exhibit4-2.htm


    
      

    


    


    Exhibit
4.2

     

    


     

    FIRST
AMENDED AND RESTATED

    2008
EQUITY INCENTIVE PLAN

    FOR
NON-EMPLOYEE DIRECTORS

    OF

    ICO,
INC.

    


    [Amending
and Restating the 2008 Equity Incentive Plan for Non-Employee Directors of ICO,
Inc.]

    


     

    This 2008
Equity Incentive Plan for Non-employee Directors of ICO, Inc. has been adopted
by the Board of Directors of the Company, effective on January 23, 2008, subject
to approval by the stockholders of the Company no later than twelve months
thereafter.

     

    ARTICLE
I

     

    Purpose

     

    The
purpose of this Plan is to advance the interests of the Company, by providing an
additional incentive to attract and retain qualified and competent Directors,
upon whose efforts and judgment the success of the Company is largely dependent,
through the encouragement of stock ownership in the Company by such
persons.

     

    ARTICLE
II

     

    Definitions

     

    2.1           Definitions. For purposes of this
Plan the following capitalized terms shall have the definition that is
attributed to them, unless another definition is clearly indicated by a
particular usage and context:

     

    
      	
               
      

            	
              (a)

            	
              “Affiliate”
      shall mean, except to the extent otherwise not permitted under Code
      Section 424(f), any one or more corporations which are members of a
      “parent-subsidiary controlled group” as such term is defined in Code
      Section 1563(a)(1), except that “at least 50 percent” shall be substituted
      for “at least 80 percent” each place it appears in Code Section
      1563(a)(1).

            


    

     

    
      	
               
      

            	
              (b)

            	
              “Award”
      shall mean any form of award authorized and granted under this Plan,
      whether singly or in combination, pursuant to the terms, conditions,
      restrictions and/or limitations (if any) the Committee may
      establish.  Awards granted under this Plan may
      include:

            


    

     

    
      	
               
      

            	
              (i)

            	
              Options;
      and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Restricted
      Shares.

            


    

     

    
      	
               
      

            	
              (c)

            	
              “Award
      Agreement” shall mean an agreement between an Eligible Person and the
      Company evidencing an Award including, without limitation, an Option
      Agreement and/or a Restricted Stock
Agreement.

            


    

     

    
      	
               
      

            	
              (d)

            	
              “Board”
      shall mean the Board of Directors of the
  Company.

            


    

     

    
      	
               
      

            	
              (e)

            	
              ”Change
      of Control” shall have the meaning ascribed to it in Section
      9.3.

            


    

     

    
      	
               
      

            	
              (f)

            	
              “Code”
      shall mean the Internal Revenue Code of 1986, as
  amended.

            


    

     

    
      	
               
      

            	
              (g)

            	
              “Committee”
      shall mean the Board.

            


    

     


    
      
         


      

      
        - 1
-  

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (h)

            	
              “Company”
      shall mean ICO, Inc.

            


    

     

    
      	
               
      

            	
              (i)

            	
              “Date
      of Grant” shall mean the date when a grant of an Award is effective,
      which, unless otherwise provided in this Plan, shall be designated by the
      Committee at the time it makes an Award, and shall be either the date when
      the Award is made or a date in the future specified by the
      Committee.

            


    

     

    
      	
               
      

            	
              (j)

            	
              “Director”
      shall mean a member of the Board.

            


    

     

    
      	
               
      

            	
              (k)

            	
              “Eligible
      Person(s)” shall mean those persons who are Directors of the Company and
      who are not employees or officers of the Company or a
      Subsidiary.

            


    

     

    
      	
               
      

            	
              (l)

            	
              “Fair
      Market Value” of a Share on a specified date shall mean the last sale
      price reported on the NASDAQ Global MarketTM (“NASDAQ”) on the specified
      date, or if Shares are no longer traded on the NASDAQ, the last sales
      price of the Shares reported on any other stock exchange or
      over-the-counter trading system on which the Shares are trading on the
      specified date.   If no sale has been made on a specified
      date, then the Fair Market Value of the Shares shall be the last sales
      price on the last preceding date on which any sales of Shares were made on
      the NASDAQ or other applicable stock exchange or over-the-counter trading
      system.

            


    

     

    
      	
               
      

            	
              (m)

            	
              “Minimum
      Restricted Period” shall have the meaning ascribed to it in Section
      7.3.

