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                                                                   EXHIBIT 10.25

                  CIT GROUP LONG-TERM EQUITY COMPENSATION PLAN
                          EFFECTIVE AS OF JUNE 1, 2002

    Section 1. Establishment, Objectives, and Duration

    1.1. Establishment of the Plan. CIT Group Inc., a Delaware corporation,
formerly known as Tyco Capital Corporation ("CIT"), 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 is effective as of
June 1, 2002 (the "Effective Date") 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 Committee to amend or terminate the Plan at any time pursuant to
Section 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.

    Section 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 an award granted to a Participant
described in Section 6.

    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 CIT and each
Participant setting forth the terms and provisions applicable to an Award.

    2.4. "Beneficially Owned", "Beneficially Owns", "Beneficial Owner" or
"Beneficial Ownership" shall have the respective meanings ascribed thereto or
used in Section 13d-3 under the Exchange Act.

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

    2.6. "Business Entity" means any corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or other business entity.

    2.7. "Change of Control" means:

        (a) The acquisition by any Person (in any case, the "ACQUIROR") of
    direct or indirect Beneficial Ownership of Voting Securities of any CIT
    Entity, as a result of which such Acquiror becomes, directly or indirectly,
    the Beneficial Owner of Voting Securities representing 30% or more of the
    combined voting power of all Voting Securities of such CIT Entity
    outstanding immediately thereafter, PROVIDED that none of the following
    shall constitute a Change of Control: (1) any such acquisition in any
    Non-Control Transaction; or (2) any such acquisition by such CIT Entity, any
    Subsidiary of such CIT Entity, or any employee benefit plan (or related
    trust)
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    maintained by such CIT Entity or any Subsidiary thereof; or (3) any such
    acquisition by Tyco, if immediately prior thereto, each CIT Entity (other
    than Tyco) is Controlled by Tyco; or (4) any such acquisition directly from
    such CIT Entity (other than Tyco) if, immediately prior thereto, such CIT
    Entity is not Controlled by any Person (excluding, however, any such
    acquisition directly from such CIT Entity resulting from the exercise of any
    conversion, exchange or exercise privilege unless the security being so
    converted, exchanged or exercised was acquired directly from such CIT Entity
    at a time when such CIT Entity was not Controlled by any Person); PROVIDED
    FURTHER that if any Acquiror becomes, directly or indirectly, the Beneficial
    Owner of Voting Securities representing 30% or more of the combined voting
    power of the then outstanding Voting Securities of such CIT Entity by reason
    of any acquisition of outstanding Voting Securities by such CIT Entity no
    Change of Control shall be deemed to have occurred by reason thereof unless
    and until such Acquiror shall thereafter become the Beneficial Owner of any
    additional Voting Securities of such CIT Entity under circumstances where,
    after giving effect thereto, the aforesaid percentage is met, and PROVIDED
    FURTHER that no such acquisition (unless Tyco is the CIT Entity whose Voting
    Securities are being acquired) shall give rise to a Change of Control for so
    long as, after giving effect thereto, Tyco remains the direct or indirect
    Beneficial Owner of Voting Securities representing more than 50% of the
    combined voting power of all Voting Securities of each CIT Entity (other
    than Tyco); or

        (b) Consummation of any of the following (each, a "BUSINESS
    TRANSACTION"): (i) any reorganization, merger, statutory share exchange or
    consolidation or similar corporate transaction involving any CIT Entity,
    (ii) any sale or other disposition of all or substantially all of the assets
    of any CIT Entity, or (iii) any acquisition of assets or stock of another
    Business Entity by any CIT Entity, unless, in any such case, such Business
    Transaction is a Non-Control Transaction; or

        (c) Consummation of a complete liquidation or dissolution of any CIT
    Entity; or

        (d) If (i) a Change of Control shall not have theretofore occurred and
    CIT is still Controlled by Tyco, or (ii) a Change of Control shall not have
    theretofore occurred and CIT is no longer Controlled by Tyco, or (iii) a
    Change of Control shall have theretofore occurred, individuals who in any
    such case constitute the then applicable Incumbent Board ceasing for any
    reason to constitute at least two-thirds of the board of directors of the
    Ultimate CIT Entity.

    2.8. "CIT Entity" means CIT (including its successors) and any Business
Entity Controlling CIT.

