UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.              )

 

 

 

ICO Global Communications (Holdings) Limited

11700 Plaza America Drive, Suite 1010

Reston, Virginia 20190

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 15, 2007

Dear Stockholder:

You are cordially invited to attend the 2007 Annual Meeting of Stockholders (“Annual Meeting”) of ICO GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED, a Delaware corporation (“Company” or “ICO”). The meeting will be held on FRIDAY, JUNE 15, 2007 at 12:00 p.m. local time at the Hyatt Regency Hotel, 1800 Presidents Street, Reston, Virginia 20190 for the following purposes:

1.                To elect 8 directors to serve for the ensuing year and until their successors are elected.

2.                To approve the Company’s Amended and Restated 2000 Stock Incentive Plan.

3.                To ratify the selection by the Audit Committee of the Board of Directors of the independent registered public accounting firm of Deloitte & Touche LLP as independent auditor of the Company for its fiscal year ending December 31, 2007.

4.                To conduct any other business properly brought before the meeting.

These items of business are more fully described in the proxy statement accompanying this notice. The Company’s annual report for the year ended December 31, 2006 is also enclosed.

The record date for the Annual Meeting is April 18, 2007. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof.

By Order of the Board of Directors

John L. Flynn

Corporate Secretary

Reston, Virginia

APRIL 30, 2007

You are cordially invited to attend the meeting in person. Registration and seating will begin at 11:30 a.m. local time. Stockholders will be asked to sign-in and may be asked to provide valid photo identification. Whether or not you expect to attend the meeting, please complete, date, sign and return the enclosed proxy, or vote over the telephone or the Internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.

ICO Global Communications (Holdings) Limited
11700 Plaza America Drive, Suite 1010
Reston, Virginia 20190

PROXY STATEMENT
FOR THE 2007 ANNUAL MEETING OF STOCKHOLDERS

JUNE 15, 2007

QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING

Why am I receiving these materials?

We have sent you this proxy statement and the enclosed proxy card because the Board of Directors (“Board of Directors”) of ICO Global Communications (Holdings) Limited (“Company” or “ICO”) is soliciting your proxy to vote at the 2007 Annual Meeting of Stockholders (“Annual Meeting”). You are invited to attend the Annual Meeting to vote on the proposals described in this proxy statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the telephone or on the Internet.

The Company intends to mail this proxy statement and accompanying proxy card on or about April 30, 2007 to all stockholders of record entitled to vote at the Annual Meeting.

Who can vote at the Annual Meeting?

Only stockholders of record at the close of business on April 18, 2007 (“Record Date”) will be entitled to vote at the Annual Meeting. On the Record Date, there were 143,336,708 shares of Class A common stock outstanding and entitled to vote (one vote per share) and 54,840,000 shares of Class B common stock outstanding and entitled to vote (ten votes per share).

Stockholders of Record: Shares Registered in Your Name

If on the Record Date your shares were registered directly in your name with ICO’s transfer agent, Mellon Investor Services LLC, then you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy card or vote by proxy over the telephone or on the Internet as instructed below to ensure your vote is counted.

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Beneficial Owner: Shares Registered in the Name of a Broker or Bank

If on the Record Date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other agent.

What am I voting on?

There are three matters scheduled for a vote:

·       Election of 8 directors;

·       Approval of the Company’s Amended and Restated 2000 Stock Incentive Plan; and

·       Ratification of the selection of the independent registered public accounting firm of Deloitte & Touche LLP as independent auditor of the Company for its fiscal year ending December 31, 2007.

How do I vote?

You may either vote “For” all the nominees to the Board of Directors or you may “Withhold” your vote for any nominee you specify. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting. The procedures for voting are fairly simple:

Stockholder of Record: Shares Registered in Your Name

If you are a stockholder of record, you may vote in person at the Annual Meeting, vote by proxy using the enclosed proxy card, vote by proxy over the telephone, or vote by proxy on the Internet. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote in person even if you have already voted by proxy.

·       To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive.

·       To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.

·       To vote over the telephone, dial toll-free 1-866-540-5760 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the enclosed proxy card. Your vote must be received by 11:59 PM Eastern Time on June 14, 2007, the day prior to the Annual Meeting to be counted.

·       To vote on the Internet, go to http://www.proxyvoting.com/icog to complete an electronic proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. Your vote must be received by 11:59 PM Eastern Time on June 14, 2007, the day prior to the Annual Meeting to be counted.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from ICO. Simply complete and mail the proxy card to ensure that your vote is

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counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or bank. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent. You may contact your broker or bank to request a proxy form.

We provide Internet proxy voting to allow you to vote your shares on-line, with procedures designed to ensure the authenticity and correctness of your proxy vote. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

How many votes do I have?

On each matter to be voted upon, you have one vote for each share of Class A common stock you own as of the Record Date and ten votes for each share of Class B common stock you own as of the Record Date.

What if I return a proxy card but do not make specific choices?

If you return a signed and dated proxy card without marking any voting selections, your shares will be voted “For” the election of all 8 nominees for director, “For” the approval of the Amended and Restated 2000 Stock Incentive Plan, and “For” the Ratification of the selection of the independent registered public accounting firm of Deloitte & Touche LLP as independent auditor of the Company for its fiscal year ending December 31, 2007. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his best judgment.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

Can I change my vote after submitting my proxy?

Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:

·       You may submit another properly completed proxy card with a later date.

·       You may send a timely written notice that you are revoking your proxy to the Company’s Corporate Secretary at 11700 Plaza America Drive, Suite 1010, Reston, Virginia 20190.

·       You may attend the Annual Meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy.

If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.

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When are stockholder proposals due for next year’s Annual Meeting?

To be included in next year’s proxy materials, your proposal must be submitted in writing by January 1, 2008 to ICO’s Corporate Secretary at 11700 Plaza America Drive, Suite 1010, Reston, Virginia 20190.

A stockholder proposal or nomination for director that will not be included in next year’s proxy materials, but that a stockholder intends to present in person at next year’s Annual Meeting, must comply with the notice, information and consent provisions contained in the Company’s Bylaws. In part, the Bylaws provide that to timely submit a proposal or nominate a director you must do so by submitting the proposal or nomination in writing, which must be delivered to or mailed and received by the Company’s Corporate Secretary at the Company’s principal executive offices no later than the close of business on April 16, 2008 (60 days prior to the first anniversary of the 2007 Annual Meeting Date) nor earlier than the close of business on March 17, 2008 (90 days prior to the first anniversary of the 2007 Annual Meeting date). However, if the date of the meeting is changed by more than 30 days from such anniversary date, to be timely, notice by the stockholder must be received no later than the close of business on the earlier of the 7th day following the date on which notice of the date of the meeting was mailed or a public announcement of the meeting was made. The Company’s Bylaws contain additional requirements to properly submit a proposal or nominate a director. If you plan to submit a proposal or nominate a director, please review the Company’s Bylaws carefully. You may obtain a copy of the Company’s Bylaws by mailing a written request to the Corporate Secretary of ICO at 11700 Plaza America Drive, Suite 1010, Reston, Virginia 20190 or by visiting the Company’s website at www.ico.com.

How are votes counted?

Votes will be counted by the inspector of election appointed for the meeting, who will separately count “For” and “Withhold” and, with respect to proposals other than the election of directors, “Against” votes, abstentions and broker non-votes. Abstentions will be counted towards the vote total for each proposal, and will have the same effect as “Against” votes. Broker non-votes have no effect and will not be counted towards the vote total for any proposal.

What are “broker non-votes”?

Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Currently under the Nasdaq regulations, the election of directors and the ratification of the selection of independent registered public accounting firms are considered routine matters for which brokerage firms may vote shares for which they have not received voting instructions.

How many votes are needed to approve each proposal?

·       For the election of directors, Proposal 1, the 8 nominees receiving the most “For” votes (from the holders of votes of shares present in person or represented by proxy and entitled to vote on the election of directors) will be elected. Only votes “For” or “Withheld” will affect the outcome.

·       To be approved, Proposal No. 2, Approval of the Company’s Amended and Restated 2000 Stock Incentive Plan, must receive “For” votes from the holders of a majority of shares present in person or by proxy. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect.

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·       To be approved, Proposal No. 3, Ratification of the selection by the Audit Committee of the Board of Directors of the independent registered public accounting firm of Deloitte & Touche LLP as independent auditor, must receive “For” votes from the holders of a majority of shares present in person or by proxy. If you “Abstain” from voting, it will have the same effect as an “Against” vote.

What is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding shares representing a majority of the combined voting power of the outstanding Class A common stock and Class B common stock are present at the meeting in person or represented by proxy. On the Record Date, there were 143,336,708 of Class A common stock outstanding and 54,840,000 shares of Class B common stock outstanding. Thus holders of shares representing 345,868,355 votes must be present in person or represented by proxy to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy may adjourn the meeting to another date.

How can I find out the results of the voting at the Annual Meeting?

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in the Company’s quarterly report on Form 10-Q for the second quarter of 2007.

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PROPOSAL 1

ELECTION OF DIRECTORS

The Company’s Board of Directors consists of 8 directors. There are 8 nominees for director this year. Each director to be elected will hold office until the next Annual Meeting of stockholders and until his or her successor is elected, or, if sooner, until the director’s death, resignation or removal. Each of the nominees listed below is currently a director of the Company who was previously elected by the stockholders. The Company encourages nominees for directors to attend the Annual Meeting. Three of the directors attended the 2006 Annual Meeting of Stockholders.

Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. The 8 nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the 8 nominees named below. If any nominee becomes unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by the Company’s management. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that any nominee will be unable to serve.

Nominees

 

The following is a brief biography of each nominee for director.

Craig O. McCaw—Director since May 2000. Mr. McCaw is currently Chairman of both the Company and ICO North America, Inc. (“ICO North America”). Since 1993, Mr. McCaw has been Chairman, Chief Executive Officer, and a member of Eagle River Investments, LLC, a private company formed to focus on strategic investments in the telecommunications industry, and its affiliated companies. Mr. McCaw founded Clearwire Corporation in October 2003 and currently serves as its Chairman of the Board of Directors. Mr. McCaw was a director of Nextel Communications, Inc., from July 1995 until December 2003, and a director of XO Communications, Inc. (formerly known as NEXTLINK Communications, Inc.) (“XO”), from January 1997 until January 2002. From September 1994 to July 1997, he was also XO’s Chief Executive Officer. From 1974 to September 1994, Mr. McCaw served as Chairman and Chief Executive Officer of McCaw Cellular Communications, Inc., which he built into the nation’s leading provider of cellular services in more than 100 U.S. cities, until the company was sold to AT&T Corp. in August 1994. Mr. McCaw is also a Director of RadioFrame Networks, Inc and Tello Corporation.

