Document:

EX-10.13

Western Reserve Bancorp, Inc. and

Western Reserve Bank

Incentive Compensation Plan

The Board of Directors of Western Reserve Bancorp, Inc. and Western Reserve Bank desires to provide
an Incentive Compensation Plan for the employees of the Bank that will achieve the following
objectives:

	 	•	 	Allow the Company to attract and retain talented employees;

	 	•	 	Align the interests of the Company’s employees with those of the Company’s shareholders;

	 	•	 	Recognize that there are several components to the Company’s financial success,
including profitability, growth and asset quality; and

	 	•	 	Provide a quantitative way to measure each of the components of the Company’s financial
success and to allocate rewards equitably among all of the Company’s employees.

To this end, the Board of Directors has adopted The Incentive Compensation Plan (“the Plan”), which
is attached as Exhibit 1.

The Plan seeks to provide a range of potential rewards based on the Company’s results in each of
eight Performance Factors, discussed below. The Plan involves seven Performance Levels, ranging
from acceptable (Level 1) to spectacular (Level 7).

The Plan recognizes that different groups of employees may have different impacts on various
aspects of the Company’s success. Therefore, the Plan divides the Company’s employees into five
Groups:

	 	•	 	CEO;

	 	•	 	Senior Vice Presidents;

	 	•	 	Loan Department Officers;

	 	•	 	Other Officers; and

	 	•	 	Staff.

The Plan also recognizes that certain Groups have a greater impact on all areas of the Company’s
overall results, and thus provides for varying Bonus Percentages in relation to Base Compensation.
Base Compensation is defined as the employee’s actual earnings for the year, exclusive of any
bonuses or fringe benefits.

The Board believes that a properly-designed incentive plan does not over-emphasize one type of
behavior to the detriment of another. For instance, if Loan Growth were the only Performance
Factor, Asset Quality could potentially suffer. Or, if Profitability were the only measure, Growth
might be hampered. Therefore, the Plan provides for eight Performance Factors in three broad
categories:

Page 1

Adopted: January 19, 2005

1

Western Reserve Bancorp, Inc. and

Western Reserve Bank

Incentive Compensation Plan

Overall Profitability:

—Return on Average Consolidated Equity

—Net Interest Margin

—Earnings Per Share Growth

Growth Rates:

—Loan Growth

—Local Deposit Growth

Asset Quality:

—Allowance for Loan Losses as a Percentage of Nonperforming Assets

—Nonperforming Assets as a Percentage of Total Assets

—Net Charge-offs as a Percentage of Average Net Loans

There is also a provision for a Discretionary component of the Incentive Compensation payment.
This component is based on the Company’s overall Performance Level, as determined by the Board of
Directors.

Likewise, the Plan is designed to assign an appropriate Weighting to each of the Performance
Factors for each Group of employees. For example, the CEO’s potential bonus is based 45% on
Overall Profitability, 30% on Growth, 15% on Asset Quality, and 10% on the Board’s Discretion.
Loan Department Officers’ bonuses are based 30% on Overall Profitability, 30% on Growth, 15% on
Asset Quality, and 25% on the Board’s discretion. Staff, who have no control over Asset Quality,
have their bonuses calculated 30% on Overall Profitability, 30% on Growth, 0% on Asset Quality, and
40% on the Board’s discretion.

The Plan provides for a Minimum Threshold to be met before any payments may be made under the Plan.
This Threshold is based on the Board-approved budget for the Plan year. The Threshold is computed
as follows:

	 	•	 	The Company must have Net Income (after payment of any Incentive Compensation) of at
least 50% of budget in order for any payments to be made under the Plan. (Obviously, at
this level of performance, the Profitability targets would not have been met.)

	 	•	 	If the Company earns between 50% and 99% of budgeted net income, any payments otherwise
earned under the Plan will be pro-rated to that percentage.

	 	•	 	If the Company earns at least 100% of budgeted net income, the payments will be computed
as per the Plan.

No payment of Incentive Compensation for the Plan year will be made until after the Company’s
year-end results are finalized and released.

The Board of Directors reserves the right to modify or terminate this Plan at any time.

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Adopted: January 19, 2005

2

Western Reserve Bancorp, Inc. and Western Reserve Bank

Incentive Compensation Plan

Exhibit 1

A. Potential Bonuses as Percent of Base Compensation

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Groups
	Performance	 	 	 	 	 	Senior	 	Loan Dept.	 	Other	 	 
	Level	 	CEO	 	VPs	 	Officers	 	Officers	 	Staff
	1

	 	 	10	%	 	 	10	%	 	 	5	%	 	 	5	%	 	 	3.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	 	20	%	 	 	15	%	 	 	8	%	 	 	8	%	 	 	3.5	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	 	30	%	 	 	20	%	 	 	11	%	 	 	11	%	 	 	4.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	 	40	%	 	 	25	%	 	 	14	%	 	 	14	%	 	 	4.5	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	 	50	%	 	 	30	%	 	 	17	%	 	 	17	%	 	 	5.0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6

