================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
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:
[ ] PRELIMINARY PROXY STATEMENT
[ ] DEFINITIVE PROXY STATEMENT [ ] CONFIDENTIAL, FOR USE OF THE
[ ] DEFINITIVE ADDITIONAL MATERIALS COMMISSION ONLY (AS PERMITTED)
[X] SOLICITING MATERIAL PURSUANT TO BY RULE 14A-6(E)(2)
RULE 14A-12
ICO, INC.
--------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TRAVIS STREET PARTNERS, LLC
--------------------------------------------------------------------------------
(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:
NOT APPLICABLE
--------------------------------------------------------------------------
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES: NOT
APPLICABLE.
--------------------------------------------------------------------------
(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): NOT APPLICABLE.
--------------------------------------------------------------------------
<PAGE>
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION: NOT APPLICABLE.
--------------------------------------------------------------------------
(5) TOTAL FEE PAID: NOT APPLICABLE.
--------------------------------------------------------------------------
[ ] 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: NOT APPLICABLE.
--------------------------------------------------------------------------
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.: NOT APPLICABLE.
--------------------------------------------------------------------------
(3) FILING PARTY: NOT APPLICABLE.
--------------------------------------------------------------------------
(4) DATE FILED: NOT APPLICABLE.
--------------------------------------------------------------------------
<PAGE>
TSP MESSAGE 1: 1/12/01 10:24 pm
by: timgollin Msg: 1400 of 1427
---------
We apologize for the slow reply to your comments in recent days. You will find
many answers to your questions about our methodology for valuation, our
strategy, and other topics in following posts.
We do anticipate posting additional comments in the future. Please feel free to
contact us at [email protected] with comments, information about
your shareholdings, or other thoughts, and please visit our website at
www.travisstreetpartners.com for our latest filings and postings.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A.
<PAGE>
John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture between
McCord and Calaway, John V. Whiting, Freeman Capital Management LLC, Robert
Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In aggregate,
the TSP Participants beneficially own 1,158,300 shares of ICO's common stock or
5.11% of such shares outstanding (based on ICO's Annual Report on Form 10-K for
the fiscal year ended September 30, 2000). TSP has filed a preliminary proxy
statement with the Securities and Exchange Commission (SEC) in connection with a
proposed solicitation that the TSP Participants may make with respect to
shareholder proxies for the 2001 Annual Meeting of Shareholders of ICO. The
Preliminary Proxy Statement contains important information, including additional
information about the views and members of TSP as well as the individuals that
TSP intends to nominate for election to the ICO Board of Directors. You should
read the Preliminary Proxy Statement in its entirety. It can be obtained at no
charge on the SEC's web site at http://www.sec.gov/ or by requesting a copy from
MacKenzie Partners, Inc., (212) 929-5500 (call collect) or (800) 322-2885
(toll-free).
2
<PAGE>
RE MESSAGE 1365 1/12/01 10:34 pm
by: timgollin Msg: 1401 of 1427
---------
Message 1365: "With results like this how does management ever expect
shareholders to vote for their current slate of directors ?".
By law, every public company's proxy statement has to show the performance of
the company's public stock against a peer group (management gets to hand-select
its peers) and against broad market indices.
As this message points out, ICO's preliminary proxy filings show that ICO common
stock is down 52% over the 1995 -2000 reporting period while the oilfield
services index is up 246%. Even the dismal specialty chemical sector (in which
the Pacholders chose to invest $120 million) is up almost 110%.
