Unassociated Document


    Exhibit
      4.9

    


    INGERSOLL-RAND
      COMPANY LIMITED

    


    Amended
      and Restated

    Incentive
      Stock Plan of 1998

    


    Section
      1. Purposes: The
      purposes of the Plan are (a) to provide additional incentives for Key Employees,
      by authorizing the payment of bonus or incentive compensation in shares of
      Common Stock and by encouraging Key Employees to invest in shares of Common
      Stock, thereby furthering their identity of interest with the interests of
      the
      Company’s members, increasing their stake in the future growth and prosperity of
      the Company and stimulating and sustaining constructive and imaginative
      thinking, and (b) to enable the Company, by offering incentives comparable
      to
      other organizations with which it competes in connection with the employment
      of
      senior level individuals, to induce the employment of the most highly-qualified
      individuals and the continued employment of Key Employees.

    


    Section
      2. Definitions:
      Unless
      otherwise required by the context, the following terms, when used in the Plan,
      shall have the meanings set forth in this Section 2:

    


    Act: The
      Securities Exchange Act of 1934, as amended.

    


    Affiliate:
      Used
      to
      indicate a relationship with a specified person, a person that directly, or
      indirectly through one or more intermediaries, controls, or is controlled by,
      or
      is under common control with, such a specified person.

    


    Associate:
      Used
      to
      indicate a relationship with a specified person, (a) any corporation or
      organization (other than the Company or a majority-owned Subsidiary of the
      Company) of which such specified person is an officer or partner, or is,
      directly or indirectly, the beneficial owner of 10% or more of any class of
      equity securities, (b) any trust or other estate in which such specified person
      has a substantial beneficial interest or as to which such specified person
      serves as trustee or in a similar capacity, (c) any relative or spouse of such
      specified person, or any relative of such spouse who has the same home as such
      specified person, or who is a director or officer of the Company or any of
      its
      parents or subsidiaries, and (d) any person who is a director, officer or
      partner of such specified person or of any corporation (other than the Company
      or any wholly-owned Subsidiary), partnership or other entity which is an
      Affiliate of such specified person.

    


    Beneficial
      Owner: As
      such
      term is defined by Rule 13d-3 under the Act (or any successor provision at
      the
      time in effect); provided,
      however, that
      any
      individual, corporation, partnership, group, association or other person or
      entity which has the right to acquire any of the Company’s outstanding
      securities entitled to vote generally in the election of directors at any time
      in the future, whether such right is contingent or absolute, pursuant to any
      agreement, arrangement or understanding or upon exercise of conversion rights,
      warrants or options, or otherwise, shall be deemed the Beneficial Owner of
      such
      securities.

    


    Board
      of Directors or Board: The
      Board
      of Directors of the Company.

    


    Change
      in Control of the Company: The
      occurrence of either of the following:

    


    
      	 	
              (a)

            	
              any
                individual, corporation, partnership, group, association or other
                person
                or entity, together with its Affiliates and Associates (other than
                a
                trustee or other fiduciary holding securities under an employee benefit
                plan of the Company or any of its Subsidiaries), is or becomes the
                Beneficial Owner of securities of the Company representing 20% or
                more of
                the combined voting power of the Company’s then outstanding securities
                entitled to vote generally in the election of directors, unless a
                majority
                of the Continuing Directors determines in their sole discretion that,
                for
                purposes of the Plan, a Change in Control of the Company has not
                occurred;
                or

            


    

    


    
      
        
        

      

      
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              (b)

            	
              the
                Continuing Directors shall at any time fail to constitute a majority
                of
                the members of the Board of
                Directors.

            


    

    


    Notwithstanding
      any other provision of this Section or any other Section of the Plan to the
      contrary, none of the transactions contemplated by the Merger Agreement which
      are undertaken by (i) Ingersoll-Rand Company or its Affiliates prior to or
      as of
      the Effective Time or (ii) Ingersoll-Rand Company Limited or its Affiliates
      on
      or after the Effective Time shall trigger, constitute or be deemed a Change
      in
      Control of the Company.

    


    Code:
      The
      Internal Revenue Code of 1986, as amended from time to time.

    


    Committee:
      Such
      committee or committees as shall be appointed by the Board of Directors to
      administer the Plan pursuant to the provisions of Section 12.

    


    Common
      Stock: The
      Class
      A common shares of the Company, par value $1.00 per share, or such other class
      of shares or other securities as may be applicable pursuant to the provisions
      of
      paragraph (a) of Section 10.

    


    Common
      Stock Equivalents: Such
      of
      the rights and benefits of the actual owner of shares of Common Stock as the
      Committee may determine, including the right to receive dividends and the right
      to receive the amount of appreciation in value, if any, on such shares of Common
      Stock from the date the grant of such Common Stock Equivalents becomes effective
      until they become payable to the holder.

    


    Company:
      Ingersoll-Rand
      Company Limited, a Bermuda company.

    


    Continuing
      Director: A
      director who either was a member of the Board on January 1, 2002, or who became
      a member of the Board subsequent to such date and whose election, or nomination
      for election by the Company’s shareholders, was Duly Approved by the Continuing
      Directors at the time of such nomination or election, either by a specific
      vote
      or by approval of the proxy statement issued by the Company on behalf of the
      Board in which such person is named as a nominee for director, provided,
      however, that
      no
      individual shall be considered a Continuing Director if such individual
      initially assumed office as a result of either an actual or threatened “Election
      Contest” (as described in Rule 14a-11 promulgated under the Act) or other actual
      or threatened solicitation of proxies or consents other than by or on behalf
      of
      the Board (a “Proxy Contest”), including by reason of any agreement intended to
      avoid or settle any Election Contest or Proxy Contest.