J. Timothy Bryan—Chief Executive Officer and Director. On November 1, 2005, Mr. Bryan became the Chief Executive Officer of both the Company and ICO North America. Mr. Bryan has served on our Board of Directors since October 2001. He also served on the Boards of Open TV, Inc., a Liberty Media Corporation affiliate,  the Samaritan Institute and Clearwire Corporation. From September 2003 until November 2005, Mr. Bryan was a private investor in, and consultant to, the telecommunications industry

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and private equity firms interested in investing in telecommunications businesses. From May 2001 until September 2003, Mr. Bryan was the Chief Financial Officer of Eagle River, Inc. Mr. Bryan previously served as President of United Pan-Europe Communications NV and as Chief Financial Officer and member of the Office of the Chairman of UnitedGlobalCom, Inc. Prior to UnitedGlobalCom, Mr. Bryan served as Treasurer of Jones Intercable, Inc. Mr. Bryan has previously served on the Board of Directors of Nextel Communications and on the Board of Management and the Supervisory Board of UPC. Mr. Bryan is a graduate of Duke University.

Donna P. Alderman—Executive Vice President, Corporate Development and Strategy and Director. On April 1, 2006, Ms. Alderman became the Company’s Executive Vice President, Corporate Development and Strategy. Ms. Alderman is also a Director of ICO North America and has served on the Board of Directors and numerous special committees of the Company since May 2000. Prior to that, Ms. Alderman was a founding and senior partner of Matlin Patterson Global Opportunities Fund, a private equity fund. Prior to that, she was a Managing Director of Credit Suisse First Boston and co-managed the Distressed Debt and Special Situations Group. She has held numerous senior investment and trading positions at leading investment banks, including Oppenheimer & Co. Inc., Jefferies & Company, Inc. and Bear Stearns. Ms. Alderman graduated from Vassar College and the J.L. Kellogg Graduate School of Management, EDP, at Northwestern University.

Samuel L. Ginn—Director since May 2006 and from October 2001 to April 2004. Mr. Ginn has over 43 years of experience in the telecommunications industry. Mr. Ginn was Chairman and Chief Executive Officer of AirTouch Communications, Inc. from December 1993 until its merger with Vodafone Group Public Limited Company in June 1999. Upon the Vodafone-AirTouch merger, he became Chairman of Vodafone, a position he held until May 2000. Since leaving Vodafone, he has continued to be a private investor and advisor to several startup companies in the telecommunications industry. Mr. Ginn currently serves on the Board of Directors of Chevron Corporation, Templeton Emerging Markets Investment Trust and TVG Capital Partners Limited and as an advisor. Mr. Ginn is a graduate of the School of Engineering of Auburn University.

Barry L. Rowan—Director since June 2006. Barry Rowan has over 24 years of financial and operational experience in building technology and communications companies. From August 2005 until June 2006, he was Executive Vice President, Chief Financial Officer of Nextel Partners and its subsidiaries. Mr. Rowan joined Nextel Partners in August 2003 as Vice President and Chief Financial Officer, and from August 2003 to August 2004 he also served as the company’s Treasurer. From January 2002 to August 2003, he was a principal at Rowan & Company, LLC, a consulting and private investment firm, and from 1999 to 2001, Mr. Rowan was the Chief Financial Officer at Velocom, Inc., an international communications company, during which time he served as Chief Executive Officer of Vesper, the company’s Brazilian subsidiary, for six months. From 1992 until 1999, Mr. Rowan held a number of executive management positions at Fluke Corporation, including Chief Financial Officer, and Senior Vice President and Division General Manager. Mr. Rowan earned his M.B.A. from the Harvard Business School, and his B.S., summa cum laude, in Business Administration and Chemical Biology from The College of Idaho.

R. Gerard Salemme—Director since May 2002. Mr. Salemme has over 27 years of experience in the telecommunications industry. Since November 2003, he has been Executive Vice President—Strategy, Policy and External Affairs and a Director of Clearwire Corporation. He is also a Principal of Eagle River Holdings, LLC, an affiliate of Eagle River Satellite Holdings, LLC. From May 1997 to June 2003, Mr. Salemme was Senior Vice President, External Affairs of XO, and, before joining XO, he was AT&T Corporation’s Vice President of Government Affairs, directing AT&T’s federal regulatory public policy organization, and overseeing AT&T’s participation in the FCC’s narrowband and broadband PCS auctions. Prior to joining AT&T, Mr. Salemme was Senior Vice President, External Affairs for McCaw Cellular Communications Inc. He also held the position of Senior Telecommunications Policy Analyst for

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the U.S. House of Representatives Subcommittee on Telecommunications and Finance. He also served as Chief of Staff to Congressman Ed Markey of Massachusetts. Mr. Salemme earned a B.A. in Political Science and Economics, and an M.A. in Economics, from Boston College.

David Wasserman—Director since April 2002. Mr. Wasserman is a financial principal at Clayton, Dubilier & Rice, Inc. which he joined in 1998. Prior to joining CD&R, he was employed at Goldman, Sachs & Co. in the Principal Investment Area. He has also been employed by Fidelity Capital and as a management consultant. Mr. Wasserman serves on the Board of Directors of Culligan Ltd., Covansys Corporation and The Hertz Corporation and formerly served as a director of Kinko’s Inc.

Benjamin G. Wolff—Director since September 2005. Mr. Wolff currently serves as a director and the Chief Executive Officer of Clearwire Corporation. In addition to his positions with Clearwire, Mr. Wolff serves as the President of Eagle River Investments, LLC, Eagle River Holdings, LLC and Eagle River, Inc. From January 1994 until April 2004, Mr. Wolff was a lawyer with Davis Wright Tremaine LLP, where he became a partner in 1998. Mr. Wolff’s practice focused on mergers and acquisitions, corporate finance and strategic alliance transactions. While with Davis Wright Tremaine LLP, he co-chaired the firm’s Business Transactions Department, served on the firm’s Executive Committee, and had primary responsibility for representing clients such as Allied Signal, Eagle River, Intel, Starbucks Coffee Company and XO in various corporate and transactional matters. In 2003, Mr. Wolff was identified as one of the top 45 lawyers in the country under the age of 45 by the American Lawyer magazine.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR EACH NAMED NOMINEE

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INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Independence of the Board of Directors

Controlled Company

Under the NASD Marketplace Rules, a “controlled company” is a company of which more than 50% of the voting power is held by an individual, a group or another company. The Board of Directors has determined that the Company is a “controlled company” within the meaning of the Nasdaq listing standards. The basis for the Board of Directors’ determination that the Company is a “controlled company” is the beneficial ownership of approximately 69% of the voting power of the Company’s outstanding capital stock, as of the Record Date, by Eagle River Satellite Holdings, LLC. Craig McCaw is the sole manager and beneficial member of Eagle River Investments, LLC, which is the sole member of Eagle River Satellite Holdings, LLC. As a “controlled company” under Nasdaq Global Market corporate governance requirements, ICO is exempted from complying with (1) Nasdaq’s requirement that a majority of the Board of Directors consist of independent directors, (2) Nasdaq’s requirement that the compensation of officers be determined, or recommended to the Board of Directors for determination, by a majority of the independent directors or a compensation committee comprised solely of independent directors, and (3) Nasdaq’s requirement that director nominees be selected, or recommended for the Board of Directors’ selection, by a majority of the independent directors or a nominating committee comprised solely of independent directors with a written charter or board resolution addressing the nomination process. The Company has elected to use these exemptions available to controlled companies.

Nominations Process

Because the Company qualifies as a “controlled company,” it currently does not have a Board of Directors consisting of a majority of independent directors, and the slate of nominees nominated and recommended by the Board of Directors is not comprised of a majority of independent directors. Further, due to its status as a “controlled company,” and in part as a result of the historically low turnover of its members, the Board of Directors has not established a nominating committee comprised solely of independent directors and has not adopted a nominating committee charter. In light of the Company’s status as a “controlled company” and the fact that all of the nominees for director named herein are incumbent directors, the Board of Directors approved the nomination of such nominees without a prior recommendation from a majority of the independent directors.

The Board of Directors consults with the Company’s counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the Nasdaq, as in effect time to time. Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditor, the Board of Directors has affirmatively determined that Messrs. Ginn, Rowan, and Wasserman are independent directors within the meaning of the applicable Nasdaq listing standards.

Meetings of the Board of Directors

The Board of Directors met five times during the last fiscal year. All directors except Mr. Salemme attended at least 75% of the aggregate of the meetings of the Board of Directors and of the committees on which they served, held during the period for which they were directors or committee members, respectively.

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Information Regarding Committees of the Board of Directors

The Board of Directors has three committees: an Audit Committee, a Compensation Committee, and a Strategy Committee. The following table provides membership and meeting information for fiscal 2006 for each of the Board committees:

*                    Committee Chairperson

Audit Committee

The Audit Committee of the Board of Directors was established by the Board of Directors in accordance with Section 10A(m) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and Nasdaq Marketplace Rule 4250(d) to assist the Board of Directors in overseeing the Company’s accounting and financial reporting processes and system of internal controls; evaluating the qualifications and independence of the Company’s auditor; and overseeing the Independent Auditor. For this purpose, the Audit Committee performs several functions. The Audit Committee: (i) evaluates the performance of and assesses the qualifications of the independent auditor; (ii) determines and approves the engagement of the independent auditor; (iii) determines whether to retain or terminate the existing independent auditor or to appoint and engage new independent auditor; (iv) reviews and approves the retention of the independent auditor to perform any proposed permissible non-audit services; (v) monitors the rotation of partners of the independent auditor on the Company’s audit engagement team as required by law; (vi) review and approves or rejects transactions between the Company and any related persons; (vii) confers with management and the independent auditor regarding the effectiveness of internal controls over financial reporting; (viii) establishes procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and (ix) meets to review the Company’s annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  The Audit Committee is composed of three directors: Messrs. Rowan (chairman) and Wasserman and Ms. Alderman. The Audit Committee met four times during the fiscal year. The Board of Directors has adopted a written charter for the Audit Committee that is available to stockholders on the Company’s website at www.ico.com.