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

    2.10. "Committee" means the Compensation and Governance Committee of the
Board or, in the absence of such a committee, the full Board.

    2.11. "Company" means the CIT Group Inc., a Delaware corporation, formerly
known as Tyco Capital Corporation, and any successor thereto, and all
Subsidiaries of CIT.

    2.12. "Control" means, with the respect to any specified Business Entity,
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Business Entity, whether through
the ownership of Voting Securities, by contract or agreement or otherwise; and
the terms "Controlling", "Controlled by" and "under common Control with" have
correlative meanings.

    2.13. "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).

    2.14. "Director" means any individual who is a current or former member of
the Board of Directors or the board of directors of any Subsidiary of CIT.

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    2.15. "Disability" means a physical or mental impairment sufficient to make
an individual eligible for benefits under the Company's Long-Term Disability
Plan or, in the event there is no Company Long-Term Disability Plan,
"Disability" shall have the same meaning as defined in the Company Long-Term
Disability Plan last in effect prior to the first date a Participant suffers
from such physical or mental impairment.

    2.16. "Distribution Agreement" means an agreement by and between Tyco and
CIT with respect to the direct or indirect distribution or sale of Shares by
Tyco.

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

    2.18. "Employee" means any individual who is a current or former employee of
the Company.

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

    2.20. "Fair Market Value" means the fair market value of Shares as
determined by the Committee; provided that, unless otherwise determined by the
Committee, the "Fair Market Value" for any Awards made while Shares are traded
on a securities exchange 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.

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

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

    2.23. "Incumbent Board" means (i) if no Change of Control shall have
theretofore occurred and CIT is still Controlled by Tyco, individuals who, as of
the date hereof, constitute the board of directors of Tyco, or (ii) if no Change
of Control shall have theretofore occurred and CIT is no longer Controlled by
Tyco, individuals who, immediately after CIT ceases to be Controlled by Tyco,
constitute the board of directors of the Ultimate CIT Entity, or (iii) if a
Change of Control shall have theretofore occurred, individuals who, immediately
after giving effect to director changes made in connection with such Change of
Control, constitute the board of directors of the Ultimate CIT Entity, PROVIDED
that, in any such case, any individual becoming a director subsequent to such
time whose election, or nomination for election by, the stockholders of the
Ultimate CIT Entity was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board shall be deemed to be a member of
the Incumbent Board (but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of any actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the board of directors of the Ultimate CIT Entity (a "PROXY
CONTEST"), including by reason of any agreement intended to avoid or settle any
election contest or proxy contest).

    2.24. "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.

    2.25. "Non-Control Transaction" means any Business Transaction involving, or
engaged in by, any CIT Entity that satisfies all of the following criteria:

        (a) all or substantially all the Beneficial Owners of the outstanding
    Voting Securities of such CIT Entity, immediately prior to such Business
    Transaction, Beneficially Own directly or indirectly

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    65% or more of the combined voting power of the then outstanding Voting
    Securities of the Business Entity resulting from such Business Transaction
    (including without limitation a Business Entity which as a result of such
    Business Transaction owns such CIT Entity or all or substantially all its
    assets either directly or indirectly through one or more Subsidiaries) in
    substantially the same proportions as their ownership, immediately prior to
    such Business Transaction, of the Voting Securities of such CIT Entity;

        (b) at least two-thirds of the members of the board of directors (or
    equivalent persons) of the Ultimate CIT Entity after giving effect to such
    Business Transaction were members of the applicable Incumbent Board at the
    time of the execution of the initial agreement, or of the action of the
    board of directors of such CIT Entity or any other relevant CIT Entity,
    providing for such Business Transaction; and

        (c) no Person (other than: such CIT Entity; any Subsidiary thereof; any
    employee benefit plan (or related trust) maintained by such CIT Entity or
    any Subsidiary thereof; the Business Entity resulting from such Business
    Transaction; and any Person that Beneficially Owned, immediately prior to
    such Business Transaction, directly or indirectly, Voting Securities
    representing 15% or more of the combined voting power of the outstanding
    Voting Securities of such CIT Entity immediately prior to such Business
    Transaction) Beneficially Owns, directly or indirectly, 15% or more of the
    combined voting power of the then outstanding Voting Securities of the
    Business Entity resulting from such Business Transaction.

