exh10-1.htm


    
      

    

    Exhibit
      10.1

    Second
      Amended and Restated

    ICO,
      Inc.

    2007
      Equity Incentive Plan

    


    


    ARTICLE
      1

    Objectives

    


    This
      Second Amended and Restated ICO, Inc. 2007 Equity Incentive Plan (formerly
      known
      as the ICO, Inc. 1998 Stock Option Plan) is intended to advance the interests
      of
      the Company, its shareholders, and its subsidiaries by encouraging and enabling
      selected key employees of the Company, upon whose judgment, initiative and
      effort the Company is largely dependent for the successful conduct of its
      business, to acquire and/or increase and retain a proprietary interest in the
      Company by ownership of its stock.

    


    ARTICLE
      2

    Definitions

    


    
      	
              2.1

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

            


    

    


    
      	
               

            	
              (a)

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

            


    

    


    (i)           Options;
      and

     

    (ii)           Restricted
      Shares.

     

    
      	
               

            	
              (c)

            	
              “Award
                Agreement” means an agreement between a Participant and ICO, Inc.
                evidencing an Award.

            


    

    


    
      	
               

            	
              (d)

            	
              “Change
                of Control” has the meaning ascribed to it in Section
                10.3.

            


    

    


    
      	
               

            	
              (e)

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

            


    

    


    
      	
               

            	
              (f)

            	
              “Committee”
                means the Compensation Committee, or such other committee comprised
                solely
                of “non-employee directors,” as defined in Rule 16b-3(b)(3), as designated
                by the

            


    

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    Board
      of
      Directors, vested with authority for administration of the Plan by the
      Board.  The Committee shall be comprised solely of two (2) or more
      outside directors (within the meaning of the term “outside directors” as used in
      Code Section 162(m) and applicable interpretive authority thereunder, and within
      the meaning of “Nonemployee Director” as defined in Rule 16b-3, as
      currently in effect or as hereinafter modified or amended).

    


    
      	
               

            	
              (g)

            	
              The
                “Company” means ICO, Inc. and any Affiliate of
                ICO.

            


    

    


    
      	
               

            	
              (h)

            	
              “Date
                of Exercise” means the date on which the Company has received a
                written notice of exercise of an Option, in such form as is acceptable
                to
                the Company, and full payment of the purchase
                price.

            


    

    


    
      	
               

            	
              (i)

            	
              “Date
                of Grant” means the date when the grant of an Award is effective,
                which 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)

            	
              “Effective
                Date” means January 25, 2007.

            


    

    


    
      	
               

            	
              (k)

            	
              “Eligible
                Employee” means any individual employed by the Company who performs
                services for the Company and is treated as an employee for federal
                income
                tax purposes either in the U.S. or in another country where such
                individual is employed  or is otherwise
                taxable.  Eligible Employees include individuals employed by the
                Company and on foreign assignment or working for the Company in a
                business
                unit that is located outside of such individual’s country of
                citizenship.

            


    

    


    
      	
               

            	
              (l)

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

            


    

    


    
      	
               

            	
              (m)

            	
              “Incentive
                Stock Option” shall have the same meaning as given to that term by
                Section 422 of the Code.

            


    

    


    
      	
               

            	
              (n)

            	
              “Nonqualified
                Stock Option” means any Option granted under the Plan that is not
                considered an Incentive Stock
                Option.

            


    

    


    
      	
               

            	
              (o)

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

            


    

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    be
      designated by the Committee to be either an Incentive Stock Option or a
      Nonqualified Stock Option.

    


    
      	
               

            	
              (p)

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

            


    

    


    
      	
               

            	
              (q)

            	
              “Option
                Price” means the purchase price per Share subject to an Option and
                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)

            	
              “Participant”
                means any Eligible Employee who is granted an Award under the
                Plan.

            


    

    


    
      	
               

            	
              (s)

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

            


    

    


    
      	
               

            	
              (t)

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

            


    

    


    
      	
               

            	
              (u)

            	
              “Permanent
                Disability” means 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 12 months.

            


    

    


    
      	
               

            	
              (v)

            	
              “Plan”
                means this ICO, Inc. 2007 Equity Incentive Plan, which is a restatement
                of
                the previously adopted Fourth Amended and Restated ICO, Inc. 1998
                Stock
                Option Plan.