In view of the disastrous company performance highlighted in ICO's proxy
statement, the Board of Directors did not fire management. The rules are
different at ICO. Your Board of Directors decided to punish the Pacholders this
year for this appalling performance with a record $600,000+ . . . raise. Here's
how:
- Sylvia A. Pacholder's pay increased by $208,000, 50% more than 1999, to
$513,000
- Asher O. Pacholder's pay increased by $116,000, 30% more than 1999, to
$410,000
- Robin E. Pacholder's pay increased by $70,000, 45%+ more than 1999, to
$218,000
3
<PAGE>
- David M. Gerst's pay increased by $68,000, 55%+ more than 1999, and more than
double 1998, to $197,000 (he's the son-in-law)
- Tom D. Pacholder's pay increased by $35,000, 40%+ pay increase to $119,000
AND ON TOP OF THESE:
- Sylvia A. Pacholder got 75,000 options at a $1.75 strike price - more than
$60,000 of compensation at today's prices
- Asher O. Pacholder got 75,000 options at a $1.75 strike price - more than
$60,000 of compensation at today's prices
- Robin E. Pacholder got 25,000 options at a $1.75 strike price - more than
$12,000 of compensation at today's prices
- David M. Gerst got 50,000 options at a $1.75 strike price - more than $24,000
of compensation at today's prices
In case you were wondering, just the raises given to the Pacholder family last
year are nearly double the Company's earnings. Total Pacholder family
compensation exceeds 5x earnings and ballooned to an all-time high of $1.6
million.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for
4
<PAGE>
the fiscal year ended September 30, 2000). TSP has filed a preliminary proxy
statement with the Securities and Exchange Commission (SEC) in connection with a
proposed solicitation that the TSP Participants may make with respect to
shareholder proxies for the 2001 Annual Meeting of Shareholders of ICO. The
Preliminary Proxy Statement contains important information, including additional
information about the views and members of TSP as well as the individuals that
TSP intends to nominate for election to the ICO Board of Directors. You should
read the Preliminary Proxy Statement in its entirety. It can be obtained at no
charge on the SEC's web site at http://www.sec.gov/ or by requesting a copy from
MacKenzie Pa
5
<PAGE>
RE MESSAGES 1363 AND 1362 1/12/01 10:36 pm
by: timgollin Msg: 1402 of 1427
---------
Message 1363: "Of course, $39m could buy a lot."
Our reading of the indenture for the Senior Notes indicates that the Pacholders
cannot commence a stock buyback for the same reason they cannot pay a dividend -
it's prohibited by the terms of the indenture. Before anyone - including the
Pacholders or TSP - can do much of anything with ICO assets, we believe the
rights of the Senior Notes must be considered. That would mean a redemption, a
defeasance, or a waiver of covenants .
Message 1362: "Do you know how much of the outstanding stock could be bought by
Travis ?"
Since TSP is not trying to make a quick buck on the stock, then disappear, right
now we are not motivated to accumulate a huge position. In fact, for strategic
reasons, buying 15% just doesn't make sense.
First of all, the Company's Poison Pill, if it is valid, prevents us from buying
more than 14.9%. Second of all, right now, we just don't see any real advantage
to TSP in buying more in the open market. Yes, we could buy below our offer
price. But that doesn't save us a lot of money, and against that, at least for
the moment, we don't want to be marooned with an illiquid 15% ownership position
in ICO if the Board continues to refuse to enhance shareholder value.
Finally, because every shareholder we've talked to (other than ICO board
members, who have not given us an opinion)
6
<PAGE>
agrees that it's time for management change at ICO, right now we don't think
there is a compelling reason for us to buy stock to have more votes. More stock
means more capital exposure to an indifferent Board. In this stock, more
ownership most certainly means a higher risk of loss.
Naturally, TSP is reserving the right to acquire more shares at any point in the
future, assuming they are available on the market and the price is attractive.
Obviously, we are reviewing our investment strategy on a continuous basis and
will continue to take actions appropriate to our business interests as we see
fit from time to time.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to
7
<PAGE>
the ICO Board of Directors. You should read the Preliminary Proxy Statement in
its entirety. It can be obtained at no charge on the SEC's web site at
http://www.sec.gov/ or by requesting a copy from MacKenzie Partners, Inc., (212)
929-5500 (call collect) or (800) 322-2885 (toll-free).
8
<PAGE>
MESSAGE 1360 1/12/01 10:39 pm
by: timgollin Msg: 1403 of 1427
---------
Message 1360: "I wonder what a thorough analysis of ICO books . . would reveal."
