Corrosion Control Services of ICO since October 1995. From November 1994 to
October 1995, Mr. Miller served ICO as Assistant Vice President - Corrosion
Control Products. From October 1993 to October 1994, he was ICO's Louisiana
Division Manager, and for the three years prior to October 1993, Mr. Miller
served as the Gulf Coast Area Manager for Baker Hughes Tubular Services, Inc.
The Board of Directors held eight meetings and took action in writing on
seven occasions during the year ended September 30, 1996. Each meeting was
attended by all Directors. Each Director who is not an employee of the
7
<PAGE> 11
Company received an annual retainer of $10,000 and a Director's fee in the
amount of $2,000 for each meeting of the Board or Committee of the Board
attended and reimbursement of expenses incurred. In May of 1996, the
compensation paid to Directors was modified. Under the new terms, each
non-employee Director of ICO will be paid a fee of $15,000 per year.
Additionally, each of these Directors will receive $1,000 per meeting
attended. The Chairmen of the Audit and Compensation Committees will also
receive an annual stipend of $2,000. In addition, each Director who is not an
employee is a participant in the 1993 Non-Employee Director Stock Option Plan.
Under the plan, each non-employee Director is granted options to purchase 5,000
shares of Common Stock upon appointment to the Board of Directors and options
to purchase 5,000 shares of Common Stock on the first business day after the
date of each subsequent Annual Meeting of Shareholders.
The standing Audit Committee met one time during the past fiscal year.
The Compensation Committee met on one occasion and took action in writing four
times during the year. The Dividend Committee took action in writing four
times during fiscal year 1996. All committee members were present for all the
aforementioned meetings. The functions of the Audit Committee include
reviewing the engagement of the independent accountants, the scope and timing
of the audit and certain non-audit services to be rendered by the independent
accountants, examining the report of the independent accountants upon
completion of their audit, and reviewing with the independent accountants the
Company's policies and procedures with respect to accounting and financial
controls. The Compensation Committee reviews and establishes compensation
arrangements for Directors, officers and other employees and takes whatever
action that may be required in connection with the Company's stock option
plans. The Company does not have a Nominating Committee.
8
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the Company to
each of the five most highly compensated executive officers and directors and
the Company's Chief Executive Officer during the fiscal year ended September
30, 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ---------------
SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION (1)
- ------------------ ---- ------ ----- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Sylvia A. Pacholder (2) 1996 $175,000 $400,000 (3) 35,000 2,015
President and 1995 156,193 125,000 50,000 2,300
Chief Executive Officer 1994 78,564 75,000 -- --
Asher O. Pacholder (2) 1996 150,000 375,000 (3) 30,000 1,875
Chairman of the Board 1995 94,327 100,000 30,000 --
& Chief Financial Officer 1994 -- -- -- --
Isaac H. Joseph 1996 95,188 35,000 12,000 952
Executive Vice President - 1995 78,126 37,500 10,000 781
Oilfield Services 1994 18,423 17,000 -- 100
Jon C. Biro 1996 78,038 55,000 (3) 22,000 3,009
Senior Vice President and 1995 58,958 20,000 500 --
Treasurer 1994 -- -- -- --
Curtis Mathews 1996 104,375 25,000 12,000 1,297
Senior Vice President - 1995 91,875 30,000 20,000 1,148
Corporate Development 1994 78,528 10,000 -- 1,020
</TABLE>
(1) Includes the Company's matching contributions to the Employee Stock
Ownership Plan (the 401(k) Plan).
(2) Effective June 14, 1996, the Company's Employment Agreements with Ms.
Pacholder and Dr. Pacholder were amended. The termination date of both
agreements was changed to December 31, 2001 from December 31, 1998.
The term of the Employment Agreements is extended automatically
from day to day until such time as either party gives written notice to
the other that no further such automatic extensions shall occur,
in which event employment terminates on a date five years after such
notice has been given.
(3) Includes a special bonus in the amount of $250,000, $250,000 and
$25,000 paid to Ms. S. Pacholder, Dr. Pacholder and Mr. Biro,
respectively, relating to the acquisition of Wedco Technology, Inc.
9
<PAGE> 13
OPTIONS GRANTED DURING FISCAL 1996
The following table sets forth stock options granted to the individuals
named in the Summary Compensation Table during the fiscal year ending September
30, 1996 under the Company's 1985, 1994 and 1995 Stock Option Plans. Under the
Securities and Exchange Commission ("SEC") regulations, companies are required
to project an estimate of appreciation of the underlying shares of Common Stock
during the option term. The Company has chosen the 5%, 10% formula approved by
the SEC; however, the ultimate value will depend on the market value of the
Company's Common Stock at a future date, which may or may not correspond to the
projections below.