            


    

    


    
      	
               

            	
              (w)

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

            


    

    


    
      	
               

            	
              (x)

            	
              An
                Award of “Restricted Shares” has the meaning ascribed to it in
                Section 7.1.

            


    

    


    
      	
               

            	
              (y)

            	
              Rule
                16b-3(b)(3) means Rule 16b-3 promulgated under the Securities
                Exchange Act of 1934.

            


    

    


    
      	
               

            	
              (z)

            	
              “Share”
                means one share of the common stock, no par value, of ICO,
                Inc.

            


    

    


    
      	
               

            	
              (aa)

            	
              “Termination
                of Employment” means the cessation of a Participant’s relationship as
                an employee of the Company for federal tax purposes in any jurisdiction
                where the individual is subject to federal income taxes as an employee
                of
                the Company.

            


    

    


    
      	
               

            	
              (bb)

            	
              “Vesting
                Period” means the continuous period of employment required for an
                Award of Options or Restricted Shares to become fully earned and
                exercisable.

            


    

    


    
      
         

      

      
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    ARTICLE
      3

    Administration

    


    
      	
              3.1

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

            


    

    


    
      	
              3.2

            	
              Except
                as specifically limited by the provisions of the Plan, the Committee
                in
                its discretion shall have the authority
                to:

            


    

    


    
      	
               

            	
              (a)

            	
              determine
                which Eligible Employees shall be granted
                Awards;

            


    

    


    
      	
               

            	
              (b)

            	
              determine
                the number of Shares which may be subject to each
                Award;

            


    

    


    
      	
               

            	
              (c)

            	
              for
                any Award that is an Option, determine the Option Price and the Option
                Expiration Date;

            


    

    


    
      	
               

            	
              (d)

            	
              determine
                the term and Vesting Period, if any, applicable to each Award of
                Options
                and Restricted Shares;

            


    

    


    
      	
               

            	
              (e)

            	
              for
                any Award that is an Option, determine whether each such Option is
                an
                Incentive Stock Option or Nonqualified Stock
                Option;

            


    

    


    
      	
               

            	
              (f)

            	
              for
                each Award, designate the Date of Grant of the Award, which must
                be on or
                after the date when a majority of the Committee members have specifically
                approved the material terms of the Award, and which Date of Grant
                cannot
                be retroactive;

            


    

    


    
      	
               

            	
              (g)

            	
              interpret
                the provisions of the Plan and decide all questions of fact arising
                in its
                application; and

            


    

    


    
      	
               

            	
              (h)

            	
              prescribe
                such rules and procedures for Plan administration as from time to
                time it
                may deem advisable.

            


    

    


    
      	
              3.3

            	
              An
                Award may be granted contingent upon the achievement of performance
                or
                other objectives (“Performance Measures”) during a specified period (the
                “Performance Period”).  Except as specifically limited by the
                provisions of the 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 applicable to
                the
                Award 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.

            


    

    


    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    
      	
              3.4

            	
              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

            	
              No
                member of the Committee shall be liable for any action or determination
                taken or made in good faith with respect to the 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
      4

    Shares
      Subject to Plan

    


    
      	
              4.1

            	
              Number
                of Authorized Shares.  The Shares that may be made subject
                to Awards granted under the Plan shall not exceed 1,960,000 Shares
                in the
                aggregate.  Except as provided in Section 4.2 and 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 aggregate
                number of Shares which may be issued under the Plan shall be subject
                to
                adjustment in the same manner as provided in Article 10 hereof with
                respect to Shares subject to Awards then outstanding.  Exercise
                of an Award in any manner shall result in a decrease in the number
                of
                Shares which may thereafter be available, both for purposes of the
                Plan
                and for sale to any one individual, by the number of Shares as to
                which
                the Award is exercised.  Separate stock certificates may be, but
                are not required to be, issued by the Company for those Shares acquired
                pursuant to the exercise of an Incentive Stock Option, for those
                Shares
                acquired pursuant to the exercise of  a Nonqualified Stock
                Option, or upon satisfaction of applicable Vesting Period and/or
                Performance Measures under an Award of Restricted
                Shares.

