S-8

FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 2009

REGISTRATION NO. 333-_____

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

______________________

ICO, Inc.

(Exact name of registrant as specified in its charter)

Texas	76-0566682
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1811 Bering Drive, Suite 200

Houston, Texas 77057

(Address of principal executive offices, including zip code)

__________________

THIRD AMENDED AND RESTATED ICO, INC. 2007 EQUITY INCENTIVE PLAN

FIRST AMENDED AND RESTATED 2008 EQUITY INCENTIVE PLAN FOR NON-

EMPLOYEE DIRECTORS OF ICO, INC.

(Full title of the plans)

A. John Knapp, Jr.

Chief Executive Officer and President,

ICO, INC.

1811 Bering Drive, Suite 200

Houston, Texas 77057

(Name and address of agent for service)

(713) 351-4100

(Telephone number, including area code, of agent for service)

Copies to:

David Taylor

Locke Lord Bissell & Liddell LLP

600 Travis St., Suite 3400

Houston, Texas 77002-3095

(713) 226-1496

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer o                                                                           Accelerated filer þ

Non-Accredited filer     o                                                                           Smaller reporting company o

CALCULATION OF REGISTRATION FEE

Title of Securities To be Registered	Amount to be Registered (1)	Proposed Maximum Offering Price Per Share (2)	Proposed Maximum Aggregate Offering Price (2)	Amount of Registration Fee
Common Stock, no par value	500,000 shares	$2.45	$1,225,000	$68.36

(1)  Consists of an additional 350,000 shares of common stock, no par value (the “Common Stock”), of ICO, Inc. (the “Registrant”) reserved for issuance under the Third Amended and Restated ICO, Inc. 2007 Equity Incentive Plan (formerly known as the Fourth Amended and Restated ICO, Inc. 1998 Stock Option Plan) (the “2007 Employee Plan”) and an additional 150,000 shares of the Common Stock of the Registrant reserved for issuance under the First Amended and Restated 2008 Equity Incentive Plan for Non-Employee Directors of ICO, Inc. (formerly known as the Fourth Amended and Restated 1993 Stock Option Plan for Non-Employee Directors of ICO, Inc.) (the “Director Plan” and together with the 2007 Employee Plan, the “Plans”).  Pursuant to Rule 416 of the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also relates to such indeterminate number of additional shares as may become issuable under the Plans as a result of the antidilution provisions of the Plans.

(2)  Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) and (h) under the Securities Act. The offering price per share and aggregate offering price for the unissued stock options and Common Stock are based upon the average of the high and low prices of the Common Stock of the Registrant as reported on the NASDAQ Global Market on May 1, 2009.

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STATEMENT UNDER GENERAL INSTRUCTION E - REGISTRATION OF ADDITIONAL SHARES

This Registration Statement on Form S-8 is being filed by the Registrant for the purpose of registering an additional (i) 350,000 shares of Common Stock of the Registrant reserved for issuance under the 2007 Employee Plan and (ii) 150,000 shares of Common Stock of the Registrant reserved for issuance under the Director Plan.  Following the registration of the additional shares of Common Stock under this Registration Statement, a total of (i) 2,310,000 shares of Common Stock will be registered under the 2007 Employee Plan and (ii) 560,000 shares of Common Stock will be registered under the Director Plan.

The additional shares of Common Stock to be registered by this Registration Statement are of the same class of securities covered by the Registrant’s previously filed Registration Statements on Form S-8 filed on May 22, 1998 (Registration No. 333-53443) (the "1998 Registration Statement") with respect to the 2007 Employee Plan and on December 22, 1999 (Registration No. 333-93352) (the “1999 Registration Statement”) with respect to the Director Plan.  Pursuant to General Instruction E to Form S-8, the contents of the 1998 Registration Statement and the 1999 Registration Statement, including periodic reports that the Registrant filed after the dates of the 1998 Registration Statement and 1999 Registration Statement to maintain current information about the Registrant, are incorporated herein by reference.

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PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 8.  EXHIBITS.

The following exhibits are filed herewith:

4.1	Third Amended and Restated ICO, Inc. 2007 Equity Incentive Plan
4.2	First Amended and Restated 2008 Equity Incentive Plan for Non-Employee Directors of ICO, Inc.
5.1	Opinion of Locke Lord Bissell & Liddell LLP
23.1	Consent of PricewaterhouseCoopers LLP
23.2	Consent of Locke Lord Bissell & Liddell LLP  (included in Exhibit 5.1)
24.1	Powers of Attorney (included on the signature page to this Registration Statement)

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, on the 8th day of May, 2009.

