Document:

Exhibit 10.9

 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT (“Amendment”) is made and entered into by and between Cano Petroleum Inc., a Delaware corporation
with its principal executive offices in Fort Worth, Texas (the “Company”), and John Lacik, an individual currently residing in Fort Worth,
Texas (“Employee”), effective as of the 1st day of May 2005 (the “Effective
Date”).

 

WHEREAS, the Company and Employee entered into that
certain Employment Agreement dated May 1, 2005 (the “Agreement”); and

 

WHEREAS, the Company and Employee now desire to
amend, alter, modify and change the terms and provisions of the Agreement, as
follows.

 

NOW THERFORE, for and in consideration of the mutual
benefits to be obtained hereunder, the payment by Company to Employee of the
sum of $9,006.81 and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, Company and
Employee do hereby agree to amend, alter, modify and change the Agreement as
follows:

 

 Paragraph 4. (e) Signing
Bonus: of the Agreement is deleted in its entirety.

 

Except as specifically amended, altered, modified
and changed hereby, the Agreement remains in full force and effect as
originally written.

 

Signatures

 

To evidence the binding
effect of the covenants and agreements described above, the parties hereto have
executed this Agreement effective as of the date first above written.

 

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  CANO PETROLEUM, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S. Jeffrey Johnson

  	
   

  
	
   

  	
   

  	
  S. Jeffrey Johnson

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John Lacik

  	
   

  
	
   

  	
        John LacikExhibit 10.17

 

TRANS WORLD CORPORATION

 

2004 EQUITY INCENTIVE PLAN

 

SECTION 1.
Purpose. The purposes of the Trans World Corporation 2004 Equity
Incentive Plan are to promote the interests of the Company and its stockholders
by (i) attracting and retaining exceptional executive personnel and other
key employees of the Company and its Affiliates; (ii) motivating such
employees by means of performance-related incentives to achieve long-range
performance goals; and (iii) enabling such employees to participate in the
long-term growth and financial success of the Company.

 

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

 

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

 

“Award”
shall mean any Option, Stock Appreciation Right, Restricted Stock Award, Other
Stock-Based Award or Performance Award.

 

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

 

“Board”
shall mean the Board of Directors of the Company.

 

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

 

(i)                                     any “person” (as defined in Section 3(a)(9) of
the Exchange Act) or “group” of persons (as provided under Rule 13d-3
under the Exchange Act) who, after the effective date of the Plan, becomes a “beneficial
owner” of (as defined in Rule 13d-3 or otherwise 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 of which 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 any such deemed ownership of securities
by another person or group) equal to or greater than twenty-five percent (25%)
of all such voting stock, excluding for purposes of this definition, any person
who, as of the effective date of this plan, is an existing stockholder of the
Company and controls directly or indirectly equal to or greater than
twenty-five percent (25%) of the voting stock of the Company;

 

(ii)                                  during any period of twenty-four consecutive
months, individuals who, at the beginning of such period, constituted the Board
(including for this purpose any new director whose election or nomination for
election by the Company’s shareholders was approved by a vote of at least a
majority of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a
majority of the Board (excluding any Board seat that is vacant or otherwise
unoccupied); and

 

(iii)                               there shall be consummated any consolidation,
merger, stock-for-stock exchange or similar transaction (collectively, “Merger
Transactions”) involving securities of the Company in which holders of voting
stock of the Company immediately prior to such consummation own, as a group,
immediately after such consummation, voting stock of the Company (or, if the
Company does not survive the Merger Transaction, voting securities of the
corporation surviving such transaction) having less than 50% of the total
voting power in an election of directors of the Company (or such other
surviving corporation).