    


    Disability:
      Such
      term
      as defmed under the pension, retirement or appropriate benefit plan or plans
      of
      the Company or a Subsidiary applicable to the Key Employee.

    


    Dividend
      Equivalents: A
      right
      to receive immediately or on a deferred basis, whether or not subject to
      forfeiture, an amount equivalent to all or part of dividends paid or payable
      on
      a share of Common Stock subject to a Stock Incentive.

    


    Duly
      Approved by the Continuing Directors: An
      action
      approved by the vote of at least a majority of the Continuing Directors then
      on
      the Board, except, if the votes of such Continuing Directors in favor of such
      action would be insufficient to constitute an act of the Board if a vote by
      all
      of its members were to have been taken, then such term
      shall
      mean an action approved by the unanimous vote of the Continuing Directors then
      on the Board so long as there are at least three Continuing Directors on the
      Board at the time of such unanimous vote.

    


    
      
        
        

      

      
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    Effective
      Time: The
      Effective Time as such term is defined in the Merger Agreement.

    


    Fair
      Market Value: As
      applied to any date, the mean between the high and low sales prices of a share
      of Common Stock on such date in New York Stock Exchange Composite Transactions,
      as reported in The Wall Street Journal or another newspaper of general
      circulation, or, if no such sales were made on such date, on the next preceding
      date on which there were such sales so reported. If the Common Stock is not
      listed or admitted to trading on The New York Stock Exchange, the Fair Market
      Value of the Common Stock shall be the closing sales price of one share of
      Common Stock on the principal national securities exchange on which the Common
      Stock is listed or admitted to trading, or, if the Common Stock is not listed
      or
      admitted to trading on any national securities exchange, the last quoted sales
      price, or if not so quoted, the average of the high bid and low asked prices
      in
      the over-the-counter market of the Common Stock, as reported by the National
      Association of Securities Dealers Inc. Automated Quotations system or such
      other
      system then in use, or, if on any such date the Common Stock is not quoted
      by
      any such organization, the average of the closing bid and asked prices of the
      Common Stock as furnished by a professional market maker making a market in
      the
      Common Stock selected by the Board. If on any such date no market maker is
      making a market in the Common Stock, the Fair Market Value shall be determined
      in good faith by the Continuing Directors.

    


    Incentive
      Compensation: Bonuses,
      extra and other compensation payable in addition to a salary or other base
      amount, whether contingent or not, whether discretionary or required to be
      paid
      pursuant to an agreement, resolution, arrangement, plan or practice and whether
      payable currently or on a deferred basis, in cash, Common Stock or other
      property, awarded by the Company or a Subsidiary.

    


    Key
      Employee: An
      employee of the Company or a Subsidiary, including an officer or director who
      is
      an employee, who in the opinion of the Committee can contribute significantly
      to
      the growth and successful operations of the Company or such Subsidiary. The
      granting of a Stock Incentive to an employee pursuant to the Plan shall be
      deenied a determination that such employee is a Key Employee.

    


    Outside
      Director: A
      member
      of the Board who is not an officer or employee of the Company, a Subsidiary
      or
      an Affiliate.

    


    Merger
      Agreement: That
      certain Agreement and Plan of Merger among Ingersoll-Rand Company,
      Ingersoll-Rand Company Limited, and IR Merger Corporation dated as of October
      31, 2001, pursuant to which Ingersoll-Rand Company became an indirect
      wholly-owned subsidiary of Ingersoll-Rand Company Limited.

    


    Option:
      An
      option
      to purchase a share of Common Stock.

    


    Plan:
      The
      Incentive Stock Plan of 1998 herein set forth as the same may from time to
      time
      be amended.

    


    Retirement:
      The
      termination of employment with the Company and its subsidiaries at or after
      the
      individual in question has attained age 55
      and
      served as such an employee for at least five years.

    


    Stock
      Appreciation Right: A
      right
      to receive a number of shares of Common Stock, or, with the approval of the
      Committee, cash, in either event based on the increase in the Fair Market Value
      of the number of shares of Common Stock subject to such right, as set forth
      in
      Section 7.

    


    
      
        
        

      

      
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    Stock
      Award: An
      issuance or transfer of shares of Common Stock at the time a Stock Incentive
      is
      granted or as soon thereafter as practicable, or an undertaking to issue or
      transfer such shares in the future. As provided in Section 5,
      Stock
      Awards may be designated as Employment Stock Awards or Performance Stock
      Awards.

    


    Stock
      Incentive: A
      Stock
      Incentive granted under the Plan in one of the forms provided for in Section
      3.

    


    Subsidiary:
      A
      corporation or other form of business association of which shares (or other
      ownership interests) having 50% or
      more
      of the voting power are owned or controlled, directly or indirectly, by the
      Company.

    


    Section
      3. Grants
      of Stock Incentives:

    


    (a) 
Subject
      to the provisions of the Plan, the Committee may at any time, and from time
      to
      time, grant Stock Incentives to, and only to, Key Employees.

