Document:

Exhibit 10.17

                      SEPARATION AND CONSULTANCY AGREEMENT

      This Separation and Consultancy Agreement (this "Agreement") is entered
into as of this 2nd day of February, 2006 by and between Douglas A. McIntyre, an
individual currently residing at 33 Highview Road, Pound Ridge, New York 10576
(the "Executive"), and On2 Technologies, Inc., a Delaware corporation (the
"Company") (Executive and Company are referred to collectively hereafter as, the
"Parties").

      In consideration of the mutual execution of this Agreement, and the
covenants, promises and releases herein, the Parties agree as follows:

      1. Termination of Employment and all Other Relationships. The termination
of Executive's employment with the Company and Executive's resignation from the
Company's Board of Directors (the "Board") and all offices and other
relationships with the Company or any of its subsidiaries (including as
President and Chief Executive Officer of the Company) will be effective as of
February 2, 2006 (the "Termination Date"). The employment agreement between the
Executive and the Company dated as of April 17, 2000, as amended, will terminate
as of the Termination Date.

      2. Compensation.

      (a) Executive shall be entitled to receive the unpaid portion, if any, of
his salary earned through the Termination Date, in accordance with the Company's
standard payroll procedures, any expense reimbursements for expenses incurred
while Executive was in the employ of the Company, duly submitted and approved in
accordance with the Company's expense policy and any accrued but unused vacation
time through the Termination Date.

      (b) All vested stock options held by the Executive on the Termination Date
shall remain exercisable during the three-month period following the Termination
Date and shall thereupon terminate and all unvested stock options held by
Executive on the Termination Date automatically terminated on the Termination
Date.

      (c) The Company agrees that it will consider a request by Executive made
prior to the expiration of the three-month period set forth in Section 2(b) to
extend the period during which the vested stock options are exercisable. The
Company may grant or deny any such request at its discretion in light of the
facts and circumstances at the time.

      (d) It is expressly agreed and understood that, in addition to any other
rights the Company may have, if Executive exercises Executive's right of
revocation in accordance with the provisions set forth in Section 19 during the
seven-day waiting period referred to in such section, then the Company shall not
be required to pay to Executive the amounts set forth in Section 3 hereof.

<PAGE>

      3. Independent Consultancy.

      (a) From and after the Termination Date through the earlier of (i) January
31, 2007 or (ii) the termination date elected by the Company pursuant to Section
3(c) below (such period referred to as the "Transition Period"):

      i.    Executive shall work for the Company as an independent consultant.

      ii.   As an independent consultant, Executive shall work and cooperate
            with the Board and the Company in a productive and professional
            manner in order to effect a smooth and orderly transition of
            Executive's job responsibilities.

      iii.  During the Transition Period, Executive shall have such day-to-day
            responsibilities as are reasonably delegated to him by the Board or
            the President or Chief Executive Officer of the Company, and
            Executive shall make himself reasonably available to report to,
            update and advise the President or Chief Executive Officer on his
            activities. During the Transition Period, Executive shall be an
            independent contractor providing services to the Company and shall
            have none of the powers of an officer or executive of the Company,
            Executive shall have no power or authority to act for or take any
            action on behalf of the Company, and Executive shall have no power
            or authority to bind the Company in any manner.

      iv.   During the Transition Period, Executive shall comply with all of
            Executive's obligations hereunder and all applicable laws and all
            policies and standards of conduct as may be reasonably set by the
            Company for executive employees generally.

      (b) During the Transition Period, in accordance with the terms hereof,
provided that Executive does not exercise Executive's right of revocation set
forth in Section 19, the Company shall pay to Executive the sum of $14,423.08 on
the 1st and 15th day of each month during the Transition Period (such amounts,
the "Transitional Payments"), it being understood that if Executive exercises
Executive's right of revocation in accordance with the provisions set forth in
Section 19, Executive shall not be entitled to receive, and the Company shall
not be obligated to pay to Executive, the Transitional Payments, or any portion
thereof.

      (c) Notwithstanding anything herein to the contrary, the Company may in
its sole discretion elect to terminate the Transition Period at any time prior
to the expiration of such period, in which case, the Executive shall be entitled
to receive the sum of $14,423.08 and Executive shall not be entitled to receive,
and the Company shall not be obligated to pay to Executive, any portion of the
Transitional Payments that becomes payable after the date of such election.

      4. Cooperation. During and after the Transition Period, Executive will
cooperate with the Company and its subsidiaries by making himself available, at
reasonable times and at no out-of-pocket expense to Executive, to testify on
behalf of the Company or any subsidiary or affiliate of the Company in any
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to reasonably assist the Company or any such subsidiary or
affiliate in any such action, suit, or proceeding by providing information and
meeting and consulting with the Board or its representatives or counsel, or
representatives or counsel to the Company or any such subsidiary or affiliate,
as reasonably requested by the Company.

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<PAGE>

      5. Health Continuation Coverage.

      (a) Executive shall be eligible to elect continuation of medical and
dental insurance coverage under the Consolidated Omnibus Budget Reconciliation
Act, as amended ("COBRA"), in accordance with its terms, unless it is later
discovered by the Company that the Executive engaged in gross misconduct prior
to the Termination Date. Executive acknowledges that Executive received written
notice from the Company of Executive's right under COBRA to elect to continue
medical and dental insurance coverage effective as of the Termination Date.

      (b) Subject to Executive's electing COBRA, Executive and his eligible
dependents shall be entitled to receive such COBRA continuation coverage from
the Company, at the Company's expense, through January 31, 2007. Thereafter,
Executive shall be responsible for the cost of his and his eligible dependents'
medical and dental insurance coverage under COBRA for the remainder of the
continuation coverage period.

      6. Confidentiality.

      (a) Executive shall not, directly or indirectly, misappropriate, disclose,
copy, memorize, use, reproduce, sell or make available to anyone at any time or
for Executive's direct or indirect benefit or the direct or indirect benefit of
any other person or entity, any information obtained in connection with
Executive's employment or during the Transition Period which is Confidential
Information or proprietary to the Company. "Confidential Information" shall
include, without limitation (whether or not reduced to writing), (i) all
information which has been developed by the Company and is unique to the Company
and the unauthorized disclosure or use of which would reduce the value of such
information to the Company, (ii) the Company's client lists and prospective
client lists, (iii) the Company's trade secrets, inventions, processes,
formulae, programs and technical data, (iv) any confidential information about
or provided by any client or customer or prospective or former client or
customer of the Company, and (v) information concerning the Company's business
or financial affairs, including its books and records, commitments, procedures,
plans and prospects, financial products developed by it, its securities
positions, investment and trading strategies, and current or prospective
transactions or business. Notwithstanding the foregoing, it is understood that
Confidential Information does not include information (i) that is or becomes
generally available to the public other than as a result of an act or omission
by Executive or as result of a breach of this Agreement, or (ii) that Executive
receives on a non-confidential basis from a source other than the Company or any
of its clients, officers, directors, employees, shareholders or affiliates,
provided that Executive, after making due inquiry, is not aware that such source
is subject to a contractual, legal, fiduciary or other obligation of
confidentiality with respect to such information. Nothing set forth in this
Section 6(a) shall be interpreted to prohibit Executive from disclosing any such
information as may be required by applicable law or as may be requested by any
governmental body in connection with an inquiry, investigation or action;
provided, that, Executive shall provide reasonable prior written notice to the
Company in the event Executive is required to disclose any Confidential
Information permitted by this sentence.