The Board of Directors reviews the Nasdaq listing standards definition of independence for Audit Committee members and has determined that Messrs. Rowan and Wasserman are independent (as independence is currently defined in Rule 4350(d)(2)(A)(i) and (ii) of the Nasdaq listing standards). The Board of Directors is in the process of seeking an additional independent director to join our Board of Directors and serve as a member of the Audit Committee. Pursuant to the phase-in period permitted under the Nasdaq Marketplace Rules, Ms. Alderman may serve as a member of the Audit Committee until

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the one-year anniversary of the Company’s listing on Nasdaq, or September 13, 2007. The Board of Directors has also determined that Mr. Rowan qualifies as an “audit committee financial expert,” as defined in applicable U.S. Securities and Exchange Commission (“SEC”) rules. The Board of Directors made a qualitative assessment of Mr. Rowan’s level of knowledge and experience based on a number of factors, including his formal education and experience as a chief financial officer for public reporting companies.

Compensation Committee

The Compensation Committee of the Board of Directors was established by the Board of Directors to: (i) act on behalf of the Board of Directors in fulfilling the Board of Director’s responsibilities to oversee the Company’s compensation policies, plans and programs; (ii) review and determine the compensation for the Company’s executive officers and directors; (iii) review the Compensation Discussion and Analysis (“CD&A”) with management and make a recommendation as to whether the CD&A should be included in the Company’s annual report and/or proxy statement; (iv) prepare and review the Compensation Committee report included in the Company’s annual proxy statement in accordance with applicable rules and regulations of the SEC in effect from time to time; and (v) perform such other functions as may be deemed necessary or convenient in the efficient and lawful discharge of the foregoing.

The Compensation Committee is composed of two directors: Messrs. Wolff (chairman) and Rowan. The Compensation Committee was chartered in December 2006 and did not meet during the last fiscal year. The Compensation Committee has adopted a written charter that is available to stockholders on the Company’s website at www.ico.com.

Strategy Committee

The Strategy Committee is available to assist the Company’s Board of Directors in shaping its business strategy as it develops its satellite system, including recommending and evaluating potential strategic partners. The Strategy Committee is composed of two directors: Messrs. McCaw (chairman) and Ginn. The Strategy Committee did not meet during the last fiscal year.

Corporate Governance

Compensation Committee Processes and Procedures

In accordance with its charter, the Compensation Committee will meet at least one time annually and with greater frequency if necessary. The chairman of the Committee, the chairman of the Board of Directors or the Chief Executive Officer may call meetings. From time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in Compensation Committee meetings. The Chief Executive Officer may not participate in or be present during any deliberations or determinations of the Compensation Committee regarding his compensation. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company, as well as authority to obtain, at the expense of the Company, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has the authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms.

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Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is an officer or employee of ICO, and none of the Company’s executive officers serve as a member of a compensation committee of any entity that has one or more executive officers serving as a member of the Company’s  Compensation Committee.

Stockholder Communications with the Board of Directors

Historically, the Company has not provided a formal process related to stockholder communications with the Board of Directors. Nevertheless, the Company believes it has provided for the views of its stockholders to be heard by the Board of Directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. During the upcoming year, the Board of Directors may consider the adoption of a formal process for stockholder communications with the Board of Directors and, if adopted, publish it promptly and post it to the Company’s website. Stockholders may submit questions to the Investor Relations department by going to the Investor Relations section of the Company’s website at www.ico.com.

Code of Conduct and Ethics

The Company has adopted the ICO Global Communications (Holdings) Limited Code of Conduct and Ethics that applies to all officers, directors and employees. The Code of Conduct and Ethics is available on the Company’s website at www.ico.com. If the Company makes any substantive amendments to the Code of Conduct and Ethics or grants any waiver from a provision of the Code of Conduct and Ethics to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website.

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PROPOSAL 2

APPROVAL OF AMENDED AND RESTATED 2000 STOCK INCENTIVE PLAN

Overview

The ICO Global Communications (Holdings) Limited 2000 Stock Incentive Plan was initially adopted following stockholder approval on May 10, 2000 and was subsequently amended and restated on August 9, 2000 and on November 17, 2005. The Board of Directors has approved, and recommends that stockholders approve, the Amended and Restated 2000 Stock Incentive Plan, effective June 15, 2007 (“Plan”). If the Plan is not approved by our stockholders, the Plan will continue in accordance with its terms as amended and restated effective November 17, 2005.

The Board of Directors believes that the Plan is necessary to continue its effectiveness in attracting, motivating and retaining officers, employees, directors and consultants with appropriate experience, to increase the grantees’ alignment of interest with the stockholders, to make awards eligible for certain tax deductibility under the Internal Revenue Code of 1986, as amended (“Code”), and to facilitate the Plan’s operation.

A summary of the Plan, as amended and restated, is described below. The summary of the Plan is qualified in its entirety by reference to the full text of the Plan, a copy of which is attached to this proxy statement as Annex A. The copy attached in Annex A is marked to highlight changes to the Plan. The significant changes to the Plan include:

·       an increase in the maximum number of shares available for issuance under the Plan of 7,000,000 shares (as amended and restated, the Plan permits the issuance of 20,000,000 shares in total);

·       an increase of 7,000,000 shares in the number of shares that may be issued upon the exercise of incentive stock options (as amended and restated, the Plan permits the issuance of 20,000,000 shares in total);

·       additional types of awards—stock appreciation rights have been added to the Plan and the stock awards section has been revised to specifically include: restricted stock, restricted stock units, performance awards or performance units and stock bonuses, in addition to other stock-based awards;

·       provisions to permit awards to satisfy certain tax deduction requirements—including the material terms for qualifying performance-based compensation: a description of the “qualifying performance criteria” on which a performance goal is based, eligible employees, and the maximum amount of compensation that may be paid if the performance goal is attained, a per participant grant limit of not more than 5,000,000 shares for any calendar year, and a per participant limit for cash settlement of awards limiting cash payments to not more than $5,000,000 for any calendar year;

·       a 10 year term for the Plan; and

·       changes to the Plan to reflect the status of the Company as publicly traded and other regulatory and governance changes.

Summary of the Plan

The purpose of the Plan is to enhance the long-term stockholder value of the Company by offering opportunities for eligible individuals to participate in the growth and success of the Company, encourage their long-term service, and to provide an opportunity for participants to acquire and maintain stock ownership in the Company. The Plan permits the award of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards (including restricted stock, restricted stock units,

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performance awards or performance units, stock bonuses and other stock-based awards), or any combination thereof (“Awards”).

Administration

The Plan is administered by the Board of Directors or a committee of two or more directors appointed by the Board of Directors (“Plan Administrator”). The Plan Administrator has the authority, among other things, to select the individuals to be granted Awards, to determine the type, number of shares, and purchase price of Awards, and other terms and conditions of Awards, and to construe and interpret the Plan and any Awards granted under the Plan. As amended and restated, the Plan also permits the Plan Administrator to determine whether to reduce the exercise price of an option or stock appreciation right to the then current fair market value of the common stock covered by the Award if the value has decreased since the grant date, and whether, to what extent, and under what circumstances to offer an exchange or to redeem any previously granted Award for a payment in cash, shares of common stock, other securities or another Award. The Board of Directors may delegate authority of the Plan Administrator with respect to designated classes of eligible persons to one or more members of the Board of Directors. In December 2006, the Board of Directors delegated authority to the Chief Executive Officer to grant options to newly hired employees and consultants, subject to certain limitations. All decisions and determinations by the Plan Administrator in the exercise of its power are binding and conclusive.

Eligible Individuals

Generally, officers, employees, directors and consultants of the Company or a related entity are eligible to participate in the Plan. Awards are made to eligible individuals at the discretion of the Plan Administrator and therefore, we cannot determine who will receive a future grant at this time. As of the Record Date, there were 35 employees, 7 non-employee directors and 1 consultant of the Company and its related entities participating in the Plan.

Shares Subject to Plan

Prior to the amendment and restatement of the Plan, 13,000,000 shares of our common stock were authorized for issuance under the Plan. On March 12, 2007, our Board of Directors approved an increase in the number of shares available for issuance by an additional 7,000,000 shares. If approved by our stockholders, the maximum number of shares available for issuance under the Plan will be 20,000,000 shares. As of April 18, 2007, 9,917,250 shares are outstanding under the Plan and 3,082,750 shares available for future issuance, or if approved by the stockholders, 10,082,750 shares available for future issuance. The aggregate number of shares that may be issued upon the exercise of incentive stock options cannot exceed 13,000,000 shares, or if approved by stockholders, 20,000,000 shares, both subject to adjustment for changes in capitalization.

As amended and restated, the Plan includes individual limits to permit Awards granted under the Plan to satisfy certain tax deduction requirements under Section 162(m) of the Code (“Section 162(m)”). The aggregate number of shares of common stock that may be granted under the Plan during any calendar year to any one participant cannot exceed 5,000,000 shares, subject to adjustment for changes in capitalization and the maximum dollar amount of any payment made under the Plan to settle all or a portion of an Award in cash payable to any one participant in any calendar year cannot exceed $5,000,000.

Shares subject to Awards which expire, or are canceled, forfeited, or otherwise terminated for any reason without having been exercised or settled in vested and nonforfeitable shares, will again be available for issuance under the Plan. Shares reacquired by the Company pursuant to any forfeiture or other provision will again be available for issuance under the Plan.

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In the event of a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company’s capital structure that results in a different number or kind of securities to be exchanged for outstanding shares or the issuance of new, different or additional securities to holders of common stock of the Company, then proportional adjustments will be made in (i) the maximum number and kind of securities subject to the Plan, issuable to any one participant and issuable as incentive stock options and (ii) the number and kind of securities subject to outstanding Awards and the per share price of such securities, without any change in the aggregate price to be paid.

Types of Awards

Stock Options

The Plan Administrator may grant both nonqualified stock options and incentive stock options within the meaning of Section 422 of the Code. The terms and conditions of the option will be set forth in an option agreement. The Board of Directors has authorized the Company’s Chief Executive Officer to grant options to newly hired employees and consultants on their first date of employment subject to certain limitations. The newly hired employee or consultant must not report directly to the Chief Executive Officer and must not be subject to Section 16 of the Exchange Act. Additionally, the number of shares covered by the options granted by the Chief Executive Officer are limited based on the position held by the newly hired employee or consultant. The total number of shares covered by options granted by the Chief Executive Officer may not exceed 1,000,000 shares, unless additional authority is granted by the Board of Directors.

