**Exhibit 10.17**

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**TRANS WORLD CORPORATION**

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**2004 EQUITY INCENTIVE PLAN**

 

SECTION 1.  Purpose.  The purposes of the Trans World Corporation2004 Equity Incentive Plan are to promote the interests of the Company and itsstockholders by (i) attracting and retaining exceptional executive personneland other key employees of the Company and its Affiliates; (ii) motivating suchemployees by means of performance-related incentives to achieve long-rangeperformance goals; and (iii) enabling such employees to participate in thelong-term growth and financial success of the Company.

 

SECTION 2.  Definitions.  As used in the Plan, the following termsshall have the meanings set forth below:

 

“Affiliate”shall mean (i) any entity that, directly or indirectly, is controlled by theCompany and (ii) any entity in which the Company has a significant equityinterest, in either case as determined by the Committee.

 

“Award” shallmean any Option, Stock Appreciation Right, Restricted Stock Award, OtherStock-Based Award or Performance Award.

 

“AwardAgreement” shall mean any written agreement, contract or other instrument ordocument evidencing any Award, which may, but need not, be executed oracknowledged by a Participant.

 

“Board” shallmean the Board of Directors of the Company.

 

“Change inControl” shall mean a change in control of a nature that would be required tobe reported in response to Item 6(e) of Schedule 14A of Regulation 14Apromulgated under the Exchange Act or any successor thereto, provided that,without limiting the foregoing, a change in control also shall mean theoccurrence of any of the following events:

 

(i)            any“person” (as defined in Section 3(a)(9) of the Exchange Act) or “group” ofpersons (as provided under Rule 13d-3 under the Exchange Act) who, after the effectivedate of the Plan, becomes a “beneficial owner” of (as defined in Rule 13d-3 orotherwise under the Exchange Act) or acquires, directly or indirectly(including as provided in Rule 13d-3(d)(1) under the Exchange Act),  capital stock of the Company the holders ofwhich are entitled to vote for the election of directors (“voting stock”)representing that percentage of the Company’s then outstanding voting stock(giving effect to the deemed ownership of securities by such person or group,as provided in Rule 13d-3(d)(1) the Exchange Act, but not giving effect to anysuch deemed ownership of securities by another person or group) equal to orgreater than twenty-five percent (25%) of all such voting stock, excluding forpurposes of this definition, any person who, as of the effective date of thisplan, is an existing stockholder of the Company  and controls directly or indirectlyequal to or greater than twenty-five percent (25%) of the voting stock of theCompany;

 

(ii)           during any periodof twenty-four consecutive months, individuals who, at the beginning of suchperiod, constituted the Board (including for this purpose any new directorwhose election or nomination for election by the Company’s shareholders wasapproved by a vote of at least a majority of the directors then still in officewho were directors at the beginning of such period) cease for any reason toconstitute at least a majority of the Board (excluding any Board seat that isvacant or otherwise unoccupied); and

 

(iii)          thereshall be consummated any consolidation, merger, stock-for-stock exchange orsimilar transaction (collectively, “Merger Transactions”) involving securitiesof the Company in which holders of voting stock of the Company immediatelyprior to such consummation own, as a group, immediately after suchconsummation, voting stock of the Company (or, if the Company does not survivethe Merger Transaction, voting securities of the corporation surviving suchtransaction) having less than

 

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50% of thetotal voting power in an election of directors of the Company (or such othersurviving corporation).

 

“Code” shallmean the Internal Revenue Code of 1986, as amended from time to time.

 

“Committee”shall mean the Compensation****Committee of the Board, which shallbe composed of not less than the minimum number of persons from time to timerequired by (i) Rule 16b-3, each of whom, to the extent necessary to complywith Rule 16b-3, shall be a “non-employee director” within the meaning of Rule16b-3, as from time to time amended, and (ii) applicable listing or quotationrequirements relating to the Shares, each of whom, to the extent necessary tocomply with such requirements, shall be “independent” directors within themeaning of such requirements, provided that, with respect to any CoveredEmployee, “Committee” shall mean the Compensation Subcommittee of the Compensation Committee of the Board,which shall consist of two or more members of the Board appointed by the Boardwho qualify as outside directors for purposes of Section 162(m) of theCode.  Any reference in the Plan to the “Committee”shall be understood to refer to the CompensationCommittee or its Compensation Subcommittee, whichever has administrativeauthority with respect to the matter.

 

“Company”shall mean Trans World Corporation and any successor thereto.

 

“CoveredEmployee” shall mean any Employee who is a covered employee as defined inSection 162(m)(3) of the Code and the regulationsthereunder, or any successor section and regulations thereunder.

 

“Employee”shall mean an employee of the Company or of any Affiliate.

 

“Exchange Act”shall mean the Securities Exchange Act of 1934, as amended.

