Exhibit 10.4

 

HONEYWELL INTERNATIONAL INC.

INCENTIVE COMPENSATION PLAN FOR EXECUTIVE EMPLOYEES

 

Amended and Restated

Effective as of January 1, 2014

 

HONEYWELL INTERNATIONAL INC.

INCENTIVE COMPENSATION PLAN FOR EXECUTIVE EMPLOYEES

AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2014

 

1. Purpose

 

The purpose of the Honeywell International Inc. Incentive Compensation Plan for
Executive Employees (the “Plan”) is to attract and retain highly qualified
employees, to obtain from each the best possible performance, and to underscore
the importance to such employees of achieving particular business objectives.

 

2. Definitions

 

For the purposes of the Plan, the following terms shall have the following
meanings:

 

2.1 “Board of Directors” means the Board of Directors of Honeywell.     2.2
“Change in Control” means (i) any one person, or more than one person acting as
a group (as defined under Treasury Regulation § 1.409A-3(i)(5)(v)(B)) acquires
ownership of stock of Honeywell that, together with stock held by such person or
group, constitutes more than 50 percent of the total fair market value or total
voting power of the stock of Honeywell; or (ii) any one person, or more than one
person acting as a group (as defined under Treasury Regulation §
1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of Honeywell possessing 30 percent or more of the total
voting power of the stock of Honeywell; or (iii) a majority of members of the
Board of Directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Board of Directors before the date of the appointment or election; or (iv) any
one person, or more than one person acting as a group (as defined in Treasury
Regulation § 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal
to or more than 40 percent of the total gross fair market value of all of the
assets of the Company immediately before such acquisition or acquisitions. For
purposes of subsection (iv), gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets. The foregoing
subsections (i) through (iv) shall be interpreted in a manner that is consistent
with the Treasury Regulations promulgated pursuant to Section 409A of the Code
so that all, and only, such transactions or events that could qualify as a
“change in control event” within the meaning of Treasury Regulation
§1.409A-3(i)(5)(i) will be deemed to be a Change in Control for purposes of this
Plan.     2.3 “Change in Control Date” means the date on which a Change in
Control occurs.     2.4 “Code” means the Internal Revenue Code of 1986, as
amended from time to time, and all regulations, interpretations, and
administrative guidance issued thereunder.

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2.5 “Committee” means the Management Development and Compensation Committee of
the Board of Directors, or such other committee as the Board of Directors shall
appoint from time to time to administer the Plan and to otherwise exercise and
perform the authority and functions assigned to the Committee under the terms of
the Plan. The Committee shall at all times be comprised solely of two or more
outside directors within the meaning of Treasury Regulation § 1.162-27(e) ), and
shall be “independent” pursuant to the listing requirements of the NYSE (or
other such exchange on which the Company’s shares may be listed for trading) as
may be applicable from time to time.     2.6 “Common Stock” means the common
stock of Honeywell.     2.7 “Company” means Honeywell and its subsidiaries and
affiliated entities, as well as their respective successors.     2.8
“Consolidated Earnings” means the consolidated net income for the Performance
Period for which an Incentive Compensation Award is made, as determined by
Honeywell’s independent auditors, adjusted to omit the effects of extraordinary
items, gain or loss on the disposal of a business segment (other than provisions
for operating losses or income during the phase-out period), unusual or
infrequently occurring events and transactions, the effects of the annual fourth
quarter mark-to-market adjustment that recognizes pension related net actuarial
gains and losses outside the Corridor, and the effects of changes in accounting
principles, all as determined in accordance with generally accepted accounting
principles.     2.9 “Corporate Officer” means any Senior Executive Employee who
has been elected by the Board of Directors as an officer of the Company.    
2.10 “Corridor” means the range of amounts that are within 10% of the greater of
(i) the fair value of the Company’s pension plan assets, or (ii) the projected
benefit obligations under the Company’s pension plans.     2.11 “Covered
Employee” means an Employee who is a “covered employee” within the meaning of
Section 162(m), as such section may be amended from time to time.     2.12
“Employee” means any Senior Executive Employee or Executive Employee who is on
the active salaried payroll of the Company at any time during the period for
which an Incentive Compensation Award relates.     2.13 “Executive Employee”
means an Employee of the Company who is designated by the Company as an
Executive level employee, other than an Employee designated by the Company as a
Senior Executive Employee.     2.14 “Good Reason” means, without the Employee’s
consent, (a) a material reduction in the Employee’s total cash compensation
opportunity in effect immediately prior to the Change in Control; (b) the
permanent elimination of the Employee’s position, not including a transfer
pursuant to the sale of a facility or line of business, if and only if the
Employee is offered substantially comparable employment with the successor
employer; (c) a material adverse change to the Employee’s position, function,
responsibilities or reporting level, or in the standard of performance required
of the Employee, as determined immediately prior to a