                                       3
<PAGE>

      (b) For purposes of Sections 6, 7, 8 and 9 of this Agreement, the term
"Company" shall be deemed to include any stockholder, subsidiary or affiliate of
the Company.

      7. Return of Property and Documents; Innovations Acknowledgement.

      (a) Executive represents and warrants that Executive has returned to the
Company all Company property in his possession (including, without limitation,
computers, materials, records and documents), and has retained no copies
(electronic or otherwise) of, any written or electronic materials, records and
documents made by Executive or coming into Executive's possession or control in
Executive's capacity as an employee, officer, or board member during the course
of Executive's employment with the Company, which contain, relate or refer to,
any proprietary or Confidential Information, provided however that Executive may
retain his rolodex or similar written or electronic phone directories to the
extent they do not contain Confidential Information other than name, address,
telephone number or similar contact information. Notwithstanding the foregoing,
Executive may temporarily retain possession of such Company property as the
Board or the President determines is reasonably necessary for him to perform his
assigned duties during the Transition Period. Executive agrees that at the
expiration of the Transition Period, he will return to the Company all such
Company property in his possession, whether obtained prior to the Termination
Date or during the Transition Period, and that he will retain no copies of any
written materials, records and documents made by Executive or coming into
Executive's possession or control during the course of Executive's performing
his services to the Company prior to the Termination Date or during the
Transition Period, which contain, relate or refer to, any proprietary or
Confidential Information. Nothing contained herein shall be deemed a waiver of
the attorney-client and attorney work-product privileges.

      (b) Executive understands and acknowledges that any invention, process,
innovation or other property (intellectual or otherwise) that he developed
during the term of his employment with the Company or that he develops during
the Transition Period which relates to the business of the Company during either
of such periods and which is reducible to tangible form or evidenced in writing
is the property of the Company. Executive agrees to cooperate with the Company
in evidencing or supporting any rights the Company has with respect to the
property described in this Section 7(b).

      8. Non-Disparagement.

      (a) Executive covenants and agrees that Executive shall in no way
disparage, attempt to discredit, or otherwise call into disrepute, the Company
or its subsidiaries, affiliates, successors, assigns, officers, directors,
employees, shareholders, agents or any of their products or services, in any
manner that would damage the business or reputation of the Company, its products
or services or its subsidiaries, affiliates, successors, assigns, officers,
directors, employees or agents. Executive further covenants and agrees that
Executive shall not otherwise engage in conduct which could reasonably be
expected to disrupt, damage, impair or interfere with the business reputation of
the Company. Without limiting the foregoing, Executive shall

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<PAGE>

not make any comments or statements to the press, employees or former employees
of the Company, any client or prospective or former client of the Company, any
individual or entity with whom the Company has a business relationship or any
other person, if such comment or statement could adversely affect the conduct of
the business of the Company, or any of its plans or prospects or the business
reputation of the Company or any of its products or services or that of any of
its current or former employees or Board members, except (i) truthful statements
made in compliance with legal process, governmental inquiry or as required by
legal filing or disclosure requirements, (ii) consistent with the foregoing
sentence, Executive may disclose or describe in general the circumstances of his
departure from the Company to a prospective employer or recruiter, or (iii) as
in good faith deemed necessary to rebut any untrue or misleading statements by
the Company. Neither the Company nor any officer or director of the Company
shall disparage, attempt to discredit, or otherwise call into disrepute,
Executive in any manner that would damage the reputation of Executive, provided
that the foregoing shall not apply to (i) actions or statements taken or made in
good faith within the Company in fulfilling duties with the Company, (ii)
truthful statements made in compliance with legal process, governmental inquiry
or as required by legal filing or disclosure requirements, or (iii) as in good
faith deemed necessary to rebut any untrue or misleading statements by
Executive.

      (b) Executive shall not issue any press release or make any public
statement (including, without limitation, on the internet) relating to the
Company, Executive's employment with the Company or Executive's termination of
employment with the Company without the prior written consent of the Company
(acting through the Board), in its sole discretion, except (and to the extent)
as may be required by applicable law. The Company shall not issue any press
release or make any public statement relating to the Executive's employment with
the Company or Executive's termination of employment with the Company without
the prior written consent of Executive, in his sole discretion, except (and to
the extent) as may be required by applicable law.

      9. Non-Solicitation.

      (a) During the Transition Period and the twelve-month period following the
Transition Period (the "Restricted Period"), the Executive will not, directly or
indirectly, without the prior written consent of the Company, solicit or induce,
or attempt to solicit or induce, any employee or other personnel of the Company
to terminate, alter or lessen that person's affiliation with the Company or to
violate the terms of any agreement or understanding with the Company.

      (b) Executive represents and warrants that prior to the Termination Date,
Executive has not engaged in any of the foregoing actions set forth in Section 8
or 9(a) above.

      10. Mutual Release and Waiver.

      (a) Executive hereby acknowledges that a portion of the consideration
Executive receives under this Agreement is in addition to anything of value to
which Executive is already entitled.

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<PAGE>

      (b) Executive (for himself, his agents, heirs, successors, assigns,
executors and/or administrators) does hereby and forever release and discharge
the Company and its past and present parent, subsidiaries, affiliates,
predecessors or other related entities, and the respective employees, agents and
affiliates thereof, as well as the successors, shareholders, partners, members,
officers, directors, heirs, predecessors, assigns, agents, employees, attorneys
and representatives of each of them, past or present, from any and all causes of
action, actions, judgments, liens, debts, contracts, indebtedness, damages,
losses, claims, liabilities, rights, interests and demands of whatsoever kind or
character, known or unknown, suspected to exist or not suspected to exist,
anticipated or not anticipated, whether or not heretofore brought before any
state or federal court or before any state or federal agency or other
governmental entity, which Executive has or may have against any released person
or entity by reason of any and all acts, omissions, events or facts occurring or
existing prior to the date hereof, including, without limitation, all claims
attributable to the employment of Executive, all claims attributable to the
termination of that employment, and all claims arising under contract, tort,
common law, or any federal, state or other governmental statute, regulation or
ordinance or common law, provided, that, the foregoing release shall not apply
to any rights of Executive under this Agreement. This release includes, but is
not limited to, all claims of discrimination in employment under the Federal Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, and other federal, state, or local law.