 

“Fair MarketValue” shall mean the fair market value of the property or other item beingvalued, as determined by the Committee in its sole discretion, provided that,unless otherwise determined by the Committee in order to satisfy therequirements relating to Incentive Stock Options under applicable laws andregulations, the “Fair Market Value” of a Share shall be (i) if the Shares arelisted or admitted to trading on any securities exchange or national marketsystem in the United States, the closing price, regular way, on such day on theprincipal securities exchange or national market system in the United States onwhich Shares are traded, (ii) if the Shares are not then listed or admitted totrading on any such day, or if no sale takes place on such day, the average ofthe closing bid and asked prices in the United States on such day, as reportedby a reputable quotation source designated by the Committee, and (iii) if theShares are not then listed or admitted to trading on any such securitiesexchange or national market system and no such reported sale price or bid andasked prices are available, the average of the reported high bid and low askedprices in the United States on such day, as reported in *The Wall Street Journal* (Eastern edition)or other newspaper designated by the Committee.

 

“IncentiveStock Option” shall mean a right to purchase Shares from the Company at a fixedprice for a specified period that is granted under Section 6 of the Plan andthat is intended to meet the requirements of Section 422 of the Code or anysuccessor provisions thereto.

 

 “Nonqualified Stock Option” shall mean a rightto purchase Shares from the Company at a fixed price for a specified periodthat is granted under Section 6 of the Plan and that is not intended to be anIncentive Stock Option.

 

“Option” shallmean an Incentive Stock Option or a Nonqualified Stock Option.

 

“OtherStock-Based Award” shall mean any right granted under Section 9 of the Plan.

 

“Participant”shall mean any Employee selected by the Committee to receive an Award under thePlan.

 

“PerformanceAward” shall mean any Award granted under Section 10 of the Plan.

 

“PerformanceGoal” shall have the meaning set forth in Section 10(d).

 

“PerformancePeriod” shall mean, with respect to any Performance Award, the period specifiedby the 

 

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Committee, including, but not limited to, the calendar year or any partthereof and periods of more than one consecutive calendar year.

 

“PerformanceTargets” shall mean the specific measures which must be satisfied in connectionwith any Performance Goal.

 

“Person” shallmean any individual, corporation, partnership, association, joint-stockcompany, trust, unincorporated organization, government or politicalsubdivision thereof or other entity.

 

“Plan” shallmean this Trans World Corporation 2004 Equity Incentive Plan, as may be amendedfrom time to time in accordance with its terms.

 

“QDRO” shallmean a domestic relations order meeting such requirements as the Committeeshall determine, in its sole discretion.

 

“RestrictedStock Award” shall mean any Award granted under Section 8 of the Plan.

 

“RestrictedStock” shall mean any Share granted under Section 8 of the Plan that is subjectto a substantial risk of forfeiture due to a restriction based on continuedemployment or the occurrence of other events as determined by the Committee inits sole discretion and as specified in the Applicable Award Agreement.

 

“RestrictedStock Unit” shall mean any unit granted under Section 8 of the Plan that issubject to a substantial risk of forfeiture due to a restriction based oncontinued employment or the occurrence of other events as determined by theCommittee in its sole discretion, which may be settled either (i) by thedelivery of one Share for each Restricted Stock Unit or (ii) in cash in anamount equal to the Fair Market Value of one Share for each Restricted StockUnit, all as specified in the applicable Award Agreement. The Award of aRestricted Stock Unit represents the mere promise of the Company to deliver aShare or the appropriate amount of cash, as applicable, upon removal of theapplicable restriction (or such later date as may be provided in the AwardAgreement) in accordance with and subject to the terms and conditions of theapplicable Award Agreement, and is not intended to constitute a transfer of “property”within the meaning of Section 83 of the Code.

 

“Rule 16b-3”shall mean Rule 16b-3 as promulgated and interpreted by the SEC under theExchange Act, or any successor rule or regulation thereto as in effect fromtime to time.

 

“SEC” shallmean the Securities and Exchange Commission or any successor thereto and shallinclude the staff thereof.

 

“Shares” shallmean shares of the common stock, $.001 par value, of the Company, or such othersecurities of the Company as may be designated by the Committee from time totime.

 

“StockAppreciation Right” shall mean any right granted under Section 7 of the Plan toreceive the difference between (i) a grant price, which shall be no less thanone hundred percent (100%) of the Fair Market Value of a Share on the date ofgrant, and (ii) the Fair Market Value of a Share on the date the right isexercised, which amount may be paid in cash, Shares or a combination of cashand Shares.

 

SECTION 3.  Administration.

 

(a)           Authority of Committee.  The Plan shall be administered by theCommittee.  Subject to the terms of thePlan and applicable law, and in addition to other express powers andauthorizations conferred on the Committee by the Plan, the Committee shall havefull power and authority to:  (i)designate Participants; (ii) determine the type or types of Awards to begranted to an eligible Employee; (iii) determine the number of Shares to becovered by, or with respect to which payments, rights or other matters are tobe calculated in connection with, Awards; (iv) determine the terms andconditions of any Award, provided that no Awards granted under the Plan shallhave a vesting period of less than one year, except (x) as provided in Section12 hereof and (y) in the Committee’s sole discretion, in the event of theParticipant’s retirement, permanent and total disability or death; (v)determine whether, to what extent and under what circumstances Awards may besettled or exercised in cash, Shares, other securities, other Awards or otherproperty, or canceled, forfeited or suspended; (vi) determine whether,

 

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to what extent and under whatcircumstances cash, Shares, other securities, other Awards, other property andother amounts payable with respect to an Award shall be deferred eitherautomatically or at the election of the holder thereof or of the Committee;(vii) interpret and administer the Plan and any instrument or agreementrelating to, or Award made under, the Plan; (viii) establish, amend, suspend orwaive such rules and regulations and appoint such agents as it shall deemappropriate for the proper administration of the Plan; (ix) determine themeaning of the terms “retirement” and “permanent and total disability” forpurposes of the Plan; and (x) make any other determination and take any otheraction that the Committee deems necessary or desirable for the administrationof the Plan.