    


    (b) 
Stock
      Incentives may be granted in the following forms:

    


    (i)
 
      a
      Stock
      Award, in accordance with Section 5, or

    


    (ii) 
an
      Option, in accordance with Section 6, or

    


    (iii) 
a
      Stock
      Appreciation Right, in accordance with Section 7, or

    


    (iv) 
any
      combination of the foregoing.

    


    Section
      4. Stock Subject to the Plan:

    


    (a) 
Subject
      to the provisions of paragraph (b) of this Section 4 and of paragraph (a) of
      Section 10, the aggregate number of shares of Common Stock which may be issued
      or transferred pursuant to Stock Incentives granted under the Plan shall not
      exceed 30,000,000 shares of Common Stock. Of the total available Stock
      Incentives not more than 20% shall be in the form of Stock Awards. No Key
      Employee shall be granted in the aggregate Stock Incentives (excluding Stock
      Awards) relating to more than 15% of
      the
      aggregate number of shares of Common Stock issuable or transferable under the
      Plan.

    


    (b) 
If
      any
      shares of Common Stock subject to a Stock Incentive shall not be issued or
      transferred and shall cease to be issuable or transferable because of the
      termination, in whole or in part, of such Stock Incentive, or, subject to the
      provisions of paragraph (j) of Section 6 and paragraph (d) of Section 7, for
      any
      other reason, or if any such shares shall, after issuance or transfer, be
      reacquired by the Company or a Subsidiary because of an employee’s failure to
      comply with the terms and conditions of a Stock Incentive, the shares not so
      issued or transferred, or the shares so reacquired by the Company or a
      Subsidiary, shall no longer be charged against the limitation provided for
      in
      paragraph (a) of this Section 4 and may again be made subject to Stock
      Incentives.

    


    Section
      5. Stock Awards:
      Stock
      Incentives in the form of Stock Awards shall be subject to the following
      provisions:

    


    (a) 
A
      Stock
      Award shall be granted only (i) in payment of Incentive Compensation that has
      been earned or (ii) as Incentive Compensation to be earned.

    


    
      
        
        

      

      
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    (b) 
Shares
      of
      Common Stock subject to a Stock Award may be issued or transferred to a Key
      Employee at the time the Stock Award is granted, or at any time subsequent
      thereto, or in installments from time to time, as the Committee shall determine.
      In the event that any such issuance or transfer shall not be made to the Key
      Employee at the time the Stock Award is granted, the Committee may provide
      for
      the payment or crediting to such Key Employee of Dividend Equivalents. Any
      amount payable in shares of Common Stock under the terms of a Stock Award may,
      in the discretion of the Committee, be paid in cash on each date on which
      delivery of shares would otherwise have been made, in an amount equal to the
      Fair Market Value on such date of the shares which would otherwise have been
      delivered.

    


    (c) 
A
      Stock
      Award shall contain such terms and conditions as the Committee shall determine
      with respect to payment or forfeiture of all or any part of the Stock Award
      upon
      termination of employment or the occurrence of other circumstances.

    


    (d) 
A
      Stock
      Award shall be subject to such other terms and conditions, including, without
      limitation, restriction on sale or other disposition of the Stock Award or
      of
      the shares issued or transferred pursuant to such Stock Award, as the Committee
      shall determine; provided,
      however, that
      upon
      the issuance or transfer of shares pursuant to a Stock Award, the recipient
      shall, with respect to such shares, be and become a shareholder of the Company
      fully entitled to receive dividends, to vote and to exercise all other rights
      of
      a shareholder except to the extent otherwise provided in the Stock Award. Each
      Stock Award shall be evidenced by a written instrument in such form as the
      Committee shall determine, provided the Stock Award is consistent with the
      Plan
      and incorporates it by reference.

    


    (e) 
All
      or
      part of a Stock Award may be designated as an Employment Stock Award, as to
      which the shares so designated shall only be issued if the Key Employee to
      whom
      such Stock Award has been granted meets the employment terms and conditions
      specified by the Committee at the time such Stock Award is granted.

    


    (f) 
All
      or
      part of a Stock Award may be designated as a Performance Stock Award, as to
      which the shares so designated shall only be issued if certain pre-established
      performance goals are met during the term of the grant. The Committee may
      establish such performance goals in writing at the time the Performance Stock
      Award is granted or it may establish such goals early in each year during the
      term of the grant, provided it indicates, at the time of grant, what portion
      of
      the Performance Stock Award will be available to be earned each year during
      the
      term of the award based on each year’s performance goals. The performance goals
      established by the Committee may be based, among other factors, upon the
      attainment of specified earnings per share, return on asset or asset management
      goals or upon the Company’s total return to shareholder ranking relative to a
      pre-established comparator group of companies. Shares subject to a Performance
      Stock Award granted to any individual whose compensation from the Company is
      covered by Section 162(m) of the Code shall be issued only after the Committee
      certifies in writing that the performance goals have been met.

    


    Section
      6. Options: Stock
      Incentives in the form of Options shall be subject to the following
      provisions:

    


    (a) 
The
      price
      per share at which a share subject to an Option may be purchased shall be
      determined by the Committee, but in no instance shall such price be less than
      the Fair Market Value of a share of Common Stock on the date such Option is
      granted.

    


    (b) 
Each
      Option shall expire at such time as the Committee may determine on the date
      such
      Option is granted, but no later than ten years from the date such Option is
      granted. The Committee may, at any time prior to the expiration of the Option,
      extend its term for a period ending not later than ten years from the date
      such
      Option is granted and any such extension shall not be deemed the grant of a
      new
      or additional Option for any purpose under the Plan.