    2.26. "Nonemployee Director" means a Director who is not an Employee of CIT
or the Company.

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

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

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

    2.30. "Participant" means an Employee or Director selected by the Committee
to participate in the Plan.

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

    2.32. "Performance Target" means a 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 on a business unit, divisional, subsidiary or consolidated basis or any
combination thereof.

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

    2.34. "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, in its

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discretion), and the Shares are subject to a substantial risk of forfeiture, as
provided in Section 9 herein.

    2.35. "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, and shall
include any successor to such Person.

    2.36. "Plan" means the CIT Group Inc. Long-Term Equity Compensation Plan.

    2.37. "Plan Year" means the fiscal year of the Company or the calendar year,
as determined by the Committee.

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

    2.39. "Retirement" for all Participants, irrespective of whether a
Participant is eligible to participate in or is a "Member" in the CIT
Group Inc. Retirement Plan effective January 1, 2001 (the "Retirement Plan") or
whether a Participant's benefits are calculated pursuant to Article IV or
Article V of the Retirement Plan, means either (i) a Participant's election to
retire upon attaining his or her "Normal Retirement Age"; or (ii) a
Participant's election to retire upon (A) completing at least a 10-year "Period
of Benefit Service" and (B) having either (1) attained age 55, or (2) incurred
an "Eligible Termination" and, at the time of such "Eligible Termination,"
having attained age 54. The terms "Normal Retirement Age," "Period of Benefit
Service" and "Eligible Termination" shall have the meanings as defined in the
Retirement Plan.

    2.40. "Shares" means the shares of common stock of the Company.

    2.41. "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 Section 8 herein. An SAR may be either a Freestanding SAR or a Tandem SAR.

    2.42. "Subsidiary" means, with respect to any specified Business Entity as
of any time, any other Business Entity at least a majority of the outstanding
Voting Securities of which at such time are Beneficially Owned, directly or
indirectly, by such specified Business Entity.

    2.43. "Substitute Award" means any Award or Shares granted or issued to a
Participant (i) pursuant to the Distribution Agreement, (ii) in substitution or
exchange for employee benefits awards previously granted or issued to a
Participant by Tyco or CIT or any of its or their predecessors, subsidiaries or
affiliates or (iii) through the assumption of, or in substitution or exchange
for, employee benefits awards, or the right or obligation to make future
employee benefits awards, by a Business Entity acquired by the Company or with
which the Company combines.

    2.44. "Tyco" means Tyco International Ltd., a Bermuda company, and its
successors.

    2.45. "Tandem SAR" means an SAR that is granted in connection with a related
Option pursuant to Section 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).

    2.46. "Ultimate CIT Entity" means (i) CIT, if CIT is not then Controlled by
any Business Entity, or (ii) any Business Entity Controlling CIT that is not
Controlled by any other Business Entity, if CIT is then Controlled by any
Business Entity.

    2.47. "Voting Securities", as applied to the stock or the equivalent thereof
of any corporation or other Business Entity, means stock or such equivalent of
any class or classes, however designated, having ordinary voting power for the
election of directors or equivalent persons of such corporation or

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other Business Entity, other than stock or the equivalent thereof having such
power only by reason of the occurrence of a contingency.

    Section 3. Administration

    3.1. The Administrator. The Plan shall be administered by the Committee.
Notwithstanding the foregoing, with respect to any Award granted or to be
granted to a Participant who is a Nonemployee Director, the Plan shall be
administered by the full Board, and all references herein to the Committee shall
be deemed to be references to the Board.

    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 and Substitute
Awards to Participants; (c) construe and interpret the Plan and any agreement or
instrument entered into under the Plan; (d) adopt, implement, 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
Section 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 the beginning 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.

    Section 4. Shares Subject to the Plan and Maximum Awards

    4.1. Number of Shares Available for Grants. Subject to adjustment as
provided in Section 4.2 and Section 4.3 herein, the maximum number of Shares
with respect to which Awards may be granted to Participants under the Plan, and
the maximum number of Shares that may be issued upon the exercise of ISOs, shall
be 26 million of the total outstanding shares of all classes of common stock of
CIT. Shares issued under the Plan may be either authorized but unissued Shares,
treasury Shares or any combination thereof.