 

(b)           Committee Discretion Binding.  Unless otherwise expressly provided in thePlan, all designations, determinations, interpretations and other decisionsunder or with respect to the Plan or any Award shall be within the solediscretion of the Committee, may be made at any time and shall be final,conclusive and binding upon all Persons, including the Company, any Affiliate,any Participant, any holder or beneficiary of any Award, any stockholder andany Employee.

 

(c)           Delegation.  Subject to the terms of the Plan andapplicable law, the Committee may delegate to one or more officers of theCompany or any Affiliate, or to a committee of such officers, the authority,subject to such terms and limitations as the Committee shall determine, togrant Awards to, or to cancel, modify or waive rights with respect to, or toalter, discontinue, suspend or terminate Awards held by, Employees who are not(i) Covered Employees or (ii) officers or directors of the Company for purposesof Section 16 of the Exchange Act, or any successor section thereto, or who areotherwise not subject to such Section.

 

SECTION 4.  Shares Available forAwards.

 

(a)           Shares Available.  Subject to adjustment as provided in Section4(c), the number of Shares with respect to which Awards may be granted underthe Plan shall not exceed (i) 251,583 plus (ii) 10,800 Shares that, as of May5, 2004, were available for issuance under the Company’s 1998 Stock Option Plan(the “Prior Plan”) or that thereafter become available for issuance under thePrior Plan in accordance with its terms as in effect on such date.  Subject to the last sentence of this Section4(a), if, after the effective date of the Plan, any Shares covered by an Awardgranted under the Plan, or to which such an Award relates, are forfeited, or ifsuch an Award is settled for cash or otherwise terminates or is canceledwithout the delivery of Shares, then the Shares covered by such Award, or towhich such Award relates, or the number of Shares otherwise counted against theaggregate number of Shares with respect to which Awards may be granted, to theextent of any such settlement, forfeiture, termination or cancellation, shallagain become Shares with respect to which Awards may be granted.  Subject to the last sentence of this Section4(a), in the event that any Option or other Award granted hereunder isexercised through the delivery of Shares or in the event that withholding taxliabilities arising from such Award are satisfied by the withholding of Sharesby the Company, the number of Shares available for Awards under the Plan shallbe increased by the number of Shares so surrendered or withheld.  Notwithstanding any other provision of thePlan to the contrary, the aggregate number of Shares that may be issued underthe Plan upon the exercise of Incentive Stock Options shall not be increased byany of the actions set forth in the two immediately preceding sentences to theextent that such an increase is not permitted by applicable regulations underSection 422 of the Code.

 

(b)           Award Limits.  Notwithstanding any provision herein to thecontrary, the following provisions shall apply (subject to adjustment asprovided in Section 4(c)):

 

(i)            in no event shall aParticipant receive an Award or Awards during any one calendar year covering inthe aggregate more than 25,000 Shares (whether such Award or Awards may besettled in Shares, cash or any combination thereof); and

 

(ii)           in no event shallthere be granted during the term of the Plan Restricted Stock or RestrictedStock Units which are not subject to be achievement of a Performance Target orTargets covering more than an aggregate of 75,000 Shares.

 

(c)           Adjustments.  In the event that the Committee determinesthat any dividend or other distribution (whether in the form of cash, Shares,other securities or other property), recapitalization, stock split, reversestock split, reorganization, merger, consolidation, split-up, spin-off,combination, repurchase, or exchange of Shares or other securities of theCompany, issuance of warrants or other rights to purchase Shares or othersecurities of the Company, or other similar corporate transaction or eventaffects the Shares such that an adjustment is determined by

 

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the Committee to be appropriate in order to prevent dilution orenlargement of the benefits or potential benefits intended to be made availableunder the Plan, then the Committee shall, in such manner as it may deemequitable, adjust any or all of (i) the number of Shares or other securities ofthe Company (or number and kind of other securities or property) with respectto which Awards may be granted, (ii) the number of Shares or other securitiesof the Company (or number and kind of other securities or property) subject tooutstanding Awards and (iii) the grant or exercise price with respect to anyAward, or, if deemed appropriate, make provision for a cash payment to the holderof an outstanding Award; provided, in each case, that (A) with respect toAwards of Incentive Stock Options no such adjustment shall be authorized to theextent that such authority would cause the Plan to violate Section 422(b)(1) ofthe Code, as from time to time amended, and (B) with respect to any Award nosuch adjustment shall be authorized to the extent that such authority would beinconsistent with the Plan’s meeting the requirements of Section 162(m) of theCode, as from time to time amended, or Rule 16b-3, as from time to timeamended.