            


    

     

    
      	
               
      

            	
              (n)

            	
              “Nonqualified
      Stock Option” shall mean an Option granted under this Plan that is not an
      incentive stock option as defined in Section 422A of the
    Code.

            


    

     

    
      	
               
      

            	
              (o)

            	
              “Option”
      shall mean the right to purchase a stated number of Shares at a specified
      price.  An Option may be granted to an Eligible Person subject
      to the terms of this Plan, and such other conditions and restrictions as
      the Committee deems appropriate.

            


    

     

    
      	
               
      

            	
              (p)

            	
              “Option
      Expiration Date” shall mean the last day of the term of an Option, i.e.
      the last date when an Option may be
exercised.

            


    

     

    
      	
               
      

            	
              (q)

            	
              “Option
      Price” shall mean the purchase price per Share subject to an Option and,
      unless otherwise provided in this Plan, shall be fixed by the Committee,
      but shall not be less than 100% of the Fair Market Value of a Share on the
      Date of Grant.

            


    

     

    
      	
               
      

            	
              (r)

            	
              “Optionee”
      shall mean a person to whom an Option is granted under this Plan or any
      successor to the rights of such person under this Plan by reason of the
      death of such person.

            


    

     

    
      	
               
      

            	
              (s)

            	
              “Performance
      Measures” shall have the
      meaning ascribed to it in Section
3.3.

            


    

     

    
      	
               
      

            	
              (t)

            	
              “Performance
      Period” shall have the meaning ascribed to it in Section
    3.3.

            


    

     

    
      	
               
      

            	
              (u)

            	
              “Permanent
      Disability” shall mean any medically determinable physical or mental
      impairment rendering an individual unable to engage in any substantial
      gainful activity, which disability can be expected to result in death or
      which has lasted or can be expected to last for a continuous period of not
      less than twelve months.

            


    

     

    
      	
               
      

            	
              (v)

            	
              “Plan”
      shall mean this 2008 Equity Incentive Plan for Non-employee Directors of
      ICO, Inc., which is a restatement of the previously adopted Fourth Amended
      and Restated 1993 Stock Option Plan for Non-employee Directors of ICO,
      Inc.

            


    

     

    
      	
               
      

            	
              (w)

            	
              “Restricted
      Period” shall
      have the meaning ascribed to it in Section
7.1.

            


    

     

    
      	
               
      

            	
              (x)

            	
              “Restricted
      Shares” shall have the meaning ascribed to it in Section
    7.1.

            


    

     

    
      	
               
      

            	
              (y)

            	
              “Rule
      16b-3” shall mean Rule 16b-3 promulgated under the Securities and Exchange
      Act of 1934, as amended.

            


    

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (z)

            	
              “Share(s)”
      shall mean a share or shares of the common stock, no par value, of the
      Company.

            


    

     

    
      	
               
      

            	
              (aa)

            	
              “Subsidiary”
      shall mean any corporation (other than the Company) in any unbroken chain
      of corporations beginning with the Company if, at the time of the granting
      of the Award, each of the corporations other than the last corporation in
      the unbroken chain owns stock possessing more than 50 percent of the total
      combined voting power of all classes of stock in one of the other
      corporations in such chain.

            


    

     

    
      	
               
      

            	
              (bb)

            	
              “Termination
      of Service” shall mean the cessation of the Eligible Person’s relationship
      with the Company as a director.

            


    

     

    
      	
               
      

            	
              (cc)

            	
              “Vesting
      Period” shall mean the continuous period of service on the Board required
      for an Award of Options or Restricted Shares to become fully
      earned.

            


    

     

    ARTICLE
III

     

    Administration

     

    
      	
              3.1

            	
              Administration.  The
      Plan shall be administered by the Committee.  Actions shall be
      taken by a majority of the Committee
members.

            


    

     

    
      	
              3.2

            	
              Interpretation.  Except
      as specifically limited by the provisions of this Plan, the Committee in
      its discretion shall have the authority to interpret the provisions of
      this Plan and decide all questions of fact arising in its
      application.