So do we. And we have heard plenty of stories that pique our curiosity. We are
keenly interested in a look at the company's books, especially with respect to
management compensation issues.
January 9 was my birthday, and one of my birthday presents was the surprise
Pacholder disclosure of all of the various voting agreements, dating back to
1995, which they have extracted from the sellers of companies ICO has acquired.
Clearly TSP proxy materials flushed this one out: the fact that Asher and Sylvia
Pacholder have been awarding themselves personally voting rights on the stock
they gave to the sellers of the companies ICO bought. Seemingly by magic, this
year, after six years with virtually no disclosure, a paragraph describing each
transaction appeared in the preliminary proxy statement. Question: if the
Pacholders were just getting the voting rights as officers of ICO, why didn't
the company simply issue non-voting stock ? There are clearly tax issues and
compensation issues which require further exploration here.
Another question is why the Pacholders have not updated their 13D filings in
accordance with federal securities laws to reflect their changing holdings both
with respect to disposition of ICO shares by Pacholder Associates and its
affiliates and with respect to ownership of the voting rights mentioned above.
The total number of voting rights has
9
<PAGE>
dropped to 374,873 from 1,395,092, according to the ICO preliminary proxy
materials. These changes should have been filed when they occurred, not picked
up later in the proxy statement. We believe that the failure to make timely
disclosure of their real ownership and control position could well have misled
investors in ICO.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
10
<PAGE>
MESSAGE 1355 1/12/01 10:41 pm
by: timgollin Msg: 1404 of 1427 -
---------
Message 1355: "I surmise Travis isn't interested in petrochemicals."
We ARE interested in petrochemicals. (Actually, let's drop the pretense that
it's somehow related to oilfield services and just call it what it is -
"plastics". ) Properly managed, we think there is more upside in that business
than in oilfield services, starting from today. If ICO offers us the oilfield
services business, we'd look at that as a compromise. Our interest, first and
foremost, is in buying the whole company.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting,
11
<PAGE>
Freeman Capital Management LLC, Robert Whiting, Randall Grace, R. Allen Schubert
and Stephen F. Martin. In aggregate, the TSP Participants beneficially own
1,158,300 shares of ICO's common stock or 5.11% of such shares outstanding
(based on ICO's Annual Report on Form 10-K for the fiscal year ended September
30, 2000). TSP has filed a preliminary proxy statement with the Securities and
Exchange Commission (SEC) in connection with a proposed solicitation that the
TSP Participants may make with respect to shareholder proxies for the 2001
Annual Meeting of Shareholders of ICO. The Preliminary Proxy Statement contains
important information, including additional information about the views and
members of TSP as well as the individuals that TSP intends to nominate for
election to the ICO Board of Directors. You should read the Preliminary Proxy
Statement in its entirety. It can be obtained at no charge on the SEC's web site
at http://www.sec.gov/ or by requesting a copy from MacKenzie Partners, Inc.,
(212) 929-5500 (call collect) or (800) 322-2885 (toll-free).
12
<PAGE>
MESSAGES 1354 AND 1353 1/12/01 10:43 pm
by: timgollin Msg: 1405 of 1427
---------
Message 1354: "I guess only the parties at the meeting [between Travis Street
and the Pacholders] will know what really happened but I imagine that it did not
end up cordially"
Actually, from our point of view, our meeting with the Pacholders was
anticlimactic.
After we nominated directors, our lawyer got a call from a well-known (and
undoubtedly expensive) New York takeover lawyer, - for whom we, the
shareholders, are undoubtedly all paying. He asked us if we'd like to meet with
the Pacholders. (They could have called us themselves - we answer our phones.)
We agreed, and after bickering about venue (we proposed sandwiches at our
office; they rebutted with a suite at the St. Regis Hotel, one of Houston's most
expensive; obviously, through our ownership in ICO, we effectively wind up
paying for 5.02% of the meeting cost while the Pacholders paid for less than
3%), we sat down. They asked what appeared to be a carefully scripted series of
questions, and we replied. They didn't give us any encouragement at all, except
to drop a few platitudes about their quest for shareholder value. Chris
O'Sullivan and I had the feeling at the end that the meeting was on a list of
things their lawyer had told them to do to prepare for a proxy fight. We sure
didn't get to much of an exchange of ideas.
