The CIT Group, Inc.

                       Long-Term Equity Compensation Plan

                              Amended and Restated

                               as of July 26, 2000


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                                Table of Contents

                                                                        Page

Article 1.   Establishment, Objectives, and Duration.................... 1
        1.1.   Establishment of the Plan................................ 1
        1.2.   Objectives of the Plan................................... 1
        1.3.   Duration of the Plan..................................... 1

Article 2.   Definitions ............................................... 1
        2.1.   Annual Incentive Award................................... 1
        2.2.   Award.................................................... 2
        2.3.   Award Agreement.......................................... 2
        2.4.   Beneficial Owner or Beneficial Ownership................. 2
        2.5.   Board or Board of Directors.............................. 2
        2.6.   Change of Control........................................ 2
        2.7.   Code .................................................... 2
        2.8.   Committee................................................ 2
        2.9.   Company.................................................. 2
        2.10.  Covered Employee......................................... 2
        2.11.  Director................................................. 2
        2.12.  Disability............................................... 3
        2.13.  Effective Date........................................... 3
        2.14.  Employee................................................. 3
        2.15.  Exchange Act............................................. 3
        2.16.  Fair Market Value........................................ 3
        2.17.  Freestanding SAR......................................... 3
        2.18.  Incentive Stock Option or ISO............................ 3
        2.19.  Insider.................................................. 3
        2.20.  Nonemployee Director..................................... 3
        2.21.  Nonqualified Stock Option or NQSO........................ 3
        2.22.  Option................................................... 3
        2.23.  Option Price............................................. 3
        2.24.  Participant.............................................. 3
        2.25.  Performance Share........................................ 4
        2.26.  Performance Target....................................... 4
        2.27.  Performance Unit......................................... 4
        2.28.  Period of Restriction.................................... 4
        2.29.  Person................................................... 4
        2.30.  Plan..................................................... 4
        2.31.  Plan Year................................................ 4
        2.32.  Restricted Stock......................................... 4
        2.33.  Retirement............................................... 4
        2.34.  Shares................................................... 4
        2.35.  Stock Appreciation Right or SAR.......................... 4
        2.36.  Subsidiary............................................... 5


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                                                                            Page

        2.37.   Tandem SAR..................................................  5

Article 3.   Administration.................................................  5
        3.1.   The Administrator............................................  5
        3.2.   Authority of the Administrator...............................  5
        3.3.   Determination of Performance Target..........................  5
        3.4.   Decisions Binding............................................  5

Article 4.   Shares Subject to the Plan and Maximum Awards..................  5
        4.1.   Number of Shares Available for Grants........................  5
        4.2.   Lapsed Awards................................................  6
        4.3.   Adjustments in Authorized Shares.............................  6
        4.4.   Maximum Awards...............................................  6

Article 5.   Eligibility and Participation..................................  7
        5.1.   Eligibility..................................................  7
        5.2.   Actual Participation.........................................  7

Article 6.   Annual Incentive Awards........................................  7
        6.1.   General......................................................  7
        6.2.   Determination of Annual Incentive Awards.....................  7
        6.3.   Payment of Annual Incentive Awards...........................  7
        6.4.   Termination of Employment....................................  7
        6.5.   Nontransferability of Annual Incentive Award.................  8
        6.6.   Adjustment...................................................  8

Article 7.   Stock Options..................................................  8
        7.1.   Grant of Options.............................................  8
        7.2.   Award Agreement..............................................  8
        7.3.   Option Price.................................................  8
        7.4.   Duration of Options..........................................  9
        7.5.   Exercise of Options..........................................  9
        7.6.   Payment......................................................  9
        7.7.   Restrictions on Share Transferability........................  9
        7.8.   Termination of Employment....................................  9
        7.9.   Nontransferability of Options................................ 10

Article 8.   Stock Appreciation Rights...................................... 10
        8.1.   Grant of SARs................................................ 10
        8.2.   Exercise of Tandem SARs...................................... 10
        8.3.   Exercise of Freestanding SARs................................ 11
        8.4.   SAR Agreement................................................ 11
        8.5.   Term of SARs................................................. 11
        8.6.   Payment of SAR Amount........................................ 11
        8.7.   Rule 16b-3 Requirements...................................... 11
        8.8.   Termination of Employment.................................... 11
        8.9.   Nontransferability of SARs................................... 11


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                                                                            Page

Article 9.   Restricted Stock............................................... 12
        9.1.   Grant of Restricted Stock.................................... 12
        9.2.   Restricted Stock Agreement................................... 12
        9.3.   Transferability.............................................. 12
        9.4.   Other Restrictions........................................... 12
        9.5.   Voting Rights................................................ 13
        9.6.   Dividends and Other Distributions............................ 13
        9.7.   Termination of Employment.................................... 13