The exercise price of any option granted under the Plan will be determined by the Plan Administrator. The exercise price of an incentive stock option cannot be less than the fair market value of a share of our common stock on the date of grant. The fair market value of a share of our common stock on any date generally will be the closing sales price as reported by the Nasdaq Global Market on that date. The closing price of our common stock on the Record Date was $3.91.

The Plan Administrator determines when the options vest and become exercisable and has the authority to waive or modify the vesting and exercise terms at any time. If the option agreement does not include the time or times upon which the option vests and becomes exercisable, the option will vest and become exercisable under the Plan over a four year period, with 1/4th vesting after one year and 1/48th vesting each month thereafter. Options previously granted under the Plan have generally been granted on a vesting schedule of 25% per year. Options generally expire 10 years after the date of grant or up to 90 days after termination of employment, which ever occurs earlier.

Stock Appreciation Rights

As amended and restated, the Plan now permits the grant of stock appreciation rights. Previously, the Plan did not include stock appreciation rights as a type of Award. A stock appreciation right is generally a right to benefit from an appreciation in value of a specified number of shares of common stock over a specified period of time.

Under the Plan, the grant price of a stock appreciation right shall not be less than 100% of the fair market value of a share of common stock on the grant date. The Plan Administrator establishes the term of each stock appreciation right, which cannot exceed 10 years from the grant date. The stock appreciation right may be exercised, in whole or in part, upon such terms and conditions as the Plan Administrator sets forth in the Award agreement. Upon exercise, the stock appreciation right may be settled in cash, shares of common stock, or any combination, or in any other manner approved by the Plan Administrator and set forth in the Award agreement.

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The Plan Administrator may establish and set forth in an Award agreement whether or not the stock appreciation right shall continue to be exercisable, and the terms and conditions of the exercisability, if the participant ceases to be employed by, or provide services to, the Company or a related entity.

Stock Awards

The Plan Administrator may grant stock awards of common stock or awards denominated in units of common stock. As amended and restated, the Plan specifies that stock awards include, but are not limited to, Awards of restricted stock, restricted stock units, performance awards or performance units and stock bonuses. The Plan Administrator establishes the terms, conditions and restrictions, if any, of stock awards in its discretion and sets forth the terms in the Award agreement. The Plan Administrator may waive any forfeiture period or other terms and conditions of a stock award in its discretion.

Performance Criteria

As amended and restated, the Plan includes authority to grant Awards, in any form permitted under the Plan, under which the grant, issuance, retention, vesting and/or transferability of any Award is subject to the attainment of performance criteria and such additional terms and conditions as the Plan Administrator designates. For Awards intended to satisfy the requirements of Section 162(m) for qualifying performance-based compensation, the performance criteria shall be limited to one or more of the “qualifying performance criteria” described below.

Section 162(m)—Performance Criteria

The Board of Directors is requesting the stockholders of the Company approve the qualifying performance criteria to enable the Company to claim an income tax deduction for performance-based Awards granted under the Plan to persons who are “covered employees” for purposes of Section 162(m).

Section 162(m) provides that, to be deductible by the Company for federal income tax purposes, compensation in excess of $1,000,000 for a taxable year paid to a person serving on the last day of such taxable year as the Company’s Chief Executive Officer and to the other four persons required to be included in the Summary Compensation Table for the taxable year who are employed by the Company on the last day of the year must be “performance-based.”  Section 162(m) refers to such persons as “covered employees.”

Qualifying Performance Criteria

For purposes of an Award made under the Plan, “Qualifying Performance Criteria” shall mean one or more of the following performance criteria applied to the individual, the Company as a whole, a related entity, a business unit, or any combination thereof, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to a previous year’s results or to a designated comparison group, in each case as specified by the committee in the Award agreement:

 

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In each case, the Qualifying Performance Criteria are subject to adjustment by the committee, if applicable, to remove the effect of charges for restructurings, discontinued operations, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence, related to the disposal of a segment or a business, or related to a change in accounting principle or otherwise.

For Awards intended to satisfy the requirements of Section 162(m) for qualifying performance-based compensation, the committee shall designate the Qualifying Performance Criteria and establish the objective performance goals in writing not later than 90 days after the beginning of the applicable performance period, or any other period permitted under Section 162(m). The committee must certify in writing prior to payment of the compensation subject to the Award the extent to which the pre-established performance goals and any other material terms have been satisfied.

Transferability of Awards

Awards granted under the Plan are generally not transferable except by will or under the laws of descent and distribution, and all rights with respect to such Awards are generally exercisable only by the participant during his or her lifetime, except that the Plan Administrator may permit such assignment, transfer and exercisability and may permit a Participant to designate a beneficiary who may exercise the Award or receive payment under the Award subject to all of the same terms and conditions set forth in the instrument evidencing the Award.

Corporate Transactions

In the event of a Corporate Transaction (as defined in the Plan), the Awards will either automatically become vested and exercisable for a limited period of time, or, depending on the type of Corporate Transaction, will do so if the Awards are not assumed or substituted by a corporate successor.

Market Standoff

Until two years after an initial public offering by the Company, shares acquired under the Plan will generally be subject to market standoff provisions, which prevent the sale of the shares, without the prior written consent of the Company or its underwriters, for a period of up to 180 days after a public offering of the Company’s stock.

Amendment or Termination

As amended and restated, the Plan includes a 10 year term. The Plan will terminate on April 23, 2017 and no Awards may be granted after such date. In addition, our Board of Directors may sooner terminate the Plan and may amend, modify or suspend the Plan at any time or from time to time. To the extent required under any applicable law, regulation or exchange requirement, no amendment will be effective unless approved by our stockholders in accordance with such applicable law, regulation or exchange requirement. Except for an amendment pursuant to Section 409A of the Code (“Section 409A”), no modification of an agreement evidencing an Award may adversely impair or diminish any rights or obligations of the participant under the Award without the consent of the participant.

No Stockholder Rights

A participant granted an option, a stock appreciation right or a stock award denominated in units shall not have any rights as a stockholder of the Company with respect to the shares covered by the Award unless and until the date the shares are issued to the participant.

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Other

The Plan, as amended and restated, no longer includes provisions that were applicable to the Company prior to becoming publicly traded: payment of the option exercise price with a full recourse promissory note or in installments, repurchase and first refusal rights in the discretion of the Company, and additional provisions applicable to Awards made to residents of California.

Federal Income Tax Consequences

The following discussion is a general summary of the principal United States federal income tax consequences under current federal income tax laws relating to options and stock appreciation rights granted under the Plan. This information is only a summary and is not intended to be complete, among other things, it does not describe state, local or foreign income tax and other tax consequences.

Stock Options

A participant will not recognize any taxable income upon the grant of a nonqualified option, and the Company will not be entitled to a tax deduction with respect to such grant. Generally, upon exercise of a nonqualified option, the excess of the fair market value of the Company’s common stock on the date of exercise over the exercise price will be taxable as ordinary income to the participant. The Company will generally be entitled to a federal income tax deduction in the amount that the participant includes in his or her gross income upon exercise and at the same time as he or she recognizes such income, subject to any deduction limitation under Section 162(m) (which is discussed below). The participant’s tax basis for the common stock received pursuant to such exercise will equal the sum of the compensation income recognized by the participant and the amount of the exercise price paid. The holding period for the shares will begin at the time of exercise. The participant’s subsequent disposition of shares acquired upon the exercise of a nonqualified option will ordinarily result in capital gain or loss, which may be long term or short term, depending on how long the shares were held.

Subject to the discussion below, the participant will not recognize taxable income at the time of grant or exercise of an incentive stock option, and the Company will not be entitled to a tax deduction with respect to such grant or exercise. However, the exercise of an incentive stock option may result in an alternative minimum tax liability for the participant.

Generally, if the participant holds the shares acquired upon the exercise of an incentive stock option for at least 1 year after the date of exercise and for at least 2 years after the date of grant of the incentive stock option, upon his or her disposition of the shares, the difference, if any, between the sales price of the shares and the exercise price will be treated as long-term capital gain or loss to the participant.

Generally, upon a sale or other disposition of shares acquired upon the exercise of an incentive stock option within 1 year after the date of exercise or within 2 years after the date of grant of the incentive stock option (any such disposition being referred to as a “disqualifying disposition”), any excess of the fair market value of the shares at the time of exercise of the option over the exercise price of such option will constitute ordinary income to the participant. Subject to any deduction limitation under Section 162(m), the Company will be entitled to a deduction equal to the amount of ordinary income included in the participant’s gross income. Any excess of the amount realized by the participant on the disqualifying disposition over the fair market value of the shares on the date of exercise will generally be capital gain and will not be deductible by the Company. If the sale proceeds from a disqualifying disposition are less then the fair market value of the shares on the date of exercise, the amount of the participant’s ordinary income will be limited to the gain (if any) realized on the sale.

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Payment of Exercise Price With Shares

If the option is exercised through the use of shares of the Company’s common stock previously owned by the participant, such exercise generally will not be considered a taxable disposition of the previously owned shares and thus no gain or loss will be recognized by the participant with respect to the use of such shares upon exercise of the option. The basis and the holding period of the shares (for purposes of determining capital gain) will carry over to a like number of shares acquired upon exercise of the option. In the case of any nonqualified stock option, ordinary income (treated as compensation) will be recognized by the participant on the additional shares of common stock acquired upon exercise of the option and will be equal to the fair market value of such shares on the date of exercise less any additional cash paid. If the previously owned shares of common stock were acquired by the participant on the exercise of an incentive stock option and the holding period requirement for these shares is not satisfied at the time they are used to pay the exercise price for the option, such use will constitute a disqualifying disposition of the previously owned shares resulting in the participant recognizing ordinary income in the amount described in the preceding paragraph. Special rules may apply in computing the amount and character of the participant’s income (or loss) in connection with the exercise of an incentive stock option where the exercise price is paid by the participant’s delivery of previously owned shares.