 

(d)           Sources of Shares Deliverable Under Awards.  AnyShares delivered pursuant to an Award may consist, in whole or in part, ofauthorized and unissued Shares or of treasury Shares, including Sharespurchased in the open market or in private transactions.

 

SECTION 5.  Eligibility.  Any Employee, including any officer oremployee-director of the Company or any Affiliate, who is not a member of theCommittee, shall be eligible to be designated a Participant, provided that (i)only Employees who are common-law employees of the Company or any of itsAffiliates shall be eligible for the grant of an Incentive Stock Option and(ii) an Employee-shareholder who owns more than 10% of the total combinedvoting power of all classes of outstanding stock of the Company or any of itsAffiliates shall not be eligible for the grant of an Incentive Stock Optionunless the requirements set forth in Section 422(c)(5) of the Code aresatisfied.

 

SECTION 6.  Stock Options.

 

(a)           Grant.  Subject to the provisions of the Plan, theCommittee shall have sole and complete authority to determine the Employees towhom Options shall be granted, the number of Shares to be covered by eachOption, the option price therefor and the conditions and limitations applicableto the exercise of the Option.  TheCommittee shall have the authority to grant Incentive Stock Options, or togrant Nonqualified Stock Options, or to grant both types of options.  In the case of Incentive Stock Options, theterms and conditions of such grants shall be subject to and comply with suchrules as may be prescribed by Section 422 of the Code, as from time to timeamended, and any regulations implementing such statute.

 

(b)           Exercise Price.  The Committee in its sole discretion shallestablish the exercise price at the time each Option is granted, provided thatthe per share price at which Shares may be purchased upon exercise of an Optionshall be no less than one hundred percent (100%) of the Fair Market Value of aShare at the time such Option is granted.

 

(c)           Exercise.  Subject to the terms of the Plan, each Optionshall be exercisable at such times and subject to such terms and conditions asthe Committee may, in its sole discretion, specify in the applicable AwardAgreement or thereafter, provided that no Option shall be exercisable after theexpiration of ten years from the date the Option is granted.  The Committee may impose such conditions withrespect to the exercise of Options, including without limitation any conditionsrelating to the application of federal or state securities laws, as it may deemnecessary or advisable.

 

(d)           Payment.  No Shares shall be delivered pursuant to anyexercise of an Option until payment in full of the option price therefor isreceived by the Company.  Such paymentmay be made in cash, or its equivalent, or, if and to the extent permitted bythe Committee, by exchanging Shares owned by the optionee (which are not thesubject of any pledge or other security interest), or by a combination of theforegoing, provided that the combined value of all cash and cash equivalentsand the Fair Market Value of any such Shares so tendered to the Company as ofthe date of such tender is at least equal to such option price.

 

SECTION 7.  Stock Appreciation Rights.

 

(a)           Grant.  Subject to the provisions of the Plan, theCommittee shall have sole and complete authority to determine the Employees towhom Stock Appreciation Rights shall be granted, the number of Shares to be

 

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covered by each Stock Appreciation Right, the grant price thereof,which may be no less than one hundred percent (100%) of the Fair Market Valueof a Share on the date of grant, the conditions and limitations applicable tothe exercise thereof and whether a Stock Appreciation Right shall be settled incash, Shares or a combination of cash and Shares.  Stock Appreciation Rights may be granted intandem with another Award, in addition to another Award, or freestanding andunrelated to another Award.  StockAppreciation Rights granted in tandem with or in addition to an Award may begranted either at the same time as the Award or at a later time, provided thatany Stock Appreciation Right related to an Incentive Stock Option must begranted at the same time such Incentive Stock Option is granted.

 

(b)           Other Terms and Conditions.  Subject to the terms of the Plan and anyapplicable Award Agreement, the Committee shall determine, at or after thegrant of a Stock Appreciation Right, the term, methods of exercise, methods andform of settlement and any other terms and conditions of any Stock AppreciationRight.  Any such determination by theCommittee may be changed by the Committee from time to time and may govern theexercise of Stock Appreciation Rights granted prior to such determination aswell as Stock Appreciation Rights granted thereafter.  The Committee may impose such conditions orrestrictions on the exercise of any Stock Appreciation Right as it shall deemappropriate.

 

SECTION 8.  Restricted Stock and Restricted StockUnits.