            


    

    


    
      	
              3.3

            	
              Awards Contingent on
      Performance.  The Committee may grant Awards contingent
      upon the achievement of performance or other objectives (“Performance
      Measures”) during a specified period (“Performance
      Period”).  Except as specifically limited by the provisions of
      this Plan, the Committee in its discretion shall have the authority to
      determine the Performance Period and Performance Measures, if any,
      applicable to an Award, and the Performance Period and Performance
      Measures shall be set forth in the Award Agreement.  If an Award
      is subject to Performance Measures, the number of Options that vest, or
      the number of Restricted Shares earned will be contingent on the degree to
      which the Performance Measures established at the time of the initial
      Award are satisfied or achieved, in the sole discretion of the
      Committee.  The Committee shall have the sole discretion to
      revise the Performance Measures or Performance Period to reflect
      significant events or changes that occurred during the Performance
      Period.

            


    

     

    
      	
              3.4

            	
              Final and Binding
      Decisions.  Any action, decision, interpretation or
      determination by the Committee with respect to the application or
      administration of this Plan shall be final and binding upon all persons,
      and need not be uniform with respect to its determination of recipients,
      amount, timing, form, terms or provisions of
  Awards.

            


    

     

    
      	
              3.5

            	
              Limitation of Liability;
      Indemnification.  No member of the Committee shall be
      liable for any action or determination taken or made in good faith with
      respect to this Plan or any Award granted hereunder, and to the extent
      permitted by law, all members shall be indemnified by the Company for any
      liability and expenses that may occur through any claim or cause of
      action.

            


    

     

    ARTICLE
IV

     

    Shares Subject to
Plan

     

    The
maximum number of Shares that may be made subject to Awards granted under this
Plan shall not exceed FIVE HUNDRED AND SIXTY THOUSAND (560,000) Shares, such
number having been adjusted for all previous stock splits, from Shares held in
the Company’s treasury or from authorized and unissued Shares.  To the
extent permitted under Rule 16b-3, upon lapse or termination of any Award for
any reason without being completely exercised, the Shares that were subject to
such Award may again be subject to other Awards.  The maximum number
of shares which may be subject to Awards granted under this Plan is subject to
adjustment as provided in Article IX hereof with respect to the Shares subject
to Awards then outstanding.  Exercise of an Award granted under this
Plan in any manner shall result in a decrease in the number of Shares which may
thereafter be available, both for purposes of this Plan and for sale to any one
individual, by the number of Shares as to which the Award is exercised.


     

     

    
      
        
        

      

      
        - 3
-

        
          

        

      

      
        
        

      

    

    Separate
stock certificates may be, but are not required to be, issued by the Company for
those Shares acquired pursuant to the exercise of a Nonqualified Stock Option or
upon the satisfaction of the applicable Vesting Period and/or Performance
Measures under an Award of Restricted Shares. Any Option granted hereunder shall
be a Nonqualified Stock Option.

     

    ARTICLE
V

     

    Award
Agreements

     

    
      	
              5.1

            	
              Award
      Agreements.  All Awards granted under this Plan shall be
      evidenced by a written Award Agreement in such form or forms as the
      Committee in its sole discretion may
determine.

            


    

     

    
      	
              5.2

            	
              Consent of Eligible
      Person. Each Eligible Person, by acceptance of an Award under this
      Plan, shall be deemed to have consented to be bound, on the Eligible
      Person’s own behalf and on the behalf of the Eligible Person’s heirs,
      assigns and legal representatives, by all terms and conditions of this
      Plan, as amended from time to time.

            


    

     

    ARTICLE
VI

     

    Stock Option
Awards

     

    
      	
              6.1

            	
              Option Expiration
      Dates.  Subject to the provisions regarding Termination
      of Awards in Article VIII herein, each Option shall be for a term of from
      one to ten years from the Date of Grant.  In the event that the
      Option Expiration Date is not specified in the Option Award Agreement, it
      shall be ten years from the Date of
Grant.

            


    

     

    
      	
              6.2

            	
              Revisions to Option
      Awards.  The Committee, subject to the Eligible Person’s
      approval, on or after the Date of Grant, may establish different exercise
      schedules and impose other conditions upon exercise and vesting for any
      particular Option or groups of
Options.

            


    

     

    
      	
              6.3

            	
              Option
      Price.  The Option Price per Share of any grant of
      Options under this Plan shall be not less than 100% of the Fair Market
      Value per Share on the Date of
Grant.

