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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of the
Securities Exchange Act of 1934.
Filed by the Registrant [__]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ X] Preliminary Proxy Statement
[__] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6 (e) (2))
[__] Definitive Proxy Statement
[__] Definitive Additional Materials
[__] Soliciting Material Under Rule 14a-12
ICO INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TRAVIS STREET PARTNERS, LLC
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(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) (1) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials:
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[_] 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:
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<PAGE>
PRELIMINARY COPY, SUBJECT TO COMPLETION
DATED JANUARY 5, 2001
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PROXY STATEMENT OF
TRAVIS STREET PARTNERS, LLC
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IN CONNECTION WITH THE
2001 ANNUAL MEETING OF SHAREHOLDERS
OF ICO, INC.
To the Shareholders of ICO, Inc.:
This Proxy Statement is being furnished to holders of common stock,
with no par value ("Common Stock"), of ICO, Inc. (the "Company" or "ICO") in
connection with a solicitation by Travis Street Partners, LLC ("TSP," "we" or
"us") and the other participants described below under "Certain Information
Concerning TSP and Other Participants in the Solicitation." TSP, as the owner of
5.02% of the Company's outstanding Common Stock, is one of the Company's largest
shareholders.
This Proxy Statement is for use at the 2001 Annual Meeting of
Shareholders of the Company and at any adjournments thereof (the "2001 Annual
Meeting"). The Company has announced that the 2001 Annual Meeting will be held
on March __, 2001, at 10:00 a.m., Central Daylight Savings Time, at [the
Westchase Hilton, located at 9999 Westheimer, Houston, Texas], and that the
record date for shareholders entitled to vote at the 2001 Annual Meeting is
January __, 2001. Only shareholders of record at the close of business on such
date will be entitled to notice of and to vote at the 2001 Annual Meeting.
On December 20, 2000, we delivered to ICO a letter indicating that TSP
was prepared to make a friendly fully-financed offer (the "TSP Offer"), the full
text of which is set forth below under "Background of This Solicitation -- TSP
Offer" to acquire ICO at $2.85 per share of Common Stock, a premium of
approximately 82% to the prior day's closing price, subject to due diligence
completion, agreement as to senior management arrangements and confidentiality.
Subsequently, on December 22, 2000, the Company rebuffed our proposal,
criticizing the "process" of the TSP Offer, but failing to address the financial
merits of the TSP Offer. You can obtain a current quotation for ICO's share
price prior to voting at the 2001 Annual Meeting or granting your proxy.
We are soliciting proxies in connection with the 2001 Annual Meeting
for the election of James D. Calaway, A. John Knapp and Charles T. McCord, III
(together, the "TSP Nominees") as Directors of the Company. The TSP Nominees are
<PAGE>
committed to pursuing the highest possible value for ICO Shareholders, which
could be either the TSP Offer or any superior proposal.
YOU WILL SOON RECEIVE A PROXY CARD FROM MANAGEMENT. PLEASE RETURN ONLY
TSP'S GOLD PROXY CARD AND DO NOT RETURN ANY MANAGEMENT PROXY CARD UNDER ANY
CIRCUMSTANCES, EVEN TO VOTE "AGAINST" MANAGEMENT'S PROPOSAL ON THEIR PROXY CARD.
IF YOU RETURN BOTH PROXY CARDS THERE IS A DANGER THAT YOUR SHARES WILL NOT BE
VOTED AS YOU DESIRE, BECAUSE ONLY THE LATEST DATED PROXY CARD YOU SUBMIT COUNTS.
IF YOUR SHARES ARE HELD BY A BROKER, BANK OR ANOTHER NOMINEE, ONLY THAT
NOMINEE CAN VOTE YOUR SHARES. PLEASE CONTACT YOUR BROKER OR OTHER NOMINEE AND
INSTRUCT IT TO RETURN ONLY TSP'S GOLD PROXY CARD.
TSP AND OUR INVESTMENT IN ICO
TSP is a Texas limited liability company, which was formed to invest in
various securities, including the Common Stock. TSP members include six private
individuals, a joint venture between individuals and a limited liability
company. At present, TSP owns 1,138,300 shares, or approximately 5.02% of the
outstanding shares of the Common Stock. We believe this makes us one of ICO's
largest shareholders. As such, we have a considerable economic stake in ICO's
future - a stake which is substantially greater than the ownership position held
by ICO's current management group.
On December 19, 2000, after submitting our director nominations to ICO,
at ICO's invitation, Timothy J. Gollin and Christopher N. O'Sullivan (the "TSP
Managers"), in their capacity as TSP Managers, met with Dr. Asher "Al" O.
Pacholder, ICO's Chairman and Chief Financial Officer ("Asher Pacholder"), and
Dr. Sylvia A. Pacholder, ICO's President and Chief Executive Officer ("Sylvia
Pacholder" and, with Asher Pacholder, the "Controlling Pacholders") for
discussions. The TSP Managers shared some of TSP's ideas for the Company's
future with the Controlling Pacholders, specifically our belief that the Company
should be sold to the highest bidder to maximize shareholder value.
At the Controlling Pacholders' invitation, on December 20, 2000, we
provided the Company with the TSP Offer to purchase the Company at a price of
$2.85 per common share, a 82% premium to the ICO closing price on December 19,
2000. By letter dated December 22, 2000, Asher Pacholder informed us that the
Company's Board of Directors (the "Board" or "ICO Board") had determined that
the TSP Offer was not consistent with the ICO Board's goals, criticizing the
process we had proposed for negotiating the specific terms of sale of the
Company, but failing to respond substantively to the financial merits of the TSP
Offer.
On December 29, 2000, TSP filed its Schedule 13D with the Securities
and Exchange Commission ("SEC"), disclosing the delivery of the TSP Offer to
ICO, ICO's written response, that TSP had accumulated 5.02% of ICO common stock,
and that TSP was considering all options with respect to its investment.
Since the date of delivery of the TSP Offer to ICO, ICO's closing price
has risen from approximately $1.57 per share on December 19, 2000 to $2.06 per
share on January 4, 2000, an increase of over 30%.
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The address and telephone number of TSP are: Travis Street Partners,
LLC, 910 Travis Street, Suite 2150, Houston, Texas 77002, (713) 759-2030.
Communications may also be directed to TSP by facsimile at (713) 759-2040 and by
email at [email protected]. The website address for TSP is
www.travisstreetpartners.com.
ABOUT THIS PROXY STATEMENT
The TSP Nominees have a simple agenda: to provide maximum value to ICO
shareholders through a sale of the Company to the highest bidder. In this proxy
statement, we will describe our plans for ICO and how we believe they will
benefit ICO shareholders. We will also explain why this strategy, in comparison
to the ICO Board's, is the right one for all ICO shareholders. We have nominated
the TSP Nominees as three directors - the maximum number possible this year - to
try to bring fresh thinking and new ideas to the ICO Board.
If you are a longterm ICO shareholder, you already know that the
current ICO Board, and the current management team, both of which are dominated
by the Controlling Pacholders, have presided while the value of the shares of
Common Stock has declined by nearly 80% since its high trading price in 1997.
The same ICO Board has presided while 80% of the Company's tangible net worth
has vanished.
Under the Company's Amended and Restated By-Laws (the "By-Laws"), the
principal way shareholders can voice their dissatisfaction with management is by
nominating and electing their own slate of directors. Part of the process of
electing that slate is asking other shareholders for their vote through a
process called proxy solicitation. When you give us your proxy, you are
effectively voting for our slate of candidates - the TSP Nominees.
This proxy statement is a step in the proxy solicitation process. It
gives us the opportunity to explain our position and ideas to other
shareholders. By law, the Company must make it possible for us to send you this
information, even if management does not welcome our input.
EXECUTIVE SUMMARY
The following points provide a brief explanation of our reasons for
seeking to elect our own slate of directors to the ICO Board. A more
comprehensive explanation is provided in later sections.
PROFITS FOR PACHOLDERS, LOSSES FOR SHAREHOLDERS
o Under current management, ICO's tangible net worth has
declined from $7.61 per share at the end of fiscal year 1995
to $1.57 at the end of fiscal year 2000.
o As a result of abysmal operating performance, the market has
torpedoed ICO's common stock. A $100 investment in ICO on
October 27, 1997, the date of the highest market price of ICO
shares in the last 5 years, plummeted to a value of less than
$19 on December 19, 2000, the day preceding the date we
delivered the TSP Offer to ICO, a decline of 81% in three
years.
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o ICO shares reached a new low of $1.00 on December 5, 2000
compared to its peak of $8.62 on October 27, 1997.
o At the same time as ICO's market and financial performance has
declined precipitously, the Pacholder family has taken
millions of dollars in cash compensation over the last five
years. During the same period, under Pacholder family
management, the Company has reported in excess of $17 million
in cumulative losses.
o In the spirit of openness and candor, we call upon the Board
to fully disclose the terms under which the voting rights of
common stock issued to third parties in connection with
acquisitions (the "Pacholder Voting Rights") were awarded
personally to the Controlling Pacholders. At the very least,
the failure of both ICO and the Controlling Pacholders,
personally, to fully disclose the terms of these acquisitions
in public filings creates the appearance of impropriety and
self-dealing. Only a full disclosure, verified by independent
auditors, can assure shareholders that the Pacholder Voting
Rights have been properly awarded. Our concern is that the
Company overpaid for acquisitions so that the Controlling
Pacholders could be awarded the Pacholder Voting Rights.
Accordingly, it appears that ICO management has received
personal benefits when the Company has acquired businesses - a
possible reason ICO has been aggressively pursuing its
acquisition strategy.
o We believe there are serious questions about the independence
of the majority of the Board which approved these
transactions, about the adequacy of the SEC disclosures of the
Company and the Controlling Pacholders personally (which, to
our knowledge, have never included copies, or even a summary
of terms, of these voting agreements), and, most importantly,
about the fairness of the underlying transactions to the
Company.
A COSTLY, FLAWED ACQUISITION PROGRAM IN PLASTICS HAS FAILED
o In 1999, the Company stopped paying common stock dividends so
ICO could borrow $120 million for its acquisition program.