      (c) Executive represents that he has provided to date truthful and
complete information to the Company's outside attorneys, and, aside from those
disclosures, knows of no other facts or circumstances arising out of his actions
or omissions on which a claim or action could be asserted against the Company or
its subsidiaries. Based upon the foregoing representation, the Company does
hereby and forever release and discharge Executive, his heirs, assigns,
representatives and successors from any and all causes of action, actions,
judgments, liens, debts, contracts, indebtedness, damages, losses, claims,
liabilities, rights, interests and demands of whatsoever kind or character,
known or unknown, suspected to exist or not suspected to exist, anticipated or
not anticipated, whether or not heretofore brought before any state or federal
court or before any state or federal agency or other governmental entity, which
the Company has or may have against Executive by reason of any and all acts,
omissions, events or facts occurring or existing prior to the date hereof
relating to or arising out of Executive's employment, including, without
limitation, all claims attributable to the employment of Executive, and all
claims attributable to the termination of that employment, excepting only those
obligations expressly recited to be performed hereunder; provided, that, the
foregoing release shall not apply to claims which the Company has or may have
against Executive by reason of any willful misconduct, criminal acts or acts of
fraud of Executive involving the Company or its subsidiaries.

      (d) Except for those obligations created by or arising out of this
Agreement and except as limited in this Agreement, it is the intention of
Executive and the Company in executing this Agreement that the same shall be
effective as a bar to each and every claim, demand and cause of action
hereinabove specified. In furtherance of this intention, Executive and the
Company hereby expressly and mutually consent that this Agreement shall be given
full force and effect according to each and all of its express terms and
provisions, including those related to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims,
demands and causes of action hereinabove specified.

                                       6
<PAGE>

      11. Sole Entitlement. Executive acknowledges and agrees that no
compensation or benefits are owing to Executive by the Company or its
subsidiaries except as set forth in this Agreement.

      12. Remedies. The Company and Executive each acknowledge and agree that
their respective rights under this Agreement are of a specialized and unique
character, that a monetary remedy for a breach of the agreements set forth in
this Agreement will be inadequate and impracticable and that immediate and
irreparable damage will result to the Company or Executive (the "Aggrieved
Party") if the other (the "Aggrieving Party") fails to or refuses to perform its
obligations under this Agreement. Notwithstanding any election by any person to
claim damages from the Company or Executive, as the case may be, as a result of
any such failure or refusal, the Aggrieved Party may, in addition to any other
remedies and damages available, seek temporary and permanent injunctive relief
(without the posting of a bond or other security) in a court of competent
jurisdiction to restrain any such failure or refusal and the Aggrieving Party,
on its own behalf and on behalf of its affiliates (in the case of the Company),
waives any defense that the Aggrieved Party has an adequate remedy at law. The
Aggrieving Party agrees that, in addition to all other remedies available at law
or in equity, the Aggrieved Party shall be entitled to such injunctive relief,
including temporary restraining orders, preliminary injunctions and permanent
injunctions as a court of competent jurisdiction shall determine.

      13. No Admissions. Nothing in this Agreement is nor shall it be construed
as being an admission of wrongdoing or liability by either Executive or the
Company.

      14. Severability. The Parties expressly agree that the character, duration
and geographical scope of the provisions set forth in this Agreement are
reasonable in light of the circumstances as they exist on the date hereof. If a
court of competent jurisdiction determines that the character, duration or
geographical scope of the provisions of this Agreement are unreasonable, then it
is the intention and the agreement of the Parties hereto that the provisions
hereof shall be construed by the court in such a manner as to impose only those
restrictions on each party's respective conduct that are reasonable in light of
the circumstances and as are necessary to assure to each party the benefits of
this Agreement. If, in any judicial proceeding, a court shall refuse to enforce
all of the separate covenants deemed included herein because taken together they
are more extensive than necessary to assure to each Party the intended benefits
of this Agreement, it is expressly understood and agreed by the Parties hereto
that the provisions hereof that, if eliminated, would permit the remaining
separate provisions to be enforced in such proceeding, shall be deemed
eliminated, for the purposes of such proceeding, from this Agreement.

      15. Entire Agreement; All Other Agreements Superseded. This Agreement
constitutes the entire agreement of the Parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous oral and written
agreements and discussions with respect to the subject matter hereof. There are
no other agreements, written or oral, express or implied, between the parties
hereto, concerning the subject matter hereof, except as set forth herein. This
Agreement may be amended or modified only by written agreement of the parties.

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<PAGE>

      16. Governing Law. This Agreement and all disputes or controversies
arising out of or relating to this Agreement or the transactions contemplated
hereby shall be governed by, and construed in accordance with, the internal laws
of the State of New York, without regard to the laws of any other jurisdiction
that might be applied because of the conflicts of laws principles of the State
of New York, except where corporate law is applicable in which case the law of
the State of Delaware shall apply.

      17. Dispute Resolution.

      (a) Subject to Section 12 hereof, any dispute, controversy or claim
arising out of or relating to any provision of this Agreement and any
instruments or agreements delivered in connection herewith or the
interpretation, enforceability, performance, breach, termination or validity
hereof or thereof, including without limitation, this arbitration clause, shall
be determined exclusively through a final and binding arbitration to be held in
New York City, New York, administered and conducted before a single arbitrator
pursuant to the National Rules For Resolution of Employment Disputes of the
American Arbitration Association; provided, however, that this Section 17 shall
not apply to any cross-claim made by the Company against Executive in litigation
brought by a third party. The claims subject to arbitration include, without
limitation, all matters concerning, relating to or arising out of this Agreement
and Executive's employment or its termination. Judgment upon the award of the
arbitrator may be rendered in any court of competent jurisdiction. The
arbitrator shall be selected by mutual agreement of the parties within 30 days
of the effective date of the notice initiating the arbitration and shall be a
former jurist or an attorney with substantial experience in employment matters.
The arbitrator's authority and jurisdiction shall be limited to determining the
dispute in arbitration in conformity with law to the same extent as if such
dispute were determined as to liability and remedy by a court without a jury.
The arbitrator shall render an award which shall include a written statement of
opinion setting forth the arbitrator's findings of fact and conclusions of law.
EXECUTIVE AND THE COMPANY EXPRESSLY WAIVE ALL RIGHTS TO A JURY TRIAL IN COURT ON
ALL STATUTORY OR OTHER CLAIMS.

      (b) Each party shall pay its own attorney fees and costs including,
without limitation, fees and costs of any experts. However, attorney fees and
costs incurred by the party that prevails in any arbitration commenced pursuant
to this Section 17 or any judicial action or proceeding seeking to enforce the
agreement to arbitrate disputes as set forth in this Section 17 or seeking to
enforce any order or award of any arbitration commenced pursuant to this Section
17 may be assessed against the Party or Parties that do not prevail in such
arbitration in such manner as the arbitrator or the court in such judicial
action, as the case may be, may determine to be appropriate and lawful under the
circumstances.

      18. Assignment; Successors. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise, by either party without the
prior written consent of the other party, and any such assignment without such
prior written consent shall be null and void; provided, however, that the
Company may assign this Agreement to any affiliate or successor of the Company
without the prior consent of Executive. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the Parties and their respective successors and assigns.