    


    
      
        
        

      

      
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    (c) 
The
      Option may be exercised solely by the person to whom it is granted, except
      as
      hereinafter provided in the case of such person’s death or Disability. During
      the lifetime of the optionee, the Option and any rights and privileges
      pertaining thereto shall not be transferred, assigned, pledged or hypothecated
      in any way, whether by operation of law or otherwise, and shall not be subject
      to execution, attachment or similar process.

    


    (d) 
Each
      optionee must complete twelve months of continuous employment with the Company
      or Subsidiary, or both, before any part of the Option may be exercised by such
      optionee (subject to the provisions of paragraph (f) below).

    


    (e) 
After
      the
      completion of the required period of employment, the Option may be exercised,
      in
      whole or in part, and from time to time, during the balance of the term of
      the
      Option, subject to the terms and conditions specified in the Option or by the
      Committee.

    


    (f) 
Unless
      otherwise determined by the Committee each Option (to the extent then
      exercisable) shall terminate 90 days after the optionee shall terminate
      employment with the Company and its Subsidiaries, except that if the optionee
      shall die or become subject to a Disability while in the employ of the Company
      or of a Subsidiary, then the Option shall be exercisable within such period
      as
      shall be set forth in the Option, by the optionee or by such person or persons
      as shall have acquired the optionee’s rights under the Option by will or by the
      laws of descent and distribution, or by the optionee’s guardian, conservator or
      similar legal representative, but not later than three years after the date
      of
      death or Disability. In the event of the Retirement of the optionee, if the
      optionee shall have completed at least twelve months of continuous employment
      (or such shorter period as the Committee may determine) then the Option shall
      be
      exercisable within such period as shall be set forth in the Option but not
      later
      than three years after the date of Retirement (or such longer period as the
      Committee may determine).

    


    (g) 
Shares
      purchased under the Option shall be paid for in full at the time of the exercise
      of the Option as to such shares upon such terms as the Committee may approve,
      including cash, secured or unsecured indebtedness, by exchange for other
      property (including shares of Common Stock), by delivery of irrevocable
      instructions to a financial institution to deliver promptly to the Company
      the
      portion of sale or loan proceeds sufficient to pay the Option exercise price,
      or
      otherwise.

    


    (h) 
The
      Committee may at any time and from time to time provide for the payment to
      an
      optionee of Dividend Equivalents.

    


    (i) 
Except
      as
      otherwise provided in Section 10, in no event will the Committee decrease the
      price per share at which a share subject to an Option may be purchased after
      the
      date of grant or cancel outstanding Options and grant replacement Stock Options
      or Stock Appreciation Rights with a lower purchase price than that of the
      replaced Stock Options without first obtaining the approval of the shareholders
      of the Company.

    


    (j) 
The
      Option agreements or Option grants authorized by the Plan may contain such
      other
      provisions as the Committee shall deem advisable. Without limiting the
      foregoing, if so authorized by the Committee and subject to such terms and
      conditions as are specified in the Option or by the Committee, the Company
      may,
      with the consent of the holder of the Option, and at any time or from time
      to
      time, cancel all or a portion of the Option then subject to exercise and
      discharge its obligation in respect of the Option either by payment to the
      holder of an amount of money equal to the excess, if any, of the Fair Market
      Value, at such time or times, of the shares subject to the portion of the Option
      so cancelled over the aggregate purchase price of such shares, or by the
      issuance or transfer to the holder of shares of Common Stock with the Fair
      Market Value at such time or times equal to any such excess, or by a combination
      of cash and shares. The number of shares of Common Stock subject to the Option,
      or portion thereof, so cancelled shall, in the event that a payment of money
      or
      transfer of shares is made by the Company in respect of such cancellation,
      be
      charged against the maximum limitation set forth in paragraph (a) of Section
      4
      of the Plan.

    


    
      
        
        

      

      
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    (k) 
Options
      may be granted under the Plan from time to time in substitution for stock
      options held by employees of other corporations who are about to become
      employees of the Company or a Subsidiary as the result of a merger or
      consolidation of the employing corporation with the Company or a Subsidiary,
      or
      the acquisition by the Company or a Subsidiary of the assets of the employing
      corporation, or the acquisition by the Company or a Subsidiary of stock of
      the
      employing corporation as the result of which it becomes a Subsidiary. The terms
      and conditions of the substitute options so granted may vary from the terms
      and
      conditions set forth in this Section 6 to such extent as the Committee at the
      time of grant may deem appropriate to conform, in whole or in part, to the
      provisions of the options in substitution for which they are
      granted.

    


    Section
      7. Stock Appreciation Rights:

    


    (a) 
      Stock
      Appreciation Rights may be granted in connection with any Option granted under
      the Plan, either at the time of the grant of such Option or at any time
      thereafter during the term of the Option, or may be granted independently of
      the
      grant of an Option.

    


    (b) 
If
      granted in connection with an Option, Stock Appreciation Rights shall entitle
      the holder of the related Option, upon surrender of the Option, or any portion
      thereof, to exercise the Stock Appreciation Rights, to the extent unexercised,
      and to receive a number of shares of Common Stock, or cash, determined pursuant
      to paragraph (c) (iii) of this Section 7. Such Option shall, to the extent
      so
      surrendered, thereupon cease to be exercisable. If granted independently of
      an
      Option, Stock Appreciation Rights shall entitle the holder of the Stock
      Appreciation Rights to receive a number of shares of Common Stock, or cash,
      determined pursuant to paragraph (c) (iii) of this Section 7.