Today, many of the purchased businesses appear to lose money.
Yet the Company pays $14 million per annum in interest. That's
more than $0.60 per share per year which might have gone to
shareholders but instead is going to holders of ICO's junk
bonds.
o When ICO merged with WEDCO Technology, Inc. ("WEDCO"), the
Company's first foray into plastics, ICO itself had no
management experience in the plastics business. Rather than
hiring an experienced manager, we believe that the ICO Board
compounded its problems in 1998 by appointing Ms. Robin E.
Pacholder, the 31-year-old daughter of the Controlling
Pacholders, to run the plastics business. According to ICO's
proxy materials, Ms. Pacholder had no significant prior
experience, background or training in running a plastics
business.
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o Thereafter, without experienced management, but with cash from
junk bond issuances on the balance sheet, ICO expanded its
plastics business by acquiring numerous overseas businesses as
well as domestic businesses. We believe, after reviewing the
Company's public filings, that none of the Company's senior
management had prior experience with management of overseas
businesses. Moreover, according to the Company's public
statements, the overseas plastics businesses, engaged
primarily in distribution activities, require substantially
greater inventory risk and enjoy far lower margins than ICO's
traditional businesses.
o Lacking both the industry expertise and, we believe, the
humility to seek appropriate know-how outside the Pacholder
family, management has catastrophically destroyed shareholder
value while saddling shareholders with a mountain of debt and
intangible assets which will take years to amortize.
o The failed acquisition strategy, which has resulted in a
highly leveraged capital structure, numerous losses, several
asset writedowns and unprofitable international operations, is
the primary cause of the dramatic decline in ICO's tangible
net worth and, we believe, its market value.
THE MAJORITY OF THE ICO BOARD HAS PROTECTED THE CONTROLLING PACHOLDERS AND
FAMILY
o The Pacholder-controlled ICO Board has approved employment
contracts providing Pacholder family members with
approximately $6 million in severance payments if they are
fired.
o A majority of the ICO Board consists of Pacholders or their
employees or business associates whose close relationships
with the Pacholders raise substantial questions concerning
their ability to act independently of management.
o The ICO Board has put in place a shareholder rights plan (the
"Poison Pill") to prevent outsiders from tackling basic
governance issues at ICO. We believe the Poison Pill has added
to the illiquidity of the Common Stock.
o At the same time as a majority of the ICO Board has taken
strong steps to protect and benefit the Controlling Pacholders
and their family, the Board has failed to complete any
significant initiatives which have led to a general
enhancement of shareholder value.
o We believe the market has indicated its dissatisfaction with
the performance of the current ICO Board, and current ICO
management, by reducing the Company's valuation by 81% in the
last three years.
MANAGEMENT REFUSES TO MAXIMIZE SHAREHOLDER VALUE THROUGH A SALE OF ICO
o ICO's stock has been at historic lows for more than two years.
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o The Controlling Pacholders and their family continue to
benefit economically from their entrenched position at ICO
while shareholders have witnessed a substantial loss of market
value.
o Much of ICO's value has been lost in the last three years, as
the per share price has tumbled from $8.63 per share in
October 1997 to $l.56 per share on the day prior to the
delivery of the TSP Offer. ICO's stock price touched $1.00 in
December 2000 and, we believe, may well return to these levels
in the future.
o ICO's market capitalization of approximately $35.5 million
(based on the $1.56 closing price on the day preceding the
date we delivered the TSP Offer to ICO) is less than the value
of ICO's cash as of September 30, 2000 (approximately $39.0
million), which we believe is a profound market statement
about the Company's current management and strategy.
o Since October 27, 1997, ICO's market capitalization has lost
nearly $150 million in shareholder value.
o Based on the Company's rebuff to the TSP Offer, existing
management is unwilling or unable to respond to an offer to
sell the Company.
TO MAXIMIZE SHAREHOLDER VALUE, ICO SHOULD BE SOLD
o We believe the best way to maximize the Company's value is to
sell the Company to the highest bidder, and we believe this
should be done as quickly as possible.
o The TSP Nominees will support a sale of the Company.
o We believe that delays in implementing our sale strategy could
result in continued deterioration in ICO's stock price and,
thus, value impairment to shareholders.
We therefore ask for your proxy to elect the TSP Nominees - James D.
Calaway, A. John Knapp, and Charles T. McCord, III - as Directors of the
Company. Background information about the TSP Nominees is set forth below under
"Information Regarding the Solicitation."
If elected, the TSP Nominees, all of whom are respected businessmen in
Houston, where ICO is based, will support the following program consistent with
their fiduciary obligations to the Company:
o To seek a sale of the Company to the highest bidder as
promptly as possible. The TSP Nominees will support a sale to
the highest bidder, whoever it may be, even if that means that
TSP itself ends up losing out to a third party.
o To seek independent and impartial review of ICO's process for
determining the compensation of the Company's senior
management.
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o To appoint a special audit committee and to engage outside
auditors to investigate the compensation paid to Company
senior management, especially including:
o the basis and validity of the Pacholder Voting Rights
awarded to the Controlling Pacholders for the 1.3
million shares issued to third parties in connection
with acquisitions;
o any and all personal expenses of senior management
which may have been improperly paid by the Company;
o the propriety of bonuses paid to senior management in
connection with the now-reversed John Wood Group PLC
judgment and WEDCO acquisition; and
o any tax implications related to the above items with
respect to the Company or its management.
o To investigate and disclose any and all relationships between
Pacholder Associates, Inc. ("Pacholder Associates"), its
affiliates and employees, and the Company, including any
ownership of Company securities, such as senior notes or
preferred stock, by Pacholder Associates or its affiliates.
o To redeem the Poison Pill.
TSP believes the only way for shareholders to realize the value of
their ICO investment is to wrest control of this company from the Controlling
Pacholders and then to sell the Company. We believe the current ICO Board,
controlled by the Controlling Pacholders, by contrast, supports continued
operation of the Company and its assets by the same management with, as far as
we can tell, the same unsuccessful strategy. TSP believes the best way for
shareholders to receive a premium to the current market price of the Common
Stock is through a sale of the Company in an auction. While we believe the TSP
Offer, if accepted by the Board, would be equitable to all ICO shareholders, the
TSP Nominees will be committed to seeking the highest possible bid for the
Company. A shareholder vote in favor of the TSP Nominees will enable the TSP
Nominees to advocate these steps as representatives of the shareholders on the
ICO Board.
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YOUR VOTE IS IMPORTANT!
TO ELECT OUR DIRECTORS PLEASE NOTE THE FOLLOWING:
ONLY YOUR LATEST DATED PROXY CARD WILL COUNT AT THE 2001 ANNUAL
MEETING. THEREFORE, PLEASE DO NOT COMPLETE OR RETURN ANY
PROXY CARD SENT TO YOU BY THE COMPANY'S MANAGEMENT OR BOARD
OF DIRECTORS.
ONLY SUBMIT THE GOLD PROXY CARD.
You are urged to sign and date the enclosed GOLD PROXY CARD and return
it in the enclosed envelope whether or not you attend the meeting.
You can revoke your proxy (whether such proxy was solicited by TSP or
the Company) at any time prior to its use at the 2001 Annual Meeting by
submitting to TSP or the Company a written revocation or duly executed proxy
bearing a later date. In addition, if you attend the 2001 Annual Meeting in
person, you can vote by ballot, thereby canceling any proxy previously given.
Proxies may be delivered to TSP, by hand or by mail, at:
Travis Street Partners, LLC
c/o MacKenzie Partners
156 Fifth Avenue, PH 3
New York, New York 10010
THIS SOLICITATION IS BEING MADE BY TSP IN OPPOSITION TO THE INCUMBENT
ICO BOARD AND MANAGEMENT OF THE COMPANY.
This Proxy Statement is first being sent or given to one or more
shareholders on or about January 16, 2001. The Company reported in its annual
report on Form 10-K for the fiscal year ended September 30, 2000, that there
were 22,686,987 shares of Common Stock outstanding on December 18, 2000. Unless
otherwise indicated, any reference in this Proxy Statement to the percentage of
outstanding shares of Common Stock owned by any person, and all such references
with respect to shares of Common Stock owned by TSP, were computed based upon
this number of outstanding shares. Each share of Common Stock is entitled to one
vote.
TSP's Proxy Statement and a form of proxy will be delivered to all
holders of record of the outstanding shares of Common Stock on the record date
for the 2001 Annual Meeting.
The ICO Board currently consists of ten Directors. At the 2001 Annual
Meeting, three Directors will be elected for three-year terms or until the
election and qualification of each of their successors.
The ICO Board has announced that it will nominate Robin E. Pacholder,
William E. Cornelius and George S. Sirusas, each of whom is a current Director
whose term expires at the 2001 Annual Meeting, for election as Directors.
WE ARE SOLICITING PROXIES PURSUANT TO THIS PROXY STATEMENT TO ELECT TO
THE ICO BOARD: (I) JAMES D. CALAWAY, (II) A. JOHN KNAPP AND (III) CHARLES T.
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MCCORD, III TO SERVE THREE-YEAR TERMS, REPLACING ROBIN E. PACHOLDER, WILLIAM E.
CORNELIUS AND GEORGE S. SIRUSAS.
As indicated under "Background of this Solicitation" below, the
Company's incumbent Directors have rejected our proposals to consider a sale of
the Company.
In reviewing this Proxy Statement, please note that our evaluation of
the Company and its business is subject to limitations arising from the
information that we have available to us. As described below under "Background
of this Solicitation," we have delivered the TSP Offer to ICO to buy the Company
at $2.85 per share. We have not completed our due diligence on the Company and
have not solicited any offers from any other potential acquirers of the Company.