Stock Appreciation Rights

A participant will not recognize taxable income upon the grant of a stock appreciation right, and the Company will not be entitled to a tax deduction. Generally, upon the exercise of a stock appreciation right, the amount of any cash and the fair market value as of the date of exercise of any shares of the common stock received is taxable to the participant as ordinary income, and the Company generally will be entitled to a corresponding deduction. Upon the sale of the shares acquired by the exercise of a stock appreciation right, the participant will recognize capital gain or loss (assuming such stock was held as a capital asset) in an amount equal to the difference between the amount realized upon such sale and the fair market value of the stock on the date that governs the determination of your ordinary income.

Section 162(m) Deduction Limit

Section 162(m) generally disallows a federal income tax deduction to any publicly held corporation for compensation paid in excess of $1,000,000 in any taxable year to the chief executive officer or any of the four other most highly compensated executive officers who are employed by the corporation on the last day of the taxable year. However, Section 162(m) provides an exception for “performance-based compensation” if the material terms are disclosed to and approved by the Company’s stockholders. The Plan, as amended and restated, includes provisions intended to permit the Company to pay qualified performance based compensation to covered employees, thereby reducing the after-tax cost of such compensation to the Company.

A number of requirements must be met in order for compensation relating to a specific grant to qualify for the performance based award exception under Section 162(m), so there can be no assurance that such grants made under the Plan will be fully deductible under all circumstances. In addition, the Company reserves the right to grant Awards under the Plan from time to time that are not intended to satisfy the requirements of Section 162(m) when the Board of Directors or Plan Administrator considers such grants to be appropriate.

Section 409A

The Plan and Awards made under the Plan are intended to avoid the imposition of an additional tax that may be imposed under Section 409A. If any Plan provision or Award under the Plan would result in the additional tax under Section 409A, the Company and the participant intend that the Plan provision or

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Award will be reformed to avoid imposition, to the extent possible, of the applicable tax and no action taken to comply with Section 409A shall be deemed to adversely affect the participant’s rights to an Award. The Plan Administrator, in its sole discretion and without the consent of the Participant, may amend or modify an Award in any manner and delay the payment of any amounts payable pursuant to an Award to the minimum extent necessary to meet the requirements of Section 409A.

New Plan Benefits

The amounts subject to Awards to be made under the Plan are not determinable because Awards are made at the discretion of the Plan Administrator from time to time. Awards made under the Plan for 2006 for the directors and named executive officers are reported in the compensation tables included in this proxy statement. During 2006, stock options covering 1,294,500 shares were awarded to all executive officers (including the named executive officers) as a group, 670,000 shares to all current non-employee directors as a group, 740,250 shares to all other employees and 10,500 shares to consultants.

The Company intends to file a registration statement to register the Plan and shares issuable under the Plan following stockholder approval of the Plan.

Required Vote

The affirmative vote of a majority of those shares of common stock present in person or represented by proxy and entitled to vote thereon at the Meeting is necessary for the approval of the Plan. Abstentions will be considered a vote against this proposal and broker non-votes will have no effect on such matter since these votes will not be considered present and entitled to vote for this purpose.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE  FOR PROPOSAL 2

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Securities Authorized for Issuance Under Equity Compensation Plans

Set forth below is information concerning our equity compensation plans, for which the Company’s common stock has been authorized for issuance, as of December 31, 2006.

(1)          The securities that remain available for future issuance under the Plan may be issued as either Class A common stock or Class B common stock.

(2)          Restricted Class A common stock awards granted to certain officers and directors in connection with the ICO North America debt financing.

(3)          Under the terms of the merger with ICO Global Limited on November 28, 2001, the ICO-Teledesic Global Limited 2000 Stock Incentive Plan and all the outstanding options under the plan were assumed by the Company. All the options outstanding under the plan are exercisable for the Company’s Class A common stock. Effective December 31, 2005, the Company will not issue any further awards under the plan.

(4)          Options granted under other equity compensation plans not approved by security holders consist of the following:

 

(a)          Represents fully vested options to an executive officer. These options terminate automatically upon termination for cause and on the first anniversary of the listing of the Company’s shares on the Nasdaq Global Market. The options are generally not transferable. Additionally, until two years after an initial public offering by the Company, all shares acquired under the options are subject to market standoff provisions. Further, in the case of termination of employment, the Company has the right to repurchase shares acquired under the options at fair market value.

(b)         Represents options granted to Clayton, Dubilier & Rice, Inc. in connection with David Wasserman’s service on the Board of Directors. These options vest 25% after each full year of board service, fully vesting after four years of service.

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PROPOSAL 3

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has selected the independent registered public accounting firm of Deloitte & Touche LLP as the Company’s independent auditor for the fiscal year ending December 31, 2007 and has further directed that management submit the selection of independent auditor for ratification by the stockholders at the Annual Meeting. Deloitte & Touche LLP has audited the Company’s financial statements for fiscal years ending 2003 through 2006. Representatives of Deloitte & Touche LLP will be available telephonically at the Annual Meeting to make a statement if they so desire and will be available to respond to appropriate questions.

Neither the Company’s Bylaws nor other governing documents or law require stockholder ratification of the selection of Deloitte & Touche LLP as the Company’s independent auditor. However, the Audit Committee of the Board of Directors is submitting the selection of Deloitte & Touche LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee of the Board of Directors will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board of Directors in its discretion may direct the appointment of different independent auditor at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.

The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the selection of Deloitte & Touche LLP. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved.

Principal Accountant Fees And Services

The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2006 and 2005, by Deloitte & Touche LLP, the Company’s principal accountant.

 

(1)         Audit fees consist of fees and expenses for professional services rendered by Deloitte & Touche LLP in connection with audits of the Company’s annual consolidated financial statements, reviews of the Company’s quarterly consolidated financial statements and services provided in connection with the Company’s SEC filings and statutory audits.

(2)         Audit fees for fiscal year ended December 31, 2005 include fees and expenses associated with the Company’s annual financial statement audits and annual statutory audits pertaining to the fiscal years ended December 31, 2003 through December 31, 2005. None of the financial statements for these years had been subject to audit procedures prior to 2005.

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Pre-Approval Policies and Procedures

The Audit Committee pre-approves all audit and non-audit services rendered by our independent registered accounting firm, Deloitte & Touche LLP. While the Audit Committee charter permits the Audit Committee to delegate pre-approval authority to one or more individuals, as well as to pre-approve defined categories of services, the Audit Committee has not yet done so. To date, all pre-approval has been given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual explicit case-by-case basis before the independent auditor is engaged to provide each service. All of the services provided by Deloitte & Touche LLP in 2006, as described under audit fees above, were pre-approved by the Audit Committee.

Report of the Audit Committee of the Board of Directors

The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year end December 31, 2006 with management of the Company. The Audit Committee has discussed with the independent auditor the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T. The Audit Committee has also received the written disclosures and the letter from the independent accountants required by the Independence Standards Board Standard No. 1, (Independence Discussions with Audit Committees), as adopted by the PCAOB in Rule 3600T and has discussed with the independent accountants the independent accountant’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended.

 

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR PROPOSAL 3

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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the ownership of the Company’s common stock as of the Record Date by: (i) each director and nominee for director; (ii) each of the named executive officers named in the Summary Compensation Table; (iii) all named executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than five percent of its Class A common stock and Class B common stock.

                  * Less than one percent of the outstanding Class A common stock.

               + J. Timothy Bryan also serves as a Director.

      ++ Donna P. Alderman also serves as a Director and served as a consultant to the Company until April 1, 2006 when she was named Executive Vice President, Corporate Development and Strategy.

+++       R. Gerard Salemme also serves as a consultant to the Company.

          (1) Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that a person have or share voting or investment power with respect to the securities in question. Shares of common stock issuable upon the conversion of shares or the exercise of options and warrants that are exercisable or convertible within 60 days of the date of this table are deemed to be beneficially owned by the holder of such securities but are not outstanding for the purpose of computing the percentage ownership of any other stockholder. As of the Record Date, the Company had 143,336,708 shares of Class A common stock and 54,840,000 shares of Class B common stock issued and outstanding.

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          (2) Includes the shares beneficially owned by Eagle River Satellite Holdings, LLC. Mr. McCaw is the sole manager and beneficial member of Eagle River Investments, LLC, which is the sole member of Eagle River Satellite Holdings, LLC. Mr. Wolff is the President of Eagle River Investments, LLC. Messrs. McCaw and Wolff have shared voting and investment power as to these shares.

          (3) Includes Class A common stock into which the Class B common stock held by Eagle River Satellite Holdings, LLC is convertible on a share-for-share basis, at the discretion of Eagle River Satellite Holdings, LLC.

          (4) Includes 3,000,000 shares of Class A common stock that Eagle River Satellite Holdings, LLC may acquire, at an exercise price of $0.01 per share, upon exercise of a warrant that expires on December 12, 2012.

          (5) Holders of Class B common stock are entitled to ten votes per share on each matter submitted to a vote of stockholders, as opposed to one vote per share of Class A common stock. For Eagle River Satellite Holdings, LLC and Mente, LLC (“Mente”), the common stock beneficially owned represents approximately 69% and 13.5%, respectively, of the combined voting power of both classes of our common stock.

          (6) CDR-Satco LLC shares voting and dispositive power over the Company’s shares owned by CDR-Satco LLC with Clayton, Dubilier & Rice Fund VI Limited Partnership (“Fund VI”), CD&R Associates VI Limited Partnership (“Associates VI LP”), and CD&R Investment Associates VI, Inc. (“Associates VI, Inc.”). Fund VI is the sole member of CDR-Satco LLC. Associates VI LP is the general partner of Fund VI. Associates VI, Inc. is the general partner of Associates VI LP. As a result, each of Fund VI, Associates VI LP and Associates VI, Inc. may be deemed to be the beneficial owner of the shares owned by CDR-Satco LLC. Each of Fund VI, Associates VI and Associates VI, Inc. disclaims beneficial ownership of those shares.

          (7) Based on information contained in a Schedule 13G/A filed with the SEC on February 14, 2007. Includes 8,521,301 shares of Class A common stock beneficially owned by Harbinger Capital Partners Master Fund I, Limited; Harbinger Capital Partners Offshore Manager, L.L.C.; HMC Investors, L.L.C.; Harbert Management Corporation; Philip Falcone; Raymond J. Harbert and Michael D. Luce. Each of Harbinger Capital Partners Offshore Manager, L.L.C.; HMC Investors, L.L.C.; Harbert Management Corporation; Philip Falcone; Raymond J. Harbert and Michael D. Luce disclaims beneficial ownership in the reported shares except to the extent of their pecuniary interest therein.