	ICO, INC.
By:	/s/ A. John Knapp, Jr.
Name:	A. John Knapp, Jr.
Title:	President and Chief Executive Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints A. John Knapp, Jr., his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement on Form S-8, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the 8th day of May, 2009.

Signature	Title
/s/ Gregory T. Barmore
Gregory T. Barmore	Chairman of the Board
/s/ A. John Knapp, Jr.
A. John Knapp, Jr.	President, Chief Executive Officer and Director (Principal Executive Officer)
/s/ Bradley T. Leuschner
Bradley T. Leuschner	Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ Eugene R. Allspach
Eugene R. Allspach	Director
/s/ Eric O. English
Eric O. English	Director
/s/ David E. K. Frischkorn, Jr.
David E. K. Frischkorn, Jr.	Director
/s/ Daniel R. Gaubert
Daniel R. Gaubert	Director
/s/ Max W.  Kloesel
Max W. Koesel	Director
/s/ Kumar Shah
Kumar Shah	Director
/s/ Warren W. Wilder
Warren W. Wilder	Director

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INDEX TO EXHIBITS

4.1	Third Amended and Restated ICO, Inc. 2007 Equity Incentive Plan
4.2	First Amended and Restated 2008 Equity Incentive Plan for Non-Employee Directors of ICO, Inc.
5.1	Opinion of Locke Lord Bissell & Liddell LLP
23.1	Consent of PricewaterhouseCoopers LLP
23.2	Consent of Locke Lord Bissell & Liddell LLP  (included in Exhibit 5.1)
24.1	Powers of Attorney (included on the signature page to this Registration Statement)

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EX-4.1

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.

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(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 Market™  (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.

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(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.

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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.

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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.

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(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

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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

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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

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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

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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.

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EX-4.2

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.

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(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 Market™ (“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.

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(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.

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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

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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

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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.

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ARTICLE IX

Adjustments to Awards due to Changed Circumstances

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

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

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

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

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

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

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

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

ARTICLE X

Transferability of Awards

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

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

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

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

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

ARTICLE XI

Amendment or Discontinuance of Plan

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

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ARTICLE XII

Miscellaneous

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

12.2 Interpretation; Governing Law

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

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

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

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

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

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

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EX-5.1

Exhibit 5.1

  3400 JPMorgan Chase Tower, 600 Travis Houston, TX 77002 Telephone: 713-226-1200 Fax: 713-223-3717 www.lockelord.com David F. Taylor Direct Telephone: 713-226-1496 Direct Fax: 713-229-2565 dtaylor@lockelord.com

May 8, 2009

ICO, Inc.

1811 Bering Drive, Suite 200

Houston, Texas  77057

Ladies and Gentlemen:

We have acted as special counsel for ICO, Inc., a Texas corporation (the “Company”), in connection with the registration, pursuant to a Registration Statement on Form S-8 being filed with the Securities and Exchange Commission (the “Registration Statement”) under the Securities Act of 1933, as amended, of the offering of up to an aggregate of 500,000 shares of the Company's common stock, no par value (the “Common Stock”), 350,000 shares of which may be issued under the Company’s Third Amended and Restated 2007 Equity Incentive Plan and 150,000 shares of which may be issued under the Company’s 2008 Equity Incentive Plan for Non-Employee Directors (collectively, the “Plans”).

In such capacity, we have examined the corporate documents of the Company, including its Articles of Incorporation and its Bylaws, each as amended or restated, and resolutions adopted by its board of directors and committees thereof.  We have also examined the Registration Statement, the Plans, and such other documents that we have deemed necessary for the purposes of the expressing the opinion contained herein. We have relied on representations made by and certificates of the officers of the Company and public officials with respect to certain facts material to our opinion.  We have made no independent investigation regarding such representations and certificates.

Based upon the foregoing, we are of the opinion that the shares of Common Stock, when issued and paid for pursuant to the provisions of each of the Plans, will be duly authorized, validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement.

Very truly yours,

/s/ Locke Lord Bissell & Liddell LLP

Locke Lord Bissell & Liddell LLP

Atlanta, Austin, Boston, Chicago, Dallas, Houston, London, Los Angeles, New Orleans, New York, Sacramento, San Francisco, Washington DC

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated December 9, 2008 relating to the financial statements, financial statement schedules and the effectiveness of internal control over financial reporting, which appears in ICO, Inc.'s Annual Report on Form 10-K for the fiscal year ended September 30, 2008.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

May 8, 2009