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<PAGE>

      19. Waiting Period and Right of Revocation. EXECUTIVE ACKNOWLEDGES (SAYS)
THAT EXECUTIVE IS AWARE THAT AND IS HEREBY ADVISED THAT EXECUTIVE HAS THE RIGHT
TO CONSIDER THIS AGREEMENT FOR TWENTY-ONE DAYS BEFORE SIGNING IT AND THAT IF
EXECUTIVE SIGNS THIS AGREEMENT PRIOR TO THE EXPIRATION OF TWENTY-ONE DAYS,
EXECUTIVE IS WAIVING (GIVING UP) THIS RIGHT FREELY AND VOLUNTARILY. EXECUTIVE
ALSO ACKNOWLEDGES (SAYS) THAT EXECUTIVE IS AWARE OF AND IS HEREBY ADVISED THAT
EXECUTIVE HAS THE RIGHT TO REVOKE (CANCEL) THE PORTION OF THIS AGREEMENT
RELEASING AGE DISCRIMINATION CLAIMS UNDER THE FEDERAL AGE DISCRIMINATION IN
EMPLOYMENT ACT FOR A PERIOD OF SEVEN CALENDAR DAYS FOLLOWING THE SIGNING OF THIS
AGREEMENT AND THAT IT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION (CANCELLATION) PERIOD HAS EXPIRED. TO REVOKE (CANCEL) THE APPLICABLE
PORTION OF THIS AGREEMENT, EXECUTIVE MUST DELIVER WRITTEN NOTICE OF SAME TO THE
COMPANY WITHIN SEVEN CALENDAR DAYS OF SIGNING IT. SHOULD EXECUTIVE REVOKE, THE
COMPANY SHALL HAVE THE RIGHT, IN ITS SOLE DISCRETION, TO TERMINATE OR NOT
TERMINATE THE REMAINDER OF THE AGREEMENT.

      20. Attorney Advice. EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE IS AWARE OF
EXECUTIVE'S RIGHT TO CONSULT AN ATTORNEY AND THAT EXECUTIVE HAS CONSULTED WITH
AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT.

      21. Understanding of Agreement. Executive states that Executive has
carefully read this Agreement, that Executive fully understands its final and
binding effect, that the only promises made to Executive to sign this Agreement
are those stated above, and that Executive is signing this Agreement
voluntarily.

      22. Counterparts/Facsimile Execution. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
instrument and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party. This Agreement
may be executed by facsimile signature and a facsimile signature shall
constitute an original for all purposes.

      23. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, or if by facsimile, upon written confirmation of receipt by
facsimile or otherwise, (b) on the first business day following the date of
dispatch if delivered by a recognized next-day courier service or (c) on the
earlier of confirmed receipt or the fifth business day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered to the addresses set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:

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      (a) if to the Company:

                           On2 Technologies, Inc.
                           1560 Broadway, 10th Floor
                           New York, NY 10036
                           Attention:  Timothy Reusing

          with a copy to (which shall not constitute notice):

                           Kenneth M. Breen
                           Fulbright & Jaworski L.L.P.
                           666 Fifth Avenue
                           New York, New York 10103

      (b) if to Executive:

                           Douglas A. McIntyre
                           33 Highview Road
                           Pound Ridge, NY 10576

          with a copy to (which shall not constitute notice):

                           Michael E. Mooney
                           Nutter, McClennen & Fish, LLP
                           World Trade Center West
                           155 Seaport Boulevard
                           Boston, MA  02210-2604

      24. Headings. The headings in this Agreement are for convenience of
reference only and shall not be construed as part of this Agreement or to limit
or otherwise affect the meaning hereof.

                            [signature page follows]

                                       10

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.

                                    EXECUTIVE:

                                    By:    /s/ Douglas A. McIntyre
                                       -------------------------------
                                           Douglas A. McIntyre

                                    COMPANY:

                                    ON2 TECHNOLOGIES, INC.,
                                    a Delaware corporation

                                    By:    /s/ Tim Reusing
                                       -------------------------------
                                    Name:  Tim Reusing
                                    Title: EVPWMS
      INDUSTRIES INC.

    NONQUALIFIED
      DEFERRED COMPENSATION PLAN

    

    (As
      Amended and Restated Effective January 1, 2005)

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      I  

     

    INTRODUCTION

     

    1.1.  Name
      and Purpose.
      WMS
      Industries Inc. (the “Company”) established the WMS Industries Inc. Nonqualified
      Deferred Compensation Plan (the “Plan”), effective December 1, 2003, for the
      benefit of Eligible Employees. The Plan was amended and restated in its entirety
      effective as of December 9, 2004, to incorporate applicable provisions of the
      American Jobs Creation Act of 2004 and to clarify other administrative
      provisions. The Plan is hereby further amended and restated effective January
      1,
      2005, as set forth herein, to reflect the requirements of Code Section 409A
      and
      to make certain changes in the design of the Plan. 

     

    The
      purpose of the Plan is to provide Eligible Employees with the opportunity to
      defer compensation on a pre-tax basis and to receive Company Matching Credits.
      The Plan is intended to be a deferred compensation plan for a select group
      of
      management and highly compensated employees, as described in Sections 201(2),
      301(a)(3) and 401(a)(1) of ERISA. The Company intends that the Plan (and any
      grantor trust described in Article VI) shall be treated as unfunded for tax
      purposes and for purposes of Title I of ERISA. An Employer’s obligations
      hereunder, if any, to a Participant (or to a Participant’s Beneficiary) shall be
      unsecured and shall be a mere promise by the Company to make payments hereunder
      in the future. A Participant (or the Participant’s Beneficiary) shall be treated
      as a general, unsecured creditor of the Company. The Plan is not intended to
      be
      qualified under Section 401(a) of the Code.

     

    1.2.  Effective
      Date and Plan Year.
      The
      Effective Date of the amended and restated Plan is January 1, 2005. The Plan
      will be administered on the basis of a Plan Year, which is the calendar year.
      

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      II

     

    DEFINITIONS

     

    2.1.  “Account”
      means
      the recordkeeping account maintained by the Committee to record a Participant’s
      accrued benefit under the Plan.

     

    2.2.  “Accounting
      Date”
      means
      each date that the New York Stock Exchange is open for business.

     

    2.3.  “Base
      Salary”
      means
      the base salary payable to a Participant during a calendar year.

     

    2.4.  “Beneficiary”
      means
      any person or entity, or any combination thereof, who is named by the
      Participant in a Participation Agreement as his or her beneficiary to receive
      benefits under this Plan in the event of the Participant’s death, or in the
      absence of any such designation, the Participant’s estate. A Participant may
      amend his or her Participation Agreement to name a new Beneficiary at any
      time.

     

    2.5.  “Board”
      means
      the Board of Directors of the Company.

     

    2.6.  “Bonus”
      means
      any cash compensation, other than Base Salary, relating to services performed
      in
      a calendar year, whether or not paid in such calendar year or included in the
      Participant’s Federal Income Tax Form W-2 for such calendar year, payable to a
      Participant under any Employer’s bonus or cash incentive plan.

     

    2.7.  “Cause”
      means
      that the Participant has engaged in an act of willful misconduct, gross
      negligence, fraud or moral turpitude, as determined by the Board in its sole
      discretion.