            


    

    


    
      	
              4.2

            	
              Annual
                Grant Limitation.  The maximum number of Shares with respect
                to which Awards (in any combination of Options and Restricted Shares)
                may
                be granted to any Participant during each fiscal year of ICO, Inc.
                is
                400,000 (subject to adjustment in the same manner as provided in
                Article
                10 hereof with respect to Shares subject to Awards then
                outstanding).  The limitation set forth in the preceding
                sentence shall be applied in a manner which will permit compensation
                generated under the Plan to constitute “performance-based” compensation
                for purposes of Code Section 162(m), including, without limitation,
                counting against such maximum number of Shares, to the extent required
                under Code Section 162(m), any Shares subject to Options that are
                canceled
                or repriced.

            


    

    


    
      	
              4.3

            	
              Term
                of Plan.  Subject to the terms and conditions of the Plan,
                the Committee may, from time to time prior to January 25, 2017, grant
                Awards to Eligible Employees on such terms and conditions as the
                Committee
                may determine.  More than one Award may be granted to the same
                Eligible Employee.

            


    

    


    
      
         

      

      
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    ARTICLE
      5

    Award
      Agreements

    


    
      	
              5.1

            	
              All
                Awards granted under the 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

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

            


    

    


    


    ARTICLE
      6

    Stock
      Option Awards

    


    
      	
              6.1

            	
              Option
                Expiration Dates.  Subject to specific provisions relating
                to Incentive Stock Options set forth in Section 6.5 below, and subject
                to
                the provisions regarding Termination of Awards in Article 9 below,
                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
                Participant’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.  In
                addition, the Committee may, at any time subject to the Participant’s
                approval, reclassify an Incentive Stock Option as a Nonqualified
                Stock
                Option.

            


    

    


    
      	
              6.3

            	
              Exercise
                of Options.  Any person entitled to exercise an Option in
                whole or in part may do so by delivering a 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.

            


    

    


    6.4           Payment
      of Option Price.

    


    
      	
               

            	
              (a)

            	
              Payment
                of the Option Price may be made in cash, by the tender of Shares,
                or both,
                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 Participant
                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 portion thereof being
                exercised.

            


    

    


    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    6.5           Designation
      as Incentive Stock Options or Nonqualified Stock Options

    


    
      	
               

            	
              (a)

            	
              The
                Committee in its discretion may designate whether an Option is to
                be
                considered an Incentive Stock Option or a Nonqualified Stock
                Option.  The Committee may grant both an Incentive Stock Option
                and a Nonqualified Stock Option to the same
                individual.  However, where both an Incentive Stock Option and a
                Nonqualified Stock Option are awarded at one time, such Options shall
                be
                deemed to have been awarded in separate grants, shall be clearly
                identified, and in no event will the exercise of one such Option
                affect
                the right to exercise the other such
                Option.

            


    

    


    
      	
               

            	
              (b)

            	
              Any
                Option designated by the Committee as an Incentive Stock Option will
                be
                subject to the general provisions applicable to all Options granted
                under
                the Plan.  In addition, the Incentive Stock Option shall be
                subject to the following specific
                provisions:

            


    

    


    
      	
               

            	
              (1)

            	
              At
                the time the Incentive Stock Option is granted, if the Eligible Employee
                owns, directly or indirectly, stock representing more than 10% of
                (i) the
                total combined voting power of all classes of stock of the Company,
                or
                (ii) a corporation that owns 50% or more of the total combined voting
                power of all classes of stock of the Company,
                then:

            


    

    


    
      	
               

            	
              (i)

            	
              the
                Option Price must equal at least 110% of the Fair Market value of
                the
                Shares on the Date of Grant, and

            


    

    


    
      	
               

            	
              (ii)

            	
              the
                term of the Option shall not be greater than five years from Date
                of
                Grant.

            


    

    


    
      	
               

            	
              (2)

            	
              The
                aggregate Fair Market Value of Shares (determined at the Date of
                Grant)
                with respect to which Incentive Stock Options are exercisable by
                a
                Participant for the first time during any calendar year under this
                Plan or
                any other plan maintained by the Company shall not exceed
                $100,000.