    


    (c)   Stock
      Appreciation Rights shall be subject to
      the following terms and conditions and to such other terms and conditions not
      inconsistent with the Plan as shall from time to time be approved by the
      Committee:

    


    (i)  
If
      granted in connection with an Option, Stock Appreciation Rights shall be
      exercisable at such time or times and to the extent, but only to the extent,
      that the Option to which they relate shall be exercisable, except that, at
      the
      time of granting such Stock Appreciation Rights, the Committee may provide
      that
      the period during which such Stock Appreciation Rights may be exercised shall
      expire prior to the expiration of the period during which the related Option
      may
      be exercised. If granted independently of an Option, Stock Appreciation Rights
      shall be exercisable at such time or times as shall be determined by the
      Committee at the time of the grant of the Stock Appreciation Rights but, unless
      otherwise determined by the Committee, in no event later than the date the
      employment of the holder of the Stock Appreciation Rights shall have terminated
      other than by reason of death, Disability or Retirement. In the event of
      termination of employment by reason of death or Disability, Stock Appreciation
      Rights shall be exercisable for such period as the Committee may specify at
      the
      time of granting of the Stock Appreciation Rights, but in no event later than
      three years after such termination of employment by the holder of the Stock
      Appreciation Rights or by the beneficiary designated pursuant to paragraph
      (1)
      of Section 13, and in the case of Retirement, no later than three years after
      the date of such Retirement. Unless otherwise determined by the Committee,
      each
      Stock Appreciation Right shall terminate if and when the holder thereof shall
      terminate employment with the Company and its Subsidiaries for reasons other
      than the death, Disability or Retirement of such holder.

    


    
      
        
        

      

      
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    (ii) 
Stock
      Appreciation Rights shall in no event be exercisable unless and until the holder
      of the Stock Appreciation Rights shall have completed at least twelve months
      of
      continuous service with the Company or a Subsidiary, or both, immediately
      following the date upon which the Stock Appreciation Rights shall have been
      granted.

    


    (iii)    
Upon
      exercise of Stock Appreciation
      Rights, the holder thereof shall be entitled to receive a number of shares
      equal
      in Fair Market Value on the date of exercise to the amount by which the Fair
      Market Value of one share of Common Stock on the date of such exercise shall
      exceed the Fair Market Value of a share of Common Stock on the date of grant
      of
      such Stock Appreciation Rights multiplied by the number of shares in respect
      of
      which the Stock Appreciation Rights shall have been exercised. The Company
      may
      determine, by action of the Committee, to settle all or any part of its
      obligation arising out of an exercise of Stock Appreciation Rights by the
      payment of cash equal to the aggregate value of shares of Common Stock (or
      a
      fraction of a share) that it would otherwise be obligated to deliver under
      the
      preceding sentence of this paragraph (c) (iii) of Section 7.

     

    (d)     
To
      the extent that Stock
      Appreciation Rights shall be exercised, an Option in connection with which
      such
      Stock Appreciation Rights shall have been granted shall be deemed to have been
      exercised for the purpose of the maximum limitation set forth in the Plan under
      which such Option shall have been granted. In the case of Stock Appreciation
      Rights granted independently of an Option, the number of shares of Common Stock
      in respect of which such Stock Appreciation Rights shall be exercised shall
      be
      charged against the maximum limitation set forth in paragraph (a) of Section
      4.

     

    (e)       
      If so directed by the Committee at any time and from time to time, the grant
      of
      Stock Appreciation Rights may provide for payment of Dividend Equivalents to
      the
      holder of the Stock Appreciation Rights.

    


    (f)     
      Stock
      Appreciation Rights may provide that, upon exercise of such Stock Appreciation
      Rights, the shares or cash, as the case may be, which the holder of such Stock
      Appreciation Rights shall be entitled to receive, shall be distributed or paid
      in such installments and over such number of years as the Committee may direct,
      with distribution or payment of each such installment contingent upon continued
      services of the employee to the Company or a Subsidiary, or both (except for
      death, Disability, Retirement or termination of employment by the Company or
      with its consent), to the time for distribution or payment of such
      installment.

    


    (g)     
      Except as otherwise provided in Section 10, in no event will the Committee,
      for
      purposes of a Stock Appreciation Right, decrease the Fair Market Value of a
      share of Common Stock on the date of grant of a Stock Appreciation Right after
      the date of grant or cancel outstanding Stock Appreciation Rights and grant
      replacement Options or Stock Appreciation Rights with a lower Fair Market Value
      of a share of Common Stock on the date of grant.