     

    2.8.  “Change
      in Control”
      means
      that any of the following have occurred:

     

    
      
        	
              	(i)	
                a
                  complete dissolution or liquidation of the Company, or similar
                  occurrence;

              

      

      
        	 	 	 

      

      
        	 	(ii) 	the consummation of a merger, consolidation,
                acquisition, separation, reorganization, or similar occurrence, where
                WMS
                Industries Inc. is not the surviving
                entity;

      

      
        	 	 	 

      

      
        	 	(iii) 	a transfer of substantially all of
                the assets
                of the Company or more than 80% of the outstanding common stock of
                WMS
                Industries Inc. in a single transaction;
                or

      

      
        	 	 	 

      

      
        	 	(iv)	the individuals who constitute the
                Board as of
                the effective date (as such term is defined in the WMS Industries
                Inc.
                2005 Incentive Plan) or who have been recommended for election to
                the
                Board by two-thirds of the Board consisting of individuals who are
                either
                on the Board as of the effective date (as such term is defined in
                the WMS
                Industries Inc. 2005 Incentive Plan) or such successors, cease for
                any
                reason to constitute at least a majority of such
                Board.

      

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      the foregoing definition of “Change in Control,” a Change in Control shall be
      deemed to have occurred only if the event giving rise to the Change in Control
      constitutes a “Change in Control Event ” within the meaning of proposed or final
      regulations issued by the Department of the Treasury with respect to Code
      Section 409A, or any revenue rulings, notices, or other guidance (including
      Internal Revenue Service Notice 2005-1) regarding Code Section 409A that are
      published in the Internal Revenue Bulletin.

     

    2.9.  “Code”
      means
      the Internal Revenue Code of 1986, as amended, and the regulations issued
      thereunder.

     

    2.10.  “Committee”
      means
      the Plan Administration Committee.

     

    2.11.  “Company”
      means
      WMS Industries Inc., a Delaware corporation, and its successors. 

     

    2.12.  “Company
      Matching Credits”
      means
      the matching credits credited to a Participant’s Account pursuant to Section
      5.1.

     

    2.13.  “Compensation”
      shall
      have the meaning set forth in the Qualified Plan.

     

    2.14.  “Deferrals”
      means
      the portion of an Eligible Employee’s Base Salary and/or Bonus, if any, that he
      or she elects to defer under Article IV.

     

    2.15.  “Deferral
      Election”
      means
      an
      election by an Eligible Employee to defer Bonus Salary and/or Bonus in
      accordance with the provisions of Article IV. 

     

    2.16.  “Earnings”
      means
      the amount of earnings or losses credited or debited to each Participant’s
      Account pursuant to Section 4.4 of the Plan. 

     

    2.17.  “Effective
      Date”
      means
      January 1, 2005.

     

    2.18.  “Eligible
      Employee”
      means an
      Employee who has been selected to participate in the Plan in accordance with
      Section 3.1. 

     

    2.19.  “Employee”
      means a
      management or highly compensated employee of an Employer who is scheduled to
      receive Compensation of at least $200,000 during a Plan Year (assuming targeted
      bonuses are earned).

     

    2.20.  “Employer”
      means
      the Company and any subsidiary or affiliate of the Company that, with the
      consent of the Company, adopts the Plan for the benefit of its Eligible
      Employees.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    2.21.  “ERISA”
      means
      the Employee Retirement Income Security Act of 1974, as amended, and the
      regulations issued thereunder.

     

    2.22.  “Key
      Employee”
      means an
      Employee as defined in Code Section 416(i) (without regard to Section
      416(i)(5)). An Employee who meets the requirements to be a Key Employee at
      any
      time during a Plan Year shall be considered a “Key Employee” hereunder during
      the twelve-month period beginning on April 1 following such Plan
      Year.

     

    2.23.  “Participant”
      means an
      Eligible Employee who has executed a Participation Agreement. 

     

    2.24.  “Participation
      Agreement”
      means
      the agreement executed by an Eligible Employee that includes provisions for
      the
      Eligible Employee’s Deferral Election, the Eligible Employee’s Beneficiary
      designation, and the Eligible Employee’s investment designation.

     

    2.25.  “Plan
      Year”
      means
      the calendar year. 

     

    2.26.  “Qualified
      Plan”
      means
      the WMS Industries Inc. 401(k) Retirement Savings Plan for Non-Union Employees,
      or its successor. 

     

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III  

     

    ELIGIBILITY
      AND PARTICIPATION 

     

    3.1.  Eligibility.
      Members
      of the Company’s Executive Committee are automatically eligible to participate
      in the Plan. In addition, before the beginning of each Plan Year, the Committee
      may designate other Employees as eligible to participate in the Plan during
      such
      Plan Year. An
      Eligible Employee’s eligibility to make a Deferral Election in any given Plan
      Year does not guarantee that individual the right to make a Deferral Election
      in
      any subsequent Plan Year. 

     

    3.2.  Participation
      and Cessation of Participation.
      An
      Eligible Employee for any Plan Year may make a Deferral Election on a timely
      basis as described in Section 4.1, and if the Eligible Employee makes such
      a
      Deferral Election, he or she shall become a Participant and shall remain a
      Participant until he or she has received a distribution of his or her entire
      Account. A Participant in the Plan who separates from service with the Company
      and all of its subsidiaries and affiliates for any reason will cease to be
      eligible to make Deferrals under this Plan and will become entitled to
      distributions in accordance with Article VII. 

     

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV  

     

    DEFERRAL
      OF COMPENSATION 

     

    4.1.  Deferral
      of Compensation. An
      Eligible Employee may elect to defer not less than 2% and not more than 50%
      of
      his or her Base Salary for a Plan Year, and not less than 2% and not more than
      100% of his or her Bonus, by filing a Deferral Election in accordance with
      Section 4.2. Deductions will be made pursuant to such Deferral Election during
      any Plan Year following the first to occur of the following events: (1) such
      Eligible Employee’s reaching the Code Section 415 contribution limit under the
      Qualified Plan or (2) such Eligible Employee’s Compensation exceeding $200,000
      (or such other limit as may be in effect for such Plan Year under Code Section
      401(a)(17)).

     

    Each
      Deferral Election made by an Eligible Employee shall include an election of
      the
      date on which the amount of such deferral (together with Earnings thereon)
      will
      be distributed. Such date shall be no earlier than January 1 of the third Plan
      Year following the Plan Year to which the election to defer
      relates.

     

    4.2.  Deferral
      Elections. A
      Participant’s Deferral Election shall be in writing or electronic, and shall be
      filed with the Committee at such time and in such manner as the Committee shall
      provide, subject to the following:

     

    
      	(a)
                	
              Subject
                to paragraph (b) below, a Deferral Election must be made during the
                election period established by the Committee which period shall end
                no
                later than the day preceding the first day of the Plan Year in which
                such
                Compensation would otherwise be
                earned.