 

 

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

 

“Committee”
shall mean the Compensation Committee
of the Board, which shall be composed of not less than the minimum number of
persons from time to time required by (i) Rule 16b-3, each of whom,
to the extent necessary to comply with Rule 16b-3, shall be a “non-employee
director” within the meaning of Rule 16b-3, as from time to time amended,
and (ii) applicable listing or quotation requirements relating to the
Shares, each of whom, to the extent necessary to comply with such requirements,
shall be “independent” directors within the meaning of such requirements,
provided that, with respect to any Covered Employee, “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 Board who
qualify as outside directors for purposes of Section 162(m) of the Code. Any
reference in the Plan to the “Committee” shall be understood to refer to the
Compensation Committee or its Compensation Subcommittee, whichever has
administrative authority with respect to the matter.

 

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

 

“Covered
Employee” shall mean any Employee who is a covered employee as defined in Section 162(m)(3) of
the Code and the regulations thereunder, 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
Market Value” shall mean the fair market value of the property or other item
being valued, as determined by the Committee in its sole discretion, provided
that, unless otherwise determined by the Committee in order to satisfy the
requirements relating to Incentive Stock Options under applicable laws and
regulations, the “Fair Market Value” of a Share shall be (i) if the Shares
are listed or admitted to trading on any securities exchange or national market
system in the United States, the closing price, regular way, on such day on the
principal securities exchange or national market system in the United States on
which Shares are traded, (ii) if the Shares are not then listed or
admitted to trading on any such day, or if no sale takes place on such day, the
average of the closing bid and asked prices in the United States on such day,
as reported by a reputable quotation source designated by the Committee, and (iii) if
the Shares are not then listed or admitted to trading on any such securities
exchange or national market system and no such reported sale price or bid and
asked prices are available, the average of the reported high bid and low asked
prices in the United States on such day, as reported in The Wall Street Journal (Eastern edition)
or other newspaper designated by the Committee.

 

“Incentive
Stock Option” shall mean a right to purchase Shares from the Company at a fixed
price for a specified period that is granted under Section 6 of the Plan
and that is intended to meet the requirements of Section 422 of the Code
or any successor provisions thereto.

 

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

 

“Option”
shall mean an Incentive Stock Option or a Nonqualified Stock Option.

 

“Other
Stock-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 the
Plan.

 

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

 

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

 

“Performance
Period” shall mean, with respect to any Performance Award, the period specified
by the Committee, including, but not limited to, the calendar year or any part thereof
and periods of more than one consecutive calendar year.

 

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“Performance
Targets” shall mean the specific measures which must be satisfied in connection
with any Performance Goal.

 

“Person”
shall mean any individual, corporation, partnership, association, joint-stock
company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

 

“Plan”
shall mean this Trans World Corporation 2004 Equity Incentive Plan, as may be
amended from time to time in accordance with its terms.

 

“QDRO”
shall mean a domestic relations order meeting such requirements as the
Committee shall determine, in its sole discretion.

 

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

 

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

 

“Restricted
Stock Unit” shall mean any unit granted under Section 8 of the Plan that
is subject to a substantial risk of forfeiture due to a restriction based on
continued employment or the occurrence of other events as determined by the
Committee in its sole discretion, which may be settled either (i) by
the delivery of one Share for each Restricted Stock Unit or (ii) in cash
in an amount equal to the Fair Market Value of one Share for each Restricted
Stock Unit, all as specified in the applicable Award Agreement. The Award of a
Restricted Stock Unit represents the mere promise of the Company to deliver a
Share or the appropriate amount of cash, as applicable, upon removal of the
applicable restriction (or such later date as may be provided in the Award
Agreement) in accordance with and subject to the terms and conditions of the
applicable 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 the
Exchange Act, or any successor rule or regulation thereto as in effect
from time to time.

 

“SEC”
shall mean the Securities and Exchange Commission or any successor thereto and
shall include the staff thereof.

 

“Shares”
shall mean shares of the common stock, $.001 par value, of the Company, or such
other securities of the Company as may be designated by the Committee from
time to time.