    


    Section
      8. Dividend Equivalents:

    


    A
      grant
      of Dividend Equivalents shall be made subject to such terms and conditions
      as
      the Committee may determine, and may be awarded only in connection with a Stock
      Incentive granted under Section 5, 6 or 7. Dividend Equivalents may be awarded
      either at the time of grant of a Stock Incentive or at any time thereafter
      during the term of the Stock Incentive. Dividend Equivalents may be payable
      or
      credited either in cash, shares of Common Stock, or in Common Stock Equivalents.
      If credited in Common Stock or in Common Stock Equivalents, they shall be
      credited at the Fair Market Value of a share of Common Stock on the day of
      such
      crediting. The Committee may provide that any amounts representing dividends
      earned by Common Stock Equivalents may either be paid currently or credited
      in
      cash or in Common Stock or that they may be represented by further Common Stock
      Equivalents, or any combination thereof. The Committee may provide that when
      Common Stock Equivalents shall become payable to the holder, they may be paid
      in
      cash or in shares of Common Stock, or a combination of both. To the extent
      that
      any payment to the holder with respect to Dividend Equivalents is made in shares
      of Common Stock, the number of shares of Common Stock used for such payment
      shall be charged against the maximum limitation set forth in paragraph (a)
      of
      Section 4.

     

    
      
        
        

      

      
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    Section
      9. Outside Directors’ Options:

    


    (a)     
      On the date of the first Board of Directors meeting after each annual general
      meeting of the shareholders through 2003, each Outside Director shall
      automatically be granted Options to purchase 2,250 shares of Common Stock.
      In
      the event an adjustment is made under the provisions of Section 10 in the
      outstanding unexercised Options granted to Outside Directors hereunder, a
      similar adjustment shall be made in the number of Options to be granted to
      Outside Directors subsequent to the effectiveness of such adjustment.
      Notwithstanding the foregoing, Options shall not be granted under the Plan
      to an
      Outside Director who on the date referred to above in this paragraph (a) of
      Section 9 is awarded Options under another Incentive Stock Plan of the
      Company.

    


    (b)     
      The price at which each share of Common Stock covered by Options granted to
      Outside Directors may be purchased shall be the Fair Market Value of the Common
      Stock on the date the Options are granted.

    


    (c)     
      Options granted to Outside Directors hereunder shall be fully vested on the
      date
      of grant and shall become exercisable on the first anniversary of such date
      of
      grant. Such Options may be exercised by the Outside Director during the period
      that the Outside Director remains a member of the Board and for a period of
      five
      years following retirement or resignation, provided that in no event shall
      any
      such Option be exercisable more than ten years after the date of
      grant.

    


    (d)     
      In the event of the death of an Outside Director, the Options shall be
      exercisable only within the three years next succeeding the date of death,
      and
      then only by the executor or administrator of the Outside Director’s estate or
      by the person or persons to whom the Outside Director’s rights under the Options
      shall pass by the Outside Director’s will or the laws of descent and
      distribution, provided that in no event shall the Option be exercisable more
      than ten years after the date of grant.

    


    (e)     
      Except as expressly provided in this Section 9, Options granted to Outside
      Directors shall be subject to the terms and conditions of Section 6 regarding
      the terms of Options and to the other relevant provisions of the
      Plan.

    


    Section
      10. Adjustment and Change in Control Provisions:

    


    (a)     
      In the event that any recapitalization, reclassification, split-up or
      consolidation of shares of Common Stock shall be effected, or the outstanding
      shares of Common Stock are, in connection with a merger or consolidation of
      the
      Company or a sale by the Company of all or a part of its assets, exchanged
      for a
      different number or class of shares of stock or other securities of the Company
      or for shares of the stock or other securities of any other corporation, or
      new,
      different or additional shares of other securities of the Company or of another
      corporation are received by the holders of Common Stock or any distribution
      is
      made to the holders of Common Stock other than a cash dividend, (i) the number
      and class of shares or other securities that may be issued or transferred
      pursuant to Stock Incentives, (ii) the number and class of shares or other
      securities which have not been issued or transferred under outstanding Stock
      Incentives, (iii) the purchase price to be paid per share under outstanding
      Options and other Stock Incentives, (iv) the Fair Market Value of a share of
      Common Stock on the date of grant of outstanding Stock Appreciation Rights,
      (v)
      the dates or events upon which Options and Stock Appreciation Rights may be
      exercised, which may, in appropriate instances, be related to specific dates
      or
      events under any of the aforesaid actions, and (vi) the price to be paid per
      share by the Company or a Subsidiary for shares or other securities issued
      or
      transferred pursuant to Stock Incentives which are subject to a right of the
      Company or a Subsidiary to reacquire such share or other securities, shall
      in
      each case be equitably adjusted. In addition, the Committee may, in its
      discretion, make the adjustments described above in this paragraph (a) of
      Section 10 in the event the Company pays a cash dividend in respect of the
      Common Stock other than a regular quarterly dividend.

    


    
      
        
        

      

      
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    (b)     
      Notwithstanding any other provision of the Plan to the contrary (and
      notwithstanding any requirement that conditions the receipt of benefits of
      a
      Stock Incentive granted hereunder on the completion of a specified period of
      employment by the holder thereof or on the attainment of certain performance
      goals by the Company or any group, Subsidiary or division thereof), in the
      event
      of a Change in Control of the Company the holders of Stock Incentives
      outstanding as of the date of the occurrence of the Change in Control of the
      Company shall have the right to surrender such Stock Incentives within the
      60-day period following the occurrence of the Change in Control of the Company
      and to receive cash as consideration for such surrender in accordance with
      the
      following:

    


    (i) 
A
      holder
      of a Stock Award being surrendered shall be entitled to the amount equal to
      the
      highest Fair Market Value of one share of Common Stock during the 60 days
      preceding the date on which the Change in Control of the Company occurs,
      multiplied by the number of shares in respect of which the Stock Award shall
      have been surrendered.