            


    

     

    
      	
              6.4

            	
              Exercise of
      Options.  Any person entitled to exercise an Option in
      whole or in part may do so by delivering written notice of exercise to the
      Company, attention Corporate Secretary, at its principal
      office.  The written notice shall specify the number of Shares
      for which an Option is being exercised and the Date of Grant of the Option
      being exercised, and shall be accompanied by full payment of the Option
      Price for the Shares being
purchased.

            


    

     

    6.5           Payment of Option
Price

     

    
      	
               
      

            	
              (a)

            	
              Payment
      of Option Price may be made in cash, by wire transfer, by broker-assisted
      cashless exercise (in accordance with the Company’s current procedures for
      broker-assisted cashless exercise), by the tender of Shares, or any
      combination thereof, or in such other form as may be determined by the
      Committee.  Shares tendered for payment of the Option Price
      shall be valued at their Fair Market Value on the Date of
      Exercise.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Payment
      through tender of Shares may be made by instruction from the Eligible
      Person to the Company to withhold from the Shares issuable upon exercise
      that number which have a Fair Market Value equal to the exercise price for
      the Option or the portion thereof being
  exercised.

            


    

     

    ARTICLE
VII

     

    Restricted Share
Awards

     

    


    
      	
              7.1

            	
              Certain
      Definitions.  “Restricted Shares” are Awards consisting
      of grants of Shares to Eligible Persons, the vesting of which are subject
      to a Vesting Period and/or Performance Measures established by the
      

            


    

     

    
      
        
        

      

      
        - 4
-

        
          

        

      

      
        
        

      

    

    Committee.  The period when any Restricted Shares have
not yet been earned because the Vesting Period and/or Performance Measures have
not been satisfied is referred to herein as the “Restricted Period.”

     

    
      	
              7.2

            	
              Awards of Restricted
      Shares.  The Committee shall designate the Eligible
      Persons to whom Restricted Shares are to be awarded and the number of
      Shares that are subject to the Award.  Restricted Shares may be
      granted to the same Eligible Person on more than one
      occasion.  Restricted Shares may be granted under this Section
      7.2 even if the Eligible Person receives a grant of Options under Article
      VI hereof.

            


    

     

    
      	
              7.3

            	
              Terms and
      Conditions.  Grants of Restricted Shares awarded to
      Eligible Persons under this Plan shall be subject to the following terms
      and conditions and to such other terms and conditions, not inconsistent
      with this Plan, as shall be prescribed by the Committee in its sole
      discretion and as shall be contained in the Restricted Share
      Agreement:

            


    

     

    
      	
               
      

            	
              (a)

            	
              Restricted
      Shares awarded to Eligible Persons may not be sold, assigned, transferred,
      pledged or otherwise encumbered, except as provided otherwise herein,
      during the Restricted Period applicable to each
  Award.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      Restricted Period of Restricted Shares granted under this Plan shall be
      ten years or such shorter period as the Committee may determine at the
      time of the Award of such Restricted Shares.  Under no
      circumstances shall the Restricted Period be less than six months
      (“Minimum Restricted Period”); provided, however, that the vesting of any
      Restricted Shares may be accelerated to occur prior to the end of the
      Minimum Restricted Period pursuant to the provisions of Sections 8.2 or
      9.3 below.

            


    

     

    
      	
               
      

            	
              (c)

            	
              Except
      for the restrictions described in the preceding paragraph, and as
      otherwise provided in a Restricted Share Agreement, during the Restricted
      Period the Eligible Person as holder of such Restricted Shares shall have
      all the rights of a stockholder, including but not limited
    to:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      right to vote such Restricted Shares,
and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      right to receive all dividends paid on such Restricted
    Shares.

            


    

     

    
      	
               
      

            	
              (d)

            	
              The
      Committee may, subject to the Eligible Person’s approval, at any time
      after the date of an Award of Restricted Shares, adjust the length of any
      applicable Vesting Period or Performance Period to account for individual
      circumstances of an Eligible Person or group of Eligible
      Persons.

            


    

     

    
      	
               
      

            	
              (e)

            	
              Each
      certificate issued or book entry made in respect of Restricted Shares
      awarded under this Plan shall be registered in the name of the Eligible
      Person and, at the discretion of the Committee, until the conclusion of
      the Restricted Period each such certificate may be deposited in a bank or
      alternative location designated by the Committee.  Each such
      certificate shall bear the following (or a similar)
  legend:

            


    

     

    “The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) contained in the
2008 Equity Incentive Plan for Non-employee Directors of ICO, Inc. [as amended
from time to time] and an agreement entered into between the registered
stockholder and ICO, Inc.  A copy of such plan and agreement is on
file in the office of the Secretary of ICO, Inc., 1811 Bering Drive, Suite 200,
Houston, Texas 77057 [or current ICO, Inc. address].”