Article 10.   Performance Units and Performance Shares...................... 13
        10.1.   Grant of Performance Units/Shares........................... 13
        10.2.   Value of Performance Units/Shares........................... 13
        10.3.   Earning of Performance Units/Shares......................... 13
        10.4.   Payment of Performance Shares/Units......................... 14
        10.5.   Termination of Employment................................... 14
        10.6.   Nontransferability.......................................... 14

Article 11.   Beneficiary Designation....................................... 14

Article 12.   Deferrals..................................................... 15

Article 13.   Change of Control............................................. 15
        13.1.   Vesting Upon a Change of Control.............................15
        13.2.   Termination, Amendment, and Modifications of
                 Change of Control Provisions............................... 15

Article 14.   Amendment, Adjustment, and Termination........................ 16
        14.1.   Amendment and Termination................................... 16
        14.2.   Adjustment of Awards........................................ 16
        14.3.   Awards Previously Granted................................... 16
        14.4.   Compliance with Code Section 162(m)......................... 16

Article 15   Withholding.................................................... 16
        15.1.   Tax Withholding............................................. 16
        15.2.   Share Withholding........................................... 16

Article 16.   Successors.................................................... 17

Article 17.   Legal Construction............................................ 17
        17.1.   Gender and Number........................................... 17
        17.2.   Severability................................................ 17
        17.3.   Requirements of Law......................................... 17
        17.4.   Securities Law Compliance................................... 17
        17.5.   Governing Law............................................... 17
        17.6.   Special Compensation........................................ 17
        17.7.   Incompetent Payee........................................... 17
        17.8.   Plan Not an Employment Contract............................. 18



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                               The CIT Group, Inc.
                       Long-Term Equity Compensation Plan
                              Amended and Restated
                               as of July 26, 2000

      Article 1. Establishment, Objectives, and Duration

      1.1. Establishment of the Plan. The CIT Group, Inc., a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as "The CIT Group, Inc. Long-Term Equity
Compensation Plan" (hereinafter referred to as the "Plan"), as set forth in this
document. The Plan permits the grant of Annual Incentive Awards, Nonqualified
Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Performance Shares and Performance Units.

      The Plan became effective as of November 1, 1997 (the "Effective Date").
The Plan was amended and restated as of October 26, 1999 with respect
to awards made on or after such date. The Plan has been amended and restated
again as of July 26, 2000 and shall remain in effect as provided in Section 1.3
hereof.

      1.2. Objectives of the Plan. The objectives of the Plan are to optimize
the profitability and growth of the Company through incentives which are
consistent with the Company's goals and which link the personal interests of
Participants to those of the Company's stockholders; to provide Participants
with an incentive for excellence in individual performance; and to promote
teamwork among Participants.

      The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.

      1.3. Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Compensation Committee of the Board of Directors of the Company to
amend or terminate the Plan at any time pursuant to Article 14 hereof, until all
Awards granted hereunder are satisfied by the issuance of Shares and/or the
payment of cash. However, in no event may an Award be granted under the Plan on
or after the tenth anniversary of the Effective Date.

      Article 2. Definitions

      Except where the context otherwise indicates, any masculine term used
herein shall include the feminine, the plural shall include the singular, and
the singular shall include the plural.

      Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:

      2.1. "Annual Incentive Award" means annual incentive compensation awarded
under Article 6.


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      2.2. "Award" means, individually or collectively, a grant under this Plan
of Annual Incentive Awards, Nonqualified Stock Options, Incentive Stock Options,
Stock Appreciation Rights, Restricted Stock, Performance Shares or Performance
Units.

      2.3. "Award Agreement" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to an Award.

      2.4. "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

      2.5. "Board" or "Board of Directors" means the board of directors of the
Company.

      2.6. "Change of Control"

            (a) Any Person becomes the Beneficial Owner, directly or indirectly,
            of securities representing a majority of the combined voting power
            of the Company's then outstanding securities generally entitled to
            vote for the election of Directors; or

            (b) As a result of a cash tender offer, merger or other business
            combination, sales of assets or contested election, or any
            combination of the foregoing transactions (a "Transaction"), the
            persons who were Directors of the Company immediately before the
            Transaction shall cease to constitute a majority of the Board of the
            Company or of any successor to the Company. Notwithstanding the
            foregoing, the Company's initial public offering shall not
            constitute a Change of Control for the purposes of this Plan.

      2.7. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

      2.8. "Committee" means the Compensation Committee of the Board or such
other Committee appointed by the Board pursuant to Section 3.1 to administer the
Plan with respect to grants of Awards.

      2.9. "Company" means The CIT Group, Inc., a Delaware corporation, and any
successor thereto, or any Subsidiary, division or affiliate thereof.

      2.10. "Covered Employee" means any Participant who is designated by the
Committee prior to the date that the Committee establishes the Performance
Targets for a Plan Year, to be a "covered employee" within the meaning of Code
Section 162(m).

      2.11. "Director" means any individual who is a member of the Board of
Directors.


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      2.12. "Disability" means a physical or mental impairment sufficient to
make an individual eligible for benefits under the Company's Long-Term
Disability Plan.