    4.2. Lapsed Awards, Transferred and Relinquished Shares, and Business
Transactions. To the fullest extent permitted under Rule 16b-3 of the Exchange
Act and Sections 422 and 162(m) of the Code:

        (a) 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.

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        (b) If any Shares are transferred or relinquished to the Company in
    satisfaction of all or a portion of the exercise price or any withholding
    obligation with respect to an Award granted under this Plan, any Shares so
    transferred or relinquished shall be deemed to be available for the grant of
    an Award under the Plan.

        (c) If Substitute Awards (as defined in Section 2.43(iii)) are granted
    under the Plan in connection with any acquisition or combination
    specifically approved by CIT's shareholders, the maximum number of Shares
    with respect to which Awards may be granted to Participants under the Plan
    shall be increased by the number of Shares covered by such Substitute
    Awards.

    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 maximum aggregate payout with respect
    to Annual Incentive Awards granted in any one Plan Year to any one Covered
    Employee shall not exceed 3% of the consolidated pre-tax earnings of the
    Company for such Plan Year.

        (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.

        (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.

    Section 5. Eligibility and Participation

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

    5.2. Actual Participation. Subject to the provisions of the Plan, the
Committee in its sole discretion 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.

    Section 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

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conditions as the Committee may determine. At the time that Performance Targets
are established by the Committee for a Plan Year, the Committee shall establish
an individual Annual Incentive Award opportunity for such Plan Year for each
Participant or group of Participants. A Participant's individual Annual
Incentive Award opportunity shall be based on the achievement of specified
Performance Targets and may be expressed in dollars, as a percentage of base
salary, or by formula.

    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. Notwithstanding any provision of the Plan to the contrary, the
Committee, in its sole and absolute discretion, may decrease, but not increase,
the Annual Incentive Awards paid to any Participant who is at such time a
Covered Employee.

    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 6.4(b) hereto and the provisions of Section 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.

        (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 Section 11 hereto, in such
    amount as the Committee in its discretion deems appropriate.

    6.5. Nontransferability of Annual Incentive Award. No right to an 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.

    Section 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, that 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) a Substitute
Award may be granted with an exercise price less than, equal to or greater than
the Fair Market Value of a Share on the date such Award is granted, (ii) grants
of NQSOs made under the Plan concurrent with or contingent upon the consummation
of a private placement, public offering or similar transaction involving Shares
or other securities of the Company may be

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granted with an exercise price equal to the value or price attributed to Shares
or such securities for purposes of such transaction, and (iii) 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 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 ten percent (10%)
shareholder of the Company shall be exercisable later than the fifth (5th)
anniversary of the date of grant.

    7.5. Exercise of Options. Options granted under this Section 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 Section 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 applicable Federal Reserve Board
regulations, 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 Section 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 Section 13, 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 (and, if
applicable, the termination of the Participant's employment with Tyco and its
Subsidiaries). 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 Options issued pursuant to this
Section 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

                                       9
<Page>
    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. Except as otherwise provided in a
    Participant's Award Agreement, no NQSO granted under this Section 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 Participants who are executive officers of the
    Company or Directors may, in the Committee's sole discretion, transfer a
    NQSO gratuitously or for value to a member of such Participant's immediate
    family or to a trust, partnership, limited liability company or similar
    entity benefiting or owned by such Participant's immediate family. Further,
    except as otherwise provided in a Participant's Award Agreement or with
    respect to the immediate family member or the immediate family entity of an
    executive officer of the Company, as determined by the Committee, in its
    sole discretion, all NQSOs granted to a Participant under this Section 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.

    Section 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. 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: (i) the difference between the Fair Market Value of a Share on the
date of exercise over the grant price; by (ii) 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.

                                       10
<Page>
    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 Section 13, 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. 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, 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.

    Section 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. Such Shares of Restricted Stock may be granted upon the attainment of
applicable Performance Targets or may be Awards unrelated to Performance
Targets. 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 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 Section 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

                                       11
<Page>
satisfied. Except as otherwise provided in this Section 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.

    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. Subject to the provisions
of Section 13, 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
(and, if applicable, the termination of the Participant's employment with Tyco
and its Subsidiaries). 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.

    Section 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.