     

    
      	
               
      

            	
              (f)

            	
              At
      the end of the Vesting Period applicable to a Restricted Share Award (that
      is not subject to Performance Measures), certificates issued in respect to
      such Restricted Shares will be transferred free of all restrictions to the
      Eligible Person (or the Eligible Person’s successors) and all restrictions
      will be removed from an Eligible Person’s (or the Eligible Person’s
      successors) book entry(ies) representing such Restricted Shares, as
      applicable. At the end of the Performance Period applicable to a
      Restricted Share Award, the Committee shall determine the number of
      Restricted Shares that have been earned in accordance with the provisions
      of Section 3.3 above; provided that the Vesting Period, if any, has been
      satisfied, certificates issued in respect to such Restricted Shares will
      be transferred free of all restrictions to the Eligible Person (or the
      Eligible Person’s 

            


    

     

    
      
        
        

      

      
        - 5
-

        
          

        

      

      
        
        

      

    

    successors) and all restrictions will be removed from an Eligible
Person’s (or the Eligible Person’s successors) book entry(ies) representing such
Restricted Shares, as applicable; and any Restricted Shares that are not earned
because of failure to satisfy applicable Performance Measures shall be
forfeited.

     

    ARTICLE
VIII

     

    Termination of
Awards

     

    
      	
              8.1

            	
              Termination During Service as
      a Director.  During an Eligible Person’s period of
      continuous service as a director of the Company, an Award of Options or
      Restricted Shares will be terminated only if it (a) has been fully
      exercised or earned, (b) has not vested due to a failure to satisfy any
      Performance Measures or other terms of grant or (c) has expired or been
      forfeited by its terms.

            


    

     

    
      	
              8.2

            	
              Termination of
      Service.

            


    

     

    
      	
               
      

            	
              (a)

            	
              Options.

            


    

     

    (1)           Unless
an Option Award Agreement provides otherwise, upon Termination of Service for
any reason, the then exercisable portion of any Option will terminate upon the
earlier of (i) the first business day following expiration of the three month
period after the date of Termination of Service or (ii) the Option Expiration
Date set forth in the Award Agreement pursuant to which the award was
granted.  The portion of any Option Award not exercisable will
terminate on the date of Termination of Service.

     

    (2)           Notwithstanding
the preceding paragraph, if an Eligible Person holding an Option dies or becomes
subject to Permanent Disability while serving as a director of the Company or
within three months after Termination of Service, such Option may be exercised
to the extent exercisable on the date of the occurrence of the event which
triggers the operation of this paragraph, at any time by the estate or guardian
of such person or by those persons to whom the Option may have been transferred
by will or by the laws of decent and distribution until the earlier of (i) the
date which is one year after the date of such death or occurrence of Permanent
Disability or (ii) the Option Expiration Date set forth in the Award
Agreement.

     

    (3)           The
Committee may at any time prior to the three months after the date of
Termination of Service provide that particular Options not be affected by such
termination and continue in force whether or not exercisable at the date of such
Termination of Service until the Option Expiration Date set forth in the Award
Agreement or any date prior thereto.

     

    (4)           Except
as provided in Article IX hereof, in no event will the continuation of the term
of an Option beyond the date of Termination of Service allow the Eligible
Person, or the Eligible Person’s beneficiaries or heirs, to accrue additional
rights under this Plan, or to purchase more Shares through the exercise of an
Option that could have been purchased on the date of Termination of
Service.  Notwithstanding anything contained herein, no Option may be
exercised in any event after the expiration of ten years from the Date of Grant
of such Option.

     

    
      	
               
      

            	
              (b)

            	
              Restricted
      Shares.  Except as otherwise determined by the Committee
      in its sole discretion, or as otherwise permitted herein, an Eligible
      Person who ceases to be a Director of the Company prior to the end of the
      Vesting Period applicable to a Restricted Share Award for any reason shall
      forfeit all Restricted Shares remaining subject to such outstanding
      Restricted Share Award.