      2.13. "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.

      2.14. "Employee" means any individual who is an employee of the Company or
any Subsidiary.

      2.15. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor thereto.

      2.16. "Fair Market Value" means the closing sale price at which Shares
were sold regular way on the relevant date on the principal securities exchange
on which Shares were traded on such date or, if there was no sale on the
relevant date, then on the last previous day on which there was such a sale;
provided that "Fair Market Value" for any Awards made concurrent with or
contingent upon the consummation of the initial public offering of Shares in
1997 means the initial public offering price of Shares covered by such initial
public offering.

      2.17. "Freestanding SAR" means an SAR that is granted independently of any
Options, as described in Article 8 herein.

      2.18. "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 7 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.

      2.19. "Insider" shall mean an individual who is, on the relevant date, an
officer, Director or Beneficial Owner of ten percent (10%) or more of any class
of the Company's equity securities that is registered pursuant to Section 12 of
the Exchange Act, all as defined under Section 16 of the Exchange Act and the
General Rules and Regulations promulgated thereunder.

      2.20. "Nonemployee Director" means a Director who is not an Employee of
the Company or any Subsidiary or of the Dai-Ichi Kangyo Bank, Limited or any of
its direct or indirect subsidiaries.

      2.21. "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 7 herein which is not intended to be treated as an
"incentive stock option" under Code Section 422.

      2.22. "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.

      2.23. "Option Price" means the price at which a Share may be purchased by
a Participant pursuant to an Option.

      2.24. "Participant" means an Employee or Director designated by the
Committee to participate in the Plan.


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      2.25. "Performance Share" means an Award granted to a Participant, as
described in Article 10 herein.

      2.26. "Performance Target" means a Company goal which shall be equal to a
desired level or levels for any Plan Year or Plan Years of any or a combination
of the following criteria on an absolute or relative basis and, where
applicable, measured before or after interest, depreciation, amortization,
service fees, extraordinary items and/or special items: (i) pre-tax earnings,
(ii) operating earnings, (iii) after-tax earnings, (iv) return on investment,
(v) earned value added, (vi) earnings per share, (vii) revenues, (viii) cash
flow or cash flow on investment, (ix) return on assets or return on net assets,
(x) return on capital, (xi) return on equity, (xii) return on sales, (xiii)
operating margin, (xiv) total shareholder return or stock price appreciation or
(xv) net income, in each case determined in accordance with generally accepted
accounting principles (subject to modifications approved by the Committee)
consistently applied for the Company on a divisional, subsidiary or consolidated
basis or any combination thereof.

      2.27. "Performance Unit" means an Award granted to a Participant, as
described in Article 10 herein.

      2.28. "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of a Performance Target, if applicable, or upon the
occurrence of other events as determined by the Committee, at its discretion),
and the Shares are subject to a substantial risk of forfeiture, as provided in
Article 9 herein.

      2.29. "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as described in Section 13(d) thereof.

      2.30. "Plan" means The CIT Group, Inc. Long-Term Equity Compensation Plan.

      2.31. "Plan Year" means the fiscal year of the Company.

      2.32. "Restricted Stock" means an Award of Shares granted to a Participant
pursuant to Article 9 herein.

      2.33. "Retirement" shall have the meaning ascribed to such term in The CIT
Group, Inc. Retirement Plan.

      2.34. "Shares" means the shares of Class A common stock of the Company par
value $.01 per Share.

      2.35. "Stock Appreciation Right" or "SAR" means an Award, granted alone or
in connection with a related Option, designated as an SAR, pursuant to the terms
of Article 8 herein. An SAR may be either a Freestanding SAR or a Tandem SAR.


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      2.36. "Subsidiary" means any corporation, partnership, joint venture, or
other entity which is consolidated with the Company for financial reporting
purposes, provided that for ISOs, "Subsidiary" has the meaning set forth in Code
Section 422.

      2.37. "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 8 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when a
Share is purchased under the Option, the Tandem SAR shall similarly be
canceled).

      Article 3. Administration

      3.1. The Administrator. The Plan shall be administered by the Committee.

      3.2. Authority of the Administrator. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions of the Plan, the Committee shall have full power and authority, in
its sole discretion, to (a) select Participants from among all eligible
Employees and Directors and determine the nature, amount, terms and conditions
of Awards in a manner consistent with the Plan; (b) make Awards to Participants;
(c) construe and interpret the Plan and any agreement or instrument entered into
under the Plan; (d) adopt, amend, waive or rescind such rules and regulations as
the Committee may deem appropriate for the proper administration or operation of
the Plan; (e) subject to the provisions of Article 14, amend the terms and
conditions of any outstanding Award to the extent such terms and conditions are
within the discretion of the Committee as provided in the Plan; and (f) make all
other determinations and take all other actions as may be necessary, appropriate
or advisable for the administration or operation of the Plan. As permitted by
law and to the extent permitted by Code Section 162(m), the Committee may
delegate to any individual or committee (including a Committee of Nonemployee
Directors, to the extent that the Committee shall not be so constituted) its
authority, or any part thereof, as it deems necessary, appropriate or advisable
for proper administration or operation of the Plan.