            


    

    


    
      	
               

            	
              (c)

            	
              If
                any Option is not granted, exercised, or held pursuant to the provisions
                noted immediately above, it will be considered a Nonqualified Stock
                Option
                to the extent that the Award is in conflict with these
                restrictions.

            


    

    


    


    ARTICLE
      7

    Restricted
      Share Awards

    


    
      	
              7.1

            	
              “Restricted
                Shares” are Awards consisting of grants of Shares to Participants, the
                vesting of which are subject to a Vesting Period and/or Performance
                Measures established by the 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-

        
          

        

      

      
         

      

    

    


     

    
      	
              7.2

            	
              The
                Committee shall designate the Participants to whom Restricted Shares
                are
                to be awarded and the number of Shares that are subject to the
                Award.

            


    

     

    
      	
              7.3

            	
              Grants
                of Restricted Shares awarded to Participants under the Plan shall
                be
                subject to the following terms and conditions and to such other terms
                and
                conditions, not inconsistent with the Plan, as shall be prescribed
                by the
                Committee in its sole discretion and as shall be contained in the
                Award
                Agreement:

            


    

     

    
      	
               

            	
              (a)

            	
              Restricted
                Shares awarded to Participants may not be sold, assigned, transferred,
                pledged or otherwise encumbered, except as provided otherwise herein,
                for
                a Restricted Period of ten (10) 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 one (1) year (“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 Section 9.2 or Section 10.3
                below

            


    

     

    
      	
               

            	
              (b)

            	
              Except
                for the restrictions described in the preceding paragraph, and as
                otherwise provided in an Award Agreement, during the Restricted Period
                the
                Participant 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.

            


    

     

    
      	
               

            	
              (c)

            	
              The
                Committee may, subject to the Participant’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 a Participant or group of Participants, provided
                that the
                Restricted Period may not be less than the Minimum Restricted
                Period.

            


    

     

    
      	
               

            	
              (d)

            	
              Each
                certificate issued in respect of Restricted Shares awarded under
                the Plan
                shall be registered in the name of the Participant 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
      ICO, Inc. 2007 Equity Incentive Plan 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].”

     

    


    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              (e)

            	
              At
                the end of the Vesting Period applicable to a Restricted Share Award
                (that
                is not subject to Performance Measures), such Restricted Shares will
                be
                transferred free of all restrictions to a Participant (or the
                Participant’s successors).  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, such Restricted Shares will be transferred free
                of all
                restrictions to the Participant (or the Participant’s successors); and any
                such Restricted Shares that are not earned because of failure to
                satisfy
                applicable Performance Measures shall be
                forfeited.

            


    

     

    
      	
              7.4

            	
              Substitution
                of Cash.  If provided for in the applicable Award Agreement,
                the Committee may, in its discretion, substitute cash equal to the
                Fair
                Market Value (determined as of the date of distribution) of Restricted
                Shares otherwise required to be distributed to a
                Participant.

            


    

     

    


     

    ARTICLE
      8

    Transferability
      of Awards

    


    During
      the lifetime of a Participant 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
      Participant.  Upon the death of a Participant to whom an Award of
      Options or Restricted Shares has been granted, the Options or Restricted Shares
      may be transferred to the beneficiaries or heirs of the deceased Participant
      by
      will or by the laws of descent and distribution.  In addition, to the
      extent permitted in an Award Agreement, the Committee may, in its discretion,
      allow for the transferability of any Nonqualified Stock Options or Restricted
      Shares granted pursuant to this Plan.

    


    


    ARTICLE
      9

    Termination
      of Awards

    


    
      	
              9.1

            	
              Termination
                During Period of Continuous Employment.  During a
                Participant’s period of continuous employment with 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 failure to satisfy
                any Performance Measures or other terms of grant, or (c) has expired
                or
                been forfeited by its terms.

            


    

    


    9.2           Termination
      of Employment.

    


    
      	
               

            	
              (a)

            	
              Options.

            


    

    


    
      	
               

            	
              (1)

            	
              Unless
                an Option Award Agreement provides otherwise, upon Termination of
                Employment 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

            


    

     

    
      
         

      

      
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    three
      month period after the date of Termination of Employment, or (ii) the Option
      Expiration Date set forth in the Award Agreement pursuant to which the Option
      was granted.  The portion of any Option Award not exercisable will
      terminate on the date of Termination of Employment.  For purposes of
      the Plan, a leave of absence approved by the Company shall not be deemed to
      be
      Termination of Employment.