    


    (ii) 
A
      holder
      of Options being surrendered shall be entitled to the amount by which the
      highest Fair Market Value of one share of Common Stock during the 60 days
      preceding the date on which the Change in Control of the Company occurs exceeds
      the exercise price of one share of Common Stock subject to such Option,
      multiplied by the number of shares in respect of which the Option shall have
      been surrendered.

    


    (iii)      
      The holder of Stock Appreciation Rights being surrendered shall be entitled
      to
      the amount by which the highest Fair Market Value of one share of Common Stock
      during the 60 days preceding the date on which the Change in Control occurs
      exceeds the Fair Market Value of one share of Common Stock on the date of grant
      of such Stock Appreciation Rights (as adjusted, if applicable under the terms
      of
      the Plan), multiplied by the number of shares in respect of which the Stock
      Appreciation Rights shall have been surrendered. Stock Appreciation Rights
      granted in connection with the grant of Options may be surrendered only if
      surrendered together with the surrender of the related Options and the holder
      thereof shall be entitled to the payment described in this subparagraph (iii)
      only.

     

    (iv)      
      All payments to be made pursuant to this paragraph (b) of Section 10 shall
      be
      made within ten days of the delivery of written notice of such surrender by
      the
      holder to the Company.

    


    Section
      11. Term: The
      Plan
      shall be deemed adopted and shall become effective on the date it is approved
      by
      the shareholders of the Company. No Stock Incentives shall be granted under
      the
      Plan after May 31, 2007.

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Section
      12. Administration:

    


    (a)     
      The Plan shall be administered by the Committee which shall consist of not
      less
      than three directors of the Company designated by the Board; provided,
      however, that
      no
      director shall be designated as or continue to be a member of the Committee,
      unless such director shall be (i) a “Non-Employee Director” within the meaning
      of Rule 16b-3 under the Act (or any successor rule or regulation), (ii) an
      “outside director” within the meaning of Section 162(m) of the Code and the
      regulations promulgated thereunder (or any successor provisions, rules or
      regulations) and (iii) an independent director under the rules of The New York
      Stock Exchange.

    


    (b)     
      The Committee shall have full authority to act for the Company under the Plan,
      except the authority to amend or discontinue the Plan, which power shall be
      solely that of the Board.

    


    (c)     
      The Committee may establish such rules and regulations not inconsistent with
      the
      provisions of the Plan as it deems necessary to determine eligibility to
      participate in the Plan and for the proper administration of the Plan, and
      may
      amend or revoke any rule or regulation so established. The Committee may make
      such determinations and interpretations under or in connection with the Plan
      as
      it deems necessary or advisable. All such rules, regulations, determinations
      and
      interpretations shall be binding and conclusive upon the Company, its
      Subsidiaries, its shareholders and all employees, and upon their respective
      legal representatives, beneficiaries, successors and assigns and upon all other
      persons claiming under or through any of them.

    


    (d)     
      Any action required or permitted to be taken by the Committee under the Plan
      shall require the affirmative vote of a majority of all the members of the
      Committee. The Committee may act by written determination instead of by
      affirmative vote at a meeting, provided that any written determination shall
      be
      signed by all of the members of the Committee, and any such written
      determination shall be as fully effective as a unanimous vote at a
      meeting.

    


    (e)     
      Members of the Committee acting under the Plan shall be fully protected in
      relying in good faith upon the advice of counsel and shall incur no liability
      except for gross negligence or willful misconduct in the performance of their
      duties.

    


    Section
      13. General Provisions:

    


    (a)     
      With respect to any shares of Common Stock issued or transferred under any
      provision of the Plan, such shares may be issued or transferred subject to
      such
      conditions, in addition to those specifically provided in the Plan, as the
      Committee may direct and, without limiting the generality of the foregoing,
      provision may be made in the grant of Stock Incentives that shares issued or
      transferred upon their grant or exercise shall be subject to forfeiture upon
      failure to comply with conditions and restrictions imposed in the grant of
      such
      Stock Incentives.

    


    (b)     
      The Committee may fix a uniform date, within any specified period, either before
      or after the date so fixed, as of which any exercise of an Option or Stock
      Appreciation Rights shall be deemed to be effective.

    


    (c)     
      The Committee may, in its discretion, in the event of termination of employment
      with the consent of the Company or the death, Retirement or Disability of the
      holder of a Stock Incentive, reduce the period of employment required before
      such Stock Incentive may be exercised.

    


    (d)     
      In the event of the termination of employment with the consent of the Company
      of
      an optionee or a Key Employee who is a holder of Stock Appreciation Rights,
      other than by death, Retirement or Disability, the Committee may extend the
      period during which such Options or Stock Appreciation Rights may be exercised
      after the date of termination of employment but not beyond the expiration date
      of the term of the Options or Stock Appreciation Rights.

    


    
      
        
        

      

      
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    (e)     
      Whether an authorized leave of absence or an absence for military or government
      service shall constitute termination of employment or interruption of required
      additional continuous employment for the purpose of the Plan shall be determined
      by the Committee.

    


    (f)     
      Nothing
      in the Plan nor in any instrument executed pursuant thereto shall confer upon
      any employee any right to continue in the employ of the Company or any
      Subsidiary or shall affect the right of the Company or of a Subsidiary to
      terminate the employment of any employee with or without cause.