<TABLE>
<CAPTION>
Potential realizable
value at assumed
annual rates of stock
INDIVIDUAL GRANTS price appreciation for
--------------------------------------------------------------------------------------- option term
-----------------------
% of total
Options Options granted Exercise price Per Expiration
Name Granted to employees in Share (1) Date 5% 10%
1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sylvia A. Pacholder 35,000 8% $4.875 10/20/2005 $107,305 $271,932
Asher O. Pacholder 30,000 7% $4.875 10/20/2005 91,976 233,085
Isaac H. Joseph 12,000 3% $4.875 10/20/2005 36,790 93,234
Jon C. Biro 22,000 5% 12,000 @ $4.875 10/20/2005 36,790 93,234
10,000 @ $5.625 02/09/2006 35,375 89,648
Curtis Mathews 12,000 3% $4.875 10/20/2005 36,790 93,234
</TABLE>
(1) Exercise price is the fair market value on the date of grant.
FISCAL YEAR 1996 OPTION EXERCISES AND FISCAL YEAR-END VALUE
The following table sets forth stock options exercised by the individuals
named in the Summary Compensation Table during fiscal year 1996, and the number
and value of all unexercised options at fiscal year end. The value of "in-the-
money" options refers to options having an exercise price which is less than
the market price of the Company's Common Stock on September 30, 1996.
<TABLE>
<CAPTION>
Value of Unexercised
Shares Number of Unexercised Options In-the-Money Options at
Name Acquired on Value at September 30, 1996 September 30, 1996 (1)
Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sylvia A. Pacholder -0- n/a 87,000/0 $73,125/0
Asher O. Pacholder -0- n/a 66,000/0 48,750/0
Isaac H. Joseph -0- n/a 22,000/0 13,875/0
Jon C. Biro -0- n/a 22,500/0 12,250/0
Curtis Mathews -0- n/a 32,000/0 25,500/0
</TABLE>
(1) Represents market value of the Company's Common Stock at September 30,
1996 less the exercise price.
10
<PAGE> 14
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
To: The Board of Directors:
The Company's policies with respect to compensation of executive officers
are outlined as follows:
Cash Compensation
Base Salary - It is believed to be requisite that the Company pay
base salaries to executive officers that are reflective of: (1) the
individual's skills, business experience, and judgment; (2) the
responsibilities and duties of the position; and (3) the interests
of the Shareholders by assuring that well-qualified persons are
attracted, motivated, and retained to manage the Company. In this
respect, the salary levels established reflect the subjective
judgment of the Committee on these matters.
Bonus - Depending upon the operating results of the Company as a
whole and taking into account the responsibilities and performance
of the individual executive in the achievement of specific
performance goals, discretionary bonuses may be paid to executive
officers. During fiscal year 1996 special bonuses were paid to
certain officers of the Company relating to the acquisition of Wedco
Technology, Inc. Bonuses, however, are not awarded based upon any
quantifiable goals or standards, but rather reflect the Committee's
general, subjective view of the contribution of the particular
individuals to the Company's operations.
Long-Term Compensation
Stock Options - Options to purchase Company stock, at the market
price in effect at date of grant, may be granted by the Compensation
Committee to executive officers to link their interests directly
with those of other Shareholders while increasing their personal
investment in the Company. Specific stock option targets have not
been established for participants, but rather the Committee views
the awards of stock options as an incentive for future performance
and grants participants ownership positions through options which it
believes are consistent with each participant's current and expected
future responsibilities.
With respect to the base salary granted to the Chief Executive Officer in
1996, the Compensation Committee took into account the overall individual
skill, business experience and judgment of the Chief Executive Officer as well
as an assessment by the Compensation Committee of the Chief Executive Officer's
individual performance including the areas of corporate acquisitions and
increased sales volume of the Company. The Compensation Committee also
compared the compensation levels of chief executive officers of companies of
similar size that operate in the oilfield service industry. The companies with
which these comparisons were made are not necessarily the same as the index of
14 oil service companies which are utilized in the performance graph.
COMPENSATION COMMITTEE
William E. Cornelius
William J. Morgan
John F. Williamson
11
<PAGE> 15
STOCK PERFORMANCE CHART (1)
The following chart compares the yearly percentage change in the
cumulative total Shareholder return of the Company's common stock during the
five years ended September 30, 1996 with: (1) the cumulative total return of
the NASDAQ Composite Stock Index (U.S.); (2) an index of 14 oil service
companies (Oilfield Services and Equipment Industry Index); and (3) the
cumulative total Shareholder return on the Company's only publicly-held
domestic competitor, Tuboscope Vetco International Corporation (Tuboscope).
[STOCK PERFORMANCE CHART]
(1) Assumes $100 invested on September 30, 1991 and all dividends reinvested.
Data supplied by NASDAQ and Value Line Institutional Services.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors of the Company
currently consists of Messrs. William J. Morgan, William E. Cornelius, and
John F. Williamson.