          (8) Based on information contained in a Schedule 13G/A filed with the SEC on March 26, 2007 and a Form 4 filed with the SEC on April 13, 2007. Includes 15,755,647 shares of Class A common stock beneficially owned and/or held by or for the account of Highland Credit Strategies Fund; Highland Equity Opportunities Fund; Highland Multi-Strategy Onshore Master SubFund, L.L.C.; Highland Multi-Strategy Fund GP, LP; Highland Multi-Strategy Fund GP, L.L.C. and Highland Capital Management, L.P. Mr. Dondero may be deemed to be an indirect beneficial owner of shares of Class A Common Stock beneficially owned and/or held by or for the account or benefit of (i) Highland Credit Strategies Fund (“Credit Strategies Fund”); (ii) Highland Equity Opportunities Fund (“Equity Opportunities”) (iii) Highland Multi-Strategy Onshore Master SubFund, L.L.C. (“Multi-Strategy SubFund”); (iv) Highland Multi-Strategy Master Fund, L.P. (“Multi-Strategy Fund”); (v) Highland Multi-Strategy Fund GP, L.P. (“Multi-Strategy Fund GP”); (vi) Highland Multi-Strategy Fund GP, L.L.C. (“Multi-Strategy Fund GP LLC”); (vii) Highland Capital Management, L.P. (“Capital Management”). Multi-Strategy Fund is the managing member of Multi-Strategy SubFund. Multi-Strategy Fund may be deemed to beneficially own shares owned and/or held by and/or for the account and/or benefit of Multi-Strategy SubFund. Multi-Strategy Fund GP is the general partner of Multi-Strategy Fund. Multi-Strategy Fund GP may be deemed to beneficially own shares owned and/or held by and/or for the account and/or benefit of Multi-Strategy Fund. Multi-Strategy Fund GP LLC is the general partner of Multi-Strategy Fund GP. Multi-Strategy Fund GP LLC may be deemed to beneficially own shares owned and/or held by and/or for the account and/or benefit of Multi-Strategy Fund GP. Capital Management serves as an investment adviser and/or manager to other persons, including Credit Strategies Fund, Equity Opportunities and Multi-Strategy SubFund. Capital Management may be deemed to beneficially own shares owned and/or held by and/or for the account and/or benefit of other persons, including Credit Strategies Fund, Equity Opportunities and Multi-Strategy SubFund. Strand Advisors, Inc. (“Strand”) is the general partner of Capital Management. Strand may be deemed to beneficially own shares owned and/or held by and/or for the account and/or benefit of Capital Management. Mr. Dondero is the President and a director of Strand. Mr. Dondero may be deemed to beneficially own shares owned and/or held by and/or for the account and/or benefit of Strand. Mr. Dondero expressly disclaims beneficial ownership of shares of Class A Common Stock beneficially owned and/or held by or for the account or benefit of Credit Strategies Fund, Equity Opportunities, Multi-Strategy SubFund and Capital Management, except to the extent of the pecuniary interest therein.

          (9) William H. Gates III is the sole member of Mente. The business address for Mr. Gates is: Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052.

    (10) Includes (i) 394,890 shares of Class A common stock held by Teledesic LLC and (ii) Class A common stock into which the Class B common stock held by Mente is convertible on a share-for-share basis at the discretion of Mente. Mente is the owner of 88% of the capital stock of Teledesic Washington Corporation, the manager and majority owner of Teledesic LLC.

    (11) Includes beneficial ownership by CDR-Satco LLC, Mr. McCaw, Mr. Salemme, Mr. Wolff, Mr. Ginn, Mr. Bryan, Ms. Alderman, Mr. Jorgens, Mr. Bagley, and Mr. Schmitt of 37,500, 37,500, 155,000, 7,500, 50,000, 500,000, 187,500, 735,000, 100,000, and 60,000, respectively, of Class A common stock that may be acquired within 60 days of the Record Date pursuant to options.

    (12) Includes 127,599 shares of Class A common stock held by Eagle River, Inc. Mr. McCaw is the sole shareholder of Eagle River Inc., Mr. Wolff is the President of Eagle River, Inc. and Mr. Salemme is the Vice President of Eagle River, Inc.

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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended December 31, 2006, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with.

Executive Officers

The following table sets forth certain information about our executive officers, other than Mr. Bryan and Ms. Alderman, whose biographies are included under the section “Nominees,” including their ages as of the Record Date.

 

Craig Jorgens—President.   Mr. Jorgens has over 14 years of experience in the telecommunications industry and has been the Company’s President since 2002. Mr. Jorgens also serves as the President of ICO North America. From 2001 until joining the Company, he was a principal in the telecommunications group at the private equity firm of Texas Pacific Group. From 1992 to 2000, he was Executive Director of Corporate Development at AirTouch Communications, one of the world’s largest wireless operators, where he was responsible for mergers and acquisitions and new business development both domestically and internationally. He also has experience in management consulting and investment banking. Mr. Jorgens is a graduate of Harvey Mudd College and graduated from Carnegie Mellon’s Graduate School of Industrial Administration.

John L. Flynn—Executive Vice President, General Counsel and Corporate Secretary.   On May 8, 2006, Mr. Flynn became the Executive Vice President, General Counsel and Corporate Secretary of the Company and ICO North America. From July 2003 until April 2006, Mr. Flynn was counsel to the law firm of Wilmer Cutler Pickering Hale and Dorr LLP, where his practice focused primarily on communications and intellectual property law. From November 2000 until January 2003, Mr. Flynn was Vice President and Deputy General Counsel of Commerce One, Inc., a software company, where he co-managed the legal department and advised the company on corporate, regulatory and litigation matters. Mr. Flynn also served as General Counsel and Vice President of Government Affairs of rStar Broadband Networks, Inc. and, before that, was an associate at Munger, Tolles & Olson. Mr. Flynn began his legal career by serving as a law clerk to Judge Edward R. Becker on the U.S. Court of Appeals for the Third Circuit and then to Justices Byron R. White and John Paul Stevens on the U.S. Supreme Court. Mr. Flynn graduated from Stanford University with a Bachelor’s degree in Political Science, with distinction, and a Master’s degree in International Policy Studies, and he holds his law degree, magna cum laude, from the Georgetown University Law Center.

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David Bagley—Senior Vice President, Corporate Development.   Mr. Bagley has been with the Company since July 2002 and has over 18 years of experience in the telecommunications industry. Mr. Bagley also serves as ICO North America’s Senior Vice President, Corporate Development. From June 2000 to June 2001, he was Vice President of Business Development for IPWireless, where he was in charge of spectrum acquisition, strategic partnering and regulatory affairs. Mr. Bagley spent four years at AirTouch and Vodafone, which acquired AirTouch in 1999. He held various Corporate Development positions working on transactions throughout the world. His most recent position was head of Corporate Development for the Americas for Vodafone. Prior to AirTouch, Mr. Bagley spent eight years at SBC Communications in finance and Corporate Development positions. Mr. Bagley holds a Bachelor’s degree in Accounting and Economics from Pacific University and a Master’s degree in International Management from Thunderbird Graduate School of International Management.

Robert S. Day, Jr.—Senior Vice President, Space Systems.   Mr. Day has been with the Company for over six years and has over 25 years of telecommunications industry experience. Mr. Day serves as Senior Vice President, Space Systems for both the Company and ICO North America and is responsible for the design, procurement, deployment, and operation of the ICO North America space segment. The space segment includes the ICO North America satellite, launch vehicle, gateway, satellite control center, and satellite operations. His areas of expertise include satellite design, integration, test, launch, operations, and system engineering. Prior to joining the Company, he was the Vice President of Space Technology for Teledesic LLC. Mr. Day also spent 19 years at Hughes Space and Communications where he provided system engineering leadership or served as program manager for several major geosynchronous satellite programs. He led the integration, test, and launch team for the first HS601 satellite, and served as the Deputy Business Unit Leader for Spacecraft Design and Production at Hughes. Mr. Day holds a Bachelor’s degree in General Engineering from the University of Illinois, a Master’s degree in Mechanical Engineering from UCLA, and a certificate in Astronautical Engineering from UCLA.

Suzanne Hutchings Malloy—Senior Vice President, Regulatory Affairs.   Ms. Hutchings Malloy has over 15 years of experience in the telecommunications industry. Prior to joining the Company in 2000 and until 2002, Ms. Malloy served as Senior Regulatory Counsel for Teledesic LLC, where she directed the company’s licensing and regulatory efforts among various industry and regulatory constituencies, including the FCC, the U.S. State Department, and the International Telecommunication Union. At the Company and ICO North America (serving in a similar capacity), in addition to general regulatory activities, her work has included filing a major satellite application, helping maintain and monitor global spectrum assets, and advocating for the companies and their subsidiaries in major rulemaking and adjudicatory proceedings before the FCC. She has also served on numerous U.S. delegations to regional and international spectrum management treaty conferences. She has also worked as an Attorney-Advisor at the FCC, where she participated in country-to-country treaty negotiations, World Trade Organization multilateral negotiations, and rulemaking proceedings before the Federal Communications Commission as a satellite industry expert, focusing primarily on licensing direct-to-home satellite operators. Ms. Malloy holds a Bachelor of Arts degree in History from Davidson College and graduated from Harvard Law School in 1986.

Dennis Schmitt—Senior Vice President, Finance.   Mr. Schmitt has been with the Company for over four years and Senior Vice President, Finance since April 2005, having previously served as the Company’s Controller. Mr. Schmitt serves in a similar capacity for ICO North America and is responsible for all accounting and financial aspects of each company. Prior to joining the Company, he was the Assistant Controller for drugstore.com from January 2001 to July 2002, managing the SEC reporting group and all the company’s daily accounting responsibilities. His background also includes expertise in the wireless industry acquired through his time spent at Nextel International where he was responsible for the accounting of its global subsidiaries and Western Wireless where he was a member of the SEC reporting group. Mr. Schmitt holds a Bachelor’s degree in accounting from Fort Hays State University and is a Certified Public Accountant.