 

(a)           Grant.  Subject to the provisions of the Plan, theCommittee shall have sole and complete authority to determine the Employees towhom Shares of Restricted Stock and Restricted Stock Units shall be granted,the number of Shares of Restricted Stock and/or the number of Restricted StockUnits to be granted to each Participant, the duration of the period duringwhich, and the conditions under which, the Restricted Stock and RestrictedStock Units may be forfeited to the Company, the other terms and conditions ofsuch Awards and, in the case of Restricted Stock Units, whether such Unitsshall be settled in cash, Shares or a combination of cash and Shares on thedate of grant.  Each Restricted StockUnit shall have a value equal to no less than one hundred percent (100%) of theFair Market Value of a Share on the date of grant.  Notwithstanding any other provision of thePlan to the contrary, Restricted Stock and Restricted Stock Units which havenot been granted in lieu of base salary or bonuses or which have a restrictionbased on completion of a specified period of service with the Company or anAffiliate without achievement of a Performance Target or Performance Targets orother performance objectives of the Company as a condition of vesting shallhave a minimum vesting period of three years from the date of grant, except (i)as provided in Section 12 hereof and (ii) in the Committee’s sole discretion,in the event of the Participant’s retirement, permanent and total disability ordeath.

 

(b)           Transfer Restrictions.  Shares of Restricted Stock and RestrictedStock Units may not be sold, assigned, transferred, pledged or otherwiseencumbered, except, in the case of Restricted Stock, as provided in the Plan orthe applicable Award Agreements. Certificates issued in respect of Shares of Restricted Stock shall beregistered in the name of the Participant and deposited by such Participant,together with a stock power endorsed in blank, with the Company.  Upon the lapse of the restrictions applicableto such Shares of Restricted Stock, the Company shall deliver such certificatesto the Participant or the Participant’s legal representative.

 

(c)           Dividends and Distributions.  Dividends and other distributions paid on orin respect of any Shares of Restricted Stock may be paid directly to theParticipant, or may be reinvested in additional Shares of Restricted Stock orin additional Restricted Stock Units, as determined by the Committee in itssole discretion.

 

(d)           Voting of Restricted Stock.  Unless otherwise determined by the Committeeat the time of grant, an Employee to whom Shares of Restricted Stock shall begranted shall be entitled to vote such Shares.

 

SECTION 9.  Other Stock-Based Awards.  The Committee shall have authority to grantto eligible Employees an Other Stock-Based Award, which shall consist of anyright that is (i) not an Award described in Sections 6 through 8 above and (ii)an Award of Shares or an Award denominated or payable in, valued in whole or inpart by reference to, or otherwise based on or related to, Shares (including,without limitation, securities convertible into Shares), as deemed by theCommittee to be consistent with the purposes of the Plan.  Subject to the terms of the Plan and anyapplicable Award Agreement, the Committee shall determine the terms andconditions of any such Other Stock-Based Award and whether such Awards shall bepaid in cash, Shares or a combination of cash and Shares.  Notwithstanding any other provision of thePlan to the contrary, an Other Stock-Based Award which is not granted in lieuof base salary or bonuses  or which isnot subject to the achievement of a Performance Target or Targets or

 

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otherperformance objectives of the Company as a condition to vesting shall have aminimum vesting period of three years from the date of grant, except (i) asprovided in Section 12 hereof and (ii) in the Committee’s sole discretion, inthe event of the Participant’s retirement, permanent and total disability ordeath.

 

SECTION 10.  Performance Awards.

 

(a)           Grant.  The Committee shall have sole and completeauthority to determine the extent to which an Award of Options, RestrictedStock, Restricted Stock Units or Other Stock-Based Awards shall be subject tothe achievement of one or more Performance Targets over one or more PerformancePeriods.  For any Award to a Covered  Employee, any such Performance Target andrelated Performance Goal(s) and Performance Period(s) shall be determined bythe Committee within the time prescribed by Section 162(m) and the regulationsthereunder, or any successors thereto, in order for the Performance Target tobe considered “pre-established” for this purpose.

 

(b)           Terms and Conditions.  Subject to the terms of the Plan and anyapplicable Award Agreement, the Committee shall determine the PerformanceTargets to be achieved during any Performance Period, the length of anyPerformance Period, the amount of any Performance Award and the amount and kindof any payment or transfer to be made pursuant to any Performance Award.

 

(c)           Payment of Performance Awards.  Performance Awards may be paid in a lump sumor in installments following the close of the Performance Period, provided thatno full and/or partial payment of a Performance Award granted hereunder may bemade to a Covered Employee until the Committee has certified in writing theattainment by the Company of the applicable Performance Target or PerformanceTargets over the applicable Performance Period or Performance Periods.

 