	 	 	60	%	 	 	35	%	 	 	20	%	 	 	20	%	 	 	5.5	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7

	 	 	70	%	 	 	40	%	 	 	23	%	 	 	23	%	 	 	6.0	%

Page 3

Adopted: January 19, 2005

3

Western Reserve Bancorp, Inc. and Western Reserve Bank

Incentive Compensation Plan

Exhibit 1

B. Performance Factors and Weightings

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Senior	 	Loan Dept.	 	Other	 	 
	 	 	CEO	 	VPs	 	Officers	 	Officers	 	Staff
	Overall Profitability	 	45%	 	45%	 	30%	 	45%	 	30%
	Return on Avg. Equity
	 	 	15	%	 	 	15	%	 	 	10	%	 	 	15	%	 	 	10	%
	Net Interest Margin
	 	 	15	%	 	 	15	%	 	 	10	%	 	 	15	%	 	 	10	%
	Core EPS Growth
	 	 	15	%	 	 	15	%	 	 	10	%	 	 	15	%	 	 	10	%
	Growth Rates
	 	 	30	%	 	 	30	%	 	 	30	%	 	 	30	%	 	 	30	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Loan Growth
	 	 	15	%	 	 	15	%	 	 	15	%	 	 	15	%	 	 	15	%
	Local Deposit Growth
	 	 	15	%	 	 	15	%	 	 	15	%	 	 	15	%	 	 	15	%
	Asset Quality
	 	 	15	%	 	 	15	%	 	 	15	%	 	 	0	%	 	 	0	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Loan Loss Reserves/
Non-Performing Assets
	 	 	5	%	 	 	5	%	 	 	5	%	 	 	 	 	 	 	 	 
	Non-Performing
Assets/Total Assets
	 	 	5	%	 	 	5	%	 	 	5	%	 	 	 	 	 	 	 	 
	Net Charge-Offs/
Average. Loans
	 	 	5	%	 	 	5	%	 	 	5	%	 	 	 	 	 	 	 	 
	Discretionary
	 	 	10	%	 	 	10	%	 	 	25	%	 	 	25	%	 	 	40	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Weighting
	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

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Adopted: January 19, 2005

4

Western Reserve Bancorp, Inc. and Western Reserve Bank

Incentive Compensation Plan

Exhibit 1

C. Performance Targets

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Loan Loss	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Reserves/	 	Non-	 	Net
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Local	 	Non-	 	Performing	 	Charge-
	Performance	 	Return on	 	Net Interest	 	EPS	 	Loan	 	Deposit	 	Performing	 	Assets/	 	Offs/
	Level	 	Avg. Equity	 	Margin	 	Growth	 	Growth	 	Growth	 	Assets	 	Total Assets	 	Avg. Loans
	1

	 	 	8.00	%	 	 	4.00	%	 	 	6.0	%	 	 	14.0	%	 	 	12.0	%	 	 	200	%	 	 	0.60	%	 	 	0.15	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	 	10.00	%	 	 	4.25	%	 	 	9.0	%	 	 	17.0	%	 	 	15.0	%	 	 	250	%	 	 	0.50	%	 	 	0.13	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	 	12.00	%	 	 	4.50	%	 	 	12.0	%	 	 	20.0	%	 	 	18.0	%	 	 	300	%	 	 	0.40	%	 	 	0.10	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	 	14.00	%	 	 	4.75	%	 	 	15.0	%	 	 	23.0	%	 	 	21.0	%	 	 	400	%	 	 	0.30	%	 	 	0.07	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	 	16.00	%	 	 	5.00	%	 	 	18.0	%	 	 	26.0	%	 	 	24.0	%	 	 	500	%	 	 	0.20	%	 	 	0.04	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6

	 	 	18.00	%	 	 	5.25	%	 	 	21.0	%	 	 	29.0	%	 	 	27.0	%	 	 	600	%	 	 	0.10	%	 	 	0.02	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7

	 	 	20.00	%	 	 	5.50	%	 	 	24.0	%	 	 	32.0	%	 	 	30.0	%	 	 	700	%	 	 	0.00	%	 	 	0.00	%

Page 5

Adopted: January 19, 2005

5Ex. 10.1 - JCB Employee Agmt. 1-20-06

    SECOND
      AMENDMENT TO

    SECOND
      AMENDED AND RESTATED

    EMPLOYMENT
      AGREEMENT

    

    This
      Second Amendment to Second Amended and Restated Employment Agreement (“Second
      Amendment”) is entered into by and between ICO, Inc. (the “Company”) and Jon C.
      Biro (“Employee”), to be effective January 20, 2006 (the “Effective
      Date”).

     

    WHEREAS,
      Employee and the Company entered into an Employment Agreement (the “Agreement”),
      being effective as of January 28, 2004, which Agreement was amended by the
      First
      Amendment to Second Amended and Restated Employment Agreement (the “First
      Amendment”), being effective February 11, 2005; and

    

    WHEREAS,
      the parties desire to further amend the Agreement, as set forth
      herein.