            


    

     

    
      	
               
      

            	
              (c)

            	
              Termination due to
      Death or Permanent Disability – Awards Subject to Performance
      Measures.  In the event that an Eligible Person who holds
      Options or Restricted Shares conditioned upon Performance Measures ceases
      to be a Director because of death or because the Eligible Person becomes
      subject to a Permanent Disability, and the Performance Period has not
      ended at the time of such termination due to death or Permanent
      Disability, the Committee shall have sole discretion to determine whether
      all or any portion of the Award that is subject to Performance Measures
      will be deemed earned.

            


    

     


    
      
         


      

      
        - 6
-  

        
          

        

      

      
         


      

    


    ARTICLE
IX

     

    Adjustments to Awards due to
Changed Circumstances

     

    
      	
              9.1

            	
              Recapitalizations.  In
      the event of changes in the issued and outstanding Shares of the Company
      as a result of stock dividends, split-ups, recapitalizations, combinations
      of Shares, exchanges of Shares or related transactions, (a) the maximum
      number of Shares subject to Award under this Plan as provided in Article
      IV hereof shall be adjusted accordingly so that the same proportion of the
      Company’s issued and outstanding Shares shall continue to be subject to
      being so awarded and (b) the number and class of Shares and price per
      Share for each outstanding Award of Options or Restricted Shares shall be
      correspondingly adjusted by the
Committee.

            


    

     

    
      	
              9.2

            	
              Distributions to Shareholders
      and Other Adjustments.  The Committee shall make
      appropriate adjustments in the Option Price of any outstanding Award of
      Options to reflect any spin-off of assets, extraordinary dividends or
      other distributions to
shareholders.

            


    

     

    
      	
              9.3

            	
              Change of
      Control.  In event that the Company shall, pursuant to
      action by its Board, at any time propose to merge into, consolidate with,
      or sell or transfer substantially all of its assets, or otherwise enter in
      to a transaction pursuant to which the Company is not the surviving
      corporation (other than a corporate restructuring among Company
      Affiliates), or in which the outstanding Shares of the Company are
      converted to cash, other securities or other property (any such
      circumstances referred to herein as a “Change of Control”) and provision
      is not made pursuant to the terms of the transaction(s) relating to such
      Change of Control (the “Transaction”) for the assumption by the surviving,
      resulting or acquiring corporation of any outstanding category of Awards
      under this Plan, or for the substitution of new Awards therefor, with
      regard for Awards for which no provision is made the following shall
      apply:

            


    

     

    
      	
               
      

            	
              (a)

            	
              Options. The
      Committee shall cause written notice of the proposed Transaction to be
      given to each Option holder not more than twenty days prior to the
      anticipated effective date of the proposed Transaction, and the holder’s
      Option, unless otherwise provided for under the terms of the applicable
      Award Agreement, shall become fully (100%) vested and, prior to a date
      specified in such notice, which shall not be more than ten days prior to
      the anticipated effective date of the proposed Transaction, each Option
      holder shall have the right to exercise his or her Option to purchase any
      or all Shares then subject to such Option (unless otherwise provided under
      the terms of the applicable Award Agreement), including those, if any,
      which by reason of other provisions of this Plan have not then become
      available for purchase. Each Option holder, by so notifying the Company in
      writing, may, in exercising his or her Option, condition such exercise
      upon, and provide that such exercise shall become effective at the time
      of, but immediately prior to, the consummation of the proposed
      Transaction, in which event such Option holder need not make payment for
      the Shares to be purchased upon exercise of such Option until five days
      after written notice by the Company to such Option holder that the
      proposed Transaction has been consummated. If the proposed Transaction is
      consummated, each Option, to the extent not previously exercised prior to
      the date specified in the foregoing notice, shall terminate on the
      effective date of the proposed Transaction. If the proposed Transaction is
      abandoned, (i) any Shares not purchased upon exercise of such Option shall
      continue to be available for purchase in accordance with the other
      provisions of this Plan and (ii) to the extent that any Option not
      exercised prior to such abandonment shall have vested solely by operation
      of this paragraph, such vesting shall be deemed annulled, and the original
      vesting schedule set forth shall be reinstituted, as of the date of such
      abandonment.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Restricted
      Shares. The Committee shall cause written notice of the proposed
      Transaction to be given to each holder of Restricted Shares not more than
      twenty days prior to the anticipated effective date of the proposed
      Transaction, and unless provided for under the terms of the applicable
      Award Agreement, all restrictions imposed on Restricted Shares shall lapse
      and such Restricted Shares shall become fully (100%) vested as of a date
      specified in the notice, which shall not be more than ten days prior to
      the anticipated effective date of the proposed
  Transaction.