Message 1353: The ICO Board of Directors "find[s] fault with the proposed deal
`process' rather than finding fault with the price"
We were entertained by Dr. Pacholder's language criticizing
13
<PAGE>
our `process' rather than the financial merits of the deal. Someone who really
wanted to sell might have picked up the phone and called us to say: "Guys, we're
really interested in talking to you, especially since you're offering such a
good price compared to market value, but do you think you could give us another
week to consider your offer ? " That didn't happen.
We looked at their language and think they were saying the following: "Your
price is too good for us to refuse, but we sure don't want to lose our jobs. So
we will object to something else in your letter."
ICO still hasn't commented on the financial merits of the proposal.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement
14
<PAGE>
contains important information, including additional information about the views
and members of TSP as well as the individuals that TSP intends to nominate for
election to the ICO Board of Directors. You should read the Preliminary Proxy
Statement in its entirety. It can be obtained at no charge on the SEC's web site
at http://www.sec.gov/ or by requesting a copy from MacKenzie Partners, Inc.,
(21
15
<PAGE>
MESSAGES 1350, 1345 1/12/01 10:51 pm
by: timgollin Msg: 1406 of 1427
---------
Message 1350: "I have to believe that VRC or another real oilfield firm will be
involved in this fray before long . . "
If ICO had stayed an independent oilfield services business, without the
plastics business, we think this would probably be correct.
In our opinion, the problem for most companies looking at ICO as an acquisition
is that the two pieces don't fit together, except to help the Pacholders stay
entrenched. It would be a tough sell for a CEO at a big oilfield services
company to convince his board to buy a $300 million revenues business so he
could divest $200 million of the revenues. Likewise, at a plastics company, it
would be tough to justify paying 6x EBITDA for an acquisition when your stock is
trading at 3.5x EBITDA - it would be non-strategic and dilutive to earnings. A
more logical thing for these big guys to do is to wait for TSP to finish the
acquisition of ICO and then make us offers for the pieces. We haven't had those
discussions, but obviously at some point it would be worth talking to
prospective buyers.
So that leaves people like us as prospective buyers.
Message 1345: "Current management should at least hire an [investment banker] to
get the best possible deal for all holders."
Management has hired an investment banker to `assist' them. The problem is, the
assistance provided by a banker is generally linked to the objectives of the
management. If
16
<PAGE>
management doesn't want to sell, the investment banker will find a way to say so
(for a fee). We think that the minority of the board not named Pacholder or
employed by someone named Pacholder would be well-advised to hire their own
investment banker, and we have voiced that opinion to them.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
17
<PAGE>
MESSAGES 1343, 1342 1/12/01 10:55 pm
by: timgollin Msg: 1407 of 1427
---------
Message 1343: "In my experience . . proxy fights seldom succeed for the benefit
of all shareholders."
We can't speak to all proxy fights, but this one specifically should make sense
to all shareholders, with the possible exception of the Pacholders (not as
shareholders but as salaried employees). The basic point in our proxy fight is
to replace directors, and to keep replacing directors over the next year or so,
until we can organize the sale of the company to the highest bidder.
While TSP would consider `going away' if the Company offered to sell us oilfield
services at a reasonable price, other than that we are not going anywhere, and
the Company's offer would have to be attractive for us to consider it. We prefer
to buy the whole company.
Since the stock price went up only after our 13D announcement, we think the
increase was the result of our announcement and that it would probably drop
substantially if we announced we'd sold our position.
Message 1342: "BTW, does anyone know who the bond holders are?"
In this year's proxy statement, the Pacholders have finally disclosed that their
funds own some $4 million of ICO Senior Notes - another disclosure which should
have been made long ago, since these are registered securities. An interesting
18
<PAGE>
question: when ICO bought in bonds under par last year, were they purchased from
a Pacholder-related entity ?