      3.3. Determination of Performance Target. The Committee shall adopt in
writing each year, within 90 days of such year, the applicable Performance
Target that must be achieved in order to receive Annual Incentive Awards, Shares
of Restricted Stock (if applicable) or Performance Units and Performance Shares
under the Plan.

      3.4. Decisions Binding. All determinations, interpretations, decisions or
other actions made or taken by the Committee pursuant to the provisions of the
Plan and all related orders and resolutions of the Committee shall be final,
conclusive and binding for all purposes and upon all persons, including without
limitation the Company, its stockholders, Directors, Employees, Participants,
and Participants' estates and beneficiaries.

      Article 4. Shares Subject to the Plan and Maximum Awards

      4.1. Number of Shares Available for Grants. Subject to adjustment as
provided in this Section 4.1 and Section 4.3 herein, the maximum number of
Shares with respect to which Awards may be granted to Participants under the
Plan shall be 23.8 million of the Company's total outstanding shares of all
classes of common stock of the Company, plus (i) the number of Shares pursuant
to options that are not granted to participants or are canceled,


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terminate, expire or lapse for any reason without the issuance of Shares or
payment in respect thereof under the terms of The CIT Group, Inc. Transition
Option Plan (the "Transition Option Plan"), reduced by (ii) the number of Shares
granted pursuant to options under the Transition Option Plan in excess of 5.1
million, if any. Shares issued under the Plan may be either authorized but
unissued Shares, treasury Shares or any combination thereof.

      4.2. Lapsed Awards. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason without the issuance of Shares or
payment in respect thereof (with the exceptions of the termination of a Tandem
SAR upon exercise of the related Option, or the termination of a related Option
upon exercise of the corresponding Tandem SAR), any Shares subject to such Award
again shall be available for the grant of an Award under the Plan to the fullest
extent permitted under Rule 16b-3 of the Exchange Act and Sections 422 and
162(m) of the Code.

      4.3. Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, stock dividend or combination
of shares or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property of
the Company, any reorganization (whether or not such reorganization comes within
the definition of such term in Code Section 368), or any partial or complete
liquidation of the Company, an adjustment shall be made in the number and class
of Shares which may be delivered under Section 4.1, in the number and class of
and/or price of Shares subject to outstanding Awards granted under the Plan, and
in the Awards limits set forth in subsections 4.4 (a), (b), (c), (d) and (e) as
may be determined to be appropriate and equitable by the Committee, in its sole
discretion, to prevent dilution or enlargement of rights, provided, however,
that the number of Shares subject to any Award shall always be a whole number.

      4.4. Maximum Awards. The following rules shall apply to grants of such
Awards under the Plan:

      (a) Annual Incentive Awards: The Annual Incentive Award pool for each Plan
      Year for Covered Employees shall be the sum of (i) 3% of the consolidated
      pre-tax earnings of the Company (the "Annual Pool") and (ii) an amount not
      to exceed $2 million of the remaining portion of the preceding Plan Year's
      Annual Pool, if any, that was not paid to Covered Employees in the
      preceding Plan Year ((the "Carryover Amount"), together (the "Total
      Pool")). The maximum aggregate payout with respect to Annual Incentive
      Awards granted in any one Plan Year to any one Covered Employee shall not
      exceed (i) 30% of the Annual Pool plus (ii) one half of the Carryover
      Amount and in no event shall Covered Employees, as a group, receive Annual
      Incentive Awards in excess of 100% of the Total Pool for a Plan Year. If
      such 100% limitation is exceeded, each Covered Employee's Annual Incentive
      Award shall be reduced pro rata.

      (b) Stock Options: The maximum aggregate number of Shares that may be
      granted in the form of Stock Options, pursuant to any Award granted in any
      one Plan Year to any one single Participant shall be 100% of the maximum
      number of Shares provided under Section 4.1.


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      (c) SARs: The maximum aggregate number of Shares that may be granted in
      the form of Stock Appreciation Rights, pursuant to any Award granted in
      any one Plan Year to any one single Participant shall be 100% of the
      maximum number of Shares provided under Section 4.1.

      (d) Restricted Stock: The maximum aggregate grant with respect to Awards
      of Restricted Stock granted in any one Plan Year to any one Participant
      shall be 100% of the maximum number of Shares provided under Section 4.1.

      (e) Performance Shares/Performance Units: The maximum aggregate grant with
      respect to Awards of Performance Shares or Performance Units granted in
      any one Plan Year to any one Participant shall be 100% of the maximum
      number of Shares provided under Section 4.1.

      Article 5. Eligibility and Participation

      5.1. Eligibility. Persons eligible to participate in this Plan include
Directors and all Employees of the Company and its Subsidiaries, including
Employees who are members of the Board.