We have not been given access to any non-public materials of the Company and
have not conducted any appraisal of the assets of the Company in order to
determine a fair price for such a sale. Although, as indicated above, we believe
the value of the Company's assets (less indebtedness) exceeds the Company's
stock market valuation, we have not made or undertaken any formal analyses or
reports as to whether shareholder value will be maximized as a result of a vote
in favor of the TSP Nominees or obtained reports from consultants or other
outside parties as to whether our agenda or the pursuit of that agenda by the
TSP Nominees would have an effect on shareholder value. No assurance can be
given that the TSP Nominees would be able to implement their plan if elected to
the ICO Board. The TSP Nominees could, in the future, based upon their fiduciary
duties and their evaluation of the Company's operations and future plans, decide
to pursue another course of action. IF YOU HAVE ANY QUESTIONS ABOUT EXECUTING
YOUR PROXY OR REQUIRE ASSISTANCE, PLEASE CONTACT:
MACKENZIE PARTNERS
156 FIFTH AVENUE, PH 3
NEW YORK, NEW YORK 10010
CALL: (800) 322-2885
OR (212) 929-5500
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IMPORTANT
At the 2001 Annual Meeting, TSP seeks to elect three nominees as
Directors of the Company.
A VOTE FOR OUR NOMINEES WILL PROVIDE YOU -- THE OWNERS OF THE COMPANY
-- WITH AT LEAST THREE REPRESENTATIVES ON THE ICO BOARD WHO ARE COMMITTED TO
INCREASING SHAREHOLDER VALUE THROUGH A SALE, MERGER OR OTHER DISPOSITION OF THE
COMPANY OR ITS ASSETS TO THE HIGHEST BIDDER PURSUANT TO AN AUCTION.
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To support our directors, you should fill in the GOLD proxy card.
To read more about our program, we recommend that you read the rest of
these proxy materials as well as the Company's financial statements. We have
tried to provide you with more background as to our program and our reasons for
believing that ICO's value will not be realized under current management.
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OUR REASONS FOR THE SOLICITATION
PROFITS FOR PACHOLDERS, LOSSES FOR SHAREHOLDERS
During the period of five fiscal years ended September 30, 2000, while
the Controlling Pacholders have presided over ICO as chief executive and chief
financial officers, the Company has accumulated losses to common shareholders in
excess of $17 million. A $100 investment in ICO on October 27, 1997, the date of
the highest market price of ICO shares in the last 5 years, plummeted to less
than $19 on December 19, 2000, the day preceding the date we delivered the TSP
Offer to ICO, a decline of 81% in three years. The company's tangible net worth
per share has declined by more than 79% since 1995, when current management took
control.
Against this backdrop of losses to the common shareholder, the Board
has paid the Controlling Pacholders and family millions in direct cash
compensation; awarded the Controlling Pacholders the Pacholders Voting Rights
for as much as 8% of ICO stock; and granted the Controlling Pacholders and their
family members approximately $6 million in golden parachutes. A substantial
percentage of the Company's cumulative 5-year $17 million loss relates directly
to Pacholder family compensation.
Asher Pacholder, whose previous primary business experience had been
the management of a junk bond advisory firm and bond fund, is the Company's
Chairman and Chief Financial Officer. Most other senior managers are named
Pacholder, too. Sylvia Pacholder, who acts as Chief Executive Officer, was
previously a mathematics professor. According to ICO's public disclosures, she
has no prior experience as a line manager in operations. Ms. Robin E. Pacholder
is the daughter of the Controlling Pacholders. She heads up ICO's $220 million
plastics business. According to ICO's public disclosures, she has no prior
experience as a line manager in operations. Tom Pacholder is the son of the
Controlling Pacholders. He heads up another ICO operating unit. David Gerst is
married to Robin Pacholder. He is the company's General Counsel.
A COSTLY, FLAWED ACQUISITION PROGRAM IN PLASTICS HAS FAILED
We believe the Company's acquisition of WEDCO in 1996 helped to
entrench the Pacholders at ICO by giving them effective control of the ICO Board
through an agreement executed with former WEDCO shareholders (the
"Pacholder/WEDCO Agreement"). Specifically, according to the Company's proxy
statement for the 2001 Annual Meeting, all parties to the Pacholder/WEDCO
Agreement have granted irrevocable proxies to vote their shares in ICO Board
elections (such shares totaling approximately 5.2 million shares in the
aggregate, or approximately 22.9% of total outstanding shares) in favor of the
slate of nominees selected by the then incumbent members of the ICO Board.
It is our view that the Company's other acquisitions have been equally
fruitless:
o The Company has paid excessively high prices for its numerous
additional acquisitions in the plastics business, resulting in
significant increases in balance sheet goodwill.
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o The Controlling Pacholders have personally benefited from many
of these acquisitions by awarding themselves as individuals
voting rights associated with the Common Stock issued to the
sellers of the businesses ICO purchased. The voting rights
vary from year to year but at times have amounted to as much
as 8% of the outstanding Common Stock of the Company. In other
words, by making acquisitions with shareholder money, the
Controlling Pacholders have been able obtain voting power over
Common Stock and to better entrench themselves. Perhaps this
explains some transactions which appear otherwise
inexplicable.
o The Company's diversification into overseas plastics
businesses has required substantial amounts of capital which
don't seem to yield a return.
o ICO litigation with a former business partner in Canada has
been accompanied by a costly battle for market share in the
core WEDCO business.
o The Company's tangible net worth has shrunk by more than 79%
since 1995, while Company revenues have tripled.
Where Has All the Value Gone?
There was value on ICO's balance sheet before the Pacholder family
arrived on the management scene. Back in 1995, ICO had a virtually debt-free
balance sheet, a single basic business, plenty of cash - and no intangible
assets. ICO's acquisition binge, fueled by junk bonds, have resulted in ICO's
attempting to operate two businesses (oilfield services and plastics) which, we
believe, have little in common. In fact, during the Company's recent conference
call on fiscal year 2000 earnings, the Controlling Pacholders asserted that the
two businesses fit well together because they are so different. ICO has made
numerous acquisitions, on a highly leveraged basis, that look, to us, like
dubious business decisions at best and overpriced disasters at worst.
o Since 1995, under the Controlling Pacholders' watch, the
Company has spent $14 million of your money acquiring plastics
businesses in Australia and New Zealand, $35 million in
northern Italy, $7.6 million in France, and $7.8 million in
England. Simply to pay the 10-3/8% interest on the cash
required to finance this $64 million shopping spree costs
shareholders $6.6 million per year - more than the operating
profit the ICO plastics business currently generates.
o ICO has a cash hoard of nearly $40 million of borrowed money
which the Company pays more than $4 million per year to
service. That's like taking credit card advances and
depositing them in a checking account. We believe a company
whose debt is five times its market capitalization should be
paying down debt, not sitting on cash.
o The acquisition of WEDCO, for which the Controlling Pacholders
were paid hundreds of thousands of dollars in special bonuses
by the Board, was accompanied by extensive litigation with
WEDCO's former Canadian partner, WedTech, Inc. ("Wedtech").
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Today Wedtech competes head-to-head in WEDCO's most profitable
businesses.
o The Company's $220 million plastics business is operated
inefficiently, possibly, we believe, because senior management
has no prior experience in the industry. Average SG&A expense
as a percentage of revenue for plastic resin distributors, we
understand, is 9%. ICO's allocation of SG&A expense to its
plastics business, excluding corporate allocations, is 11%. By
our calculation, that's $4 million of extra cost. We believe
that ICO's market value could increase by nearly 40% by simply
eliminating these costs.
o On top of allocated divisional overhead, ICO spends more than
$4 million per year in unallocated corporate SG&A expenses -
expenses which include Pacholder family salaries and benefits.
o We believe that a reasonable investor who looks at the
Pacholder family's performance might well conclude that
acquisitions were undertaken primarily to justify the
Pacholder compensation package to the detriment of common
shareholders.
THE MAJORITY OF THE ICO BOARD HAS PROTECTED THE CONTROLLING PACHOLDERS AND
FAMILY
Facts About the Current ICO Board
To decide how to vote your shares, you should know the following about
the current ICO Board:
o Three board members have the Pacholder surname and consist of
a husband, wife and daughter. Together, they actually own
directly only about 1% of your Company's Common Stock. (We do
not know the actual ownership of Pacholder Associates, the
owner of record of an additional 2% of the Common Stock.)
o Another three members of the ICO Board, who together also
comprise the Compensation Committee which determines how your
Company's senior management is paid, are business associates
of Asher Pacholder and have been associated or employed by
other businesses of Asher Pacholder. For example, one member
of the ICO Compensation Committee, the committee that sets
Asher Pacholder's salary, is William J. Morgan. William J.
Morgan, is the President of Pacholder Associates. The chairman
of the board of Pacholder Associates is Asher Pacholder. Thus,
it appears that Asher Pacholder determines William J. Morgan's
salary while William J. Morgan determines Asher Pacholder's.
We believe this egregious conflict of interest violates the
most basic rules of corporate governance.
o Under the Pacholder/WEDCO Agreement, three members of the ICO
Board are nominated by the former senior management and
majority owners of WEDCO (the "WEDCO Group"). In turn, under
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the same agreement, the WEDCO Group has granted the
Controlling Pacholders personal voting power over the shares
of Common Stock owned by the WEDCO Group.
o Each Director receives approximately $25,000 in compensation
for his services, which, to our knowledge, consists primarily
of attending meetings of ICO's Board of Directors. We
understand most of these meetings are conducted by telephone.
Assuming each meeting is five hours long, that's $1,000 per
hour, excluding refreshments and expenses, to bless the
Company's failed strategic plan.
As a result, we believe that the Pacholders have, through voting
agreements, effectively silenced any independent voice on the current ICO Board
and that cronyism and nepotism at the Board of Directors level have allowed ICO
management to continue to pursue its own interests independent of the best
interests of shareholders.