(d)           Performance Goals.  For purposes of the Plan, the term “PerformanceGoals” shall mean objective criteria based on one or more of the following: netincome, net income before taxes, operating earnings, cash earnings, operatingcash earnings, cash flow, financial return ratios (including, but not limitedto, return on average total assets, return on tangible total assets, return onaverage stockholders’ equity, return on average tangible stockholders’ equity,average stockholders’ equity to average total assets, risk-adjusted return oncapital, return on investment, economic value added, efficiency ratio, expenseratio, revenue growth, noninterest income to total revenue ratio and netinterest margin), total stockholder return, earnings per share, operatingearnings per share, cash earnings per share, other balance sheet or incomestatement items, stock price, market share or project completion.  Performance Goals with respect to awards toParticipants who are not Covered Employees also may be based on any otherobjective performance goals as may be established by the Committee for aPerformance Period.  Performance Goalsmay be measured (i) solely on a corporate, subsidiary or business unit basis ora combination thereof and/or (ii) on actual or targeted growth factors.  Performance Goals may reflect absolute entityperformance or a relative comparison of entity performance to the performanceof a peer group of entities or other external measure of the selectedPerformance Goals.  A Performance Goalmay include or exclude items that measure specific objectives, such as thecumulative effect of changes in generally accepted accounting principles,losses resulting from discontinued operations, securities gains and losses,restructuring, merger-related and othernonrecurring costs, amortization of goodwill and other intangible assets,extraordinary gains or losses and any unusual, nonrecurring gain or loss thatis separately quantified in the Company’s financial statements.  Any Performance Goal expressed on a per-Sharebasis shall, in case of a recapitalization, stock dividend, stock split orreverse stock split affecting the number of outstanding Shares, bemathematically adjusted by the Committee so that the change in outstanding Sharesdoes not cause a substantive change in the relevant goal.  The Committee may adjust Performance Goalsfor any other objective events or occurrences which occur during a PerformancePeriod, including, but not limited to, acquisitions by the Company and changesin applicable tax laws or accounting principles, provided that the Committeeshall not have the discretion to increase the amount of a Performance Awardthat would otherwise be due upon attainment of a Performance Target orPerformance Targets to any Participant who is a Covered Employee except to theextent permitted under Section 162(m) of the Code and the regulationsthereunder or any successors thereto.

 

SECTION 11.  Termination orSuspension of Employment.  Thefollowing provisions shall apply in the event of the Participant’s terminationof employment unless the Committee shall have provided otherwise, either at thetime of the grant of the Award or thereafter.

 

 

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(a)           Nonqualified Stock Options andStock Appreciation Rights.

 

(i)            Termination ofEmployment.  If the Participant’semployment with the Company or its Affiliates is terminated for any reasonother than death, permanent and total disability or retirement, the Participant’sright to exercise any Nonqualified Stock Option or Stock Appreciation Rightshall terminate, and such Option or Stock Appreciation Right shall expire, onthe earlier of (A) the first anniversary of such termination of employment or(B) the date such Option or Stock Appreciation Right would have expired had itnot been for the termination of employment. The Participant shall have the right to exercise such Option or StockAppreciation Right prior to such expiration to the extent it was exercisable atthe date of such termination of employment and shall not have been exercised.

 

(ii)           Death,Disability or Retirement.  If theParticipant’s employment with the Company or its Affiliates is terminated bydeath, permanent and total disability or retirement, the Participant or hissuccessor (if employment is terminated by death) shall have the right toexercise any Nonqualified Stock Option or Stock Appreciation Right to theextent it was exercisable at the date of such termination of employment andshall not have been exercised, but in no event shall such Option or StockAppreciation Right be exercisable later than the date the Option or StockAppreciation Right would have expired had it not been for the termination ofsuch employment.

 

(iii)          Acceleration andExtension of Exercisability. Notwithstanding the foregoing, the Committee may, in its discretion,provide (A) that an Option granted to a Participant may terminate at a dateearlier than that set forth above, including without limitation the date oftermination of employment, (B) that an Option granted to a Participant mayterminate at a date later than that set forth above, provided such date shallnot be beyond the date the Option would have expired had it not been for thetermination of the Participant’s employment, and (C) that an Option or StockAppreciation Right may become immediately exercisable when it finds that suchacceleration would be in the best interests of the Company.

 

(b)           Incentive Stock Options.  Except as otherwise determined by theCommittee at the time of grant, if the Participant’s employment with theCompany is terminated for any reason, the Participant shall have the right toexercise any Incentive Stock Option and any related Stock Appreciation Rightduring the 90 days after such termination of employment to the extent it wasexercisable at the date of such termination, but in no event later than thedate the Option would have expired had it not been for the termination of suchemployment.  If the Participant does notexercise such Option or related Stock Appreciation Right to the full extentpermitted by the preceding sentence, the remaining exercisable portion of suchOption automatically will be deemed a Nonqualified Stock Option, and suchOption and any related Stock Appreciation Right will be exercisable during theperiod set forth in Section 11(a) of the Plan, provided that in the event thatemployment is terminated because of death or the Participant dies during such90-day period, the Option will continue to be an Incentive Stock Option to theextent provided by Section 421 or Section 422 of the Code, or any successorprovisions, and any regulations promulgated thereunder.

 

(c)           Restricted Stock.  Except as otherwise determined by theCommittee at the time of grant, upon termination of employment for any reasonduring the restriction period, all shares of Restricted Stock still subject torestriction shall be forfeited by the Participant and reacquired by the Companyat the price (if any) paid by the Participant for such Restricted Stock,provided that in the event of a Participant’s retirement, permanent and totaldisability or death, or in cases of special circumstances, the Committee may,in its sole discretion, when it finds that a waiver would be in the bestinterests of the Company, waive in whole or in part any or all remainingrestrictions with respect to such Participant’s shares of Restricted Stock.

 

SECTION 12.  Change in Control.  Notwithstanding any other provision of thePlan to the contrary, upon a Change in Control all outstanding Awards shallvest, become immediately exercisable or payable or have all restrictions liftedas may apply to the type of Award.