 

“Stock
Appreciation Right” shall mean any right granted under Section 7 of the
Plan to receive the difference between (i) a grant price, which shall be
no less than one hundred percent (100%) of the Fair Market Value of a Share on
the date of grant, and (ii) the Fair Market Value of a Share on the date
the right is exercised, which amount may be paid in cash, Shares or a
combination of cash and Shares.

 

SECTION 3.
Administration.

 

(a)                                  Authority of Committee. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to:  (i) designate Participants; (ii) determine
the type or types of Awards to be granted to an eligible Employee; (iii) determine
the number of Shares to be covered by, or with respect to which payments,
rights or other matters are to be calculated in connection with, Awards; (iv) determine
the terms and conditions of any Award, provided that no Awards granted under
the Plan shall have a vesting period of less than one year, except (x) as
provided in Section 12 hereof and (y) in the Committee’s sole discretion,
in the event of the Participant’s retirement, permanent and total disability or
death; (v) determine whether, to what extent and under what circumstances
Awards may be settled or exercised in cash, Shares, other securities,
other Awards or other property, or canceled, forfeited or suspended; (vi) determine
whether, to what extent and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award shall be deferred either automatically or at the election of the
holder

 

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thereof
or of the Committee; (vii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (viii) establish,
amend, suspend or waive such rules and regulations and appoint such agents
as it shall deem appropriate for the proper administration of the Plan; (ix) determine
the meaning of the terms “retirement” and “permanent and total disability” for
purposes of the Plan; and (x) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration
of the Plan.

 

(b)                                 Committee Discretion Binding. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion 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 and
any Employee.

 

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

 

SECTION 4.
Shares Available for Awards.

 

(a)                                  Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the
Plan shall not exceed (i) 251,583 plus (ii) 10,800 Shares that, as of
May 5, 2004, were available for issuance under the Company’s 1998 Stock
Option Plan (the “Prior Plan”) or that thereafter become available for issuance
under the Prior Plan in accordance with its terms as in effect on such date. Subject
to the last sentence of this Section 4(a), if, after the effective date of
the Plan, any Shares covered by an Award granted under the Plan, or to which
such an Award relates, are forfeited, or if such an Award is settled for cash
or otherwise terminates or is canceled without the delivery of Shares, then the
Shares covered by such Award, or to which such Award relates, or the number of
Shares otherwise counted against the aggregate number of Shares with respect to
which Awards may be granted, to the extent of any such settlement,
forfeiture, termination or cancellation, shall again become Shares with respect
to which Awards may be granted. Subject to the last sentence of this Section 4(a),
in the event that any Option or other Award granted hereunder is exercised
through the delivery of Shares or in the event that withholding tax liabilities
arising from such Award are satisfied by the withholding of Shares by the
Company, the number of Shares available for Awards under the Plan shall be
increased by the number of Shares so surrendered or withheld. Notwithstanding
any other provision of the Plan to the contrary, the aggregate number of Shares
that may be issued under the Plan upon the exercise of Incentive Stock
Options shall not be increased by any of the actions set forth in the two
immediately preceding sentences to the extent that such an increase is not
permitted by applicable regulations under Section 422 of the Code.

 

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

 

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

 

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

 

(c)                                  Adjustments. In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Shares, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee to be appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable,

 

4

 

adjust
any or all of (i) the number of Shares or other securities of the Company
(or number and kind of other securities or property) with respect to which
Awards may be granted, (ii) the number of Shares or other securities
of the Company (or number and kind of other securities or property) subject to
outstanding Awards and (iii) the grant or exercise price with respect to
any Award, or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award; provided, in each case, that (A) with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate Section 422(b)(1) of
the Code, as from time to time amended, and (B) with respect to any Award
no such adjustment shall be authorized to the extent that such authority would
be inconsistent with the Plan’s meeting the requirements of Section 162(m)
of the Code, as from time to time amended, or Rule 16b-3, as from time to
time amended.

