Document:

Exhibit 10.3 - Third Amendment to Biro employment agreement

    
      

    

    Exhibit
      10.3

    

    THIRD
      AMENDMENT TO

    SECOND
      AMENDED AND RESTATED

    EMPLOYMENT
      AGREEMENT

    

    This
      Third Amendment to Second Amended and Restated Employment Agreement (“Third
      Amendment”) is entered into by and between ICO, Inc. (the “Company”) and Jon C.
      Biro (“Employee”), to be effective January 25, 2007 (the “Effective
      Date”).

     

    WHEREAS,
      Employee and the Company entered into an Employment Agreement (the “Agreement”),
      being effective as of January 28, 2004, which Agreement has been amended by
      amendments effective February 11, 2005 and January 20, 2006; 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.

            	
              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
                2007 (commencing October 1, 2006) shall be calculated pursuant to
                Exhibit
                A
                hereto. 

            

    

    

    
      	 	
              2.

            	
              Effective
                January 1, 2007, Employee’s Base Salary (as defined in Section 2.1 of the
                Agreement) is increased to Two Hundred and Fifty Thousand and Four
                Hundred
                and Eighty Dollars ($250,480) per
                annum.

            

    

    

    
      	 	
              3.

            	
              Effective
                January 1, 2007, the Employee shall no longer be entitled to the
                Vehicle
                Allowance described in Section 2.5(a) of the
                Agreement.

            

    

    

    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

            	 	 
	 	 	 
	
              Date:

            	
              January
                31, 2007

            	 	
              Date:

            	
              January
                31, 2007

            

    

    

    

    
      
         

      

      
        Page
          1 of
          2

        
          

        

      

      
         

      

    

    

    Exhibit
      A (portions redacted)

    

     

    
      	
              ICO,
                Inc. Fiscal Year 2007 Incentive Plan Matrix- Chief Financial
                Officer

            
	
               

            
	
               

            	
               

            	
              Pay-out
                as a percentage of Base Salary *

            
	
              Measurement

            	
              Weighting

            	
              0%

            	
              32%

            	
              64%

            
	
              Corporate
                Expenses

            	 	 	 	 
	
              [redacted/specific
                operation performance]

            	 	 	 	 
	
              ICO,
                Inc. consolidated ROE

            	 	 	 	 
	
              Subjective/Qualitative
                Factors

            	 	 	 	 

    

    ** Also
      subject to Compensation Committee approval.

    

    ICO,
      Inc.

    FY
      2007 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 business unit expenses paid for by Corporate and included
      in Corporate expenses. These expenses include but are not limited to: banking
      fees formerly paid by ICO Polymers North America and Bayshore, fees related
      to
      global tax planning, expenses for two employees transferred from Europe,
      Executive Leadership Team conference fees, and consulting and legal fees to
      establish restricted stock/deferred compensation plans.

    

    *     “ROE”:
      Net
      income from continuing operations, excluding effect of preferred stock buy
      back,
      minus preferred dividends (whether paid or accrued towards preferred stock
      liquidation preference), divided by Stockholders' equity, less the liquidation
      preference of the 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 year-end balance (i.e.
      the
      previous year end balance plus the four quarter-end balances of fiscal year
      2007).

    

    Computational
      Note

    

    For
      each
      measurement the bonus amount payable is calculated as the result achieved for
      each measurement (i.e. the 0%, 32% or 64% 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 result 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
      Explanatory Notes

    

    *     At
      the
      option of the CFO, subject to the approval of the Compensation Committee, and
      subject to shareholder approval of amendments to the 1998 employee stock option
      plan to permit restricted stock grants, the CFO may be awarded up to 25% of
      the
      incentive compensation award in the form of restricted stock with a vesting
      schedule approved by the Compensation Committee.

    

    *     Base
      Salary used for calculation shall be Base Salary effective as of January 1,
      2007.

     

     

    Page
      2 of 2Form of First Amendment to Stock Option Agreement

    Exhibit
      10.1

     

    Form
      of

    

    FIRST
      AMENDMENT TO STOCK OPTION AGREEMENT

    

    THIS
      FIRST AMENDMENT TO STOCK OPTION AGREEMENT ("Amendment")
      is made as of this ____ day of ______________, 2007 by and between
      _________________ ("Executive") and COMMUNITY
      BANKS, INC.
      ("CBI").