    

    NOW,
      THEREFORE, for and in consideration of the mutual promises, covenants, and
      obligations contained herein, the Company and Employee agree as
      follows:

     

    
      	1.  	
              Pursuant
                to Section 1.1(a) of the Agreement, the parties hereby agree to extend
                the
                Agreement for an additional two-year Extension
                Period.

            

    

    

    
      	2.  	
              It
                is the parties’ agreement that Employee’s Annual Incentive Bonus (as
                defined in Section 2.2 of the Agreement) for the Company’s fiscal year
                2006 (commencing October 1, 2006) shall be calculated pursuant to
                Exhibit
                A
                hereto, with the following clarification: For the purpose of the
                fiscal
                year 2006 incentive calculation, “Corporate
                Expenses,”
                as defined on page 2 of Exhibit A, shall also be adjusted (the
                “Adjustment”) to exclude unbudgeted business unit related expenses that
                are paid and included in corporate expenses for the Company’s fiscal year
                2006. The Adjustment shall be reviewed and approved by the Company’s Chief
                Executive Officer. 

            

    

    

    
      	3.  	
              Effective
                November 1, 2005, Employee’s Base Salary (as defined in Section 2.1 of the
                Agreement) is increased to Two Hundred and Thirty-Five Thousand Dollars
                ($235,000) per annum.

            

    

    

    IN
      WITNESS WHEREOF,
      the
      Company and Employee have duly executed this Agreement in multiple originals
      to
      be effective on the Effective Date. 

                            

    
      
        	
                ICO,
                  Inc.

              	 	Employee
	
                 

                 
                  /s/ A. John Knapp,
                  Jr.                      
                  

              	 	 

                 
                  /s/ Jon C. Biro     
                                         
                  

              
	
                 
                  A. John Knapp, Jr.

              	 	
                Jon
                  C. Biro

              
	 President & Chief Executive
                Officer	 	
                Chief
                  Financial Officer

              
	 	 	 
	 Date:
                January 20, 2005	 	 Date:
                January 20, 2005

      

     

    
      
        
           

          Page
            1
of 
            3

           

          Initials
            _______

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    

    Exhibit
      A

    

    
      	
              FY
                2006 Incentive Plan Matrix- CFO

            
	 
	 	 	
              Pay-out
                as a percentage of Base Salary *

            
	
              Measurement

            	
              Weighting

            	
              0%

            	
              24%

            	
              48%

            
	
              Corporate
                Expenses (1)

            	
              33%

            	
               

            	
              
              

            	
               

               

            
	
              ICO,
                Inc. consolidated ROE

            	
              33%

            	
               

               

            	
               

            	
               

            
	
              Subjective/Qualitative
                Factors

            	
              33%

            	
               

               

            	
               

            	
               

            

    

    

    
      
        
           

          Page
            2
of
            3

           

          Initials
            _______

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    Exhibit
      A (continued)

    

    

    ICO,
      Inc.

    FY
      2006 Incentive Plan Matrix - CFO

    Explanation
      of Measurement Definitions and additional Explanatory
      Notes

    

    

    Measurement
      definitions

    

    * “Corporate
      Expenses”:
      Defined as Corporate general and administrative expenses, excluding stock option
      expenses and excluding Sarbanes-Oxley 404 implementation expenses. These targets
      assume the SEC and/or PCAOB will provide relief to small companies (including
      ICO) to reduce the burden of SOX 404. If this relief is not granted then the
      targets shall be adjusted to factor in SOX 404 expenses for FY 2006 (i.e.
      exclude such expenses from Corporate expenses for the purpose of the incentive
      calculation expenses for unbudgeted third-party-404 related audit and other
      fees
      necessary to comply).

    

    * “ROE”:
      Net
      income from continuing operations, minus preferred dividends (whether paid
      or
      accrued towards Convertible Preferred Stock liquidation preference), divided
      by
      Stockholders' equity, less the liquidation preference of Convertible Preferred
      Stock. For purposes of this calculation, Stockholders' equity and liquidation
      preference balances shall be averaged using the previous four (4) quarter-end
      balances, plus the prior year-end balance (e.g. for FY 2006 bonus calculation
      the FY 2005 previous year end-balance plus the four quarter-end balances of
      fiscal year 2006).

    

    Computational
      Note

    For
      each
      measurement the bonus amount payable is calculated as the result achieved for
      each measurement (i.e. the 0%, 24% or 48% pay-out) times the weighting and
      multiplied by the CFO’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, times (iii) the higher
      pay-out target percentage.

    

    Additional
      Explanatory Notes

    * Subject
      to Compensation Committee approval of all terms of grant, and subject to options
      being available under an existing ICO, Inc. employee stock option plan, for
      bonus amounts achieved in any measurement category based on exceeding any
      applicable 24% target, at the Committee’s discretion the Committee may, if
      requested by the CFO, award stock options in place of a portion of incentive
      cash compensation, priced, with such options vesting immediately and using
      the
      Company’s option pricing model in accordance with SFAS 123R.

    

    
      Page 3
        of 
        3

       

      Initials
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