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  Change in Control; (d) a material change in the geographic location at which
the Employee must perform his or her services from the location the Employee was
required to perform such services immediately prior to a Change in Control; or
(e) an action by the Company that under applicable law constitutes constructive
discharge. Notwithstanding the foregoing, Good Reason shall not be deemed to
have occurred unless the Employee provides written notice to the Company
identifying the event or omission constituting the reason for a Good Reason
termination within ninety (90) days following the first occurrence of such event
or omission. Within thirty (30) days after such notice has been provided to the
Company, the Company shall have to opportunity, but shall have no obligation, to
cure the events or conditions that give rise to a Good Reason termination. If
the Company fails to cure the events or conditions giving rise to an Employee’s
Good Reason termination by the end of the thirty (30) day cure period, the
Employee’s employment shall be terminated effective as of the expiration of such
thirty (30) day cure period unless the Employee has withdrawn such Good Reason
termination notice.     2.15 “Gross Cause” means (i) a fraud committed against
the Company, (ii) the misappropriation of the Company’s property, (iii)
intentional misconduct that is damaging to the Company’s property or business,
or (iv) the commission of a felony.     2.16 “Honeywell” means Honeywell
International Inc., a Delaware corporation.     2.17 “Incentive Compensation
Awards” means cash awards based on the achievement of (i) short-term business
objectives for the Company, as established by the Board of Directors or the
Committee for this purpose for each Performance Period, and (ii) short-term
business objectives for the Company’s operating units, as established by the
Chief Executive Officer for this purpose for each Performance Period.     2.18
“Maximum Amount” means 2% of Honeywell’s Consolidated Earnings for any
Performance Period for which a determination is being made. The Maximum Amount
establishes a ceiling on the amount that may be made available to Senior
Executive Employees for Incentive Compensation Awards under the Plan for any
Performance Period.     2.19 “Maximum Individual Award” means the maximum
Incentive Compensation Award payable to any individual with respect to a
Performance Period pursuant to Section 6.3.     2.20 “Performance Period” means
the Honeywell fiscal year or such other period as may be designated by the
Committee (not to exceed 18-months) with respect to which Incentive Compensation
Awards may be payable under the Plan; provided that no Performance Period shall
begin before the previous Performance Period ends.     2.21 “Reserve” means the
Incentive Compensation Award Reserve established pursuant to Section 4.2 of the
Plan.     2.22 “Section 162(m)” means Section 162(m) of the Code.     2.23
“Section 409A” means Section 409A of the Code.

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2.24 “Senior Executive Employee” means an Employee of the Company who is
designated by the Company as an Executive level employee (including Corporate
Officers) and who is among the 100 highest-paid Executive level employees of the
Company determined solely by reference to base salary as of the end of the
applicable Performance Period.     2.25 “Stub Period” means the portion of a
Performance Period that ends on the Change in Control Date.     3. Effective
Date     Subject to approval by Honeywell’s shareowners, the Plan is hereby
amended and restated effective as of January 1, 2014. Any Incentive Compensation
Awards made prior to January 1, 2014 shall be governed by the predecessor
versions of the Plan, as applicable.     4. Amounts Available for Incentive
Compensation Awards     4.1 Maximum Amounts. The Maximum Amount shall be
determined as set forth in Section 4.2. The maximum amount available for
Incentive Compensation Awards to Executive Employees shall be determined by the
Committee from time to time.     4.2 Establishment of Reserve. For each
Performance Period a Reserve shall be established to which will be credited an
amount to be determined by the Board of Directors not in excess of the Maximum
Amount for such Performance Period. All Incentive Compensation Awards to Senior
Executive Employees shall be chargeable against the Reserve. Any Incentive
Compensation Awards to Executive Employees shall not be chargeable against the
Reserve. If an Employee is an Executive Employee and a Senior Executive Employee
for a portion of the Performance Period, the Employee’s Incentive Compensation
Award shall be pro-rated based on the number of days spent as an Executive
Employee and a Senior Executive Employee, and only the portion of the Employee’s
Incentive Compensation Award allocable to time spent as a Senior Executive
Employee shall be chargeable against the Reserve.     4.3 Determination of
Reserve Maximum. Before the Committee shall determine the amount to be credited
to the Reserve for any Performance Period, the Company’s independent auditors
for such Performance Period shall report to the Committee the Maximum Amount for
such Performance Period. After receipt of the auditors’ report, which may be
based on an estimate of the Company’s financial results for the Performance
Period, the Committee shall determine the amount (not greater than such Maximum
Amount) that shall be credited to the Reserve for such Performance Period. If
the accountants’ report is based on an estimate, the amount credited to the
Reserve shall be subject to receipt of a further report from the accountants to
the Committee confirming the Maximum Amount.     4.4 Use of Reserve Amounts. The
total amount of Incentive Compensation Awards to Senior Executive Employees for
a Performance Period shall be limited by the total then in the Reserve but need
not exhaust such total. Any balance remaining after the making of Incentive
Compensation Awards to Senior Executive Employees shall be removed from the
Reserve and will not be available for future Incentive Compensation Awards to
Senior Executive Employees.