We Believe the Market is Valuing ICO Correctly Today
We believe that the precipitous drop in ICO's stock price is the direct
result of the Company's poor performance. During the past five fiscal years,
while under the watch of the Controlling Pacholders, ICO has lost $17 million
including a record $22 million loss in 1999.
o We believe the price war in the plastics industry has caused
gross margins in ICO's plastic business to drop from 24% in
fiscal year 1999 to 18% in fiscal year 2000 - a $12 million
reduction in annual gross profit. We believe the absence of
this gross profit can account for at least $30 million of the
reduction in ICO's market capitalization since October 1997.
o In fiscal year 1999, the Company generated $2 million in
operating losses from its plastics business. It's true that
the $13 million in operating income on $174 million in assets
in fiscal year 2000 was an improvement from the disastrous
performance of 1999. But since most of the company's $14
million in annual interest costs are spent to service the debt
the Company incurred to purchase those assets, the Company is
still losing money on its plastics business. Thus, the
Company's huge increase in leverage and its dissipation of
tangible net worth have eroded shareholder value.
o We believe the market sees at ICO neither a coherent strategy
nor a disciplined management but instead a wasteful cost
structure and a strategy that yields operating losses.
o We believe the market also has factored in the precipitous 79%
decline in ICO's tangible net worth from fiscal year end 1995
to fiscal year end 2000.
For these reasons, it seems to us, and because of the basic governance
issues and oppressive severance agreements, the market currently values ICO at a
discount to its cash position. We believe that the best way to realize
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additional value from this business is to sell the Company to the highest
bidder.
MANAGEMENT REFUSES TO MAXIMIZE SHAREHOLDERS VALUE THROUGH A SALE OF ICO
The Controlling Pacholders Refuse to Sell ICO or its Operating Units
In the course of doing the basic research into ICO which led us to file
this proxy statement and to nominate the TSP Nominees, we were surprised to
learn that we were not alone in believing there was unrealized value in ICO
businesses. We understand that, over the years, at least three informal
approaches have been made to the Controlling Pacholders to sell one or more of
the Company's operating divisions or even the Company itself. The Company, under
the watch of the Controlling Pacholders, has consistently discouraged these
offers and failed to seek offers for the sale of the Company or any of its
divisions.
Most recently, TSP approached ICO, seeking to buy the Company at a
negotiated price of $2.85 per share in cash, only to have the offer rejected out
of hand.
Why does the Company Refuse to Maximize Shareholder Value Through a Sale of ICO?
The Pacholders, who own only 1% of ICO's common stock personally,
control the Board through the appointment of family members and business
associates, we believe, primarily for their own benefit and possibly to the
detriment of the Company.
o We believe, the Pacholders' biggest stake in the Company's
future is in their direct cash compensation - over $1 million
per year - not in their 1% ownership position.
o Pacholder Associates owns about 2% of the shares of the
Company with a market value of less than $1 million as of the
date of the TSP Offer.
o Through various shareholder agreements, the Controlling
Pacholders purport to control more than 25% of the votes for
the ICO Board, according to their most recent Schedule 13D
filed with the SEC. In secret agreements relating to Company
acquisitions, the Controlling Pacholders appear to have
acquired the Paceholder Voting Rights giving them personal
voting power over shares issued to third parties at no cost to
themselves. The Controlling Pacholders have failed to file
these agreements as exhibits to their Schedule 13D.
We believe, in other words, the Controlling Pacholders are motivated to
oppose a sale of the Company because their financial interests are not aligned
with shareholders. As a result, we further believe the Controlling Pacholders
deliberately maintain a tame Board of Directors, avoid the financial community,
and allow your stock to languish.
The TSP Offer Provides Compelling Value to Shareholders
In the process of making our investment in ICO and studying the public
documents available to us, we formulated our own opinion of ICO's businesses and
their respective values.
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TSP has delivered the TSP Offer to ICO to acquire ICO in its entirety
for $2.85 per share in cash. Our offer represents a premium of 82% to ICO's
closing price on the day prior to delivery of the TSP Offer and 185% with
respect to ICO's low market price of $1.00 on December 5, 2000.
We believe our offer to acquire ICO common stock at a price of $2.85
per share is fair. Therefore, we are confident that when the ICO Board seeks the
highest possible bid for the Company, our offer will prevail.
TO MAXIMIZE SHAREHOLDER VALUE, ICO SHOULD BE SOLD
Considering ICO's failed acquisition strategy, its lack of
profitability, its leverage, and its history of declining shareholder value, ICO
should be sold to maximize shareholder value before more damage is done to
shareholders.
If potential buyers see greater value and, accordingly, offer to pay
more, THE TSP NOMINEES WILL SUPPORT THE HIGHEST OFFER FROM WHOMEVER THAT MIGHT
BE, EVEN IF THAT MEANS THAT TSP ITSELF ENDS UP LOSING OUT TO A THIRD PARTY
BIDDER. The foregoing valuation represents just one method of business valuation
among many that are possible. Other valuations or valuations undertaken using
more information than is available to us could yield different results.
Our Director Candidates Will Support a Sale of the Company
We believe that throughout the ill-advised diversification program of
the last five years, a majority of the current ICO Board has not held ICO
management accountable as the Company's fortunes have plummeted. ICO
shareholders should not have to wait any longer to realize what they can from
this series of misadventures.
The best way to effect change and realize maximum shareholder value is
to sell the Company. Our director nominees support a sale of the Company to the
highest bidder, whether to TSP on the terms of the TSP Offer or to a third party
bidder under a superior proposal.
Two of the three directors we want to replace were hand-selected by
Asher Pacholder. The other director we want to replace has been designated by
the WEDCO Group under the Pacholder/WEDCO Agreement.
ICO has staggered the terms of its directors, a customary strategy for
companies seeking to minimize accountability to shareholders. Consequently, we
can only elect three directors this year. Because the TSP Nominees, if elected,
will not constitute a majority of the ICO Board, they cannot assure you that
they will succeed in causing an auction of the Company. However, if elected, the
TSP Nominees would argue to the ICO Board that they have the shareholders'
mandate to cause a Company sale. If the ICO Board rejects a sale, we are fully
prepared to nominate and seek to elect additional nominees at the next annual
meeting of shareholders that, together with the TSP Nominees, would constitute a
majority of the ICO Board.
Our director slate is not in the hands of, and will not be beholden to,
the Controlling Pacholders and their family management team. If elected, our
directors, consistent with their fiduciary duty to all shareholders, will
actively undertake to advance a program intended to maximize the value that we
shareholders should realize from our holdings of ICO securities. Moreover, our
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directors have indicated that they will decline to accept the approximately
$25,000 per year of director fees and low-priced stock options paid to each of
your current directors.
Our directors are well-known businessmen in Houston, where ICO is
based, and are active in civic affairs as well as the business community. Our
directors are committed to a good deal for ICO shareholders and stakeholders.
Our directors will serve honorably to maximize shareholder value.
Our Director Nominees Will Vote to Sell ICO to the Highest Bidder
The best way to assess the real value of ICO is to offer the company on
the market. We believe that industry buyers can accurately assess the value of
the Company and the increase in that value that will occur if the Controlling
Pacholders and their family are no longer involved in management.
If elected to the ICO Board, the TSP Nominees will attempt, subject to
their fiduciary duties to the Company, to influence a majority of the ICO Board
to:
o remove unwarranted barriers to a sale of the Company, such as
the Poison Pill; and
o auction the Company to the highest bidder through a sale,
merger or other disposition of the Company or its assets.
We believe that your Board of Directors should be committed to creating
the greatest possible return on your investment. We do not believe that hording
$39 million in cash and placing inexperienced family members in management over
operating divisions optimizes returns. It is our objective that the ICO Board
consider, on the merits, the TSP Offer or any other bid made by TSP (or one of
its affiliates) or any unrelated third party to acquire the Company or its
assets that provides a significant premium over the current market price of the
Common Stock and accept any such bid that creates the greatest value for
shareholders.
As described herein, TSP has made the all-cash TSP Offer to ICO to
acquire the Company at $2.85 per share, and TSP expects that TSP (or one of
TSP's affiliates) would be a bidder in any sales process. Certain conflicts of
interest could, of course, arise if the TSP Nominees are elected to the ICO
Board, and TSP (or one of TSP's affiliates) bids to acquire the Company. The TSP
Nominees, in their capacity as Directors, intend, however, to act fully in
accordance with their fiduciary duties and would not oppose (and would favor) an
active auction process that includes appropriate procedural safeguards to ensure
that TSP and TSP's affiliates would not receive any preferential treatment.
Shareholders Need to Protect Their Own Interests
Shareholders have lost more than 80% of their investment since October
27, 1997 through their investment in ICO.
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<PAGE>
o If that trend continues, your investment in ICO will be worth
less than $1.00 per share a year from now.
o Once the Company's shares trade consistently below $1.00 per
share, the Company may risk delisting and share liquidity may
disappear.
By electing the TSP Nominees to the ICO Board, you can help protect
your investment. Our directors will vote FOR management accountability, FOR a
professional management team, and, most importantly, FOR a sale of the Company
to the highest bidder.
YOU HAVE A VOTE IN THE FUTURE OF YOUR INVESTMENT.
VOTE FOR THE TSP NOMINEES.
As described below in "Background of This Solicitation," the ICO Board
and management have rebuffed our all-cash offer to purchase the Company and our
suggestion to promptly conduct an auction process to effect a negotiated sale,
merger or other disposition of the Company (or all or substantially all of its
assets) to the highest bidder.
By nominating the TSP Nominees, we believe we are giving you, the
Company's shareholders, a choice. If you are satisfied with the performance of
your Company and its stock price, no doubt you will reelect the Board's
nominees. But, if you - like us - are not satisfied and believe that the
Company's shareholders would benefit from diligent efforts to sell the Company
at a premium to its current market value through an auction process, and by
adding three Directors unaffiliated with the Company's management, we urge you
to support the TSP Nominees.
BACKGROUND OF THIS SOLICITATION
ACQUISITION OF SHARES
Commencing on August 28, 2000, TSP members purchased shares of Common
Stock believing that such shares were undervalued in comparison to the Company's
underlying asset values and represented a favorable investment opportunity. TSP
Members contributed these ICO shares to TSP in October 2000 and TSP since its
formation has continued to purchase ICO shares in the open market. On December
26, 2000, the aggregate number of shares of Common Stock we beneficially owned
surpassed 5% or more of the aggregate outstanding shares of Common Stock as
reported on the Company's most recent periodic report filed with the SEC and on
December 29, 2000, TSP and the TSP Managers filed a Schedule 13D with the SEC as
to the shares of Common Stock beneficially owned by them. TSP believes that a
sale of the Company is the optimal way to maximize shareholder value and can
best be advocated by electing independent directors to the ICO Board.