Dr. Pacholder is the Chairman of the Board of Directors of Pacholder
Associates, Inc. which, among other things, determines the compensation of the
executive officers of Pacholder Associates, Inc., including Mr. Morgan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and Directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and NASDAQ and to furnish the Company with copies of all reports filed. Based
solely on the review of the reports furnished to the Company, or written
representations that no Forms 5 were required, the Company believes that,
during fiscal 1996, all Section 16(a) filing requirements applicable to its
Directors, officers and greater than 10% beneficial owners were met, except for
Mr. William E. Willoughby's untimely reporting of sales of 337,900 common
shares during May through September of 1996. The sale
12
<PAGE> 16
of the 337,900 common shares consisted of twenty-one transactions which
required four Form 4 filings. Upon learning of the failure to report the
transactions on a timely basis, Mr. Willoughby reported the transactions.
SELECTION OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, examined the Company's
consolidated financial statements for the fiscal year ended September 30, 1996,
and, in connection with their audit function, reviewed the Company's Annual
Report to Shareholders and certain of its filings with the Securities and
Exchange Commission. The Board of Directors has re- employed the firm of Price
Waterhouse LLP as independent accountants for the Company for fiscal 1997,
subject to Shareholders' ratification at the Annual Meeting. If ratification
is not obtained, the Board intends to continue the employment of Price
Waterhouse LLP at least through fiscal 1997. Representatives of Price
Waterhouse LLP will be present at the Annual Shareholders' Meeting, with the
opportunity to make a statement if they desire to do so, and such
representatives are expected to be available to respond to appropriate
questions at the Annual Shareholders' Meeting.
CERTAIN TRANSACTIONS
In connection with the April 30, 1996 merger of Wedco Technology, Inc.
into a wholly owned subsidiary of the Company, Wedco and William E. Willoughby
entered into a ten-year non-compete agreement and a five-year consulting
agreement. As consideration, Mr. Willoughby will receive $300,000 payable in
60 equal monthly installments for the non- compete agreement and $240,000 per
year, payable monthly, for consulting services. Mr. Willoughby and Wedco are
also parties to a salary continuation agreement which provides that Mr.
Willoughby's spouse will be paid a survivorship benefit of $150,000 for five
years if Mr. Willoughby predeceases his spouse at a time when he is serving as
a consultant to Wedco or ICO, provided however, such payment shall terminate
upon the earlier to occur of the death of his spouse or April 30, 2001.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
A Shareholder intending to submit a proposal to be presented at the 1998
Annual Meeting of Shareholders must deliver such proposal in writing to the
Company's Secretary no later than September 30, 1997.
OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Company knows of no matters other than those above stated which are
to be brought before the Annual Meeting. It is intended that the persons named
in the Proxy will vote your stock according to their best judgment if any other
matters do properly come before the Meeting.
Whether or not you intend to be present at this meeting, you are urged to
return this Proxy promptly. If you are present at the meeting and wish to vote
your stock in person, this Proxy shall, at your request, be returned to you at
the meeting.
By Order of the Board of Directors
Asher O. Pacholder Sylvia A. Pacholder
Chairman of the Board and Chief Executive Officer,
Chief Financial Officer President & Secretary
Dated: January 24, 1997
13
<PAGE> 17
ICO, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING MARCH 3, 1997
P The undersigned hereby appoints Asher O. Pacholder and Sylvia A.
R Pacholder, or any one of them, proxies of the undersigned, each with
O the power of substitution, to vote all shares of common stock which
X the undersigned would be entitled to vote at the Annual Meeting of
Y Shareholders of ICO, Inc. to be held in Houston, Texas on Monday,
March 3, 1997, and any adjournment of such meeting on the matters
specified and in their discretion with respect to such other business
as may properly come before the meeting or any adjournment thereof.
Election of four Class III directors to serve (change of address)
until the 2000 Annual Meeting of Shareholders:
Asher O. Pacholder, John F. Williamson, -------------------------
Walter L. Leib and JamesE. Gibson. -------------------------
-------------------------
-------------------------
(If you have written in
the above space, please
mark the corresponding
box on the reverse side
of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. -----------
SEE REVERSE
SIDE
-----------
<PAGE> 18
/X/ Please mark your SHARES IN YOUR NAME
votes as in this
example.
FOR WITHHELD
1. Election of Directors / / / /
(See reverse)
For, except vote withheld from the following nominee(s):
________________________________________________________
FOR AGAINST ABSTAIN
2. The ratification of the appointment / / / / / /
of Price Waterhouse LLP as
independent accountants.
Change of Address / /
Attend Meeting / /
SIGNATURE(S) ________________________________________ DATE _______________
SIGNATURE(S) ________________________________________ DATE _______________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such.