            


    

     

    
      	
              9.4

            	
              No Adjustment in Certain
      Circumstances.  Except as otherwise expressly provided
      herein, the issuance by the Company of Shares of its capital stock of any
      class, or securities convertible into Shares of capital stock of any
      class, either in connection with a direct sale or upon the exercise of
      rights or warrants to subscribe 

            


    

     

     

    
      
        
        

      

      
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    therefor, or upon conversion of Shares or obligations of the
Company convertible into such Shares or other securities, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
Shares and/or the Option Price of Shares then subject to outstanding Awards
granted under this Plan.

     

    
      	
              9.5

            	
              No Limitation on Corporate
      Actions.  Without limiting the generality of anything
      contained in this Article IX, the existence of outstanding Awards granted
      under this Plan shall not affect in any manner the right or power of the
      Company to make, authorize or consummate (a) any or all adjustments,
      recapitalizations,  reorganizations or other changes in the
      Company’s capital structure or its business; (b) any merger or
      consolidation of the Company; (c) any issue by the Company of debt
      securities, or preferred or preference stock which would rank above the
      Shares subject to outstanding Awards; (d) the dissolution or liquidation
      of the Company; (e) any sale, transfer or assignment of all or any part of
      the assets or business of the Company; or (f) any other corporate act or
      proceeding, whether of a similar character or
  otherwise.

            


    

     

    ARTICLE
X

     

    Transferability of
Awards

     

    
      	
              10.1

            	
              Transferability of
      Awards.  During the lifetime of an Eligible Person to
      whom an Award of Options or Restricted Shares has been granted, such
      Options or Restricted Shares are not transferable voluntarily or by
      operation of law, and may be exercised only by the designated Eligible
      Person.  Upon the death of an Eligible Person to whom an Award
      of Options or Restricted Shares has been granted and is outstanding, the
      Options or Restricted Shares may be transferred to the beneficiaries or
      heirs of the deceased Eligible Person by will or by the laws of descent
      and distribution.  Notwithstanding the foregoing limitations,
      the Committee, in its sole discretion, may allow for the transferability
      of any Option or Restricted Share Award granted pursuant to this
      Plan.

            


    

     

    
      	
              10.2

            	
              Issuance of
      Shares.  No person shall be, or have any of the rights or
      privileges of, a shareholder of the Company with respect to any of the
      Shares subject to an Option, unless and until certificates representing
      such Shares shall have been issued and delivered to such
      person.  As a condition of any transfer of the certificate for
      Shares, the Committee may obtain such agreements or undertakings, if any,
      as it may deem necessary or advisable to assure compliance with any
      provision of this Plan, any Award Agreement or any law or regulation
      including, but not limited to, the
following:

            


    

     

    
      	
               
      

            	
              (a)

            	
              a
      representation, warranty or agreement by the Optionee to the Company, at
      the time any Option is exercised, that he or she is acquiring the Shares
      to be issued to him or her for investment and not with a view to, or for
      sale in connection with, the distribution of any such Shares;
      and

            


    

     

    
      	
               
      

            	
              (b)

            	
              a
      representation, warranty or agreement to be bound by any legends that are,
      in the opinion of the Committee, necessary or appropriate to comply with
      the provisions of any securities law deemed by the Committee to be
      applicable to the issuance of the Shares and are endorsed upon the Share
      certificates.

            


    

     

    Share
certificates issued to an Eligible Person who is a party to any shareholders
agreement or a similar agreement shall bear the legends contained in such
agreements.

     

    ARTICLE
XI

     

    Amendment or Discontinuance
of Plan

     

    The Board
of Directors may amend, modify, suspend or terminate this Plan for the purpose
of meeting or addressing any changes in legal requirements or for any other
purpose permitted by law.  Subject to changes in law or other legal
requirements, including any change in the provisions of Rule 16b-3 and Section
162(m) of the Code that would permit otherwise, this Plan may not be amended
without the consent of the holders of a majority of the Shares of stock
represented at a meeting of Shareholders for which a quorum is present, to (i)
increase the aggregate number of Shares of stock that may be issued under this
Plan (except for adjustments pursuant to Article VIII of this Plan), (ii)
increase materially the benefit accruing to holders of Awards under this Plan,
or (iii) modify materially the requirements as to eligibility for participation
in this Plan.