      5.2. Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees and
Directors, those to whom Awards shall be granted and shall determine the nature,
amount and terms and conditions of each Award.

      Article 6. Annual Incentive Awards

      6.1. General. Subject to the provisions of the Plan, the Committee may
grant Annual Incentive Awards to Participants at any time and from time to time
in such amount and upon such terms and conditions as the Committee may
determine.

      6.2. Determination of Annual Incentive Awards. The Committee shall
determine the Annual Incentive Award, if any, subject to the attainment of the
Performance Target and the maximum Annual Incentive Award limit specified in
Section 4.4, payable to each Participant. As soon as practicable after the close
of each Plan Year, the Committee shall determine with respect to each
Participant whether and the extent to which any applicable Performance Targets
were attained or exceeded.

      6.3. Payment of Annual Incentive Awards. Annual Incentive Awards shall be
payable to Participants at such time(s) and in cash or in Shares of equivalent
value or in some combination thereof, as the Committee shall determine.

      6.4. Termination of Employment with the Company.

            (a)   Subject to Section 6.5(b) hereto and the provisions of Article
                  13, if a Participant's employment with the Company is
                  terminated prior to the payment by the Company of an Annual
                  Incentive Award for any Plan Year, such Award shall be
                  forfeited and shall not be payable to the Participant.


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<PAGE>

            (b)   In the event of the Participant's death, Disability or
                  Retirement in the Plan Year, the Committee may grant and
                  authorize payment of an Award for such Plan Year to the
                  Participant or, in the event of death, the Participant's
                  beneficiary as designated under Article 11 hereto, in such
                  amount as the Committee in its discretion deems appropriate.

      6.5. Nontransferability of Annual Incentive Award. No right to a Annual
Incentive Award may be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution.

      6.6. Adjustment. If any Performance Target or other criterion upon which
Annual Incentive Awards for any Plan Year or Plan Years is based shall have been
affected by special factors (including material changes in accounting policies
or practices, material acquisitions or dispositions of property, or other
unusual or unplanned items) which in the Committee's judgment should or should
not be taken into account, in whole or in part, in the equitable administration
of the Plan, the Committee may, for any purpose of the Plan, adjust the
Performance Target or criterion for such Plan Year or Plan Years (and subsequent
Plan Years, as appropriate) and make credits, payments and reductions
accordingly under the Plan; provided, however, that the Committee shall not have
the authority to make any such adjustments with respect to Annual Incentive
Awards paid to any Participant who is at such time a Covered Employee.

      Article 7. Stock Options

      7.1. Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee,
provided however, in the case of ISOs, the aggregate Fair Market Value
(determined at the time the ISO is granted) of the Shares with respect to which
ISOs are exercisable for the first time by any optionee during any calendar year
(under all plans of the Company and any Subsidiary) shall not exceed $100,000.

      7.2. Award Agreement. Each Option granted shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO whose grant is intended not to fall under the provisions of Code Section
422.

      7.3. Option Price. The Option Price for each grant of an Option under this
Plan shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted except that (i) initial
grants of NQSOs made under the Plan concurrent with or contingent upon the
consummation of the initial public offering of Shares in 1997 may be granted
with an exercise price equal to the initial public offering price of Shares
covered by such initial public offering and (ii) and in the case of an ISO
granted to a Participant owning (actually or constructively under Code Section
424(d)) more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of a Subsidiary, the


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Option Price shall not be less than one hundred and ten percent (110%) of the
Fair Market Value of the Shares on the date of grant.

      7.4. Duration of Options. Each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no Option shall be exercisable later than the tenth
(10th) anniversary date of its grant and no ISO granted to a five percent (5%)
shareholder of the Company shall be exercisable later than the fifth anniversary
of the date of grant.

      7.5. Exercise of Options. Options granted under this Article 7 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each Award or for each Participant.

      7.6. Payment. Options granted under this Article 7 shall be exercised by
the delivery of notice of exercise to the Company or its designee, setting forth
the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

      The Option Price upon exercise of any Option shall be payable to the
Company or its designee in full either (a) in cash or its equivalent, or (b) by
tendering previously acquired Shares having an aggregate Fair Market Value at
the time of exercise equal to the total Option price (provided that the Shares
which are tendered must have been held by the Participant for at least six (6)
months prior to their tender to satisfy the Option Price), or (c) by a
combination of (a) and (b).

      The Committee also may allow cashless exercise as permitted under the
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.

      Subject to any governing rules or regulations, as soon as practicable
after receipt of a written notification of exercise and full payment, the
Company shall deliver to the Participant, in the Participant's name, Share
certificates in an appropriate amount based upon the number of Shares purchased
under the Option(s); provided, however, that if the Committee permits cashless
exercise of Options, a Participant may elect to receive the cash proceeds from
the cashless exercise in lieu of Shares.

