ICO, Inc. FY 2009 Annual Incentive Bonus Plan for Business Unit Presidents

Summary

This agreement outlines the FY 2009 bonus plan for the presidents of ICO, Inc.'s business units in North America, Bayshore, Europe, and Asia Pacific. Bonuses are based on performance metrics such as operating income, return on invested capital, investment turnover, cash flow from operations, consolidated return on equity, and qualitative factors. Each metric has a specific weighting and payout scale. To qualify, a president must remain employed through October 1, 2009, and not be terminated for cause. The plan details how bonuses are calculated and the conditions under which they are paid.

EX-10.2 3 exhibit10-2.htm EXHIBIT 10.2 FY2009 BONUS PLAN - BUSINESS UNIT PRESIDENTS exhibit10-2.htm

Exhibit 10.2

ICO, Inc. FY 2009 Annual Incentive Bonus Plan Matrix- Business Unit Presidents
These four pages constitute the FY 2009 Annual Incentive Bonus Plans for the following four individuals: (1) Donald Eric Parsons, President – ICO Polymers North America (“IPNA”); (2) Stephen E. Barkmann, President – Bayshore Industrial (“Bayshore”); (3) Derek R. Bristow – President, ICO Europe (“Europe”); and (4) ____________, President – ICO Asia Pacific (“Asia Pacific”).

		Pay-out as a percentage of base salary
Measurement	Weighting	0%	50%	100%
Operating Income	15%	See Operating Income Targets attached	See Operating Income Targets attached	See Operating Income Targets attached
Business Unit ROIC	15%	See ROIC Targets attached	See ROIC Targets attached	See ROIC Targets attached
Business Unit Investment turnover	10%	*	*	*
Cash Flow from Operations	20%	See Cash Flow Targets attached	See Cash Flow Targets attached	See Cash Flow Targets attached
ICO, Inc. Consolidated ROE	20%	*	*	*
Subjective/Qualitative Factors	20%	As recommended by CEO, and determined & approved by the Compensation Committee	As recommended by CEO, and determined & approved by the Compensation Committee	As recommended by CEO, and determined & approved by the Compensation Committee

Measurement definitions

Operating Income - Earnings before interest and taxes. [*]

ROIC - - Annual Operating Income dividend by Invested Capital Base. Invested Capital Base defined as average total assets minus all intercompany loans (including intercompany accounts receivables and payables) investment in affiliates, and goodwill, minus current liabilities, excluding funded debt (i.e. interest bearing debt). The average Invested Capital base shall be calculated using the previous thirteen points of month-end data.

Investment turnover – Trailing twelve months revenue dividend by the average Invested Capital Base for the previous thirteen month-end periods. Note that Investment turnover calculation will include intercompany revenues, receivables and payables.

Cash Flow from Operations – Cash flow from operating activities less capital expenditures excluding: intercompany interest income/expense tax effected and changes in intercompany payables/receivables. Cash Flow From Operations will be computed by taking a weighted average of each quarter’s cash flow and then calculating the annual cash flow amount as follows: Cash flow from operations will be equal to the sum of the first quarter cash flow times four, the second quarter cash flow by three, the third quarter cash flow by two and the fourth quarter cash flow by one. That sum will then be divided by 2.5.

ROE – Net income from continuing operations divided by Stockholders’ equity. For purposes of this calculation, Stockholders’ equity shall be averaged using the previous four (4) quarter-end balances, plus the year-end balance (i.e. the previous year end balance plus the four quarter-end balances, plus the year-end balance (i.e. the previous year end balance plus the four quarter-end balances of fiscal year 2009).

Computational Note

For each measurement the bonus amount payable is calculated as the result achieved for each measurement (i.e. the 0%, 50% or 100% pay-out) times the weighting and multiplied by the relevant Business Unit President’s base salary. Results for each measurement falling between the targeted amounts adjust the pay-out targets by interpolating the percentage of: (i) the resulted achieved minus the lower threshold divided by, (ii) the difference between the higher and lower target, multiplied by (iii) the higher pay-out target percentage.

Additional Provisions

A Business Unit President will not be entitled to a bonus under this Plan, or otherwise with respect to FY 2009, if, prior October 1, 2009, (a) he resigns from employment with the Company, or (b) he is terminated from employment for “Cause.” Termination for “Cause” shall mean termination for “Cause” as defined in the employment agreement (if any) between the Company or its subsidiary and the Business Unit President, and also shall mean termination of the Business Unit President as a result of the Business Unit President’s violation of any provision of the Company’s Code of Business Ethics.

Indicates redacted

ICO, Inc.

FY 2009 Annual Incentive Bonus Plan Matrix- Business Unit Presidents

FY 2009 Operating Income Targets

	Pay-out as a percentage of base salary
Business Unit	0%	50%	100%
IPNA	*	*	*
Bayshore	*	*	*
Europe	*	*	*
Asia Pacific	*	*	*

* Indicates redacted text

ICO, Inc.

FY 2009 Annual Incentive Bonus Plan Matrix- Business Unit Presidents

FY 2009 Cash Flow From Operations

	Pay-out as a percentage of base salary
Business Unit	0%	50%	100%
IPNA	*	*	*
Bayshore	*	*	*
Europe	*	*	*
Asia Pacific	*	*	*
Total of above	*	*	*

* Indicates redacted text

ICO, Inc.

FY 2009 Annual Incentive Bonus Plan Matrix- Business Unit Presidents

FY 2009 ROIC Targets

	Pay-out as a percentage of base salary
Business Unit	0%	50%	100%
IPNA	*	*	*
Bayshore	*	*	*
Europe	*	*	*
Asia Pacific	*	*	*

*Indicates redacted text