A pellet is formed by a method includes, in one embodiment, dispersing up to about 95% by weight of thermoset rubber particles into a carrier resin to form the plastic compound. The carrier resin includes an olefin block copolymer. The method also includes the steps of extruding the plastic compound through a die having at least one die hole to form at least one extrudate filament, cutting the at least one extrudate filament to a predetermined length to form a plurality of pellets, conveying the pellets to a separator/centrifugal dryer in water having a temperature of about 170° F. or greater, and separating the pellets from the water in the separator/centrifugal dryer so that the pellets are substantially dry upon removal from the separator/centrifugal dryer. The resultant pelletized plastic compound has a flex modulus of less than about 20,000 pounds per square inch (psi).