 

SECTION 13.  Amendment andTermination.

 

(a)           Amendments to the Plan.  The Board may amend, alter, suspend,discontinue or terminate the Plan or any portion thereof at any time, providedthat no such amendment, alteration, suspension, discontinuation or terminationshall be made that would adversely affect the rights of any Participant or anyholder or beneficiary of any Award theretofore granted without the consent ofthe affected Participant, holder or beneficiary, or that without

 

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the approval ofthe stockholders of the Company would:

 

(i)            exceptas provided in Section 4(c) of the Plan, increase the total number of Shareswith respect to which Awards may be granted under the Plan;

 

(ii)           changethe employees or class of employees eligible to participate in the Plan;

 

(iii)          reducethe exercise price for Options and Stock Appreciation Rights by repricing orreplacing such Awards; or

 

(iv)          changethe Performance Goals which may be established for Performance Awards.

 

(b)           Amendments to Awards.  The Committee may waive any conditions orrights under, amend any terms of, or alter, suspend, discontinue, cancel orterminate, any Award theretofore granted, prospectively or retroactively,provided that any such waiver, amendment, alteration, suspension,discontinuance, cancellation or termination that would adversely affect therights of any Participant or any holder or beneficiary of any Award theretoforegranted shall not to that extent be effective without the consent of theaffected Participant, holder or beneficiary. Notwithstanding any other provision of the Plan to the contrary, exceptas provided in Section 4(c) and Section 13(c), the Committee shall not have theauthority to cancel any outstanding Option or Stock Appreciation Right andissue a new Option or Stock Appreciation Right in its place with a lowerexercise price without the approval of the stockholders of the Company.

 

(c)           Adjustment of Awards Upon the Occurrence of Certain Unusual or NonrecurringEvents.  The Committee is herebyauthorized to make adjustments in the terms and conditions of, and the criteriaincluded in, Awards in recognition of unusual or nonrecurring events(including, without limitation, the events described in Section 4(c) hereof)affecting the Company, any Affiliate, or the financial statements of theCompany or any Affiliate, or of changes in applicable laws, regulations oraccounting principles, whenever the Committee determines that such adjustmentsare appropriate in order to prevent dilution or enlargement of the benefits orpotential benefits intended to be made available under the Plan, provided thatno such adjustment shall be authorized to the extent that such authority wouldbe inconsistent with the Plan’s meeting the requirements of Section 162(m) ofthe Code, as from time to time amended, or Rule 16b-3, as from time to timeamended.

 

SECTION 14.  General Provisions.

 

(a)           Dividend Equivalents.  In the sole and complete discretion of theCommittee, an Award may provide the Participant with dividends or dividendequivalents, payable in cash, Shares, other securities or other property on acurrent or deferred basis.

 

(b)           Nontransferability.  No Award shall be assigned, alienated,pledged, attached, sold or otherwise transferred or encumbered by aParticipant, except by will or the laws of descent and distribution or pursuantto a QDRO, provided, however, that an Award may be transferable, to the extentdetermined by the Committee and set forth in the applicable Award Agreement,(i) if such Award Agreement provisions do not disqualify such Award forexemption under Rule 16b-3, as from time to time amended, (ii) if such Award isnot intended to qualify for exemption under such rule or (iii) with respect toAwards which are Incentive Stock Options, if such Award Agreement provisions donot prevent the Incentive Stock Options from qualifying as such under Section 422of the Code, as from time to time amended.

 

(c)           No Rights to Awards.  No Employee, Participant or other Personshall have any claim to be granted any Award, and there is no obligation foruniformity of treatment of Employees, Participants or holders or beneficiariesof Awards.  The terms and conditions ofAwards need not be the same with respect to each recipient.

 

(d)           Share Certificates.  All certificates for Shares or othersecurities of the Company or any Affiliate delivered under the Plan pursuant toany Award or the exercise thereof shall be subject to such stop transfer ordersand other restrictions as the Committee may deem advisable under the Plan orthe rules, regulations and other requirements of the SEC, any stock exchange ornational market quotation system upon which such Shares or other securities arethen listed or quoted, respectively, and any applicable Federal or state laws,and the Committee may cause a legend or legends to be put on any suchcertificates to make appropriate reference to such restrictions.

 

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(e)           Withholding.  A Participant may be required to pay to theCompany or any Affiliate and the Company or any Affiliate shall have the rightand is hereby authorized to withhold from any Award, from any payment due ortransfer made under any Award or under the Plan or from any compensation orother amount owing to a Participant the amount (in cash, Shares, othersecurities, other Awards or other property) of any applicable withholding taxesin respect of any Award, its exercise or any payment or transfer under an Awardor under the Plan and to take such other action as may be necessary in theopinion of the Company to satisfy all obligations for the payment of suchtaxes.  The Committee may provide foradditional cash payments to holders of Awards to defray or offset any taxarising from the grant, vesting, exercise or payments of any Award, but only inthe case of a Covered Employee to the extent permitted under Section 162(m) ofthe Code and the regulations thereunder or any successor thereto.