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
19
<PAGE>
MESSAGE 1340 1/12/01 10:58 pm
by: timgollin Msg: 1408 of 1427
---------
Message 1340: "The risk here remains that management entrenches itself and goes
to battle dragging this out for a long time."
Travis Street Partners is interested in acquiring ICO as a company, not in
making a small profit on the common stock. It costs money to fight a proxy fight
and pay lawyers - money that no other shareholder has yet invested - and we do
intend for our investment to be profitable. Thus, we plan to be around for as
long as it takes to change the Board of Directors so we can force a sale of the
company. To do that we need to get directors elected, unless the existing Board
suddenly recognizes that it can best maximize shareholder value by selling the
Company to the highest bidder.
With support from some of the existing directors as well as our own nominees,
that could happen this year, or it could be stalled until next year. One way or
the other, though, we expect to prevail, and we're prepared to stick around.
Having said that, there is no guarantee that we will still be prepared to make
an offer at $2.85. If the Company's cash is wasted, or if the Company doesn't
meet operating objectives, the value of the Company could drop substantially,
and so could our offer. On the other hand, if the Company can convince us that
there is more value than we see from looking at the public documents, we'd
certainly entertain an increase in our offer.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here,
20
<PAGE>
represent the opinions of the writers and do not necessarily reflect our own
opinion, nor are we responsible for any postings other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
21
<PAGE>
MESSAGE 1332 1/12/01 11:02 pm
by: timgollin Msg: 1409 of 1427
---------
Message 1332: "Split the company up, sell a division, pay down the debt . . "
We think that letting current ICO management sell a division, as a business
strategy, doesn't make a lot of sense for common shareholders for the following
reasons:
1. A sale of plastics is unlikely to yield enough cash in today's market to pay
down the debt associated with it, so we believe that management would need to
refinance the Senior Notes and would likely have to take a huge write-off, maybe
more than $100 million. We believe that would decimate the company's book
equity, possibly making it insolvent.
2. We believe a sale of oilfield services could result in a big tax bill,
because the company's basis in the assets is likely to be relatively low. (We
won't know the facts here unless ICO lets us look at their books.) Also we
believe that the sale of oilfield services would be bad for shareholders, who
would be stuck holding shares in a small plastics company in an out-of-favor
industry. We believe institutional shareholders would be very unhappy with this
action. True, the company would be largely debt free (and cash free). But we
estimate it would generate only about $16 million per year in EBITDA after
paying for the Pacholders, $2 million in EBIT (after $12 million in D&A), and
thus effectively zero in net profit to common shareholders (after paying taxes
and preferred stock dividends). That does not imply a high market value for the
common stock. Selling oilfield services might be good for TSP, would save the
Pacholders for another few years, but we believe would seriously prejudice
shareholder values.
22
<PAGE>
3. A sale of either division would compel current management to carry the same
bloated corporate G&A on a much smaller revenue base.
4. A refinancing of the junk bonds would be very costly.
Even so, we wouldn't be surprised to see ICO try a sale of a single division.
That's why we offered to buy the oilfield services business only. If
shareholders don't like this option, they can and should make their voices heard
to ICO's Board of Directors, who, as fiduciaries, are supposed to represent the
best interests of all shareholders.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to
23
<PAGE>
the ICO Board of Directors. You should read the Preliminary Proxy Statement in
its entirety. It can be obtained at no charge on the SEC's web site at
http://www.sec.gov/ or by requesting a copy fr
24
<PAGE>
RES MESSAGE 1331 1/12/01 11:34 pm
by: travisstreetpartners Msg: 1410 of 1427
--------------------
Message 1331: "The offer will likely be sweetened to make it work."
That depends on a number of factors. Our basic premise is that we want to offer
a fair price to acquire the company. If ICO can show us more value than we
currently see in the public documents, we're willing to pay more. If ICO
stonewalls and delays, then our costs go up, our risks go up, and our price
could be reduced.