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5. Eligibility for Incentive Compensation Awards     5.1 General Eligibility
Criteria. Only Senior Executive Employees and Executive Employees shall be
eligible for Incentive Compensation Awards under the Plan. Incentive
Compensation Awards to Corporate Officers for any period may be granted to those
Corporate Officers, if any, who shall be selected by the Committee. Such
selections, except in the case of the Company’s Chief Executive Officer, shall
be made after considering the recommendations of the Chief Executive Officer.
The Committee shall also give consideration to the contribution made by each
Corporate Officer to the achievement of the Company’s established objectives and
such other matters as it shall deem relevant. Incentive Compensation Awards to
Senior Executive Employees (other than Corporate Officers) and Executive
Employees for any period may be granted to those Senior Executive Employees
(other than Corporate Officers) and Executive Employees who shall be selected by
the Chief Executive Officer.     5.2 Special Discretionary Authority. In the
discretion of (i) the Committee with respect to Corporate Officers, (ii) the
Committee, or the Chief Executive Officer to the extent the authority to
determine Incentive Compensation Awards has been delegated to the Chief
Executive Officer by the Committee, with respect to Senior Executive Employees
(other than Corporate Officers), and (iii) the Chief Executive Officer with
respect to Executive Employees, Incentive Compensation Awards may be made to
Employees who retired or whose employment terminated after the beginning of the
period for which an Incentive Compensation Award is made, or to the designee or
estate of an Employee who died during such period.     6. Determination of
Amounts of Incentive Compensation Awards     6.1 Incentive Compensation Award
Amounts. Subject to the limitations of the Reserve, Maximum Individual Award and
Maximum Amount, the amounts of individual Incentive Compensation Awards to
Corporate Officers will be determined by the Committee acting in its discretion.
Such determinations shall be made after consideration of such matters as the
Committee shall deem relevant that shall include, except in the case of an
Incentive Compensation Award for the Chief Executive Officer, the
recommendations of the Chief Executive Officer. Subject to the limitations of
the Reserve, Maximum Individual Award and Maximum Amount, the amounts of
individual Incentive Compensation Awards to Senior Executive Employees (other
than Corporate Officers) shall be determined by the Committee except to the
extent the Committee has delegated that authority to the Chief Executive
Officer, in which case the Chief Executive Officer shall make such
determinations after consideration of such matters as he shall deem relevant.
Subject to the limitations of the Maximum Individual Award and the maximum
amount available for Incentive Compensation Awards to Executive Employees as
determined by the Committee pursuant to Section 4.1, the amounts of Incentive
Compensation Awards to Executive Employees shall be determined by the Chief
Executive Officer after consideration of such matters as he shall deem relevant.

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6.2 Calculation of Incentive Compensation Awards. The performance goal shall be
to attain positive Consolidated Earnings for each Performance Period. If the
performance goal is obtained, the Incentive Compensation Awards shall be
determined as follows:

        (i) The Incentive Compensation Award payable to an individual who is the
Chief Executive Officer during any part of the Performance Period shall be equal
to 0.4% of Consolidated Earnings for such Performance Period.         (ii) The
Incentive Compensation Award payable to any other Employee shall be equal to
0.2% of Consolidated Earnings for such Performance Period.