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David Zufall—Senior Vice President, Network Systems.   Mr. Zufall has been Senior Vice President, Network Systems since January 2, 2006. During the twelve years prior to joining the Company, Mr. Zufall served in a number of technical and operational capacities at Nextel Communications, Inc., including Vice President, Infrastructure Technology Development and Vice President, Network Architecture/Chief Architect. Nextel operated a nationwide digital cellular network in the United States. Mr. Zufall had responsibility for working with partners in Nextel’s strategy and marketing divisions to establish Nextel’s long-term network and technology roadmap. Mr. Zufall holds a Bachelor of Sciences degree in Electrical Engineering and an M.B.A. in Finance and International Business, both from Columbia University.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview

The primary goals of the Company’s executive officer compensation program are to tie compensation to achievement of specified performance objectives, to attract and retain talented and dedicated executives, and to align the Company’s executive officers’ interests with those of its stockholders. The elements of this executive compensation program (some or all of which may be applicable to any particular executive) include the following: base salary, annual bonus, equity incentive compensation and other compensation. Each element is designed to achieve one or more of the Company’s goals regarding performance, retention and alignment.

While the Compensation Committee sets and oversees compensation policy for all of the Company’s executive officers and directors, this discussion and analysis is limited to compensation granted to the Company’s named executive officers.

The Company has entered into employment agreements with each of its named executive officers that, as modified by the Board of Directors, set the salary and, where applicable, targets for an annual discretionary bonus for the applicable calendar year.

Compensation Objectives

The Compensation Committee designs compensation packages that seek to serve the goals of performance, alignment and retention.

Performance

One goal of the Company’s executive compensation program is to reward individual performance and contributions toward Company performance over a long period of time. At this stage of its development, the Company measures its performance primarily based on achievement of key strategic goals such as the development of its satellite system and achievement of other operational milestones. The following elements of compensation are designed to achieve this goal:

·       equity incentive compensation in the form of stock options, the value of which are contingent upon the performance of the Company’s share price, and subject to vesting schedules that require continued service with the Company; and

·       in the case of Messrs. Schmitt and Bagley, a discretionary cash bonus, provided under each executive’s employment agreement, based upon individual and Company performance.

Base salary amounts and, for certain named executive officers, cash bonuses are designed to reward annual achievements based upon responsibilities, demonstrated leadership, and management experience and effectiveness. The Company does not typically provide annual cash bonuses for its most senior executive officers. Instead, the Company pays competitive salaries for these officers and provides their remaining compensation in long-term equity incentive awards.

Alignment

The Company seeks to align the interests of its named executive officers with those of its stockholders by evaluating executive performance on the basis of key operational measurements which the Company believes closely correlate to long-term stockholder value. These measurements include development of the Company’s satellite and ground systems, development of strategic relationships, furtherance of the Company’s business plan and other corporate and operational objectives. The element of compensation

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that most directly aligns the interests of named executive officers with stockholders is equity incentive compensation, which links a significant portion of compensation to stockholder value because the total value of those awards is tied to stock price appreciation.

Retention

The Company competes for executive talent in the telecommunications industry. To encourage retention of its named executive officers, the Company makes a substantial portion of their compensation dependent upon continued service. The Company’s equity incentive compensation awards require long-term continued service to receive any, or the maximum, payout.

Implementing the Company’s Objectives

Determining Compensation

The Compensation Committee determines compensation for named executive officers after reviewing the overall performance of the Company and evaluating executive performance during the year. The Committee evaluated executive performance based upon leadership, operational performance, responsibilities, and career with the Company. Specific factors affecting compensation decisions for the Company’s named executive officers include:

·       achievement of specific operational goals for the Company, including sustained progress in furtherance of its business plan; and

·       achievement of strategic objectives such as entering into key transactions, achieving financial and other corporate goals, and pursuing technological innovation.

The Company considers competitive market compensation paid by other communications companies, but does not attempt to maintain a certain target percentile within a peer group or otherwise rely on data to determine executive compensation. The Company maintains flexibility in its compensation program and in the assessment process which enables the Company to respond to and adjust for its evolving business environment.

The Company designs the mix of compensation elements to reward recent results and to motivate long-term performance through a combination of cash and equity incentive awards. The Company also seeks to balance compensation elements that are based on operational and strategic measures with others that are based on the performance of its stock. The Company believes the most important indicator of whether its compensation objectives are being met is its ability to motivate and to retain its named executive officers on a cost-effective basis.

Management’s Role

Management coordinates the annual review of the compensation programs for all of the Company’s named executive officers. This includes an evaluation of individual and Company performance, competitive practices and trends, and various compensation issues. Based on the outcomes of this review, management makes recommendations to the Compensation Committee regarding the compensation of each of the named executive officers, other than the chief executive officer. The Compensation Committee believes that input from management provides useful information and points of view to assist the Compensation Committee in making compensation decisions. Although the Compensation Committee receives information and recommendations regarding the design and level of compensation of the Company’s named executive officers from management, the Compensation Committee makes the final decisions as to the plan design and compensation levels for these executives.

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Compensation Committee

The Compensation Committee has overall responsibility for the approval of programs that are reasonable, consistent with the Company’s stated compensation objectives and consistent with its business goals and objectives. The Board of Directors established the Compensation Committee in December 2006, and the current members of the Committee, Messrs. Rowan and Wolff, were appointed at that time.

The Compensation Committee has authority and responsibility for the review, evaluation and approval of the compensation for all of the Company’s executive officers and directors. This includes establishing compensation objectives, and policies and plans covering the Company’s executive officers. The Compensation Committee also conducts an annual review of the chief executive officer and approves his annual compensation.

The Compensation Committee has a charter, which is available on the Company’s website at www.ico.com. Under the charter, the purposes of the Compensation Committee are summarized as follows, to:

·       act on behalf of the Board of Directors in fulfilling the Board of Director’s responsibilities to oversee the Company’s compensation policies, plans and programs;

·       review and determine the compensation for the Company’s executive officers and directors;

·       review the Compensation Discussion and Analysis with management and recommend whether the Compensation Discussion and Analysis should be included in the Company’s annual report and/or proxy statement;

·       prepare and review the Compensation Committee report included in the annual proxy statement; and

·       perform such other functions as may be deemed necessary.

The Compensation Committee meets at least one time each year to address various compensation issues and processes and holds such additional meetings as it determines are appropriate. The Compensation Committee reports to the Board of Directors regarding executive compensation matters.

Compensation Consultant

Neither the Company nor the Compensation Committee has any contractual arrangement with any compensation consultant who has a role in determining or recommending the amount or form of executive or director compensation. In the future, either the Company or the Compensation Committee may engage or seek the advice of compensation consultants.

Equity Grant Practices

In December 2006, the Board of Directors approved a new equity grant process. The grant process authorizes the Company’s Chief Executive Officer to grant options to newly hired employees and consultants who do not directly report to him and are not reporting persons for purposes of Section 16 of the Exchange Act, subject to certain limitations. The option must be granted on the first day of service with the Company, the option must have an exercise price equal to the closing share price on the date of grant, the number of shares covered by the option are limited based on the position (up to 250,000 shares for an employee who is a senior vice president), and the total number of shares covered by options granted by the Chief Executive Officer cannot exceed 1,000,000 shares unless further approval is obtained from the Board of Directors. For new hires not subject to the process described above, the Board of Directors continues to approve the relevant grants, with an exercise price equal to the closing share price on the grant approval date.

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Prior to the approval of the new equity grant process in December 2006, grants were made at meetings of the Board of Directors with a fair market value determined by the closing share price on the date of grant. The exercise price for continuing service grants in 2006 was determined by share price on the date of grant. The exercise price for new hires in 2006 was determined by the closing share price on a date associated with the hiring, such as date of acceptance, and the exercise price for certain other performance-based awards was determined by share price on the date on which the performance objective was met. Because this prior practice resulted in potential adverse tax consequences under Section 409A, one purpose of the Board of Directors in adopting the new equity grant process was to establish grant procedures intended to avoid future potential adverse tax consequences.

Tax Deductibility

Section 162(m) imposes a $1,000,000 limit on the amount that a public company may deduct for compensation paid to the Company’s Chief Executive Officer or any of the Company’s four other most highly compensated executive officers who are employed as of the end of the year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation. When a company first becomes publicly held, special transition rules apply to compensation paid pursuant to a compensation plan or agreement that existed during the period in which the company was not publicly held. The Company is seeking stockholder approval of changes to its equity plan, including changes intended to make stock options, stock appreciation rights and certain performance-based awards granted to executive officers eligible for treatment as qualifying performance-based compensation under Section 162(m). For additional information, see Proposal 2, Approval of Amended and Restated 2000 Stock Incentive Plan.

Annual Review of Executive Compensation

Each year, the Compensation Committee evaluates each named executive officer’s total compensation, equity holdings and merit history, including management’s recommendations regarding the appropriate compensation for each named executive officer other than the Chief Executive Officer. In making its decisions on each named executive officer’s compensation, the Compensation Committee considers the nature and scope of all elements of the executive officer’s total compensation package, responsibilities, and his or her effectiveness in supporting the Company’s key strategic, operational and financial goals. The Compensation Committee also considers recommendations from the Chief Executive Officer regarding total compensation for those reporting directly to him.

Employment Agreement

The Company has employment agreements with each of its named executive officers that, among other things, provide for a target base salary, subject to adjustment by the Compensation Committee from time to time. Each of the named executive officers serves at the will of the Board of Directors, and the Company may terminate each executive’s employment at any time. However, if the Company terminates the employment of Messrs. Schmitt or Bagley without cause, the Company must pay the executive 30 days’ salary and benefits during that period (or may elect to give 30 days’ notice in the alternative). If the Company terminates Messrs. Bryan or Jorgens or Ms. Alderman without cause, the Company must pay continued salary and vesting of options and restricted stock (if applicable) for a period of six months. For additional information about the employment agreements, see Potential Payments Upon Termination or Change-in-Control below.

Compensation Elements

The Company’s executive compensation program includes the following elements: base salary, annual bonus, and equity incentive compensation (which collectively represent an executive officer’s total direct

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compensation, as reported below) and other compensation. For 2006, the mix of the total direct compensation elements for each of the named executive officers is as follows:

Percent of Total Direct Compensation

 

Base Salary

Base salaries for the Company’s named executive officers are established based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies for similar positions. On March 12, 2007, the Compensation Committee increased the 2007 base salary amounts for the named executive officers by 4%.