Here are two quick not-in-depth fundamental valuation methods for getting to a
fair price for ICO:
On an asset valuation basis, ICO has $260 million of tangible assets (including
cash), minus $160 million in debt, accrued interest, and other liabilities; $32
million in preferred stock, for a net value of $68 million, less golden
parachutes and transaction costs of at least $10 million, equals $58 million.
That's about $2.57 per share.
On a cash flow basis, if ICO EBITDA for the next 12 months is $20 million from
plastics and $25 million from oilfield services, and we apply a 3.5x multiple
for plastics and a 6x multiple to oilfield services, then the value of the
business is $70 million (plastics) plus $150 million (oilfield), minus $20
million (5x corporate G&A of $4 million) = $200 million of enterprise value.
From this, subtract $160 million in debt, accrued interest, and other
liabilities; $32 million in preferred stock, then add back $39 million in cash
and subtract golden parachutes and
25
<PAGE>
transaction costs of $10 million. The remaining value is $37 million or about
$1.64 per share. So our price of $2.85 is nearly a 74% premium to the values
outlined above. Our offer reflects the fact that we believe we can create value
at ICO post-closing. And while it's certainly true that small cap oilfield
service stocks are trading at more than 6x EBITDA, we believe that private
transactions of this size are taking place at 6x multiples.
Of course we think we can make money with the business after we buy it and fix
it - otherwise we wouldn't be spending time and investing money in the proxy
fight.
In our proxy materials we have consistently advocated that the Company should be
sold to the highest bidder. We think our offer is high enough so that in an
auction we will prevail.
26
<PAGE>
MESSAGE 1331 1/12/01 11:39 pm
by: travisstreetpartners Msg: 1411 of 1427
--------------------
Message 1331: "The offer will likely be sweetened to make it work."
That depends on a number of factors. Our basic premise is that we want to offer
a fair price to acquire the company. If ICO can show us more value than we
currently see in the public documents, we're willing to pay more. If ICO
stonewalls and delays, then our costs go up, our risks go up, and our price
could be reduced.
Here are two quick not-in-depth fundamental valuation methods for getting to a
fair price for ICO:
On an asset valuation basis, ICO has $260 million of tangible assets (including
cash), minus $160 million in debt, accrued interest, and other liabilities; $32
million in preferred stock, for a net value of $68 million, less golden
parachutes and transaction costs of at least $10 million, equals $58 million.
That's about $2.57 per share.
On a cash flow basis, if ICO EBITDA for the next 12 months is $20 million from
plastics and $25 million from oilfield services, and we apply a 3.5x multiple
for plastics and a 6x multiple to oilfield services, then the value of the
business is $70 million (plastics) plus $150 million (oilfield), minus $20
million (5x corporate G&A of $4 million) = $200 million of enterprise value.
From this, subtract $160 million in debt, accrued interest, and other
liabilities; $32 million in preferred stock, then add
27
<PAGE>
back $39 million in cash and subtract golden parachutes and transaction costs of
$10 million. The remaining value is $37 million or about $1.64 per share. So our
price of $2.85 is nearly a 74% premium to the values outlined above. Our offer
reflects the fact that we believe we can create value at ICO post-closing. And
while it's certainly true that small cap oilfield service stocks are trading at
more than 6x EBITDA, we believe that private transactions of this size are
taking place at 6x multiples.
In our proxy materials we have consistently advocated that the Company should be
sold to the highest bidder. We think our offer is high enough so that in an
auction we will prevail.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as
28
<PAGE>
the individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
29
<PAGE>
MESSAGE 1328 1/12/01 11:41 pm
by: travisstreetpartners Msg: 1412 of 1427
--------------------
Message 1328: "Remember how the company . . paid Mr. Pacholder a big bonus (for
his efforts in the lawsuit), after the jury verdict, only to see it overturned
on appeal?"