      7.7. Restrictions on Share Transferability. The Committee may impose such
restrictions on the transfer of any Shares acquired pursuant to the exercise of
an Option granted under this Article 7 as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities laws, under
the requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

      7.8. Termination of Employment with the Company. Subject to the provisions
of Article 13, each Each Participant's Award Agreement shall set forth the
extent to which the Participant shall have the right to exercise the Option
following termination of the Participant's employment with the Company or any
Subsidiary. Such provisions shall be determined in the sole discretion of the
Committee,


                                       9
<PAGE>

shall be included in the Award Agreement entered into with each Participant,
need not be uniform among all Options issued pursuant to this Article 7, and may
reflect distinctions based on the reasons for termination of employment with the
Company.

      7.9. Nontransferability of Options.

      (a)   Incentive Stock Options. No ISO granted under the Plan may be sold,
            transferred, pledged, assigned, or otherwise alienated or
            hypothecated, other than by will or by the laws of descent and
            distribution. Further, all ISOs granted to a Participant under the
            Plan shall be exercisable during his or her lifetime only by such
            Participant or in the event of the Participant's legal incapacity,
            the Participant's legal guardian or representative.

      (b)   Nonqualified Stock Options. No NQSO granted under this Article
            7 may be sold, transferred, pledged, assigned, or otherwise
            alienated or hypothecated, other than by will or by the laws of
            descent and distribution; provided, however, that notwithstanding
            any provision contained in a Participant's Award Agreement to the
            contrary, Participants who are executive officers of the Company or
            Directors, may in the Committee's sole discretion, transfer a NQSO
            to a member of such Participant's immediate family or to a trust for
            the benefit of such Participant's immediate family pursuant to the
            provisions of Revenue Ruling 98-21. Further, except as otherwise
            provided in a Participant's Award Agreement or with respect to the
            immediate family member or trust established for the immediate
            family of an executive officer or Director of the Company, as
            determined by the Committee, in its sole discretion, all NQSOs
            granted to a Participant under this Article 7 shall be exercisable
            during his or her lifetime only by such Participant or in the event
            of the Participant's legal incapacity, the Participant's legal
            guardian or representative.

      Article 8. Stock Appreciation Rights.

      8.1. Grant of SARs. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SAR.

      The Committee shall have complete discretion in determining the number of
SARs granted to each Participant; and, consistent with the provisions of the
Plan, in determining the terms and conditions pertaining to such SARs.

      The grant price of a Freestanding SAR shall equal the Fair Market Value of
a Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.

      8.2. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.


                                       10
<PAGE>

      Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.

      8.3. Exercise of Freestanding SARs. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon them.

      8.4. SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.

      8.5. Term of SARs. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed ten (10) years.

      8.6. Payment of SAR Amount. Upon exercise of an SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying:

      (a)   The difference between the Fair Market Value of a Share on the date
            of exercise over the grant price by

      (b)   The number of Shares with respect to which the SAR is exercised.

      At the discretion of a Participant, the payment upon SAR exercise may be
in cash, in Shares of equivalent value, or in some combination thereof, subject
to the availability of Shares to the Company.

      8.7. Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on exercise of an SAR (including,
without limitation, the right of the Committee to limit the time of exercise to
specified periods) as may be required to satisfy the requirements of any
exemption from the liability provisions of Section 16 of the Exchange Act (or
any successor rule).

      8.8. Termination of Employment with the Company. Subject to the provisions
of Article 13, each Each SAR Award Agreement shall set forth the extent to which
the Participant shall have the right to exercise the SAR following termination
of the Participant's employment with the Company or a Subsidiary. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with a Participant, need not be
uniform among all SARs issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination of employment with the Company.

      8.9. Nontransferability of SARs. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred,


                                       11
<PAGE>

pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further, except as otherwise provided
in a Participant's Award Agreement, all SARs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such Participant or
in the event of the Participant's legal incapacity, the Participant's legal
guardian or representative.

      Article 9. Restricted Stock

      9.1. Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine upon the attainment of the Performance Target, if applicable. As soon
as practicable after the close of each Plan Year, the Committee shall determine
with respect to each Participant whether and the extent to which any applicable
Performance Targets were attained or exceeded.

      9.2. Restricted Stock Agreement. Each Restricted Stock Award shall be
evidenced by a Restricted Stock Award Agreement that shall specify the
restrictions, including restrictions creating a substantial risk of forfeiture,
the Period(s) of Restriction, the number of Shares of Restricted Stock granted,
and as such other provisions as the Committee shall determine. Restrictions on
Restricted Stock shall lapse at such time(s) and in such manner and subject to
such conditions as the Committee shall in each instance determine, which need
not be the same for each Award or for each Participant.

      9.3. Transferability. Except as provided in this Article 9, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Award Agreement. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant, or in the event of the Participant's
legal incapacity, to the Participant's legal guardian or representative.

      9.4. Other Restrictions. The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
time-based restrictions on vesting following the attainment of the Performance
Target, if applicable, and/or restrictions under applicable Federal or state
securities laws.