Annual Bonus

The employment agreements for Messrs. Schmitt and Bagley provide that each executive is eligible for a discretionary annual bonus up to an amount equal to a specified percentage of their respective salaries (Mr. Schmitt 20% and Mr. Bagley 30%). These awards are intended to compensate the executives for achieving financial and operational goals and for achieving individual annual performance objectives. These objectives vary depending on the individual executive, and relate generally to strategic factors such as progress towards the furtherance of the Company’s business plan. In addition, while it is the Company’s current policy not to award bonuses to its most senior executive officers, the Compensation Committee has the authority to award discretionary annual bonuses and to set the terms and conditions of those bonuses. Each of Messrs. Schmitt and Bagley received bonuses for 2006, which were paid in March 2007.

Equity Incentive Compensation

The Company’s equity compensation program consists of stock options and, in some prior years, restricted stock awards. The Company grants equity awards as long-term incentive compensation for its named executive officers. Equity awards allow the executive to acquire and maintain stock ownership in the Company and encourage the executive to remain employed by the Company to satisfy the vesting conditions. The equity awards are granted under the Plan. The Plan permits the grant of options and stock awards. The Company is seeking stockholder approval for changes to the Plan to increase the number of shares available for issuance, to permit additional types of awards, to add provisions to satisfy tax deduction requirements, and to make other changes to update the Plan. For more information about the Plan and the proposed changes, see Proposal 2, Approval of Amended and Restated 2000 Stock Incentive Plan.

Beginning in 2006, the Company expenses stock option grants under Statement of Financial Accounting Standards 123 (revised 2004), Share-Based Payment (“SFAS 123(R)”).

In 2006, the Company granted stock options to each of its named executive officers in the amounts reported in the “Grants of Plan-Based Awards” table. The options vest in equal installments over a 4 year period based upon continued employment and expire 10 years after the date of grant.

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Other Compensation

Each named executive officer is entitled to the health, medical and other benefits the Company makes available to all employees. These other benefits include the Company’s contribution to an employee’s 401(k) account equal to 12% of the base salary, subject to Internal Revenue Service limitations. Additionally, and as discussed below in the Summary Compensation Table, Mr. Bryan received amounts for moving expenses and a related tax gross up, Mr. Schmitt received a payment related to the timely filing of the Company’s Registration Statement on Form 10 (“Form 10”), and Ms. Alderman received director fees and fees for consulting services performed prior to her becoming an employee to achieve Company objectives, including those in connection with ICO North America’s debt financing. Mr. Jorgens received an amount for tax return preparation and the Company pays his premiums related to his supplemental life insurance and individual disability insurance.

Report of the Compensation Committee of the Board of Directors

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended.

 

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SUMMARY COMPENSATION TABLE

The following table shows for the fiscal year ended December 31, 2006, compensation awarded to or paid to, or earned by, the Company’s Chief Executive Officer, Senior Vice President—Finance and its three other most highly compensated executive officers at December 31, 2006 (“Named Executive Officers”).

Summary Compensation Table for Fiscal 2006

(1)              Amounts represent discretionary cash bonuses paid in 2006, as described in more detail in the section entitled “Compensation Discussion and Analysis” above.

(2)              Amounts represent the dollar amounts recognized as stock-based compensation expense in 2006 for financial accounting purposes related to restricted stock awards granted to certain executives in 2005, determined in accordance with SFAS 123(R). These amounts do not correspond to the actual value that may be realized by the Named Executive Officers. See Note 3 of Notes to Consolidated Financial Statements set forth in the Company’s Annual Report on Form 10-K for fiscal year 2006, filed with the SEC on April 2, 2007 (“Form 10-K”) for the assumptions used in determining such amounts.

(3)              Amounts represent the dollar amounts recognized as stock-based compensation expense in 2006 for financial accounting purposes related to stock options granted to each Named Executive Officer in 2006 and in prior years, before reflecting forfeitures, determined in accordance SFAS 123(R). These amounts do not correspond to the actual value that may be realized by the Named Executive Officers. See Note 3 of Notes to Consolidated Financial Statements set forth in the Company’s Form 10-K for the assumptions used in determining such amounts.

(4)              Amounts represent cash incentive awards paid in 2006. During 2006, Mr. Schmitt received a payment related to the timely filing of the Form 10 and Ms. Alderman received fees for consulting services performed prior to her becoming an employee to achieve Company objectives in connection with the ICO North America debt financing.

(5)              Amounts include a Company contribution of $26,400 to each of the Named Executive Officer’s 401(k) plan accounts, as described in more detail in the section entitled “Compensation Discussion and Analysis” above.

(6)              Amount includes moving expenses of $51,751 and relocation expenses of $331,141, which includes taxes paid on behalf of Mr. Bryan in the amount of $115,734.

(7)              Consists of Company paid premiums related to Mr. Jorgen’s supplemental life insurance and individual disability insurance of $1,510 and $6,322, respectively. Also includes $2,000 paid towards Mr. Jorgen’s tax return preparation fees.

(8)              Consists of fees for consulting services and director fees prior to Ms. Alderman becoming an employee of the Company.

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GRANTS OF PLAN-BASED AWARDS

The following table shows for the fiscal year ended December 31, 2006, certain information regarding grants of plan-based awards to the Named Executive Officers.

Grants of Plan-Based Awards in Fiscal 2006

(1)              Options listed were granted under the Plan and, unless otherwise indicated, vest over four years from the date of grant, with 25% vesting in equal increments at the end of each annual period.

(2)              Except as noted in footnote (4) below, the exercise price of each option award granted on October 3, 2006 is based on the closing price of a share of the Company’s common stock on the grant date.

(3)              Amounts reflect the full grant date fair value of stock and option awards that the Company would expense in its financial statements over the award’s vesting schedule. See Note 3 of Notes to Consolidated Financial Statements set forth in the Company’s Form 10-K for the assumptions used in determining such amounts. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that may be realized by the Named Executive Officers.

(4)              Mr. Schmitt was granted an option to purchase 30,000 shares with an exercise price of $5.85, the closing share price on July 14, 2006, the date the performance objective was satisfied. On October 3, 2006, the date of the next board meeting and the date the option was granted, the closing share price was $5.90 per share. This resulted in potentially adverse tax treatment pursuant to Section 409A. To avoid adverse tax treatment, on March 12, 2007, the Board of Directors cancelled the option and granted an option with identical terms whose exercise price was above fair market value on the date of grant.

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OUTSTANDING EQUITY AWARDS

The following table shows for the fiscal year ended December 31, 2006, certain information regarding outstanding equity awards at fiscal year end for the Named Executive Officers.

Outstanding Equity Awards at December 31, 2006

    (1)   500,000 options to vest on each of November 14, 2007, November 14, 2008 and November 14, 2009.

    (2)   50,000 shares to vest on each of July 14, 2007 and July 14, 2008.

    (3)   50,000 options to vest on each of October 3, 2007, October 3, 2008, October 3, 2009 and October 3, 2010.

    (4)   30,000 options to vest on each of November 14, 2007, November 14, 2008 and November 14, 2009.

    (5)   7,500 options to vest on each of October 3, 2007, October 3, 2008, October 3, 2009 and October 3, 2010.

    (6)   3,750 options to vest on each of October 3, 2007, October 3, 2008, October 3, 2009 and October 3, 2010.

    (7)   The vested portions of these options will automatically terminate on the earliest of: (i) if the Company completes a successful public offering of its shares or lists its shares on a national exchange or Nasdaq then upon the later of (a) the first anniversary of the effective date of a public offering or listing of the Company’s shares on a national exchange or Nasdaq, or (b) the first anniversary of the expiration date of any lock-up agreement as a result of the offering; and (ii) the expiration date of the option.

    (8)   100,000 options to vest on each of November 14, 2007, November 14, 2008 and November 14, 2009.

    (9)   34,250 options to vest on each of October 3,  2007, October 3, 2008, October 3, 2009 and October 3, 2010.

(10)   162,500 options to vest on each of November 14, 2007, November 14, 2008 and November 14, 2009.

(11)   12,500 options to vest on each of October 3, 2007, October 3, 2008, October 3, 2009 and October 3, 2010.

(12)   50,000 options to vest on each of November 14, 2007, November 14, 2008 and November 14, 2009.

(13)   10,625 options to vest on each of October 3, 2007, October 3, 2008, October 3, 2009 and October 3, 2010.

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OPTION EXERCISES AND STOCK VESTED

The following table shows for the fiscal year ended December 31, 2006, certain information regarding option exercises and stock vested during the last fiscal year with respect to the Named Executive Officers.

Option Exercises and Stock Vested in Fiscal 2006

(1)          Amounts have been computed by multiplying the number of shares by the Company’s closing price of the underlying shares on the vesting date.

NONQUALIFIED DEFERRED COMPENSATION

During the fiscal year ended December 31, 2006, the Company did not provide non-qualified deferred compensation benefits for any Named Executive Officer.

PENSION BENEFITS

During the fiscal year ended December 31, 2006, the Company did not provide pension benefits for any Named Executive Officer.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

Employment Agreements with Named Executive Officers and Change-in-Control Arrangements

The Company entered into an employment letter agreement with J. Timothy Bryan, effective as of November 1, 2005, naming him as the Chief Executive Officer of both the Company and ICO North America  Mr. Bryan is entitled to an annual salary of $550,000 under the agreement. The agreement provided for the grant of an option to purchase 2,000,000 shares of Class A common stock under the 2000 Stock Incentive Plan, such option to be inclusive of any options that he would have received for services as a director, and for a grant of 150,000 shares of restricted Class A common stock. Under the agreement, Mr. Bryan’s employment is at-will, and he is subject to termination with or without cause and may leave the Company for any reason. However, if the Company terminates him without cause (other than following a change in control), he is entitled to a lump sum payment of accrued salary and vacation time and reimbursement of expenses, and upon execution of a release of claims, continued salary and vesting of options granted under the plan and restricted stock for 6 months. If Mr. Bryan is terminated without cause within 6 months after a change in control of the Company, upon execution of a release of claims, he was entitled as of December 31, 2006 to the continuation of his salary then in effect for 11 months. The period for which salary was to continue was initially 24 months, but reduced one month for every month after November 2005, until it reached the current 6 month period after April 2007. In case of termination for cause or his resignation, Mr. Bryan would only be entitled to accrued salary and vacation time and unpaid expenses. In addition, in the case of termination for cause, the option granted in connection with the agreement would immediately terminate, notwithstanding any prior vesting. The agreement obligates Mr. Bryan not to compete following termination of employment for a period equal to the longer of 12 months or the applicable severance period.

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