    


    (g)     
      No shares of Common Stock shall be issued or transferred pursuant to a Stock
      Incentive unless and until all legal requirements applicable to the issuance
      or
      transfer of such shares have, in the opinion of counsel to the Company, been
      complied with. In connection with any such issuance or transfer, the person
      acquiring the shares shall, if requested by the Company, give assurances
      satisfactory to counsel to the Company that the shares are being acquired for
      investment and not with a view to resale or distribution thereof and assurances
      in respect of such other matters as the Company or a Subsidiary may deem
      desirable to assure compliance with applicable legal requirements.

    


    (h)     
      No holder of a Stock Incentive (individually or as a member of a group), and
      no
      beneficiary or other person claiming under or through such holder, shall have
      any right, title or interest in or to any shares of Common Stock allocated
      or
      reserved for the purposes of the Plan or subject to any Stock Incentive except
      as to such shares of Common Stock, if any, as shall have been issued or
      transferred to such individual.

    


    (i)     
      The Company or a Subsidiary may, with the approval of the Committee, enter
      into
      an agreement or other commitment to grant a Stock Incentive in the future to
      a
      person who is or will be a Key Employee at the time of grant, and,
      notwithstanding any other provision of the Plan, any such agreement or
      commitment shall not be deemed the grant of a Stock Incentive until the date
      on
      which the Committee takes action to implement such agreement or
      commitment.

    


    (j)     
      In the case of a grant of a Stock Incentive to any employee of a Subsidiary,
      such grant may, if the Committee so directs, be implemented by the Company
      issuing or transferring the shares, if any, covered by the Stock Incentive
      to
      the Subsidiary, for such lawful consideration as the Committee may specify,
      upon
      the condition or understanding that the Subsidiary will transfer the shares
      to
      the employee in accordance with the terms of the Stock Incentive specified
      by
      the Committee pursuant to the provisions of the Plan. Notwithstanding any other
      provision hereof, such Stock Incentive may be issued by and in the name of
      the
      Subsidiary and shall be deemed granted on the date it is approved by the
      Committee, on the date it is
      delivered by the Subsidiary, or on such other date between such two dates,
      as
      the Committee shall specify.

    


    (k)     
      The Company or a Subsidiary may make such provisions as it may deem appropriate
      for the withholding of any taxes which the Company or Subsidiary determines
      it
      is required to withhold in connection with any Stock Incentive.

    


    (l)     
      No Stock Incentive and no rights under the Plan, contingent or otherwise, shall
      be assignable or subject to any encumbrance, pledge or charge of any nature
      except that, under such rules and regulations as the Committee may establish,
      a
      beneficiary may be designated in respect of a Stock Incentive in the event
      of
      the death of the holder of such Stock Incentive and except that if such
      beneficiary shall be the executor or administrator of the estate of the holder
      of such Stock Incentive, any rights in respect of such Stock Incentive may
      be
      transferred to the person or persons or entity (including a trust) entitled
      thereto under the will of the holder of such Stock Incentive or, in the case
      of
      intestacy, under the laws relating to intestacy. A Stock Incentive shall be
      exercisable during the lifetime of the holder thereof only by the holder or
      by
      the holder’s guardian, conservator or similar legal representative.

    


    
      
        
        

      

      
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    (m)     
      Nothing in the Plan is intended to be a substitute for, or shall preclude or
      limit the establishment or continuation of, any other plan, practice or
      arrangement for the payment of compensation or fringe benefits to employees
      generally, or to any class or group of employees, which the Company or any
      Subsidiary now has or may hereafter lawfully put into effect, including, without
      limitation, any retirement, pension, insurance, stock purchase, incentive
      compensation or bonus plan.

    


    (n)     
      The place of administration of the Plan shall conclusively be deemed to be
      within the State of New Jersey and the validity, construction, interpretation
      and administration of the Plan and of any rules and regulations or
      determinations or decisions made thereunder, and the rights of any and all
      persons having or claiming to have any interest therein or thereunder, shall
      be
      governed by, and determined exclusively and solely in accordance with, the
      laws
      of the State of New Jersey. Without limiting the generality of the foregoing,
      the period within which any action must be commenced arising under or in
      connection with the Plan, or any payment or award made or purportedly made
      under
      or in connection therewith, shall be governed by the laws of the State of New
      Jersey, irrespective of the place where the act or omission complained of took
      place and of the residence of any party to such action and irrespective of
      the
      place where the action may be brought.

    


    Section 14.
      Amendment or Discontinuance of Plan:

    


    (a)     
      The Plan may be amended by the Board at any time; provided,
      however, that,
      without the approval of the shareholders of the Company, no amendment shall
      be
      made which (i) increases the aggregate number of shares of Common Stock that
      may
      be issued or transferred pursuant to Stock Incentives as provided in paragraph
      (a) of Section 4, (ii) amends the provisions of paragraph (a) of Section 12
      with
      respect to the eligibility of the members of the Committee, (iii) permits any
      person to be granted a Stock Incentive who is not at the time of such grant
      a
      Key Employee or an Outside Director, (iv) amends Section 11 to extend the term
      of the Plan, or (v) amends this Section 14.

    


    (b)     
      The Board may by resolution adopted by a majority of the entire Board
      discontinue the Plan.

    


    (c)     
      No amendment or discontinuance of the Plan shall adversely affect any Stock
      Incentive theretofore granted without the consent of the holder
      thereof.

    


    
      
        
        

      

      13