    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 has 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

                                       12
<Page>
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. Subject to the provisions
of Section 13, 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 and/or Performance 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.

    Section 11. Beneficiary Designation

    11.1. 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.

    Section 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 and/or Performance 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.

    Section 13. Effect of a Change of Control

    13.1. Treatment of Outstanding Awards. Except as otherwise provided in an
applicable Award Agreement, upon a Change of Control:

        (a) Any and all SARs and Options that are granted hereunder to a
    Participant prior to such Change of Control and that have not lapsed or been
    forfeited by the effective date of the Change of Control shall become
    immediately exercisable, and shall remain exercisable until the earlier of

                                       13
<Page>
    the expiration of their initial term or the second anniversary of the
    Participant's termination of employment with the Company;

        (b) Any Period of Restriction and restrictions imposed on Restricted
    Stock that is granted hereunder to a Participant prior to such Change of
    Control and that has not been forfeited by the effective date of the Change
    of Control shall lapse;

        (c) The Performance Target with respect to all outstanding Awards of
    Restricted Stock, Performance Units and Performance Shares that are granted
    hereunder to a Participant prior to such Change of Control and that have not
    lapsed or been forfeited by the effective date of the Change of Control
    shall be deemed to have been attained; and

        (d) The vesting of all Awards denominated in Shares that are granted
    hereunder to a Participant prior to such Change of Control and that have not
    lapsed or been forfeited by the effective date of the Change of Control
    shall be accelerated.

    13.2. The Committee may, in its sole discretion, provide in any Award
Agreement for the accelerated vesting of such Award, the accelerated
exercisability of such Award and/or the deemed attainment of the Performance
Target with respect to such Award upon specified events similar to a Change of
Control.

    13.3. 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 Section 13 may not be terminated,
amended, or modified upon or after a 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. Subject
to Section 14.3, the Board of Directors, upon recommendation of the Committee,
may terminate, amend or modify this Section 13 at any time and from time to time
prior to a Change of Control.

    Section 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 Performance Targets and Awards. Subject to Sections 6.2
and 14.3, the Committee in its discretion may make adjustments to Performance
Targets and Awards and to the terms and conditions of, and the criteria included
in, Award Agreements in recognition of events that may materially affect the
performance of the Company, including, but not limited to, (a) unusual or
nonrecurring events or market conditions (including, without limitation, the
events described in Section 4.3), (b) significant acquisitions or dispositions
of assets or other property by the Company, (c) changes in accounting policies
or practices and (d) changes in applicable laws or regulations, whenever and to
whatever extent 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

                                       14
<Page>
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
Section 14, make any adjustments it deems appropriate.

    Section 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 minimum 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 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.

    Section 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.

    Section 17. Arbitration. Any dispute, controversy or claim arising out of or
relating to the Plan that cannot be resolved by the Participant on the one hand,
and the Company on the other, shall be submitted to arbitration in the state of
New Jersey in accordance with the procedures of the American Arbitration
Association; provided that any such submission by the Participant must be made
within two years of the date of the events giving rise to such dispute,
controversy or claim. The determination of the arbitrator shall be conclusive
and binding on the Company and the Participant, and judgment may be entered on
the arbitrator's award in any court having jurisdiction. The expenses of the
arbitration proceeding shall be borne by the Company; provided, however, that
each party shall bear its own legal expenses unless the Participant is the
prevailing party, in which case the Company shall promptly reimburse the
Participant for the reasonable legal fees and expenses incurred by the
Participant in connection with such contest or dispute (excluding any fees
payable pursuant to a contingency fee arrangement).

    Section 18. Legal Construction.

    18.1. 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.

    18.2. 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.

    18.3. 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.

    18.4. 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 1934 Act. To

                                       15
<Page>
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.

    18.5. 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 Jersey.

    18.6. 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.

    18.7. 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 or her affairs because of illness or
accident, or is a minor, or has died, then the payment due to him or her or to
his or her 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
or her 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 payment. Any
such payment shall constitute a complete discharge of all liability of the Plan
thereof.

    18.8. Plan Not an Employment Contract. This Plan is not nor shall anything
contained herein be deemed to give any Employee or other individual any right to
be retained in his or her employer's employ or to in any way limit or restrict
his or her 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.

                                       16