      The Committee has the discretion to reduce the amount of the Incentive
Compensation Award actually paid to Employees to less than the 0.4% or 0.2% of
Consolidated Earnings otherwise due and the Chief Executive Officer has the
discretion to reduce the amount of the Incentive Compensation Award actually
paid to Executive Employees and Senior Executive Employees (to the extent the
Committee has delegated its authority to determine Incentive Compensation Awards
to the Chief Executive Officer) to less than the 0.2% of Consolidated Earnings
otherwise due.     6.3 Maximum Individual Award. The Maximum Individual Award
shall be equal to 0.4% of Consolidated Earnings for any individual who is the
Chief Executive Officer during any part of such Performance Period, and 0.2% of
Consolidated Earnings for any other Employee. If the total of the Maximum
Individual Awards determined pursuant to this Section 6.3 for Senior Executive
Employees would otherwise exceed 2% of Consolidated Earnings for a Performance
Period, then each Maximum Individual Award shall be reduced pro-rata so that, in
the aggregate, their total equals 2% of Consolidated Earnings.     6.4
Certification. No Incentive Compensation Awards shall be paid to Covered
Employees prior to certification by the Committee of the attainment of the
performance goal set forth in Section 6.2 for the Performance Period to which
the Incentive Compensation Awards relate. Further, no Incentive Compensation
Awards shall be paid to Senior Executive Employees prior to receipt by the Chief
Executive Officer of assurances from the Chief Financial Officer and the
Company’s independent accountants that the amount the Board of Directors has
determined shall be credited to the Reserve for the Performance Period to which
the Incentive Compensation Awards relate is not greater than the Maximum Amount.

 

7. Form of Incentive Compensation Awards     Incentive Compensation Awards under
the Plan shall be paid in cash.     8. Payment of Incentive Compensation Awards
    8.1 Timing and Eligibility for Payment. Incentive Compensation Awards shall
be paid in full in one lump sum as soon as practicable following the end of the
Performance Period in which the Incentive Compensation Award was earned, but no
later than the 15th day of the third month following the end of the Honeywell
fiscal year in which the Performance Period ended, provided that, except as
otherwise provided in Section 5.2, the recipient Employee is still actively
employed by the Company on the date Incentive Compensation Awards are

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  paid. Notwithstanding the foregoing, the Committee may, in its sole
discretion, permit payment of an Incentive Compensation Award to a Covered
Employee or an officer of Honeywell who is employed by the Company as of the end
of the Performance Period in which the Incentive Compensation Award is earned
but who is no longer actively employed by the Company on the date such Incentive
Compensation Award is paid.     8.2 Effect on Reserve. At the time any Incentive
Compensation Award is awarded to Senior Executive Employees, the Reserve shall
be reduced by the amount of such Incentive Compensation Award, regardless of
when payable or paid.     8.3 Deferrals. The Committee may, in its sole
discretion, permit Employees to defer Incentive Compensation Awards in
accordance with and subject to the terms and conditions of the Company’s
Deferred Incentive Compensation Plan (the “DIC Plan”).     9. Recoupment of
Incentive Compensation Awards     The Committee shall have the authority to
condition the receipt of an Incentive Compensation Award upon the execution of
an agreement that contains intellectual property, confidentiality,
nonsolicitation and noncompetition covenants (“Protective Agreement”) in favor
of the Company in a form determined by the Committee from time to time. In the
event that any Incentive Compensation Award recipient violates the terms of the
Protective Agreement, the Board of Directors shall have the right to recoup, and
the recipient shall have the obligation to repay, all or part of any Incentive
Compensation Award that is subject to a Protective Agreement.     The Committee
shall also have the authority to recoup, and each recipient shall have the
obligation to repay, all or part of any Incentive Compensation Award paid under
this Plan that may be required to be subject to recoupment under federal or
state laws, Company policy or the listing requirements of the NYSE (or other
such exchange on which the Company’s shares may be listed for trading) as may be
applicable from time to time.     10. Corporate Transactions     10.1 Plan
Termination Triggers. Notwithstanding anything to the contrary in the Plan, in
the event of a Change in Control, this Plan shall terminate as of the Change in
Control Date.     10.2 Incentive Compensation Awards for Stub Period. In the
event of a Change in Control, Employees shall be entitled to an Incentive
Compensation Award for the Stub Period. The amount of such Incentive
Compensation Awards shall be determined in accordance with the provisions of
Section 6 and in a manner consistent with past practice by treating the Stub
Period as the Performance Period and with the applicable metrics and Incentive
Compensation Awards adjusted, to the extent necessary, to reflect the length of
the Stub Period. The amount of the Incentive Compensation Awards shall be
determined prior to the Change in Control Date and shall be based on the good
faith estimates of the Company’s financial performance and Consolidated Earnings
for the Stub Period, as determined by the Committee (as constituted immediately
prior to the Change in Control) with the advice of Honeywell’s independent
auditors.