NOTICE OF TSP NOMINEES
Article 2, Section 2.13 of the By-Laws provides generally that if a
shareholder intends to nominate persons for election to the ICO Board at the
Company's annual meeting of the shareholders, the shareholders must notify and
submit specified information with respect thereto to the Company in writing
during a narrowly defined "window" of not more than 120 days nor less than 90
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<PAGE>
days before the anniversary date of the previous annual meeting. In accordance
with information and time requirements set forth in Article 2, Section 2.13 of
the By-Laws, which TSP reserves the right to challenge, on December 8, 2000, TSP
delivered to the Secretary of the Company a letter which provides written notice
of TSP's intent to nominate the TSP Nominees as candidates for election as
directors of the Company at the 2001 Annual Meeting.
DECEMBER 19 MEETING WITH MANAGEMENT
On December 19, 2000, the TSP Managers, in their capacity as TSP
Managers, met with the Controlling Pacholders to discuss, in general, the
Company's businesses and operations. At such meeting, the TSP Managers explained
their belief that the Shares are undervalued and that there is an opportunity to
increase shareholder value, most likely through a sale of the Company. The TSP
Managers further explained that TSP is an interested buyer of the Company's
oilfield services business, its plastics business or the whole company. The
Controlling Pacholders assured TSP and the TSP Managers that any offer would
receive the full consideration of the ICO Board.
TSP OFFER
TSP delivered the terms of the TSP Offer on the morning of December 20,
2000 in an offer letter (the "TSP Offer Letter") to ICO that reads as follows:
TRAVIS STREET PARTNERS, LLC
910 Travis
Suite 2150
Houston TX 77002
(713) 759-2030
fax (713) 759-2040
VIA COURIER
20 December 2000
Dr. Asher O. Pacholder, Chairman & CFO
ICO Inc.
11490 Westheimer
Suite 1000
Houston TX 77077
Dear Dr. Pacholder:
Thank you for the opportunity you gave us today to meet with you and your wife
to discuss our investment in ICO Inc. ("ICO" or the "Company").
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<PAGE>
At our meeting, you and Mrs. Pacholder indicated your interest in receiving a
specific proposal from Travis Street Partners, LLC ("TSP") with respect to a
possible transaction involving ICO. Bearing this in mind, we are outlining below
several possible alternatives for your consideration:
1. As we explained in our meeting, we believe that ICO's Board of
Directors can best maximize shareholder value through the sale
of the Company or one or both of its main operating divisions.
As a major ICO shareholder, TSP favors such a sale.
2. TSP believes that ICO's Board of Directors should, in
accordance with its fiduciary obligations, seek the highest
possible price for the Company's assets. For our part, TSP is
prepared to make a compelling all-cash offer for these assets,
subject to the following general conditions:
A. TSP is prepared to make a friendly fully financed
offer to acquire ICO at a price of $2.85 per common
share, a premium of approximately 100% to yesterday's
closing price.
B. Alternatively, TSP is prepared to make a friendly
fully financed offer to acquire ICO's oilfield
services business at a price in the range of 5x TTM
EBITDA. TSP cannot currently quantify this offer
further because we are unable to ascertain the
financial position of this business (specifically,
balance sheet data for the oilfield services
business) from ICO's public documents.
C. TSP's offers would be conditioned on (i) satisfactory
completion of due diligence; (ii) execution of
mutually agreeable arrangements with current ICO
senior management; and (iii) mutual agreement as to
nondisclosure of any TSP Offer or terms thereof
during the due diligence period.
D. TSP could increase either of its offers under (a) and
(b) above based on the results of its due diligence
investigation.
E. TSP would be prepared to enter into a limited
standstill agreement with respect to additional stock
purchases, which would run contemporaneously with our
due diligence period.
3. As we discussed in our meeting, we are preparing to file the
necessary proxy materials required for the annual ICO
shareholders' meeting in March. As an alternative, we welcome
the opportunity to pursue a friendly transaction with ICO,
provided:
A. we receive your written consent to pursue a
transaction in accordance with the terms of this
letter no later than 12:00 noon on Friday, December
22, 2000; and
B. we negotiate and execute a mutually satisfactory
agreement for the sale of the Company or the oilfield
services business no later than December 31, 2000, in
order to provide us with a subsequent two week window
to conduct due diligence and finalize our offer to
the Board.
Thank you once again for giving us the opportunity to explain our position more
clearly. We look forward to your speedy reply.
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Very truly yours,
TRAVIS STREET PARTNERS, LLC
by: Christopher N. O'Sullivan, Manager
cc: Dr. Sylvia A. Pacholder, President & CEO - ICO Inc.
Steve Rubin, Esq. - Weil, Gotshal & Manges LLP
* * * * * *
THE COMPANY RESPONDS
After 5:00 p.m., C.S.T., on December 22, 2000, Asher Pacholder
delivered a letter to TSP that was critical of the expedited process proposed by
TSP in the TSP Offer Letter but that failed to address the financial merits of
the TSP Offer. Moreover, the foregoing letter from Asher Pacholder failed to
mention that ICO had itself requested an early meeting with TSP, that ICO's
representatives had solicited an offer from TSP, and that TSP had done its best
to be responsive under a tight timetable.
ICO SHOULD BE SOLD.
In light of the Company's response to the TSP Offer Letter, we have
determined to seek your vote in support of election of the TSP Nominees to the
ICO Board at the 2001 Annual Meeting and otherwise to influence the Company to
promptly conduct an auction process to effect a negotiated sale, merger or other
disposition of the Company (or all or substantially all of its assets) to the
highest bidder. TSP (or one of its affiliates) may be a bidder, and reserves the
right to be participate, alone or with others, in any sales process, but would
not expect to receive any preferential treatment. If TSP (or one of its
affiliates) acquires all or a portion of the Company or its assets, TSP may
itself effect a negotiated sale, merger or other disposition of all or a portion
of the assets acquired.
INFORMATION REGARDING THE SOLICITATION
We are soliciting your proxy for the election of the TSP Nominees as
Directors of ICO after we nominate them at the 2001 Annual Meeting to serve
until their successors are duly elected and qualified.
In accordance with the Company's Amended Articles of Incorporation (the
"Articles of Incorporation") and By-Laws and the Texas Business Corporation Act,
ICO's Board of Directors is to consist of ten Directors, or as may be otherwise
determined by an amendment to the By-Laws adopted by a majority of the ICO Board
as provided in the Articles of Incorporation. The Directors are to be divided
into three classes as nearly equal in number as possible. At each annual meeting
of shareholders, members of one of the classes, on a rotating basis, are elected
for a three-year term.
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Based on information contained in reports publicly filed by the Company
with the SEC, ten Directors currently serve on the ICO Board. Three of these
Directors have terms that expire in 2001 and, according to ICO's proxy statement
for the 2001 Annual Meeting, three Directors are to be elected at the 2001
Annual Meeting. James D. Calaway, A. John Knapp and Charles T. McCord, III, if
elected, would be entitled to serve for terms expiring at ICO's annual meeting
of shareholders in 2004.
If any additional Directorships are to be voted upon at the 2001 Annual
Meeting, we reserve the right to nominate additional persons to fill such
positions. TSP does not expect that the TSP Nominees will be unable to stand for
election but, in the event that any TSP Nominee is unable to do so, shares
represented by GOLD PROXY CARDS will be voted for the other TSP Nominees. In
addition, TSP reserves the right to nominate substitute or additional persons if
the Company makes or announces any changes to its By-Laws or takes or announces
any other action that has, or if consummated would have, the effect of
disqualifying any of the TSP Nominees.
If the TSP Nominees are elected and take office as Directors, they
intend to discharge their duties as Directors of the Company in compliance with
all applicable legal requirements, including the general fiduciary obligations
imposed upon corporate directors.
TSP NOMINEES
Each of the TSP Nominees has consented to be named in TSP's proxy
statement and to serve as a Director if elected. There are no arrangements or
understandings among any such TSP Nominees and any other person pursuant to
which any such TSP Nominee was selected as a TSP Nominee. The information below
concerning age, principal occupation, directorships and beneficial ownership of
Common Stock has been furnished by the respective TSP Nominees.
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<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION AND
PRINCIPAL NUMBER OF SHARES OF PERCENT OF
NAME, BUSINESS OCCUPATIONS DURING LAST COMMON STOCK COMMON
ADDRESS AND AGE FIVE (5) YEARS; DIRECTORSHIPS OWNED STOCK
--------------- ----------------------------- ----- -----
<S> <C> <C> <C>
A. John Knapp President of Andover Group, Inc. (a 0(1) 0%
910 Travis real estate investments and
Suite 2205 development company) for more than the
Houston, Texas 77002 past five years; Private investor in
Age: 49. venture capital transactions for more
than the past five years; Director of
various civic and educational
organizations in Houston.
James D. Calaway Primarily engaged since January 2000 0(1) 0%
910 Travis as a private investor and Chairman of
Suite 2150 DigiContract, Inc. (an Internet-based
Houston, Texas 77002 legal services business), Director of
Age: 43. Network Oil, Inc. (a Houston-based
business-to-business Internet exchange
serving the oilfield services industry),
and Director of Sterling Bancshares, Inc.,
a NASD-listed bank holding company). Prior
thereto, President and a director of Edge
Petroleum, Inc. ("Edge") (an NASD-listed
energy exploration and production company)
since December 1996; Prior thereto,
Special Advisor to Edge's Corporate
predecessor since 1991.
Charles T. McCord, III General Partner of McCord Production, 0(1) 0%
910 Travis Ltd. (an energy exploration,
Suite 2150 production and investment company) for
Houston, Texas 77002 more than the past five years.