 

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

 

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

 

SECTION 6.
Stock Options.

 

(a)                                  Grant. Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the Employees to whom Options shall be
granted, the number of Shares to be covered by each Option, the option price
therefor and the conditions and limitations applicable to the exercise of the
Option. The Committee shall have the authority to grant Incentive Stock
Options, or to grant Nonqualified Stock Options, or to grant both types of
options. In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and comply with such rules as may be
prescribed by Section 422 of the Code, as from time to time amended, and
any regulations implementing such statute.

 

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

 

(c)                                  Exercise. Subject to the terms of the Plan, each Option shall be exercisable at
such times and subject to such terms and conditions as the Committee may, in
its sole discretion, specify in the applicable Award Agreement or thereafter,
provided that no Option shall be exercisable after the expiration of ten years
from the date the Option is granted. The Committee may impose such
conditions with respect to the exercise of Options, including without
limitation any conditions relating to the application of federal or state
securities laws, as it may deem necessary or advisable.

 

(d)                                 Payment. No Shares shall be delivered pursuant to any exercise of an Option
until payment in full of the option price therefor is received by the Company. Such
payment may be made in cash, or its equivalent, or, if and to the extent
permitted by the Committee, by exchanging Shares owned by the optionee (which
are not the subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to
the Company as of the 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, the Committee shall have sole
and complete authority to determine the Employees to whom Stock Appreciation
Rights shall be granted, the number of Shares to be covered by each Stock
Appreciation Right, the grant price thereof, which may be no less than one
hundred percent (100%) of the Fair Market Value of a Share on the date of
grant, the conditions and limitations applicable to the

 

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exercise
thereof and whether a Stock Appreciation Right shall be settled in cash, Shares
or a combination of cash and Shares. Stock Appreciation Rights may be
granted in tandem with another Award, in addition to another Award, or
freestanding and unrelated to another Award. Stock Appreciation Rights granted
in tandem with or in addition to an Award may be granted either at the
same time as the Award or at a later time, provided that any Stock Appreciation
Right related to an Incentive Stock Option must be granted at the same time
such Incentive Stock Option is granted.

 

(b)                                 Other Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine, at or after the
grant of a Stock Appreciation Right, the term, methods of exercise, methods and
form of settlement and any other terms and conditions of any Stock
Appreciation Right. Any such determination by the Committee may be changed
by the Committee from time to time and may govern the exercise of Stock
Appreciation Rights granted prior to such determination as well as Stock
Appreciation Rights granted thereafter. The Committee may impose such
conditions or restrictions on the exercise of any Stock Appreciation Right as
it shall deem appropriate.

 

SECTION 8.
Restricted Stock and Restricted Stock Units.

 

(a)                                  Grant. Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the Employees to whom Shares of Restricted
Stock and Restricted Stock Units shall be granted, the number of Shares of
Restricted Stock and/or the number of Restricted Stock Units to be granted to
each Participant, the duration of the period during which, and the conditions
under which, the Restricted Stock and Restricted Stock Units may be
forfeited to the Company, the other terms and conditions of such Awards and, in
the case of Restricted Stock Units, whether such Units shall be settled in
cash, Shares or a combination of cash and Shares on the date of grant. Each
Restricted Stock Unit shall have a value equal to no less than one hundred
percent (100%) of the Fair Market Value of a Share on the date of grant. Notwithstanding
any other provision of the Plan to the contrary, Restricted Stock and
Restricted Stock Units which have not been granted in lieu of base salary or
bonuses or which have a restriction based on completion of a specified period
of service with the Company or an Affiliate without achievement of a
Performance Target or Performance Targets or other performance objectives of
the Company as a condition of vesting shall have 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 or death.

 

(b)                                 Transfer Restrictions. Shares of Restricted Stock and Restricted
Stock Units may not be sold, assigned, transferred, pledged or otherwise
encumbered, except, in the case of Restricted Stock, as provided in the Plan or
the applicable Award Agreements. Certificates issued in respect of Shares of
Restricted Stock shall be registered 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 applicable to such Shares
of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant’s legal representative.