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10.3 Payment of Incentive Compensation Awards. Any Incentive Compensation Award
for the Stub Period shall be paid in full in one lump sum no later than the 15th
day of the third month following the end of the Honeywell fiscal year in which
the Stub Period ended, provided that the recipient Employee is still actively
employed by the Company on the date Incentive Compensation Awards are paid.
Notwithstanding the foregoing, if an Employee is employed by the Company on the
Change in Control Date but not on the date Incentive Compensation Awards are
paid because (i) he or she has been involuntarily terminated other than for
Gross Cause, or (ii) he or she has voluntarily resigned for Good Reason, such
Employee shall be treated for this Section 10 as being employed by the Company
on the date Incentive Compensation Awards are paid.     10.4 Deferred Incentive
Compensation Awards. Notwithstanding anything herein to the contrary, to the
extent an Incentive Compensation Award has been deferred pursuant to Section
8.3, such Incentive Compensation Award shall be subject to the terms and
conditions of the DIC Plan including, without limitation, with respect to change
in control events.     11. Power and Authority of the Committee and Chief
Executive Officer     11.1 Plan Administration. The Plan shall be administered
by the Committee, which shall have full power and authority (i) to prescribe,
amend and rescind rules and procedures relating to the Plan; (ii) subject to the
provisions of this Plan, to delegate to one or more officers of the Company some
or all of its authority under the Plan; (iii) to employ such legal counsel,
independent auditors and consultants as it deems desirable for the
administration of the Plan and to rely upon any opinion or computation received
therefrom; and (iv) to make all determinations, and to formulate such
procedures, as may be necessary or advisable in the opinion of the Committee for
the administration of the Plan.   11.2 Plan Construction and Interpretation. The
Committee shall have full power and authority to construe and interpret the
Plan.     11.3 Determinations of Committee and Chief Executive Officer Final and
Binding. All determinations by the Committee in carrying out and administering
the Plan and in construing and interpreting the Plan shall be made in the
Committee’s sole discretion and shall be final, binding and conclusive for all
purposes and upon all persons interested herein. The Committee or the Chief
Executive Officer’s decisions regarding the amount of each Incentive
Compensation Award, as applicable, shall be final, binding and conclusive for
all purposes and need not be consistent among Employees.     11.4 Liability of
Committee and Chief Executive Officer. Neither the Committee (or its delegates)
nor the Chief Executive Officer shall be liable for any action or determination
made in good faith with respect to the Plan or any Incentive Compensation Award,
and the members of the Committee (and its delegates) and the Chief Executive
Officer shall be entitled to indemnification and reimbursement in the manner
provided in the Company’s Articles of Incorporation or its By-laws, as
applicable, in each case as amended and in effect from time to time. In the
performance of its responsibilities with respect to the Plan, the Committee and
the Chief Executive Officer shall be entitled to rely upon information and
advice furnished by the Company’s officers and employees, the Company’s
accountants, the