    


    
      	
               

            	
              (2)

            	
              Notwithstanding
                the preceding paragraph, if a Participant holding an Option dies
                or
                becomes subject to Permanent Disability while employed or within
                three
                months after Termination of Employment, 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 descent 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 three months after the date of
                Termination of Employment 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 Employment until the Option Expiration
                Date set forth in the Award Agreement or any date prior
                thereto.

            


    

    


    
      	
               

            	
              (4)

            	
              Except
                as provided in Article 10 hereof, in no event will the continuation
                of the
                term of an Option beyond the date of Termination of Employment allow
                the
                Participant, or the Participant’s beneficiaries or heirs, to accrue
                additional rights under the Plan, or to purchase more Shares through
                the
                exercise of an Option that  could have been purchased on the day
                that employment was terminated.  In addition, 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, a Participant whose employment with the Company
                terminates 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 the employment with the Company of a
                Participant with Options or Restricted Shares conditioned on Performance
                Measures terminates because of death or because the Participant becomes
                subject to 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

            


    

     

    
      
         

      

      
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    or
      any
      portion of the Award that is subject to Performance Measures will be deemed
      earned.

    


    


    ARTICLE
      10

    Adjustments
      to Awards due to Changed Circumstances

    


    
      	
              10.1

            	
              In
                the event of changes in the outstanding common stock of the Company
                as a
                result of stock dividends, split-ups, recapitalizations, combinations
                of
                Shares, exchanges of Shares or related transactions, 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.

            


    

    


    
      	
              10.2

            	
              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.

            


    

    


    
      	
              10.3

            	
              In
                event that the Company shall, pursuant to action by its Board of
                Directors, 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 ICO, Inc. is not the surviving corporation
                (other than a corporate restructuring among Company Affiliates),
                or in
                which the outstanding Shares of ICO, Inc. 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
                the
                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 (20) days prior
                to the
                anticipated effective date of the proposed Transaction, and the
                Participant’s Option, unless otherwise provided for under the terms of the
                Option 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
                Participant 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 Option Award Agreement), including those,
                if any,
                which by reason of other provisions of the Plan have not then become
                available for purchase.  Each Participant, 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
                Transaction, in which event such Participant 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 Participant that the Transaction
                has
                been consummated.  If the 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

            


    

     

    
      
         

      

      
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    Transaction.  If
      the 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 the 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 Participant holding Restricted
                Shares not more than twenty (20) days prior to the anticipated effective
                date of the proposed Transaction, and unless provided for under the
                terms
                of the Restricted Share 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 (10) days prior to the anticipated effective date
                of the
                proposed Transaction.

            


    

    


    


    ARTICLE
      11

    Amendment
      or Discontinuance of Plan

    


    
      	
              11.1

            	
              The
                Board of Directors may at any time amend, suspend, or discontinue
                the
                Plan; provided, however, that except as otherwise permitted by Rule
                16b-3,
                Code Section 162(m) or Code Section 422, no amendments by the Board
                of
                Directors shall, without further approval of the shareholders of
                ICO,
                Inc.:

            


    

    


    
      	
               

            	
              (a)

            	
              change
                the class of Eligible Employees;

            


    

    


    
      	
               

            	
              (b)

            	
              except
                as provided in Articles 4 and 9 hereof, increase the number of Shares
                which may be subject to Award granted under the Plan;
                or

            


    

    


    
      	
               

            	
              (c)

            	
              cause
                the Plan or any Award granted under the Plan to fail to (i) qualify
                for
                exemption from Section 16(b) of the Act, (ii) be excluded from the
                $1
                million deduction limitation imposed by Code Section 162(m), or (iii)
                qualify as an “Incentive Stock Option” as defined by Code Section
                422.

            


    

    


    
      	
              11.2

            	
              No
                amendment or discontinuance of the Plan shall alter or impair any
                Option
                granted under the Plan without the consent of the holder
                thereof.