            

    

     

    
      	(b)
                	
              If
                an individual first becomes an Eligible Employee during a Plan Year,
                such
                individual may make a Deferral Election for such Plan Year within
                thirty
                (30) days of first becoming an Eligible Employee. Such Deferral Election
                shall become effective for Base Salary and Bonuses earned after the
                date
                such individual makes such Deferral Election and after the Eligible
                Employee’s Compensation taken into account under the Qualified Plan
                exceeds $200,000 (or such other limit as may be in effect under Code
                Section 401(a)(17)).

            

    

     

    
      	(c)
                	
              Subject
                to (d) below, all Deferral Elections shall become irrevocable as
                of the
                end of the election period, subject only to the re-deferral provisions
                of
                Section 6.2.

            

    

     

    
      	(d)
                	
              An
                individual may elect to make a new distribution election provided
                that he
                or she makes such revised distribution election by December 31, 2006
                in
                accordance with Code Section 409A. Notwithstanding the previous sentence,
                an individual may not modify an election related to a distribution
                to be
                received during 2006 or cause a distribution payable after December
                31,
                2006 to be received during 2006.

            

    

     

    4.3.  Account.
      The
      Committee shall maintain an Account for each Participant. Accounts shall be
      credited with the amount of a Participant’s Deferrals, Company Matching Credits,
      and Earnings gains, and shall be debited with Earnings losses and any
      distribution made pursuant to Article VI. Deferrals shall be credited to a
      Participant’s Account as soon as practicable following the date the Base Salary
      and Bonuses would otherwise have been paid to the Participant but for his or
      her
      Deferral Election. Company Matching Credits shall be credited to a Participant’s
      Account as of such dates as the Committee shall determine. A Participant’s
      Account shall be nonforfeitable at all times (except as otherwise provided
      in
      Section 5.3).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4.4.  Investment
      of Account.
      A
      Participant may direct the deemed investment of his or her Account among
      investment alternatives determined by the Committee from time to time
      (collectively, the “Measurement Funds”). Investment elections may be changed by
      the Participant (but only among such Measurement Funds) on such date and in
      such
      manner as determined by the Committee in its sole discretion. A Participant’s
      Account shall be credited or debited daily based on the performance of each
      Measurement Fund selected by the Participant, as though (i) the Deferrals and
      Company Matching Credits were invested in the Measurement Fund(s) as of the
      date
      that they are credited to the Participant’s Account; and (ii) any distributions
      made to the Participant that decrease the Participant’s Account balance ceased
      being invested in the Measurement Fund(s) on the date the distribution is made.
      Thereafter, the Measurement Funds that the Participant elects will be revalued
      daily based on the value of such funds on that date, and the percentages in
      which the Participant is invested in each of the Measurement Funds. If the
      Participant has provided no or insufficient investment directions for any part
      of his or her Account, that portion of the Account shall be invested as
      determined by the Committee.

     

    Notwithstanding
      any other provision of this Plan that may be interpreted to the contrary, the
      Measurement Fund(s) are to be used for measurement purposes only, and the
      allocation of Participant’s Account to such Measurement Fund(s), and the
      calculation of amounts to be credited or debited to a Participant’s Account,
      shall not be considered or construed in any manner as an actual investment
      of
      the Participant’s Account in any such Measurement Fund(s).

    

    4.5.  Adjustment
      of Participants’ Account.
      As of
      the close of each Accounting Date, the Committee shall:

     

    
      
        
          	 	(a) 	
                  First,
                    charge to the proper Accounts all payments or distributions made
                    since the
                    last preceding Accounting Date.

                

        

        
          	 	 	 

        

        
          	 	(b)	
                  Next,
                    credit each Participant’s Account with any Deferrals made since the last
                    preceding Accounting Date; 

                

        

        
          	 	 	 

        

        
          	 	(c)	
                  Next,
                    credit each Participant’s Account with any Company Matching Credits made
                    on behalf of the Participant pursuant to Section 5.1 since the
                    last
                    preceding Accounting Date;

                

        

        
          	 	 	 

        

        
          	 	(d)  	
                  Next,
                    adjust each Participant’s Account for applicable Earnings since the last
                    preceding Accounting Date.

                

        

      

       

      4.6.  Additional
        Limitation on Deferral Elections.
        Notwithstanding anything in this Plan to the contrary, the Committee may
        limit a
        Participant’s Deferral Election if, as a result of any election, a Participant’s
        Compensation would be insufficient to allow the Participant to make all 401(k)
        deferrals permitted under the Qualified Plan or to
        cover
        taxes and withholding applicable to the Participant. 

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V  

     

    COMPANY
      MATCHING
      CREDITS

     

    5.1.  Company
      Matching Credits.
      To the
      extent a Participant elects to make Deferrals pursuant to Section 4.1, the
      Company shall credit a Participant’s Account with Company Matching Credits in an
      amount equal to 100% of the first 3% of Compensation that the Participant elects
      to defer under the Plan pursuant to Section 4.1 and 50% of the next 3% of
      Compensation that the Participant elects to defer. All Company Matching Credits
      made under this Section 5.1 shall be invested in accordance with Section 4.3
      and
      shall be distributed (together with Earnings thereon) on the same elected
      distribution date, and in the same form, as the Participant has elected for
      Deferrals made during the same Plan Year. 

     

    5.2.  Accounting
      for Company Matching Credits.
      Company
      Matching Credits made on behalf of a Participant will be recorded in a separate
      subaccount maintained in the Participant’s Account as of the same date that the
      underlying Deferral is credited to the Participant’s Account. Such subaccount
      will be deemed to be invested in accordance with the Participant’s Participation
      Agreement and will be adjusted from time to time in the same manner as described
      in Section 4.4.

     

    5.3.  Vesting
      of Company Matching Credits.
      Company
      Matching Credits attributable to any Plan Year are nonforfeitable at all times;
      provided, however, if a Participant is terminated for Cause, his or her
      subaccount attributable to Company Matching Credits shall be forfeitable at
      the
      election of the Committee. 

    
 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    ARTICLE
      VI

      

    TIMING
      AND FORM OF BENEFIT PAYMENTS

     

    6.1.     
Timing
      of Distribution.
      A
      Participant’s Account shall be distributed as soon as administratively
      practicable after the earliest of: 

     

    
      
        
          	 	(a)	
                  The
                    deferred distribution date indicated on the Participant’s Participation
                    Agreement in accordance with subsection 4.1;

                

        

        
          	 	 	 

        

        
          	 	(b)	The date that the Participant incurs
                  a
                  separation from service (within the meaning of Code Section
                  409A(a)(2)(A)(i)) with the Company and its
                  subsidiaries;

        

        
          	 	 	 

        

        
          	 	(c)	
                  The
                    date that a Change in Control occurs; and

                

        

        
          	 	 	 

        

        
          	 	(d)	
                  The
                    date the Company terminates the Plan, to the extent permitted
                    by Code
                    Section 409A. 

                

        

      

       

      6.2.  One-time
        Redeferral Election.
        A
        Participant may make a one-time election to defer payment on commencement
        of any
        portion of a distribution under Section 6.1(a) for a period of not less than
        five (5) years, provided that such election must be made at least twelve
        (12)
        months in advance of the initially elected distribution date and may not
        take
        effect for at least twelve (12) months after the date the new election is
        made.
 