Age: 60.
------------------
</TABLE>
(1) Does not include 1,138,300 shares of Common Stock beneficially owned by
TSP (as described in "Certain Information Concerning TSP and Other
Participants in the Solicitation" below), representing approximately
5.02% of the Common Stock as to which such nominee does not, directly
or indirectly, have or share voting or investment power.
No TSP Nominee has engaged in any transactions in securities of the
Company during the past two years.
VOTE REQUIRED
The proposed election of Directors requires the affirmative vote of a
plurality of the shares of Common Stock of the Company having voting power
present in person or represented by proxy and entitled to vote thereon at the
2001 Annual Meeting. Each other proposal voted on at the 2001 Annual Meeting
will be approved if the votes cast favoring the proposal exceed the votes cast
opposing the proposal. Cumulative voting shall not be permitted.
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<PAGE>
METHOD OF COUNTING VOTES AND PROXY PROCEDURES
Votes will be counted by one or more inspectors of election appointed
by Asher Pacholder. Under the rules of the SEC, boxes and a designated blank
space are provided on the proxy card for you to mark if you wish to vote "for"
or "against" or "abstain" from voting on one or more of the proposals, or to
withhold authority to vote for one or more of the nominees for Director. Texas
law and ICO's By-Laws require the presence of a quorum, in person or by proxy,
consisting of at least a majority of the outstanding shares of Common Stock at
the 2001 Annual Meeting. Votes withheld in connection with the election of one
or more of the nominees for Director will not be counted as votes cast for those
individuals. Broker non-votes, which occur when brokers do not receive voting
instructions from their customers on non-routine matters and, consequently, have
no discretion to vote on those matters, and abstentions, are counted as shares
present to establish a quorum, but are not counted as votes cast for or against
any proposal.
If no directions are given and the signed GOLD PROXY CARD is returned,
the attorneys-in-fact appointed in the proxy will vote the shares of Common
Stock represented by any such GOLD PROXY CARD returned unsigned FOR the election
of the TSP Nominees and FOR the appointment of PricewaterhouseCoopers LLP as the
Company's auditors for fiscal 2001. TSP knows of no other business to be
presented at the 2001 Annual Meeting, but if other matters do properly come
before the 2001 Annual Meeting, the attorneys-in-fact appointed in the proxy
will use their discretion to vote the shares of Common Stock represented by GOLD
PROXY CARDS in accordance with their best judgment on such matters.
CERTAIN INFORMATION CONCERNING TSP
AND OTHER PARTICIPANTS IN THE SOLICITATION
Information is being given herein for (i) TSP, (ii) A. John Knapp, a
natural person and nominee for the ICO Board and a member of ("Knapp"), (iii)
James D. Calaway, a natural person and nominee for the ICO Board ("Calaway"),
(iv) Charles T. McCord, III, a natural person and nominee for the ICO Board and
a member of TSP ("McCord"), (v) Christopher N. O'Sullivan, a natural person and
a member, and one of two managers, of TSP ("O'Sullivan"), (vi) Timothy J.
Gollin, a natural person and a member, and the other manager, of TSP ("Gollin"),
(vii) Christopher P. Scully, a natural person and a member of TSP ("Scully"),
(viii) McCord/Calaway Joint Venture, a joint venture between McCord and Calaway
and a member of TSP, (ix) John V. Whiting, a natural person and a member of TSP,
(x) Freeman Capital Management, LLC, a Texas limited liability company and a
member of TSP ("Freeman Capital"), (xi) R. Allen Schubert, a natural person
("Schubert"), (xii) Randall Grace, a natural person ("Grace"), (xiii) Stephen F.
Martin, a natural person ("Martin") and (xiv) Robert Whiting, a natural person,
each of which may be deemed to be a "participant in a solicitation"
(collectively, the "Participants") as defined under the proxy rules promulgated
by the SEC under the Securities Exchange Act of 1934, as amended. Certain
information is also given for any "associate", as defined under the proxy rules,
of one or more of the Participants (each an "Associate").
The business address of each Participant is c/o TSP, 910 Travis, Suite
2150, Houston, Texas 77002.
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TSP is a Texas limited liability company. TSP is principally engaged in
the business of making, holding and disposing of investments, including
securities of ICO.
The present principal occupation of Knapp is President of Andover
Group, Inc., the principal business of which is real estate investments and
development. The present principal occupation of Calaway is private investments.
The present principal occupation of McCord is General Partner of McCord
Production Ltd., the principal business of which is energy exploration,
production and investment. The present principal occupation of O'Sullivan is
President and Chief Executive Officer of O'Sullivan Oil and Gas Company, Inc.,
the principal business of which is energy exploration, production and
investment. The present principal occupation of Gollin is private investments.
The present principal occupation of Scully is president of Scully Oil & Gas
Company, the principal business of which is investing in restaurants and
internet-based businesses. McCord/Calaway Joint Venture is principally engaged
in the business of investing, through its investment in TSP, in shares of Common
Stock. The present principal occupation of John Whiting is operations manager of
O'Sullivan Oil & Gas Company, Inc. Freeman Capital is a limited liability
company principally engaged in private investments. The present principal
occupation of Schubert is real estate development and private investments. The
present principal occupation of Grace is as a principal in Chilton Capital
Management, Inc., the principal business of which is equity assets management.
The present principal occupation of Martin is private investments. The present
principal occupation of Robert Whiting is private investments.
The Participants may be deemed to have direct beneficial ownership of
the Common Stock owned by TSP as follows:
NAME NUMBER OF SHARES
---- ----------------
TSP 1,138,300
A. John Knapp 0
James D. Calaway 0
Charles T. McCord, III 0
Christopher N. O'Sullivan 0
Timothy J. Gollin 0
Christopher P. Scully 0
McCord/Calaway Joint Venture 0
John V. Whiting 0
Freeman Capital Management, LLC 0
R. Allen Schubert 0
Randall Grace 0
Each of the TSP Managers, as a managing member of TSP with shared
voting and investment power as to any Common Stock owned by TSP, may be deemed
to indirectly own beneficially (as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934) Common Stock of which TSP may be deemed to
24
<PAGE>
possess direct beneficial ownership. Each of the TSP Managers disclaims
beneficial ownership of such Common Stock for all other purposes.
Except for TSP and the TSP Managers, none of the Participants or the
Associates may be deemed to directly or indirectly beneficially own any Shares.
To the best of the knowledge of the Participants, none has been, within
the past year, a party to any contract, arrangement or understanding with any
person with respect to any securities of ICO, including but not limited to joint
ventures, loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profits, division of losses or profits, or the giving or
withholding of proxies. The business and affairs of TSP are conducted in
accordance with the Regulations of Travis Street Partners, LLC, which provide
generally for customary rights of the members thereof in respect of
distributions by, or upon the dissolution of, TSP. In addition, as described
below, agreements exist with or among certain Participants with respect to
capital contributions made to TSP with respect to membership interests in TSP.
No Participant owns any securities of ICO of record but not
beneficially.
None of the Participants or Associates has any arrangement or
understanding with any person with respect to (i) any future employment with ICO
or its affiliates or (ii) any future transactions to which ICO or any of its
affiliates may be a party.
TSP and the other Participants intend to vote any shares of Common
Stock that they beneficially own in accordance with the recommendations of TSP
set forth herein.
All of the shares of Common Stock beneficially owned by TSP were
obtained from the working capital of TSP or, as to 28,000 shares, contributions
of such shares to the capital of TSP at or about its formation in early October
2000.
Capital contributions by TSP members to TSP with respect to their
membership interests in TSP, including contributions in the form of shares of
Common Stock, were funded from the personal assets of such members except as
otherwise described herein. Capital contributions by O'Sullivan to TSP in the
amount of $23,250 in the form of 12,000 shares of Common Stock were funded from
assets of family trusts for which O'Sullivan directs investments. Capital
contributions in the amount of $303,600 by Gollin to TSP with respect to
Gollin's membership interest in TSP were funded by Knapp, one of the TSP
Nominees, under a letter agreement which defines the terms under which Gollin
and Knapp share in gains relating to Gollin's investment in TSP. In a separate
informal agreement between Knapp and Schubert and Grace, Schubert and Grace
participate in Knapp's agreement with Gollin. Capital contributions in the
amount of $22,000 by Knapp to TSP with respect to Knapp's membership interest in
TSP were funded by Schubert under an informal agreement by which a portion of
Knapp's membership interest in TSP is held for Schubert's benefit. Capital
contributions in the amount of $492,800 by Calaway/McCord Joint Venture to TSP
with respect to such joint venture's membership interest in TSP were funded by
$440,070 and $52,730 contributed to the joint venture by McCord and Calaway,
respectively, each one of the TSP Nominees, under a joint venture agreement
which defines the terms under which McCord, Calaway and Calaway's ex-wife,
Elaine Calaway, share in gains relating to the joint venture's investment in
TSP. Scully and Marshall H. Crawford II ("Crawford") are also parties to an
25
<PAGE>
informal agreement under which Crawford has the opportunity to purchase a
participation in Scully's investment in TSP and, in the event of such a
participation, as to the terms under which Scully and Crawford share in gains
relating to Scully's investment in TSP. Capital contributions in the amount of
$48,000 by Scully to TSP with respect to Scully's membership interest in TSP
were funded by McCord, under a letter agreement which defines the terms under
which Scully and McCord share in gains relating to Scully's investment in TSP.
Capital contributions by John Whiting to TSP in the amount of $11,628 in the
form of 6,000 shares of Common Stock were obtained from Robert Whiting under an
informal agreement by which a portion of John Whiting's membership interest in
TSP is held for Robert Whiting's benefit. Capital contributions in the amount of
$35,200 by Freeman Capital were funded by Martin, the sole member of Freeman
Capital.