    

    WHEREAS,
      CBI has granted an option to purchase ___________ shares of CBI Common Stock
      to
      Executive (the “2006 Option”) pursuant to a certain Stock Option Agreement dated
      January 25, 2006 (the "Agreement"), and 

    

    WHEREAS,
      the Compensation Committee of the Board of Directors of CBI decided on January
      22, 2007 to grant an additional option to Executive to purchase __________
      shares of CBI common stock, upon the condition that Executive agree to an
      extension of the vesting period for the 2006 Option, and

    

    WHEREAS,
      the Executive is willing to extend the vesting period of the 2006 Option in
      consideration of the grant of options to be made in 2007, 

    

    NOW
      THEREFORE, in consideration of the foregoing, and intending to be legally bound
      hereby, the parties agree as follows:

    

    1.
      The
      unnumbered section of the Agreement entitled "VESTING
      OF ISO's GRANTED January 25, 2006"
      is
      hereby amended and restated to read in its entirety as follows:

    

    Your
      ISO(s) may first be exercised on an after one year from the grant date, but
      not
      before that time. On and after one year, and prior to two years from the date
      of
      the grant, your ISO's may be exercised for up to 20% of the total shares the
      subject to the ISO's. On and after two years, and prior to three years from
      the
      date of the grant, your ISO's may be exercised for up to 40% of the total shares
      the subject to the ISO's, minus the number of shares previously purchased by
      the
      exercise of ISO's (adjusted for stock dividends, stock splits, combination
      of
      shares, recapitalization, and what the Compensation Committee considers in
      its
      sole discretion to be similar circumstances.) On and after three years, and
      prior to four years from the date of the grant, your ISO's may be exercised
      for
      up to 60% of the total shares the subject to the ISO's, minus the number of
      shares previously purchased by the exercise of ISO's (adjusted for stock
      dividends, stock splits, combination of shares, recapitalization, and what
      the
      Compensation Committee considers in its sole discretion to be similar
      circumstances.) On and after four years, and prior to five years from the date
      of the grant, your ISO's may be exercised for up to 80% of the total shares
      the
      subject to the ISO's, minus the number of shares previously purchased by the
      exercise of ISO's (adjusted for stock dividends, stock splits, combination
      of
      shares, recapitalization, and what the Compensation Committee considers in
      its
      sole discretion to be similar circumstances.) On and after five years from
      the
      date of the grant, your ISO's may be exercised for up to 100% of the total
      shares the subject to the ISO's, minus the number of shares previously purchased
      by the exercise of ISO's (adjusted for stock dividends, stock splits,
      combination of shares, recapitalization, and what the Compensation Committee
      considers in its sole discretion to be similar circumstances.) No fractional
      shares shall be issued or delivered. The ISO's shall terminate and shall not
      be
      exercisable after the expiration of seven years from the date of
      grant.

    

    2.
      The
      unnumbered section of the Agreement entitled "VESTING
      OF NQSO's"
      is
      hereby amended and restated to read in its entirety as follows:

    

    Your
      NQSO may first be exercised on an after one year from the grant date, but not
      before that time. On and after one year, and prior to two years from the date
      of
      the grant, your NQSO's may be exercised for up to 20% of the total shares the
      subject to the NQSO's. On and after two years, and prior to three years from
      the
      date of the grant, your NQSO's may be exercised for up to 40% of the total
      shares the subject to the NQSO's, minus the number of shares previously
      purchased by the exercise of NQSO's (adjusted for stock dividends, stock splits,
      combination of shares, recapitalization, and what the Compensation Committee
      considers in its sole discretion to be similar circumstances.) On and after
      three years, and prior to four years from the date of the grant, your NQSO's
      may
      be exercised for up to 60% of the total shares the subject to the NQSO's, minus
      the number of shares previously purchased by the exercise of NQSO's (adjusted
      for stock dividends, stock splits, combination of shares, recapitalization,
      and
      what the Compensation Committee considers in its sole discretion to be similar
      circumstances.) On and after four years, and prior to five years from the date
      of the grant, your NQSO's may be exercised for up to 80% of the total shares
      the
      subject to the NQSO's, minus the number of shares previously purchased by the
      exercise of NQSO's (adjusted for stock dividends, stock splits, combination
      of
      shares, recapitalization, and what the Compensation Committee considers in
      its
      sole discretion to be similar circumstances.) On and after five years from
      the
      date of the grant, your NQSO's may be exercised for up to 100% of the total
      shares the subject to the NQSO's, minus the number of shares previously
      purchased by the exercise of NQSO's (adjusted for stock dividends, stock splits,
      combination of shares, recapitalization, and what the Compensation Committee
      considers in its sole discretion to be similar circumstances.) No fractional
      shares shall be issued or delivered. The NQSO's shall terminate and shall not
      be
      exercisable after the expiration of seven years from the date of
      grant.

    

    3.
      This
      Amendment shall be considered an amendment to and modification of the Agreement,
      which may not be further modified except by written agreement executed by the
      parties thereto. Except as expressly modified hereby, the Agreement shall remain
      in full force and effect.

     

    4.
      This
      Amendment shall be binding upon and an inure to the benefit of the parties
      hereto, their respective successors and assigns.

    

    5.
      This
      Amendment shall be governed by and construed in accordance to the laws of the
      Commonwealth of Pennsylvania.

    

    

    IN
      WITNESS WHEREOF, and intending to be legally bound hereby, the parties have
      set
      their hands. 

    

    

    ATTEST:                                                                          
      COMMUNITY BANKS, INC.

    

    

    _____________________                                               
      BY: ________________________

    

                                                                                                    
      ________________________

                                                                                                    
      (Name and Title)

    

    

    WITNESS:

    

    

    _____________________                                                 ____________________________

                                                                                              
      Executive

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