    

     

    6.3.  Form
      of Distribution.
      Distributions from the Plan will be made in a lump sum or in a series of
      periodic annual installments over a period not to exceed 10 years, as elected
      by
      the Participant at the time he or she files the Participation Agreement for
      that
      Plan Year. 

     

    6.4.  Beneficiaries.
      A
      Participant may designate his or her primary Beneficiary or Beneficiaries to
      receive the amounts as provided herein after his or her death in accordance
      with
      the Beneficiary Designation provisions of the Participation Agreement. A
      Participant also may designate his or her contingent Beneficiary or
      Beneficiaries to receive amounts as provided herein if all primary Beneficiaries
      predecease the Participant or have ceased to exist on the date of the
      Participant’s death. Any Beneficiary designation shall apply to the
      Participant’s entire Account balance and shall revoke all prior designations. In
      the absence of such a Beneficiary designation, the Company shall pay any such
      amount to the Participant’s estate.

     

    6.5.  Unforeseeable
      Emergency Withdrawals.
      Notwithstanding any provision of the Plan to the contrary, any portion of a
      Participant’s Account not yet distributable under subsection 6.1 may be
      distributed to the Participant upon his or her request if the Participant incurs
      an unforeseeable emergency. An unforeseeable emergency is a severe financial
      hardship resulting from a sudden and unexpected illness or accident of the
      Participant or his or her spouse or dependent (as defined in Section 152(a)
      of
      the Code), loss of the Participant’s property due to casualty, or other similar
      extraordinary and unforeseeable circumstances arising as a result of events
      beyond the control of the Participant, as determined by the Committee in its
      sole discretion. The amounts distributed pursuant to an unforeseeable emergency
      may not exceed the amounts necessary to satisfy such emergency plus amounts
      necessary to pay taxes reasonably anticipated as a result of the distribution,
      after taking into account the extent to which the hardship is or may be relieved
      through reimbursement or compensation by insurance or otherwise or by
      liquidation of the Participant’s assets (to the extent the liquidation of such
      assets would not itself cause severe financial hardship). Withdrawals made
      pursuant to this paragraph shall be paid as soon as practicable following
      approval by the Committee.

     

    6.6.  Distributions
      to Key Employees.
      Notwithstanding
      any provision in the Plan to the contrary, no distribution shall be made to
      a
      Key Employee under Section 6.1 on account of such Key Employee’s separation from
      service earlier than the date which is six (6) months after the date of such
      Key
      Employee’s separation from service.

     

    6.7.  Prohibition
      on Acceleration of Distribution.
      Except
      as
      may be permitted under Code Section 409A(a)(3), no acceleration of any
      distribution hereunder shall be permitted.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    ARTICLE
      VII  

     

    ADMINISTRATION

     

    7.1.  Committee.
      The Plan
      shall be administered by the Committee, which shall be a committee of one or
      more persons appointed by the Board from time to time. If the Board shall fail
      to appoint the Committee, the Committee shall be the Compensation Committee
      of
      the Board. 

     

    7.2.  Committee’s
      Rights, Duties and Powers.
      The
      Committee shall have all the powers necessary and appropriate to discharge
      its
      duties under the Plan, which powers shall be exercised in the sole and absolute
      discretion of the Committee, including, but not limited to, the
      power:

     

    
      
        
          	 	(a)	
                  To
                    construe and interpret the provisions of the Plan and to make
                    factual
                    determinations thereunder, including the power to determine the
                    rights or
                    eligibility under the Plan and amounts of benefits (if any) under
                    the
                    Plan, and to remedy ambiguities, inconsistencies or omissions,
                    and such
                    determinations by the Committee shall be binding on all
                    parties.

                

        

        
          	 	 	 

        

        
          	 	(b)	
                  To
                    adopt such rules of procedure and regulations as in its opinion
                    may be
                    necessary for the proper and efficient administration of the
                    Plan and as
                    are consistent with the Plan and trust agreement, if
                    any.

                

        

        
          	 	 	 

        

        
          	 	(c)	
                  To
                    direct the payment of distributions in accordance with the provisions
                    of
                    the Plan.

                

        

        
          	 	 	 

        

        
          	 	(d)	
                  To
                    employ agents, attorneys, accountants, actuaries or other persons
                    (who
                    also may be employed by the Company) and to delegate to them
                    such powers,
                    rights and duties as the Committee may consider necessary or
                    advisable to
                    carry out the administration of the Plan.

                

        

        
          	 	 	 

        

        
          	 	(e)	
                  To
                    appoint an investment manager to manage (with power to acquire
                    and dispose
                    of) the assets of the Company that may be used to satisfy benefit
                    obligations under the Plan, and to delegate to any such investment
                    manager
                    all of the powers, authorities and discretions granted to the
                    Committee
                    hereunder or to the trustee of any under Trust established to
                    pay benefits
                    under the Plan.

                

        

      

       

      7.3.  Interested
        Committee Member.
        If a
        member of the Committee is also a Participant in the Plan, such Committee
        member
        may not decide or determine any matter or question concerning his or her
        participation in the Plan, unless such decision or determination could be
        made
        by the Committee member under the Plan if the Committee member were not serving
        on the Committee.

    

     

    7.4.  Expenses.
      All
      costs, charges and expenses reasonably incurred by the Committee will be paid
      by
      the Company. No compensation will be paid to a member of the Committee as
      such.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    7.5.  Claims.
      Claims
      for benefits under the Plan shall be made in writing to the Committee or its
      duly authorized delegate. If the Committee or such delegate wholly or partially
      denies a claim for benefits, the Committee or, if applicable, its delegate
      shall, within a reasonable period of time, but no later than ninety (90) days
      after receipt of the claim, notify the claimant in writing or electronically
      of
      the adverse benefit determination. Notice of an adverse benefit determination
      shall be written in a manner calculated to be understood by the claimant and
      shall contain:

     

    
      
        
          	 	(a)	the specific reason or reasons
                  for the adverse
                  benefit determination, 

        

        
          	 	 	 

        

        
          	 	(b)	
                  a
                    specific reference to the pertinent Plan provisions upon which
                    the adverse
                    benefit determination is based, 

                

        

        
          	 	 	 

        

        
          	 	(c)	
                  a
                    description of any additional material or information necessary
                    for the
                    claimant to perfect the claim, together with an explanation of
                    why such
                    material or information is necessary, and

                

        

        
          	 	 	 

        

        
          	 	(d)	
                  an
                    explanation of the Plan’s review procedure and the time limits applicable
                    to such procedure including a statement of the claimant’s right to bring a
                    civil action under section 502(a) of ERISA following an adverse
                    benefit
                    determination. 

                

        

      

       

      If
        the
        Committee or its delegate determines that an extension of time is necessary
        for
        processing the claim, the Committee or its delegate shall notify the claimant
        in
        writing of such extension, the special circumstances requiring the extension
        and
        the date by which the Committee expects to render the benefit determination.
        In
        no event shall the extension exceed a period of ninety (90) days from the
        end of
        the initial ninety (90) day period. If notice of the denial of a claim is
        not
        furnished in accordance with this paragraph (a) within ninety (90) days after
        the Committee or its duly authorized delegate receives it (or within one
        hundred
        and eighty (180) days after such receipt if the Committee or its delegate
        determines an extension is necessary), the claim shall be deemed denied and
        the
        claimant shall be permitted to proceed to the review stage described
        below.

