Document:

exhibit4-1.htm

    
      

    

    Exhibit 4.1

    Third
Amended and Restated

    ICO,
Inc.

    2007
Equity Incentive Plan

    

    [Amending
and Restating the 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 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.

            

    

    

    
      
         

      

      
        - 1
-  

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (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 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.

            

    

    
      
         

      

      
        - 2
-  

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (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.

            

    

    

    

    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.

            

    

    
      
         

      

      
        - 3
-  

        
          

        

      

      
         

      

    

    

    
      	
              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 2,310,000 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.

            

    

    

    

    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.

            

    

    

    

    
      
         

      

      
        - 4
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    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.

            

    

    

    6.5           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.

            

    

    
      
         

      

      
        - 5
-  

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (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.”

            

    

     

    
      	
              7.2

            	
              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

     

    
      
         

      

      
        - 6
-  

        
          

        

      

      
         

      

    

    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].”

     

    
      	
               
      

            	
              (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 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

            

    

    
      
         

      

      
        - 7
-  

        
          

        

      

      
         

      

    

    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 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

            

    

    
      
         

      

      
        - 8
-  

        
          

        

      

      
         

      

    

    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
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 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

    
      
         

      

      
        - 9
-  

        
          

        

      

      
         

      

    

    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).  The Plan was
amended and restated by the Board of Directors on December 8, 2008, and approved
by the shareholders of the Company on March 9, 2009.

    

    

    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.

            

    

    

    
      	
              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.

            

    

    
       

      
        - 10
-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 

            

    

     

     

    
      
        
        

      

      
        - 7
-

        
          

        

      

      
        
        

      

    

     

    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.

     

    

    
      
        
        

      

      
        - 8
-

        
          

        

      

      
        
        

      

    

     

    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.

            

    

     

     

    
      
         

      

      
        - 9
-

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