      The Company or its designee shall retain the certificates representing
Shares of Restricted Stock in the Company's possession until such time as all
conditions and/or restrictions applicable to such Shares have been satisfied.

      Except as otherwise provided in this Article 9, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.


                                       12
<PAGE>

      9.5. Voting Rights. During the Period of Restriction, Participants holding
shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.

      9.6. Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with regular cash dividends paid with respect to the underlying Shares
while they are so held. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate. In the event that any dividend
constitutes a "derivative security" within the meaning of Rule 16a-1 of the
General Rules and Regulations promulgated under the Exchange Act or an "equity
security" within the meaning of Section 3(a)(11) of the Exchange Act, such
dividend shall be subject to a period of restriction equal to the remaining
Period of Restriction applicable to the Restricted Stock with respect to which
the dividend has been paid.

      9.7. Termination of Employment with the Company. Each Restricted Stock
Award Agreement shall set forth the extent to which the Participant shall have
the right to receive unvested Restricted Shares following termination of the
Participant's employment with the Company or any Subsidiary. Such provisions
shall be determined in the sole discretion of the Committee, shall be included
in the Award Agreement entered into with each Participant, need not be uniform
among all Shares of Restricted Stock issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of employment with the
Company.

      Article 10. Performance Units and Performance Shares.

      10.1. Grant of Performance Units/Shares. Subject to the terms of the Plan,
Performance Units and/or Performance Shares may be granted to Participants in
such amounts and upon such terms, and at any time and from time to time, as
shall be determined by the Committee upon the attainment of the Performance
Target. Each Award of Performance Shares and/or Performance Units shall be
evidenced by an Award Agreement that shall specify the initial value of such
Performance Shares and/or Performance Units, the Performance Target which
payment of such Performance Shares and/or Performance Units depends, the time
period during which the Performance Target must be met (the "Performance
Period"), the number of Performance Shares and/or Performance Units awarded and
such other terms and conditions as the Committee may determine.

      10.2. Value of Performance Units/Shares. Each Performance Unit shall have
an initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant.

      10.3. Earning of Performance Units/Shares. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number and
value of Performance Units/Shares earned by the Participant over the Performance
Period, to be determined, as a function of the extent to which the corresponding
Performance Target has been achieved. As soon as practicable after the close of
each Plan Year, the Committee shall determine with respect to each Participant
whether and the extent to which any applicable Performance Targets were attained
or exceeded.


                                       13
<PAGE>

      10.4. Payment of Performance Shares/Units. As soon as practicable after
the end of a Performance Period, if the applicable Performance Target for that
Performance Period have been achieved, the Company shall deliver to a
Participant payment for such Participant's Performance Shares and/or Performance
Units in an amount determined, as specified in such Participant's Performance
Share and/or Unit Award Agreement, on the last day of the Performance Period by
reference to the achievement of the applicable Performance Target. The Committee
may permit a Participant to elect payment of the aggregate value of such
Participant's Performance Shares and/or Performance Units in cash or in Shares
of equivalent value or in some combination thereof, subject to the availability
of Shares to the Company. If, and to the extent that, dividends with respect to
Shares are declared or paid during the Performance Period, the Committee may
direct payment of dividend equivalents to a Participant in an amount equal to
the dividends that such Participant would receive or have received if such
Participant's Performance Shares were Shares; provided, however, that such
dividend equivalents shall be subject to the same restrictions as apply to
dividends payable with respect to Restricted Stock pursuant to Section 9.4.

      10.5. Termination of Employment with the Company. Each Participant's
Performance Share and/or Unit Award Agreement shall set forth if, and the extent
to which, the Participant shall have the right to receive payment of Performance
Shares and/or Performance Units following termination of the Participant's
employment with the Company or any Subsidiary. Such terms and conditions shall
be determined in the sole discretion of the Committee, need not be uniform among
all Performance Share and/or Performance Unit Awards and may reflect
distinctions based on the reasons for termination of employment with the
Company.

      10.6. Nontransferability. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant or, in the
event of the Participant's legal incapacity, the Participant's legal
representative.

      Article 11. Beneficiary Designation

      The beneficiary or beneficiaries of the Participant to whom any benefit
under the Plan is to be paid in case of his or her death before he or she
receives any or all of such benefit shall be determined under the Company's
Group Life Insurance Plan. A Participant under the Plan may, from time to time,
name any beneficiary or beneficiaries to receive any benefit in case of his or
her death before he or she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant,
including the beneficiary designated under the Company's Group Life Insurance
Plan, and will be effective only when filed by the Participant in writing (in
such form or manner as may be prescribed by the Committee) with the Company
during the Participant's lifetime. In the absence of a valid designation under
the Company's Group Life Insurance Plan or otherwise, if no validly designated
beneficiary survives the Participant or if each surviving validly designated
beneficiary is legally impaired or prohibited from taking, the Participant's
beneficiary shall be the Participant's estate.