    

    

    Within
      sixty (60) days after the claimant receives the written or electronic notice
      of
      an adverse benefit determination, or the date the claim is deemed denied
      pursuant to the preceding paragraph, or such later time as shall be deemed
      reasonable in the sole discretion of the Committee taking into account the
      nature of the benefit subject to the claim and other attendant circumstances,
      the claimant may file a written request with the Committee that it conduct
      a
      full and fair review of the adverse benefit determination, including the holding
      of a hearing, if deemed necessary by the Committee. In connection with the
      claimant’s appeal of the adverse benefit determination, the claimant may review
      pertinent documents and may submit issues and comments in writing. The Committee
      shall render a decision on the appeal promptly, but not later than sixty (60)
      days after the receipt of the claimant’s request for review, unless special
      circumstances (such as the need to hold a hearing, if necessary) require an
      extension of time for processing, in which case the sixty (60) day period may
      be
      extended to one hundred and twenty (120) days. The Committee shall notify the
      claimant in writing of any such extension, the special circumstances requiring
      the extension, and the date by which the Committee expects to render the
      determination on review. The claimant shall be notified of the Committee’s
      decision in writing or electronically. In the case of an adverse determination,
      such notice shall:

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      
        
          	 	(a)	include specific reasons for the
                  adverse
                  determination, 

        

        
          	 	 	 

        

        
          	 	(b)	be written in a manner calculated
                  to be
                  understood by the claimant, 

        

        
          	 	 	 

        

        
          	 	(c)	
                  contain
                    specific references to the pertinent Plan provisions upon which
                    the
                    benefit determination is based, 

                

        

        
          	 	 	 

        

        
          	 	(d)	
                  contain
                    a statement that the claimant is entitled to receive upon request
                    and free
                    of charge, reasonable access to, and copies of, all documents,
                    records,
                    and other information relevant to the claimant’s claim for benefits,
                    and

                

        

        
          	 	 	 

        

        
          	 	(e)	
                  contain
                    a statement of the claimant’s right to bring an action under
                    section 502(a) of ERISA.

                

        

      

       

    

    7.6.  Reports.
      The
      Committee shall provide the Participant with a statement reflecting the amount
      of the Participant’s Account at least quarterly.

     

    7.7.  No
      Liability.
      No
      employee, agent, officer, trustee, member, volunteer or director of the Company
      shall, in any event, be liable to any person for any action taken or omitted
      to
      be taken in connection with the interpretation, construction or administration
      of this Plan, so long as such action or omission to act be made in good
      faith.

     

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VIII  

     

    AMENDMENT
      AND TERMINATION

     

     

    The
      Company, by action of its Board, may amend, alter, modify or terminate this
      Plan
      at any time, provided that no such amendment, alteration, modification or
      termination shall reduce the balance in any Participant’s Account in whole or in
      part. Upon termination of the Plan, Accounts may, at the discretion of the
      Committee, be distributed to Participants if the Committee determines that
      such
      distributions will not violate the provisions of Code Section 409A.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IX

     

    MISCELLANEOUS

     

    9.1.  Unfunded
      Plan.
      The
      Plan
      shall at all times be entirely unfunded and, except as provided in the following
      paragraph, no provision of this Plan shall at any time be made with respect
      to
      segregating any assets of the Company or any other Employer for payment of
      any
      benefits hereunder. Participants and Beneficiaries shall at all times have
      the
      status of general unsecured creditors of the Employers, and neither Participants
      nor Beneficiaries shall have any rights in or against any specific assets of
      the
      Employers. The Plan constitutes a mere promise by the Employers to make benefit
      payments in the future.

     

    The
      Company may establish a reserve of assets to provide funds for the payment
      of
      benefits under the Plan. Such reserve may be through a trust account and such
      reserve shall, at all times, be subject to the claims of general creditors
      of
      the Employers and shall otherwise be on such terms and conditions as shall
      prevent taxation to Participants and Beneficiaries of any amounts held in the
      reserve or credited to an account prior to the time payments are made. No
      Participant or Beneficiary shall have any ownership rights in or to any
      reserve.

     

    9.2.  Non-Assignability
      of Benefits.
      Neither
      any Participant nor any Beneficiary under this Plan shall have any power or
      right to transfer, assign, anticipate, hypothecate or otherwise encumber any
      part or all of the amounts payable hereunder. Such amounts shall not be subject
      to seizure by any creditor of a Participant or any Beneficiary hereunder, by
      a
      proceeding at law or in equity, nor transferable by operation of law in the
      event of the bankruptcy or insolvency of any Participant or any Beneficiary
      hereunder. Any such attempted assignment or transfer shall be void and shall
      terminate the Participant’s participation in this Plan, and the Company then may
      pay the benefits hereunder as if the Participant had terminated
      employment.

     

    9.3.  Impact
      on Other Benefits.
      Except
      as otherwise required by the Code or any other applicable law, this Plan and
      the
      benefits provided herein are in addition to all other benefits which may be
      provided by the Company to the Participants from time to time, and shall not
      reduce, replace or otherwise cause any reduction, in any manner, with regard
      to
      any of such other benefits.

     

    9.4.  Notices.
      Any
      notice, consent or demand required or permitted to be given under the provisions
      of this Plan by the Company or any Participant or Beneficiary shall be in
      writing, and shall be signed by the person or entity giving or making the same.
      If such notice, consent or demand is mailed, it shall be sent by United States
      certified mail, postage prepaid, addressed to the principal office of the
      Company, or if to a Participant or Beneficiary to such individual or entity’s
      last known address as shown on the records of the Company. The date of such
      mailing shall be deemed the date of notice, consent or demand.

     

    9.5.  Tax
      Withholding.
      The
      Company shall have the right to deduct from all deferrals, credits and payments
      made under this Plan any federal, state or local taxes required by law to be
      withheld with respect to such deferrals, credits and payments. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    9.6.  Successors
      and Assigns.
      The
      rights, privileges, benefits and obligations under the Plan are intended to
      be,
      and shall be treated as, legal obligations of and binding upon the Employers
      and
      their successors and assigns, including successors by merger, consolidation,
      reorganization or otherwise.

     

    9.7.  Governing
      Law.
      This
      Plan shall be governed by and construed in accordance with the internal laws
      of
      the State of Illinois, to the extent not preempted by the laws of the United
      States. 

     

    IN
      WITNESS WHEREOF,
      the
      Company has executed and adopted this Plan as of
      the
      Effective Date. 

    
      
        	 	 	 
	 	 
	 	WMS
                INDUSTRIES INC.
	 
 	 
 	 
 
	 	By:  	/s/ Brian
                R.
                Gamache
	 	Its:	
                
President
                and Chief Executive Officer
	 	 	 

      

    
 

    
      
        
        

      

      
        15

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