 

(f)            Award Agreements.  Each Award hereunder shall be evidenced by anAward Agreement that shall be delivered to the Participant and shall specifythe terms and conditions of the Award and any rules applicable thereto.

 

(g)           No Limit on Other CompensationArrangements.  Nothing contained inthe Plan shall prevent the Company or any Affiliate from adopting or continuingin effect other compensation arrangements, which may, but need not, provide forthe grant of Options, Restricted Stock Awards and other types of Awardsprovided for hereunder (subject to stockholder approval if such approval isrequired), and such arrangements may be either generally applicable orapplicable only in specific cases.

 

(h)           No Right to Employment.  Neither the Plan nor the grant of any Awardshereunder nor any action taken by the Committee or the Board in connection withthe Plan shall create any right on the part of any Employee to continue in theemploy of the Company or any Affiliate.

 

(i)            No Rights as Stockholder.  Subject to the provisions of the applicableAward and the Plan, no Participant or holder or beneficiary of any Award shallhave any rights as a stockholder with respect to any Shares to be distributedunder the Plan until he or she has become the holder of such Shares.

 

(j)            Governing Law.  The validity, construction and effect of thePlan and any rules and regulations relating to the Plan and any Award Agreementshall be determined in accordance with the laws of the State of Wisconsin.

 

(k)           Severability.  The Plan is intended to comply in all aspectswith applicable laws and regulations, including, with respect to thoseParticipants who are Covered Employees, Section 162(m) of the Code and theregulations thereunder, or any successors thereto.  If any provision of the Plan or any Award isor becomes or is deemed to be invalid, illegal or unenforceable in anyjurisdiction or as to any Person or Award, or would disqualify the Plan or anyAward under any law deemed applicable by the Committee, such provision shall beconstrued or deemed amended to conform to the applicable laws, or if it cannotbe construed or deemed amended without, in the determination of the Committee,materially altering the intent of the Plan or the Award, such provision shallbe stricken as to such jurisdiction, Person or Award and the remainder of thePlan and any such Award shall remain in full force and effect.

 

(l)            Other Laws.  The Committee may refuse to issue or transferany Shares or other consideration under an Award if, acting in its solediscretion, it determines that the issuance or transfer of such Shares or suchother consideration might violate any applicable law, regulation or listing orquotation requirement relating to the Shares or entitle the Company to recoverthe same under Section 16(b) of the Exchange Act, and any payment tendered tothe Company by a Participant, other holder or beneficiary in connection withthe exercise of such Award shall be promptly refunded to the relevantParticipant, holder or beneficiary. Without limiting the generality of the foregoing, no Award grantedhereunder shall be construed as an offer to sell securities of the Company, andno such offer shall be outstanding, unless and until the Committee in its solediscretion has determined that any such offer, if made, would be in compliancewith all applicable requirements of the U.S. federal securities laws and anyother laws to which such offer, if made, would be subject, as well as anyapplicable listing or quotation requirements relating to the Shares.

 

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(m)          No Trust or Fund Created.  Neither the Plan nor any Award shall createor be construed to create a trust or separate fund of any kind or a fiduciaryrelationship between the Company or any Affiliate and a Participant or anyother Person.  To the extent that anyPerson acquires a right to receive payments from the Company or any Affiliatepursuant to an Award, such right shall be no greater than the right of anyunsecured general creditor of the Company or any Affiliate.

 

(n)           No Fractional Shares.  No fractional Shares shall be issued ordelivered pursuant to the Plan or any Award, and the Committee shall determinewhether cash, other securities or other property shall be paid or transferredin lieu of any fractional Shares or whether such fractional Shares or anyrights thereto shall be canceled, terminated or otherwise eliminated.

 

(o)           Headings.  Headings are given to the Sections andsubsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any waymaterial or relevant to the construction or interpretation of the Plan or anyprovision thereof.

 

(p)           Successors and Assigns.  The Plan and any Award Agreement shall bebinding upon the successors and assigns of the Company and upon eachParticipant and such Participant’s heirs, executors, administrators, personalrepresentatives, permitted assignees and successors in interest.

 

SECTION 15.  Effective Date; Term ofthe Plan.

 

(a)           Effective Date.  The Plan shall be effective upon its approvalby the Board of Directors of the Company on May 13, 2004, subject to approvalof the Plan by the holders of a majority of the shares of Common Stock present,in person or by proxy, at the first annual meeting of stockholders of theCompany held subsequent to the approval of the Plan by the Board of Directorsof the Company.  If the Plan is not soapproved by the stockholders of the Company, the Plan shall immediately terminateand all actions taken thereunder shall be null and void.

 

(b)           Term of the Plan.  The Plan shall remain in effect until theearlier of (i) the date that no additional Shares are available for issuanceunder the Plan, (ii) the date that the Plan has been terminated in accordancewith Section 13 or (iii) the close of business on the tenth annual anniversaryof the Effective Date.  Termination ofthe Plan shall not affect any Awards previously granted and such Awards shallremain valid and in effect until they have been fully exercised or earned, aresurrendered or by their terms expire or are forfeited.

 

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