            


    

    


    


    ARTICLE
      12

    Effective
      Date

    


    The
      Plan became effective on January
      12, 1998, having been adopted by the Board of Directors on that date and
      approved by the shareholders of the Company within twelve (12) months
      thereafter.  The Plan was amended and restated by the Board of
      Directors on December 18, 2001, and approved by the

     

    
      
         

      

      
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    shareholders
      of the Company on March 15, 2002.  The Plan was amended and restated
      by the Board of Directors on January 27, 2004, and approved by the shareholders
      of the Company on March 5, 2004.  The Plan was amended by the Board of
      Directors on September 8, 2005 and was amended and restated by the Board of
      Directors on November 16, 2005 (without the necessity of shareholder approval
      for such amendments).  The Plan was amended and restated by the Board
      of Directors on January 26, 2006, and approved by the shareholders of the
      Company on March 14, 2006.  The Plan was amended and restated by the
      Board of Directors on January 25, 2007, and approved by the shareholders of
      the
      Company on March 5, 2007.  The Plan was amended and restated by the
      Board of Directors on August 7, 2007 (without the necessity of shareholder
      approval for such amendments).  The Plan was amended and restated by
      the Board of Directors on December 5, 2007 (without the necessity of shareholder
      approval for such amendments).

    


    


    ARTICLE
      13

    Miscellaneous

    


    
      	
              13.1

            	
              Nothing
                contained in this Plan or in any action taken by the Board of Directors
                or
                shareholders of the Company shall constitute the granting of an Award,
                and
                an Award shall not be deemed granted unless: a written Award Agreement
                has
                been delivered to the respective employee; the employee has executed
                the
                Award Agreement respecting the Award in conformance with the provisions
                of
                the Plan and the terms of grant; and the Award Agreement has been
                executed
                on behalf of the Company.

            


    

    


    
      	
              13.2

            	
              Nothing
                contained in this Plan or in any Award granted pursuant to it shall
                confer
                upon any employee any right to continue in the employ of the Company
                or to
                interfere in any way with the right of the Company to terminate employment
                at any time.  So long as a holder of an Award shall continue to
                be an employee of the Company, the Award shall not be affected by
                any
                change of the Participant’s duties or
                position.

            


    

    


    
      	
              13.3

            	
              Certificates
                for Shares purchased through exercise of Options or received due
                to an
                award of Restricted Shares will be issued in regular course after
                exercise
                of the Option and payment therefor as called for by the terms of
                the
                Option, or the vesting and/or performance terms of the award of Restricted
                Shares.  No persons holding an Option granted under this Plan
                shall have any rights or privileges of a shareholder of the Company
                with
                respect to any Shares issuable upon exercise of such Option until
                certificates representing such Shares shall have been issued and
                delivered.  No Shares shall be issued and delivered upon
                exercise of an Option unless and until the Company, in the opinion
                of its
                counsel, has complied with all applicable registration requirements
                of the
                Securities Act of 1933 and any applicable state securities laws,
                and with
                any applicable listing requirements of any national securities exchange
                on
                which ICO, Inc.’s securities may then be listed as well as any other
                requirements of law.

            


    

    


    
      	
              13.4

            	
              This
                Plan shall continue in effect until the expiration of all Awards
                granted
                under the Plan unless terminated earlier in accordance with Article
                11;
                provided, however, that it shall otherwise terminate ten years after
                the
                Effective Date.

            


    

    


    
      
         

      

      
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              13.5

            	
              Notwithstanding
                any provision in this Plan or in any Award Agreement, no Restricted
                Share
                Award granted after the Effective Date of this amendment and restatement
                of the Plan shall be exercisable prior to the date the ICO, Inc.
                2007
                Equity Incentive Plan (amending and restating the Fourth Amended
                and
                Restated ICO, Inc. 1998 Stock Option Plan) is approved by the shareholders
                of the Company (“Date of Shareholder Approval”).  In the event
                that any Options are granted after the Effective Date, such Options
                may
                only be exercisable prior to the Date of Shareholder Approval if,
                as of
                the Date of Grant of such Options, the total number of Options subject
                to
                awards under the Plan does not exceed the limit of Shares available
                for
                grant under the Plan as set forth in the Fourth Amended and Restated
                ICO,
                Inc. 1998 Stock Option Plan.

            


    

    
 

     

     

     

     

    -14-