PRINCIPAL OWNERS OF COMMON STOCK
The following table sets forth, as of January 15, 2001, based solely,
except as otherwise indicated herein, on the information contained in ICO's
preliminary proxy statement for the 2001 Annual Meeting, the number of
outstanding shares of Common Stock beneficially owned by each person known to
TSP as of such date to be the beneficial owner of more than five percent (5%) of
the outstanding shares of Common Stock, each Director, each of the executive
officers named in the executive compensation table of such preliminary proxy
statement and all executive officers, the Company's director nominees and
directors as a group. For purposes of the following table, the Controlling
Pacholders, Isaac H. Joseph, Jon C. Biro and David M. Gerst are referred to as
the "named executive officers."
Except as otherwise noted in a footnote below, each Director, nominee
and executive officer has sole voting and investment power with respect to the
number of shares of Common Stock set forth opposite his or her name in the
table.
[INFORMATION TO BE PROVIDED BASED ON ICO'S PRELIMINARY PROXY STATEMENT.]
<TABLE>
<CAPTION>
NAME AND ADDRESS OF INDIVIDUAL OR IDENTITY NUMBER OF SHARES
OF GROUP BENEFICIALLY OWNED(1) PERCENT OF CLASS
------------------------------------------ -------------------- ----------------
<S> <C> <C>
William E. Cornelius (2) ___._%
--------
Robin E. Pacholder (1) (3) ___._%
--------
George S. Sirusas (4) ___._%
--------
William J. Morgan (1) (5) (6) ___._%
--------
Sylvia A. Pacholder (1) (6) (7) ___._%
--------
William E. Willoughby (1) (8) ___._%
--------
Asher O. Pacholder (1) (6) (9) ___._%
--------
John F. Willliamson (10) ___._%
--------
Walter L. Leib (11) ___._%
--------
James E. Gibson (12) ___._%
--------
Executive Officers Who Are Not Directors
Isaac H. Joseph (13) ___._%
--------
26
<PAGE>
Jon C. Biro (14) ___._%
--------
Travis Street Partners, LLC
910 Travis Street, Suite 2150
Houston, Texas 77002 1,138,300 5.02%
Timothy J. Gollin 1,138,300(20) 5.02%
Christopher N. O'Sullivan 1,138,300(20) 5.02%
Dimensional Fund Advisors
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401-1005 ___._%
--------
Luther King Capital Management Corporation
301 Commerce
Suite 1600
Fort Worth, Texas 76102 ___._%
--------
All current Directors, nominees by the ICO Board for
Directors and executive officers as a group (13
persons) ___._%
--------
</TABLE>
------------------
* Less than 1% of outstanding shares.
1. Except as otherwise indicated, the beneficial owner listed has sole
voting and investment powers with respect thereto. Director or
Executive Officer is a Party to the Pacholder/WEDCO Agreement among
ICO, the Controlling Pacholders, Robin E. Pacholder, William J. Morgan,
Pacholder Associates, Inc. (these shareholders are collectively the
"ICO Shareholders"), and William E. Willoughby, Peggy S. Willoughby,
William C. Willoughby (as custodian for William B. Willoughby), Regina
S. Willoughby, Fred R. Feder, Theo J.M.L. Verhoeff and Catherine
Willoughby Stevens (these shareholders are collectively the "WEDCO
Shareholders") (the ICO Shareholders and the WEDCO Shareholders are
collectively the "Shareholders"). Pursuant to the Pacholder/WEDCO
Agreement, which covers in the aggregate 5,229,553 shares of Common
Stock, the Shareholders agree to take all actions necessary or
appropriate to cause the election of William E. Willoughby, Walter Leib
and George S. Sirusas (the "Initial WEDCO Directors") to the Board of
Directors of the Company and to cause their re-election to the Board of
Directors of the Company until the earlier of the time the WEDCO
Shareholders who are parties to the Pacholder/WEDCO Agreement, taken as
a whole, beneficially own less than 1,500,000 shares of Common Stock or
there is a "change in control" of the Company, when the ICO
Shareholders who are parties to the Pacholder/WEDCO Agreement shall no
longer be obligated to cause the re-election of the Initial WEDCO
Directors to the Company's Board of Directors ("Termination Date"). 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 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 Director(s)
or by the WEDCO Shareholders who are parties to the Pacholder/WEDCO
Agreement, subject to the consent of a majority of the full ICO Board.
In addition to the foregoing, all the ICO Shareholders who are parties
to the Pacholder/WEDCO Agreement have granted irrevocable proxies
coupled with an interest to Mr. Lieb to vote their shares of Common
Stock in favor of the slate of nominees for the ICO Board selected by
the then incumbent members of the ICO Board (the "Nominated Slate") and
the WEDCO Shareholders who are parties to the Pacholder/WEDCO Agreement
granted substantially identical proxies to the Controlling Pacholders
to vote their shares of Common Stock of the Company also in favor of
the Nominated Slate.
The Pacholder/WEDCO Agreement also provides that if one or more of the
Shareholders desire to sell 500,000 or more shares of Common Stock in a
single or series 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 person) such proposed sale shall not be effective unless the
proposed transferee agrees to be bound as the successor to the
27
<PAGE>
transferor under the agreement. The Pacholder/WEDCO Agreement is filled
with the SEC as exhibit 10.9 to the Company's Form S-4 dated May 15,
1996.
Except as set forth above, share amounts do not include the shares of
Common Stock beneficially owned by other parties to the Pacholder/WEDCO
Agreement. To the extent the parties to such Pacholder/WEDCO Agreement
constitute a group, such group and its members would be deemed to be
the beneficial owner of ____________ shares of Common Stock or
approximately _____% of the outstanding shares of Common Stock.
2. Share amounts consist of _______ shares of Common Stock and _______
shares that are issuable upon exercise of stock options granted under
the 1993 Stock Option Plan for Non-Employee Directors.
3. Share amounts include _______ shares of Common Stock, _______ Shares of
Common Stock which may be acquired upon conversion of Convertible
Exchangeable Preferred Stock, and _______ shares which are issuable
upon exercise of stock options granted under the Company's various
employee stock option plans, _______ shares issuable upon exercise of
stock options granted under the 1993 Stock Option Plan for Non-Employee
Directors, and _______ shares of Common Stock held in the various
Company 401(k) plans.
4. Share amounts include _______ shares of Common Stock and _______ shares
that are issuable upon exercise of stock options granted under the 1993
Stock Option Plan for Non-Employee Directors. Common stock holdings for
Mr. Sirusas include _______ shares held by his wife.
5. Share amounts include _______ shares of Common Stock and _______ shares
which are issuable upon exercise of stock options granted under the
1993 Stock Option Plan for Non-Employee Directors and the securities
disclosed in note (6) below.
6. Share amounts include _______ shares of Common Stock and _______ shares
of Common Stock which may be acquired upon conversion of Convertible
Exchangeable Preferred Stock each held by a limited partnership, of
which Asher Pacholder and Mr. Morgan are beneficial owners of the
general partner. Pursuant to certain Investment Advisory Agreements,
Pacholder Associates has sole voting and investment power over such
securities. Share amount also include _______ shares at Common Stock,
_______ shares of Common Stock which may be acquired through
the-exercise of warrants and _______ shares of Common Stock which may
be acquired upon conversion of Convertible Exchangeable Preferred
Stock, in each case owned by Pacholder Associates.
7. Share amounts include _______ shares of Common Stock, _______ shares
which are issuable upon exercise of stock options granted under the
Company's various employee stock option plans, _____ shares issuable
upon exercise of stock options granted under the 1993 Stock Option Plan
for Non-Employee Directors, _______ shares of Common Stock held in the
Company's 401(k) plan, the securities disclosed in footnote (6) above
and _______ shares of Common Stock issued in connection with
acquisitions over which the Controlling Pacholders purport to share
voting power. Sylvia Pacholder disclaims beneficial ownership of the
_______ shares related to the acquisitions, and TSP does not admit the
validity or proprietary of any acquisition or exercise of voting power
in respect of such shares by the Controlling Pacholders.
8. Share amounts include _______ shares of Common Stock, _______ shares
which are issuable upon exercise of stock options granted under the
1993 Stock Option Plan for Non-Employee Directors and _______ shares of
Common Stock held in a 401(k) plan of a wholly-owned subsidiary of the
Company. Common Stock owned by Mr. Willoughby includes _______ shares
owned jointly with his wife and _______ shares owned by his wife.
9. Share amounts include _______ shares of Common Stock, _______ shares
which are issuable upon exercise of stock options granted under the
Company's various employee stock option plans, _______shares issuable
upon exercise of stock options granted under the 1993 Stock Option Plan
for Non-Employee Directors, _______ shares of Common Stock held in the
Company's 401(k) plan, the securities disclosed in footnote (6) above,
and _______ shares of Common Stock issued in connection with
acquisitions over which the Controlling Pacholders purport to share
voting power. Asher Pacholder disclaims beneficial ownership of the
_______ shares related to the acquisitions, and TSP does not admit the
validity or proprietary of any acquisition or exercise of voting power
in respect of such shares by the Controlling Pacholders.
10. Share amounts include _______ shares of Common Stock, and _______
shares that are issuable upon exercise of stock options granted under
the 1993 Stock Option Plan for Non-Employee Directors. Common Stock
holdings for Mr. Williamson includes _______ shares owned by his wife.
28
<PAGE>
11. Share amounts include _______ shares of Common Stock, _______ shares of
common Stock which may be acquired upon conversion of Convertible
Exchangeable Preferred Stock, and _______ shares which are issuable
upon exercise of stock options granted under the 1993 Stock Option Plan
for Non-Employee Directors.
12. Share amounts include _______ shares of Common Stock owned jointly by
Mr. Gibson and his wife, and _______ shares which are issuable upon
exercise of stock options granted under the 1993 Stock Option Plan for
Non-Employee Directors.
13. Share amounts include _______ shares which are issuable upon exercise
of stock options granted under the Company's various employee stock
option plans and _______ shares of Common Stock held in the Company's
401(k) plan.
14. Share amounts include _______ shares of Common Stock, _______ shares
that are issuable upon exercise of stock options granted under the
Company's various employee stock option plans and ______ shares of
Common Stock held in the Company's 401(k) plan.