The bonuses the Pacholders paid themselves in connection with the John Wood
Group PLC litigation and the externally-forced sale of the Company's interest in
Wedtech have not been repaid, according to the Company's most recent
disclosures. On the John Wood Group PLC litigation, the appeals court has
essentially shut down the Pacholders on a number of the major issues, but the
appeals will undoubtedly continue.
In the first place, we think it's outrageous and irregular that the Pacholders
would pay themselves bonuses on the basis of a jury verdict. We think that
hiring lawyers and fighting court battles falls within the normal bounds of
`doing your job' as a CFO or CEO.
Even if management should get a bonus for success in court, surely the bonus
should be paid only when the company receives the cash - not when the jury award
is made. You'll note that from an accounting point of view, the award was never
treated as income on the Company's books.
The Pacholders need to give this money back.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here,
30
<PAGE>
represent the opinions of the writers and do not necessarily reflect our own
opinion, nor are we responsible for any postings other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
31
<PAGE>
MESSAGE 1327 1/12/01 11:42 pm
by: travisstreetpartners Msg: 1413 of 1427
--------------------
Message 1327: "How can current shareholders see anything lower than the proposed
price ?"
Lots of ways.
Shareholders could see a price lower than the current price if the Pacholders
decide to adopt delaying tactics. One such strategy is to announce that ICO has
hired an investment banker and is looking for `better offers', then delay and
blame the failure to sell the company on `market conditions'. In this case, we
think the price will go back to the $1.00 - $1.50 range.
Remember, the company is not a static entity. A year of fighting is going to
waste its people's energy and resources and could hurt it in the marketplace.
And, fundamentally, on a small, thinly traded stock, most people other than
current shareholders simply don't care. If management entrenches and is
unwilling to cooperate in realizing shareholder value, we believe that the value
of the company will deteriorate, the share price will skid, and the price at
which the company is ultimately sold will be lower than our $2.85 offer.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
32
<PAGE>
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
33
<PAGE>
RE: PROXY QUESTIONS 1/13/01 1:39 am
by: timgollin Msg: 1415 of 1427
---------
Record date per ICO's preliminary proxy information is 18 January 2001.
The actual vote is at the meeting. We will solicit proxies when we are allowed
to by the SEC.
TSP supports the slate of
A. John Knapp
Charles T. McCord, III
James D. Calaway
These three candidates are committed to a sale of the company to the highest
bidder, even if the highest bidder is not TSP.
Please bear in mind that other people's comments on bulletin boards, including
the comments we have quoted here, represent the opinions of the writers and do
not necessarily reflect our own opinion, nor are we responsible for any postings
other than our own.
Respectfully yours,
Timothy Gollin, Manager
TRAVIS STREET PARTNERS, LLC
* * * * *
34
<PAGE>
CERTAIN ADDITIONAL INFORMATION
The participants in the proposed solicitation of proxies ("TSP Participants")
are TSP and the following persons who are, or have funded capital contributions
of, members of TSP: Chris N. O'Sullivan, Timothy J. Gollin, Christopher P.
Scully, A. John Knapp, James D. Calaway, Charles T. McCord, III, a joint venture
between McCord and Calaway, John V. Whiting, Freeman Capital Management LLC,
Robert Whiting, Randall Grace, R. Allen Schubert and Stephen F. Martin. In
aggregate, the TSP Participants beneficially own 1,158,300 shares of ICO's
common stock or 5.11% of such shares outstanding (based on ICO's Annual Report
on Form 10-K for the fiscal year ended September 30, 2000). TSP has filed a
preliminary proxy statement with the Securities and Exchange Commission (SEC) in
connection with a proposed solicitation that the TSP Participants may make with
respect to shareholder proxies for the 2001 Annual Meeting of Shareholders of
ICO. The Preliminary Proxy Statement contains important information, including
additional information about the views and members of TSP as well as the
individuals that TSP intends to nominate for election to the ICO Board of
Directors. You should read the Preliminary Proxy Statement in its entirety. It
can be obtained at no charge on the SEC's web site at http://www.sec.gov/ or by
requesting a copy from MacKenzie Partners, Inc., (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).
35