 

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

 

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

 

SECTION 9.
Other Stock-Based Awards. The Committee shall have authority to grant to
eligible Employees an Other Stock-Based Award, which shall consist of any right
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 in part by
reference to, or otherwise based on or related to, Shares (including, without
limitation, securities convertible into Shares), as deemed by the Committee to
be consistent with the purposes of the Plan. Subject to the terms of the Plan
and any applicable Award Agreement, the Committee shall determine the terms and
conditions of any such Other Stock-Based Award and whether such Awards shall be
paid in cash, Shares or a combination of cash and Shares. Notwithstanding any
other provision of the Plan to the contrary, an Other Stock-Based Award which
is not granted in lieu of base salary or bonuses or which is not subject to the
achievement of a Performance Target or Targets or other performance objectives
of the Company as a condition to vesting shall have a minimum vesting period of
three

 

6

 

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 or death.

 

SECTION 10.
Performance Awards.

 

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

 

(b)                                 Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the Performance
Targets to be achieved during any Performance Period, the length of any
Performance Period, the amount of any Performance Award and the amount and kind
of 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 sum or in installments following the close of the Performance Period,
provided that no full and/or partial payment of a Performance Award granted
hereunder may be made to a Covered Employee until the Committee has
certified in writing the attainment by the Company of the applicable
Performance Target or Performance Targets over the applicable Performance
Period or Performance Periods.

 

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

 

SECTION 11.
Termination or Suspension of Employment. The following provisions shall
apply in the event of the Participant’s termination of employment unless the
Committee shall have provided otherwise, either at the time of the grant of the
Award or thereafter.

 

7

 

(a)                                  Nonqualified Stock Options and Stock
Appreciation Rights.

 

(i)                                     Termination of Employment. If the Participant’s employment with the
Company or its Affiliates is terminated for any reason other than death,
permanent and total disability or retirement, the Participant’s right to
exercise any Nonqualified Stock Option or Stock Appreciation Right shall
terminate, and such Option or Stock Appreciation Right shall expire, on the
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 it not been
for the termination of employment. The Participant shall have the right to
exercise such Option or Stock Appreciation Right prior to such expiration to
the extent it was exercisable at the date of such termination of employment and
shall not have been exercised.

 

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

 

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

 

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

 

(c)                                  Restricted Stock. Except as otherwise determined by the
Committee at the time of grant, upon termination of employment for any reason
during the restriction period, all shares of Restricted Stock still subject to
restriction shall be forfeited by the Participant and reacquired by the Company
at the price (if any) paid by the Participant for such Restricted Stock,
provided that in the event of a Participant’s retirement, permanent and total
disability 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 best
interests of the Company, waive in whole or in part any or all remaining
restrictions with respect to such Participant’s shares of Restricted Stock.

 

SECTION 12.
Change in Control. Notwithstanding any other provision of the Plan to
the contrary, upon a Change in Control all outstanding Awards shall vest,
become immediately exercisable or payable or have all restrictions lifted as may apply
to the type of Award.

 

SECTION 13.
Amendment and Termination.

 

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

 

8

 

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

 

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

 

(iii)                               reduce the exercise price for Options and
Stock Appreciation Rights by repricing or replacing such Awards; or

 

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

 

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

 

(c)                                  Adjustment of Awards Upon the Occurrence of
Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms
and conditions of, and the criteria included 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 the Company or any Affiliate, or of
changes in applicable laws, regulations or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, provided that no such adjustment shall be
authorized to the extent that such authority would be inconsistent with the
Plan’s meeting the requirements of Section 162(m) of the Code, as from
time to time amended, or Rule 16b-3, as from time to time amended.

 

SECTION 14.
General Provisions.