15. Share amounts include _______ shares of Common Stock and _______ shares
which are issuable upon exercise of stock options granted under the
Company's various employee stock option plans. Common Stock owned by
Mr. Verhoeff includes _______ shares held by his wife.
16. Share amounts include _______ shares of Common Stock, _______ shares of
Common Stock which may be acquired upon conversion of Convertible
Exchangeable Preferred Stock, _______ shares which are issuable upon
exercise of stock options granted under the Company's various employee
stock option plans, _______ shares issuable upon exercise of stock
options granted under the 1993 Stock Option Plan for Non-Employee
Directors, _______ shares of Common Stock held in the Company's 401(k)
plans, the securities disclosed in note (6) above, and _______ shares
of Common Stock issued in connection with acquisitions over which the
Controlling Pacholders purport to share voting power, and TSP does not
admit the validity or proprietary of any acquisition or exercise of
voting power in respect of such shares by the Controlling Pacholders.
17. Share amounts include 1,138,300 shares of Common Stock owned by TSP, as
to which this TSP Manager shares voting and investment power. The TSP
Manager disclaims beneficial ownership of such Common Stock for all
other purposes.
PROXY SOLICITATION; EXPENSES
Proxies may be solicited by members of TSP and partners and employees
of members of TSP by mail, telephone, telecopier, the Internet and personal
solicitation. Regular employees of members of TSP and their affiliates may be
used to solicit proxies and, if used, will not receive additional compensation
for such efforts. Banks, brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward the solicitation material of TSP to
their customers for whom they hold shares of Common Stock, and TSP will
reimburse them for their reasonable out-of-pocket expenses. In addition, TSP has
retained MacKenzie Partners ("MacKenzie") to assist in the solicitation of
proxies for a fee of $_______ plus out-of-pocket expenses. MacKenzie will employ
approximately __ people to solicit ICO's shareholders. In addition to the
solicitation of proxies from, and delivery of information to, ICO shareholders,
it is contemplated that MacKenzie will provide advisory services as requested
pertaining to the solicitation of proxies. TSP also contemplates indemnifying
MacKenzie against certain liabilities and expenses relating to the proxy
solicitation.
The entire expense of preparing, assembling, printing and mailing this
Proxy Statement and related materials, and the cost of soliciting proxies for
the proposals endorsed by TSP, will be borne by TSP. TSP estimates such expenses
to be $__________ (including professional fees and expenses, but excluding any
costs represented by salaries and wages of regular employees of TSP and its
affiliates). The total expenditures incurred to date have been approximately
29
<PAGE>
$________, to be paid by TSP. TSP does not intend to seek reimbursement from the
Company for TSP's expenses.
SHAREHOLDERS' PROPOSALS IN ICO'S PROXY STATEMENT
Information concerning the date by which proposals of security holders
intended to be presented at the next annual meeting of shareholders of ICO must
be received by ICO for inclusion in the ICO Proxy Statement and form of proxy
for that meeting is contained in the ICO Proxy Statement and is incorporated
herein by reference.
TSP assumes no responsibility for the accuracy or completeness of any
information contained herein that is based on, or incorporated by reference to,
ICO public filings.
PLEASE INDICATE YOUR SUPPORT OF THE TSP NOMINEES BY COMPLETING, SIGNING
AND DATING THE ENCLOSED GOLD PROXY CARD AND RETURN IT PROMPTLY TO TSP IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF THE ENVELOPE IS MAILED IN THE
UNITED STATES.
Dated: January 16, 2001
Sincerely,
Your Fellow Shareholder,
TRAVIS STREET PARTNERS, LLC
30
<PAGE>
APPENDIX A
The following is a summary of all transactions in ICO securities by the
Participants over the last two years.
<TABLE>
<CAPTION>
DATE OF TRANSACTION NATURE OF TRANSACTION NUMBER OF SHARES
------------------- --------------------- ----------------
<S> <C> <C>
Purchase by O'Sullivan of Shares
8/28/00 for O'Sullivan family trusts 1,000
Purchase by O'Sullivan of Shares
8/28/00 for O'Sullivan family trusts 500
Purchase by O'Sullivan of Shares
8/29/00 for O'Sullivan family trusts 4,000
Purchase by O'Sullivan of Shares
8/29/00 for O'Sullivan family trusts 1,000
Purchase by O'Sullivan of Shares
9/7/00 for O'Sullivan family trusts 1,000
Purchase by O'Sullivan of Shares
9/8/00 for O'Sullivan family trusts 2,000
Purchase by O'Sullivan of Shares
9/8/00 for O'Sullivan family trusts 500
Purchase of Shares by John V.
9/18/00 Whiting 6,000
Purchase of Shares by Robert
9/18/00 Whiting 6,000
Purchase by O'Sullivan of Shares
9/20/00 for O'Sullivan family trusts 2,000
9/28/00 Purchase of Shares by O'Sullivan 4,000
Purchase by O'Sullivan of Shares
10/3/00 for O'Sullivan family trusts 2,000
Purchase by O'Sullivan of Shares
10/3/00 for O'Sullivan family trusts 2,000
10/6/00 Purchase of Shares by TSP 6,000
10/6/00 Purchase of Shares by TSP 10,000
10/11/00 Purchase of Shares by TSP 6,000
Capital Contribution from
A-1
<PAGE>
DATE OF TRANSACTION NATURE OF TRANSACTION NUMBER OF SHARES
------------------- --------------------- ----------------
<S> <C> <C>
10/12/00 John V. Whiting to TSP 6,000
Receipt of Capital Contribution
10/12/00 by TSP from John V. Whiting 6,000
10/12/00 Purchase of Shares by TSP 15,000
10/13/00 Purchase of Shares by TSP 23,500
Capital Contribution from Robert
10/16/00 Whiting to TSP 6,000
Receipt of Capital Contribution
10/16/00 by TSP from Robert Whiting 6,000
10/16/00 Purchase of Shares by TSP 75,000
Capital Contribution from
10/16/00 O'Sullivan to TSP 4,000
Receipt of Capital Contribution
10/16/00 by TSP from O'Sullivan 4,000
Capital Contribution from
O'Sullivan of Shares from
10/16/00 O'Sullivan family trusts 12,000
Receipt of Capital Contribution
by TSP from O'Sullivan of Shares
10/16/00 from O'Sullivan family trusts 12,000
10/17/00 Purchase of Shares by TSP 35,000
10/18/00 Purchase of Shares by TSP 54,000
10/19/00 Purchase of Shares by TSP 45,000
10/20/00 Purchase of Shares by TSP 10,000
10/23/00 Purchase of Shares by TSP 11,000
10/24/00 Purchase of Shares by TSP 38,500
10/25/00 Purchase of Shares by TSP 58,100
10/26/00 Purchase of Shares by TSP 20,000
10/27/00 Purchase of Shares by TSP 28,000
10/30/00 Purchase of Shares by TSP 5,000
10/31/00 Purchase of Shares by TSP 22,500
11/1/00 Purchase of Shares by TSP 20,000
11/2/00 Purchase of Shares by TSP 60,000
11/3/00 Purchase of Shares by TSP 15,000
11/6/00 Purchase of Shares by TSP 37,000
11/7/00 Purchase of Shares by TSP 18,900
11/8/00 Purchase of Shares by TSP 59,500
A-2
<PAGE>
DATE OF TRANSACTION NATURE OF TRANSACTION NUMBER OF SHARES
------------------- --------------------- ----------------
<S> <C> <C>
11/9/00 Purchase of Shares by TSP 30,000
11/10/00 Purchase of Shares by TSP 26,600
11/13/00 Purchase of Shares by TSP 31,700
11/30/00 Purchase of Shares by TSP 324,000
Sale by O'Sullivan of Shares
11/30/00 from O'Sullivan family trusts 4,000
12/20/00 Purchase of Shares by TSP 10,000
12/26/00 Purchase of Shares by TSP 15,000
</TABLE>
A-3
<PAGE>
PRELIMINARY COPY, SUBJECT TO COMPLETION
ICO, INC.
PROXY SOLICITED ON BEHALF OF TRAVIS STREET
PARTNERS, LLC ("TSP") FOR THE ANNUAL MEETING MARCH __, 2001
P The undersigned hereby appoints Christopher N. O'Sullivan and
Timothy J. Gollin, or any one of them, proxies of the
undersigned, each with the power of substitution, to vote all
shares of common stock which the undersigned would be entitled
to vote at the Annual Meeting of Shareholders of ICO, Inc. to
R be held in Houston, Texas on Friday, March __, 2001, 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,
hereby revoking any proxy heretofore given.
O
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IN THE ABSENCE OF SPECIFIC DIRECTIONS TO THE
X CONTRARY (INDICATED BY MARKING THE APPROPRIATE BOXES ON THE
REVERSE HEREOF), THIS PROXY WILL BE VOTED FOR THE ELECTION OF
EACH OF A. JOHN KNAPP, JAMES D. CALAWAY AND CHARLES T. MCCORD,
Y III AS DIRECTORS TO THE BOARD OF DIRECTORS OF ICO, INC. AND FOR
THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS
LLP AS INDEPENDENT ACCOUNTANTS.
(change of address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
----------------
SEE REVERSE SIDE
----------------
<PAGE>
PRELIMINARY COPY, SUBJECT TO COMPLETION
ICO, INC.
PLEASE MARK VOTE IN BRACKET IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
TSP recommends a vote "FOR" the nominees listed below.
<TABLE>
<S> <C> <C> <C>
FOR WITHHOLD FOR except vote withheld
ALL ALL from the following nominees:
1. Election of Directors [ ] [ ] [ ] ___________________
Nominees: 01 A. John Knapp, 02 James D. Nominee Exceptions
Calaway and 03 Charles T. McCord, III (terms
to expire at 2004 Annual Meeting of
Shareholders)
TSP recommends a vote FOR proposal 2
2. The ratification of the appointment of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as independent [ ] [ ] [ ]
accountants.
3. With discretionary authority as to such
other matters as may properly come before
the 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.
Please sign, date and return the Proxy Card promptly,
using the enclosed envelope
</TABLE>
2