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  Company’s legal counsel or any other person the Committee and the Chief
Executive Officer deem necessary, and neither the Committee nor the Chief
Executive Officer shall be liable for any action taken or not taken in good
faith reliance upon any such advice.     11.5 Section 409A Limitation.
Notwithstanding anything contained herein to the contrary, any discretionary
authority that the Board of Directors, the Committee or the Chief Executive
Officer may have pursuant to the Plan shall not be applicable to an Incentive
Compensation Award that is subject to Section 409A to the extent such
discretionary authority will contravene Section 409A.     12. Amendment and
Termination of the Plan     Subject to applicable laws, rules and regulations,
the Board of Directors or the Committee shall have the right at any time to
amend, suspend, discontinue or terminate the Plan; provided, however, that no
such action shall be effective without approval by the shareowners of Honeywell
to the extent necessary to comply with applicable laws, including to continue to
qualify the amounts payable hereunder as performance-based compensation under
Section 162(m), or applicable rules of a stock exchange on which the Company’s
shares are traded. Moreover, (i) no amendment of the Plan shall operate to annul
or diminish, without the consent of the Employee, an Incentive Compensation
Award already made hereunder, (ii) no amendment shall adversely affect an
Employee’s entitlement to an Incentive Compensation Award for the Stub Period
after a Change in Control, and (iii) with respect to Incentive Compensation
Awards for Covered Employees, no amendment of the Plan to change the performance
goal based on Consolidated Earnings as set forth in Section 6.2, to change the
Maximum Individual Award, the Maximum Amount, or to change the definition of
Consolidated Earnings, shall be effective without approval by the shareowners of
Honeywell.     13. Miscellaneous     13.1 Section 409A. The Plan is intended to
comply with the requirements of Section 409A and the regulations promulgated
thereunder, and the provisions hereof shall be interpreted in a manner that
satisfies such requirements, to the extent permitted by law. All Incentive
Compensation Awards granted hereunder are intended to be excluded from coverage
under Section 409A pursuant to Treasury Regulation § 1.409A-1(b)(4)’s
“short-term deferral” rule unless, and only to the extent that, a deferral
election is made pursuant to Section 8.3. If any provision of the Plan would
otherwise frustrate or conflict with this intent or could cause any Incentive
Compensation Award to be subject to taxes, interest or penalties under Section
409A, the Board of Directors may amend the Plan to the extent necessary to (i)
comply with Section 409A, (ii) avoid the imposition of taxes, interest and
penalties under Section 409A, and/or (iii) maintain, to the maximum extent
practicable, the original intent of the applicable provision without violating
the provisions of Section 409A; provided however, that such amendment shall not
result in additional cost to the Company and provided further that nothing
herein shall require the Company to provide any Employee with any gross-up for
any tax, interest or penalty incurred by the Employee under Section 409A.    
13.2 Other Compensation Plans. Nothing contained in the Plan shall prohibit the
Company from granting special performance or recognition awards, not chargeable
against the Reserve, under such conditions, and in such form and manner as it
sees fit, to Employees

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  (including Senior Executive Employees) for meritorious service of any nature.
In addition, nothing contained in the Plan shall preclude or limit the ability
of the Company to establish other incentive compensation plans providing for the
payment of incentive compensation to Employees (including Senior Executive
Employees), not chargeable against the Reserve.     13.3 Shareholder Approval.
No award shall be paid under this Plan unless and until the stockholders of
Honeywell have approved the Plan.     13.4 Plan Expenses. All expenses and costs
in connection with the operation of the Plan shall be borne by the Company and
no part thereof (other than the amounts of Incentive Compensation Awards to
Senior Executive Employees under the Plan) shall be charged against the Reserve.
    13.5 Withholding. All Incentive Compensation Awards under the Plan are
subject to withholding, where applicable, for federal, state and local taxes.  
  13.6 No Limitation on Corporate Actions. Nothing contained in the Plan shall
be construed to prevent the Company from taking or not taking any corporate
action, whether or not such action could have an adverse effect on any Incentive
Compensation Awards made under the Plan. No Participant, beneficiary or other
person shall have any claim against the Company as a result of any such action.
    13.7 Unfunded Plan. The Plan is intended to constitute an unfunded plan for
incentive compensation. Prior to the payment of any Incentive Compensation
Award, nothing contained herein shall give any Participant any rights that are
greater than those of a general creditor of the Company.     13.8 Severability.
If any provision of this Plan is held unenforceable, the remainder of the Plan
shall continue in full force and effect without regard to such unenforceable
provision and shall be applied as though the unenforceable provision were not
contained in the Plan. In addition, if any provision of this Plan would cause
Incentive Compensation Awards not to constitute “qualified performance-based
compensation” within the meaning of Section 162(m), that provision shall be
severed from, and shall be deemed not to be a part of, the Plan, but the other
provisions hereof shall remain in full force and effect. Any specific action by
the Committee that would disqualify an award as performance-based compensation
for purposes of Section 162(m) and the regulations thereunder shall be void.    
13.9 Governing Law. The Plan and all actions taken thereunder shall be governed
by and construed in accordance with and governed by the laws of the State of New
Jersey.     13.10 No Rights to Incentive Compensation Awards or Employment. This
Plan is not a contract between the Company and an Employee. No Employee shall
have any claim or right to receive Incentive Compensation Awards under the Plan.
Nothing in the Plan shall confer upon any employee of the Company any right to
continued employment with the Company or interfere in any way with the right of
the Company to terminate the employment of any of its employees, in accordance
with the laws of the applicable jurisdiction, at any time, with or without
cause, including, without limitation, any individual who is then an Executive
Employee or Senior Executive Employee under the Plan.

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