 

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

 

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

 

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

 

(d)                                 Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan
or the rules, regulations and other requirements of the SEC, any stock exchange
or national market quotation system upon which such Shares or other securities
are then 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
such certificates to make appropriate reference to such restrictions.

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)                                  Severability. The Plan is intended to comply in all
aspects with applicable laws and regulations, including, with respect to those
Participants who are Covered Employees, Section 162(m) of the Code and the
regulations thereunder, or any successors thereto. If any provision of the Plan
or any Award is or becomes or is deemed to be invalid, illegal or unenforceable
in any jurisdiction or as to any Person or Award, or would disqualify the Plan
or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or
if it cannot be construed or deemed amended without, in the determination of
the Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.

 

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

 

(m)                               No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant

 

10

 

or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

 

(n)                                 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any
rights thereto shall be canceled, terminated or otherwise eliminated.

 

(o)                                 Headings. Headings are given to the Sections and subsections of the Plan solely
as a convenience to facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or interpretation of the Plan
or any provision thereof.

 

(p)                                 Successors and Assigns. The Plan and any Award Agreement shall be
binding upon the successors and assigns of the Company and upon each
Participant and such Participant’s heirs, executors, administrators, personal
representatives, permitted assignees and successors in interest.

 

SECTION 15.
Effective Date; Term of the Plan.

 

(a)                                  Effective Date. The Plan shall be effective upon its
approval by the Board of Directors of the Company on May 13, 2004, subject
to approval of 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 the Company held subsequent to the approval of the Plan by the
Board of Directors of the Company. If the Plan is not so approved by the
stockholders of the Company, the Plan shall immediately terminate and all
actions taken thereunder shall be null and void.

 

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

 

11

 

AMENDMENT #1 TO THE 2004 EQUITY INCENTIVE
PLAN

 

Since 1993, the Company has emphasized the grant of stock options at
fair market value exercise prices as a means of providing long-term incentive
compensation to, and encouraging a long-term commitment by, its employees. These
grants have been made pursuant to the 2004 Equity Plan adopted by the
stockholders of the Company at the 2004 Annual Meeting, the 1998 Stock Option
Plan and a predecessor stock option plan. The Company believes that stock
options and other stock compensation have enhanced the Company’s ability to
meet its long-term goals and intends to continue to utilize this means of
compensation for its employees.

 

The 2004 Equity Plan is administered by the Compensation Committee of
the Company’s Board of Directors. The Compensation Committee has, among other
powers, the power to interpret the 2004 Equity Plan and any instrument or
agreement relating thereto, as well as to establish, amend, suspend or waive
such rules and regulations as it deems appropriate in connection with its
administration of the 2004 Equity Plan. These powers also provide the
Compensation Committee with the discretion to determine the number and type of
awards to be granted to any participant, subject to certain limitations. Under
the 2004 Equity Plan, no participant is permitted to receive an award or awards
during any one calendar year covering, in the aggregate, more than 25,000
shares of Common Stock. In addition, a minimum vesting period of one year is
mandated for all awards, including stock options, granted under the 2004 Equity
Plan.

 

It has been determined by the Board of Directors that these
requirements limit the power of the Compensation Committee in establishing
adequate awards. In that regard, the Board of Directors has approved two
amendments to the 2004 Equity Plan in order to further its purpose and enable
the Company to adequately compensate its employees as well as to encourage
their continuing commitment to the Company, including the changes being
contemplated in the compensation package being negotiated with the Company’s
President. (For a discussion of the new compensation package now being
negotiated with the Company’s President, see “Management Compensation
Employment Agreement.”)  The proposed
amendments would provide the Compensation Committee with the discretion to
determine whether to include a one-year vesting requirement for any future
grants awarded under the 2004 Equity Plan to any of the Company’s employees and
increase the number of awards permitted to be granted to any one participant
annually from 25,000 shares of Common Stock to 250,000 shares of Common Stock. Stockholders
of the Company are being asked to consider and vote on these proposed
amendments at this Annual Meeting.