                                       14
<PAGE>

      Article 12. Deferrals

      The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or goals with respect to
Performance Units/Shares. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.

      Article 13. Change of Control

      13.1. Vesting Upon a Change of Control. Notwithstanding any provision
contained in the Plan to the contrary, upon a Change of Control:

            (a) Any and all SARs and Options shall become immediately
            exercisable, and shall remain exercisable throughout their entire
            term;

            (b) Any Period of Restriction and restrictions imposed on Restricted
            Stock, shall lapse; and

            (c) The Performance Target with respect to all outstanding Awards of
            Annual Incentive Awards, Restricted Stock, Performance Units and
            Performance Shares shall be deemed to have been attained. The
            vesting of all Awards denominated in Shares shall be accelerated as
            of the date of the Change of Control.

      13.2. Termination, Amendment, and Modifications of Change of Control
Provisions. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 13 may not be terminated,
amended, or modified on or after the date of Change of Control to affect
adversely any Award theretofore granted under the Plan without the prior written
consent of the Participant with respect to said Participant's outstanding
Awards; provided, however, the Board of Directors, upon recommendation of the
Committee, may terminate, amend or modify this Article 13 at any time and from
time to time prior to the date of a Change of Control.


                                       15
<PAGE>

      Article 14. Amendment, Adjustment, and Termination.

      14.1. Amendment and Termination. Subject to Section 14.3, the Committee
may at any time, and from time to time, in its sole discretion alter, amend,
suspend or terminate the Plan in whole or in part for any reason or for no
reason; provided, however, that no amendment or other action that requires
stockholder approval in order for the Plan to continue to comply with applicable
law shall be effective unless such amendment or other action shall be approved
by the requisite vote of stockholders of the Company entitled to vote thereon.

      14.2. Adjustment of Awards. Subject to Section 14.3, the Committee may
make adjustments to Awards and in the terms and conditions of, and the criteria
included in, Award Agreements in recognition of (a) unusual or nonrecurring
events (including, without limitation, the events described in Section 4.3)
affecting the Company or the financial statements of the Company, and/or (b)
changes in applicable laws, regulations or accounting principles whenever the
Committee determines that such adjustments are appropriate.

      14.3. Awards Previously Granted. No alteration, amendment, suspension or
termination of the Plan shall adversely affect in any material way any Award
previously made under the Plan without the written consent of the affected
Participant; provided, however, that the Committee may modify, without a
Participant's consent, any Award previously made to a Participant who is a
foreign national or employed outside the United States to recognize differences
in local law, tax policy or custom.

      14.4. Compliance with Code Section 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan shall comply with the
requirements of Code Section 162(m); provided, however, that in the event the
Committee determines that such compliance is not desired with respect to any
Award of Restricted Stock, compliance with Code Section 162(m) will not be
required. In addition, in the event that changes are made to Code Section 162(m)
to permit greater flexibility with respect to any Award or Awards available
under the Plan, the Committee may, subject to this Article 14, make any
adjustments it deems appropriate.

      Article 15 Withholding.

      15.1. Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.

      15.2. Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the statutory total tax (using the
Federal Supplemental wage rate, and state or local equivalent as well as any
FICA or Medicare taxes) which could be imposed on the transaction. All such
elections shall be


                                       16
<PAGE>

irrevocable, made in such form as the Committee shall designate, and shall be
subject to any restrictions or limitations that the Committee, in its sole
discretion, deems appropriate.

      Article 16. Successors.

      All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

      Article 17. Legal Construction.

      17.1. Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

      17.2. Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

      17.3. Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

      17.4. Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision
of the Plan or action by Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.

      17.5. Governing Law. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the state of New York.

      17.6. Special Compensation. Except as otherwise required by law or as
specifically provided in any plan or program maintained by the Company, no
payment under the Plan shall be included or taken into account in determining
any benefit under any pension, thrift, profit sharing, group insurance, or other
benefit plan maintained by the Company.

      17.7. Incompetent Payee. If the Committee shall find that any individual
to whom any amount is payable under the Plan is found by a court of competent
jurisdiction to be unable to care for his affairs because of illness or
accident, or is a minor, or has died, then the payment due him or his estate
(unless a prior claim thereof has been made by a duly appointed legal
representative) may, if the Committee so elects, be paid to his spouse, a child,
a relative, an institution maintaining or having custody of such individual, or
any other individual deemed by the Committee to be a proper recipient on behalf
of such individual otherwise entitled to


                                       17
<PAGE>

payment. Any such payment shall constitute a complete discharge of all liability
of the Plan thereof.

      17.8. Plan Not an Employment Contract. This Plan is not and shall not be
deemed to constitute a contract of employment between the Company and any
Employee or other individual, nor shall anything herein contained be deemed to
give any Employee or other individual any right to be retained in his employer's
employ or to in any way limit or restrict his employer's right or power to
discharge any Employee or other individual at any time and to treat such
Employee without any regard to the effect which such treatment might have upon
him as a Participant of the Plan.


                                       18