     

    


    
      
        
        

      

      
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    ARTICLE
XII

     

    Miscellaneous

     

    
      	
              12.1

            	
              Retention as
      Director.  Neither this Plan nor any Award granted under
      this Plan shall confer upon any person any right to continue to serve as a
      Director.

            


    

     

    
      	
              12.2

            	
              Interpretation; Governing
      Law

            


    

     

    
      	
               
      

            	
              (a)

            	
              If
      any provision of this Plan is held to be invalid for any reason, such
      holding shall not affect the remaining provisions hereof, but instead this
      Plan shall be construed and enforced as if such provision had never been
      included in this Plan.

            


    

     

    
      	
               
      

            	
              (b)

            	
              This
      Plan shall be governed by the laws of the State of
  Texas.

            


    

     

    
      	
               
      

            	
              (c)

            	
              Headings
      contained in this Plan are for convenience only and shall in no manner be
      construed as part of this Plan.

            


    

     

    
      	
              12.3

            	
              Section 83(b)
      Election.  If an Eligible Person receives Shares under
      this Plan that are subject to a “substantial risk of forfeiture” and are
      not “transferable” as those terms are defined for purposes of Section
      83(a) of the Code, then such Eligible Person may elect under Section 83(b)
      of the Code to include in his gross income, for his taxable year in which
      the Shares are transferred to him, the excess of the Fair Market Value of
      such Shares at the time of transfer (determined without regard to any
      restriction other than one which by its terms will never lapse), over the
      amount paid for the Shares.  If the Eligible Person makes the
      Section 83(b) election described above, the Eligible Person shall (i) make
      such election in a manner that is satisfactory to the Committee, (ii)
      provide the Company with a copy of such election, (iii) agree to promptly
      notify the Company if any Internal Revenue Service or state tax agent, on
      audit or otherwise, questions the validity or correctness of such election
      or of the amount of income reportable on account of such election, and
      (iv) agree to such withholding as the Committee may reasonably require in
      its sole and absolute discretion.

            


    

     

    
      	
              12.4

            	
              Effective Date and Termination
      Date; Adoption of Plan.  The effective date of this Plan
      is the 13th day of April, 1993, the date on which the Board originally
      adopted this Plan.  The shareholders of the Company approved
      this Plan on June 15, 1993.  This Plan was subsequently amended
      and restated by the Board on August 29, 1996, which amendment and
      restatement was approved by the Shareholders on October 7,
      1996.  In connection with the corporate restructuring effected
      on April 1, 1998, pursuant to a Plan of Merger of ICO Merger Sub, Inc.
      with and into ICO, Inc., the Company (which prior to such merger was named
      “ICO Holdings, Inc.”) adopted this Plan and assumed the obligations under
      this Plan from the entity previously named “ICO, Inc.” (which after such
      merger was renamed “ICO P&O, Inc.”).  This Plan was again
      amended and restated by the Board on January 8, 1999.  This Plan
      was again amended and restated by the Board on December 18, 2001, which
      amendment and restatement was approved by the Shareholders on March 15,
      2002.  This Plan was again amended and restated by the Board on
      November 18, 2005, which amendment and restatement was approved by the
      Shareholders on March 14, 2006.  This Plan was again amended and
      restated by the Board on January 23, 2008, which amendment and restatement
      was approved by the shareholders on March 11, 2008.  This Plan
      was again amended and restated by the Board on December 8, 2008, which
      amendment and restatement was approved by the shareholders on March 9,
      2009. No further Awards may be granted under this Plan after January 23,
      2018, subject to early termination by the Board pursuant to Article XI of
      this Plan.  This Plan shall remain in effect until all Awards
      granted under this Plan have been fully earned, exercised or have
      expired.

            


    

     

    
      	
              12.5

            	
              Government
      Regulations.  This Plan, and the granting and exercise of
      Awards thereunder, and the obligation of the Company to sell and deliver
      Shares under such Awards, shall be subject to all applicable laws, rules
      and regulations, and to such approvals by any governmental agencies or
      national securities exchanges as may be
  required.

            


    

     

     


    
      
         


      

      
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