 

The provisions of the 2004 Equity Plan to be amended as described above
are set forth below as indicated in bold-face print and are qualified in their
entirety by reference to the full text of the 2004 Equity Plan, in its present form and
as proposed for amendment, copies of which may be obtained from the
Company by addressing your request to the Compensation Committee, Trans World
Corporation, 545 Fifth Avenue, Suite 940, New York New York  10017.

 

“SECTION 3. Administration.

 

(a)                                  Authority
of Committee. The Plan shall be administered by the Committee. Subject to
the terms of the Plan and applicable law, and in addition to other express
powers and authorizations conferred on the Committee by the Plan, the Committee
shall have full power and authority to:  (i) designate

 

12

 

Participants; (ii) determine the type or types of Awards to be
granted to an eligible Employee; (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award, including the
determination of any vesting period, provided that no Awards granted
under the Plan prior to June 27, 2005
shall have a vesting period of less than one year, except (x) as provided in Section 12
hereof and (y) in the Committee’s sole discretion, in the event of the
Participant’s retirement, permanent and total disability or death; (v) determine
whether, to what extent and under what circumstances Awards may be settled
or exercised in cash, Shares, other securities, other Awards or other property,
or canceled, forfeited or suspended; (vi) determine whether, to what
extent, and under what circumstances cash, Shares, other securities, other
Awards, other property and other amounts payable with respect to an Award shall
be deferred either automatically or at the election of the holder thereof or of
the Committee; (vii) interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan; (viii) establish,
amend, suspend or waive such rules and regulations and appoint such agents
as it shall deem appropriate for the proper administration of the Plan; (ix) determine
the meaning of the terms “retirement” and “permanent and total disability” for
purposes of the Plan; and (x) make any other determination and take any other
action that the Committee deems necessary or desirable for the administration
of the Plan.

 

***********

 

SECTION 4. Shares Available for Awards.

 

***********

 

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

 

(i)                                     in
no event shall a Participant receive an Award or Awards during any one calendar
year covering in the aggregate more than 250,000
Shares (whether such Award or Awards may be settled in Shares, cash or any
combination thereof); and”

 

With the adoption of these amendments, the Compensation Committee would
have the flexibility it needs to further the goals of the 2004 Equity Plan and
align employees who receive award grants more closely with the interests of the
stockholders.

 

 

Adopted by the Board of Directors on June 27,
2005

 

13

 

AMENDMENT #2 TO THE 2004 EQUITY PLAN

 

Since 1993, the Company has emphasized the grant of stock options at
exercise prices based on fair market value as a means of providing long-term
compensation to, and encouraging a long-term commitment by, its senior
executives, certain key employees of the Company and its subsidiaries and its
non-employee directors. Most recently these grants have been made pursuant to
the 2004 Equity Plan adopted by the stockholders of the Company at the 2004
Annual Meeting and the 1999 Director Plan adopted by the stockholders of the
Company at the 1999 Annual Meeting. The Company believes that stock options and
other stock compensation have enhanced the Company’s ability to meet its
long-term goals and intends to continue to utilize this means of compensation
for its employees and its non-employee directors. In order to continue its
ability to grant incentives and equity compensation to employees and directors,
the Compensation Committee of the Board of Directors of the Company, which
administers both 2004 Equity Plan and the 1999 Director Plan, has determined
that the 2004 Equity Plan should have an additional reserve of shares so that
the Company’s policy of issuing forms of equity compensation to its employees
as an incentive for superior work as motivation for higher business
achievements and results and to its non-employee directors by compensating them
for their service to the Company can continue. In addition the Board believes
the 2004 Equity Plan will continue to enable it to attract and retain highly
qualified senior executives.

 

Under the 2004 Equity Plan, there were 251,583 shares available for
grant as well as 10,800 shares that, as of May 5, 2004, were available for
issuance under the Company’s 1998 Stock Option Plan (the “Prior Plan”). At present,
12,383 shares remain available for grant under the 2004 Equity Plan. Under the
1999 Director Plan, there were 2,500 shares available for grant of which 365
shares remain available for future grant. Accordingly, the Compensation
Committee has approved two proposed amendments affecting several sections of
the 2004 Equity Plan for stockholder approval at this Annual Meeting. The first
amendment would authorize an increase in the number of shares reserved for
issuance under the 2004 Equity Plan, due to the insufficient number of shares
presently available for awards which the Company expects to make in future
years pursuant to its current compensation practices. The second amendment
would amend the definition of those eligible to participate in the 2004 Equity
Plan to include non-employee directors. As a result, no further grants would be
made under the 1999 Director Plan.

 

The amendments provide that the total number of authorized shares that may be
issued under the provisions of the 2004 Equity Plan be increased by 125,365
shares. This increase would include the 365 shares remaining in the 1999
Director Plan, which have not been awarded to date. Other amendments provide
that non-employee directors of the Company would be eligible to participate in
the 2004 Equity Plan. If these amendments are approved by the stockholders, the
reserve of shares that will be available for the future issuance of stock
options and other awards under the 2004 Equity Plan will increase from 12,383
to 137,748 shares (representing approximately 1.8% of the Company’s 7,840,869
outstanding shares of Common Stock). All of these options will be available for
grants to the executive officers and non-employee directors as well as other
key employees, except that non-employee directors are eligible to receive only
awards of non-incentive stock options. With the exception of the current and
continuing policy to grant non-employee directors options to purchase 25 shares
of Common Stock of the Company each fiscal quarter, it is not presently
determinable who will receive these option awards since such awards are granted
by the Compensation Committee in its discretion 

 

14

 

from time to time.

 

These amendments to the 2004 Equity Plan will not become effective
unless and until they are approved by the stockholders of the Company and the
date of such approval will be its effective date. The provisions of the 2004
Equity Plan to be amended are set forth below and are qualified in their
entirety by reference to the full text of the 2004 Equity Plan, in its present form and
as proposed for amendment, a copy of which may be obtained from the
Company by addressing your request to the Compensation Committee, Trans World
Corporation, 545 Fifth Avenue, Suite 940, New York, New York 10017.

 

“SECTION 1. Purpose. The purposes of the Trans World
Corporation 2004 Equity Incentive Plan are to promote the interests of the
Company and its stockholders by (i) attracting and retaining exceptional
executive personnel and other key employees of the Company and its Affiliates (ii) motivating
such employees by means of performance-related incentives to achieve long-range
performance goals; (iii) enabling such employees to participate in the
long-term growth and financial success of the Company; and (iv) compensating
non-employee directors for their service to the Company.

 

****

 

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

 

“Non-employee Director” shall mean a director of the Company or of any
Affiliate, who is not also an employee of the Company or of any Affiliate.

 

“Participant” shall mean any Employee or Non-Employee Director selected
by the Committee to receive an Award under the Plan.

 

****

 

SECTION 4. Shares Available for Awards.

 

(a)                                  Shares
Available. Subject to adjustment as provided in Section 4(c), the
number of Shares with respect to which Awards may be granted under the
Plan shall not exceed (i) 376,583 plus (ii) 10,800 Shares that, as of
May 5, 2004, were available for issuance under the Company’s 1998 Stock
Option Plan (the “Prior Plan”) or that thereafter become available for issuance
under the Prior Plan in accordance with its terms as in effect on such date and
(iii) 365 Shares that, as of April 12, 2006, were available for
issuance under the Company’s 1999 Non-Employee Director Stock Option Plan (the “1999
Director Plan”) or that thereafter become available for issuance under the 1999
Director Plan in accordance with its terms as in effect on such date.

 

Adopted by the Board of Directors on May 17,
2006

 

15

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