Exhibit
        4.7

       

      INGERSOLL-RAND
        COMPANY

       

      INCENTIVE
        STOCK PLAN OF 1995

       

      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 shareholders, increasing their stake in the future growth and
        prosperity of the Company and stimulating and sustaining constructive and
        imaginative thinking, (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,
        and
        (c) to enhance the Company’s ability to attract and retain highly-qualified
        individuals as directors of the Company.

       

      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), 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

       

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

       

      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 Common Stock of the Company, par value $2 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 (or the Independent Directors Committee
        in the
        case of grants to Key Employees who are also members of the Board) 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 became effective until they
        become payable to the holder.

       

      Company:
        Ingersoll-Rand Company, a New Jersey corporation.

       

      Continuing
        Director: A director who either was a member of the Board on April 27, 1995
        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 defined under the pension, retirement or appropriate benefit
        plan
        or plans of the Company or a Subsidiary applicable to the Key
        Employee.

       

      
        
          
          

        

        
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      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.

       

      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.

       

      Independent
        Directors Committee: The members of the Board who satisfy the requirements
        to be
        both (a) “disinterested persons” within the meaning of Rule 16b-3 under the Act
        (or any successor rule or regulation), and (b) “outside directors” within the
        meaning of Section 162(m) of the Code and the rules and regulations promulgated
        thereunder (or any successor provision, rules or regulations).

       

      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 (or the
        Independent Directors Committee, with respect to employees who are also members
        of the Board), 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 deemed a determination that
        such
        employee is a Key Employee.

       

      
        
          
          

        

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

       

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

       

      Plan:
        The
        Incentive Stock Plan of 1995 herein set forth as the same may from time to
        time
        be amended.

       

      Retirement:
        Such term as defined under the pension or retirement plan or plans of the
        Company or a Subsidiary applicable to the Key Employee, pursuant to which
        the
        Key Employee is receiving or will, upon such retirement, be entitled to receive
        retirement benefits.

       

      Stock
        Appreciation Right: A right to receive a number of shares of Common Stock,
        or,
        with the approval of the Committee (or the Independent Directors Committee
        in
        the case of grants to employees who are also members of the Board), 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.

       

      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; provided, however,
        that a Stock Incentive may be granted to a Key Employee who at the time of
        such
        grant is a member of the Board of Directors only by the Independent Directors
        Committee based upon a recommendation of the Committee.

       

      (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.

       

      
        
          
          

        

        
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      SECTION
        4.    STOCK
        SUBJECT TO THE PLAN:

       

      (a)  Subject
        to the provisions of paragraph (c) 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 6,000,000 shares of Common Stock. 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)  Authorized
        but unissued shares of Common Stock and shares of Common Stock held in the
        treasury, whether acquired by the Company specifically for use under the
        Plan or
        otherwise, may be used, as the Board of Directors may from time to time
        determine, for purposes of the Plan; provided, however, that any shares acquired
        or held by the Company for the purposes of the Plan shall, unless and until
        transferred to a Key Employee in accordance with the terms and conditions
        of a
        Stock Incentive, be and at all times remain treasury shares of the Company
        irrespective of whether such shares are entered in a special account for
        purposes of the Plan, and shall be available for any corporate
        purpose.

       

      (c)  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 (i) 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.

       

      (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 (or the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board) 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 (or the Independent Directors Committee, as the case
        may
        be) 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 (or the Independent
        Directors Committee in the case of a grant to a Key Employee who is also
        a
        member of the Board), 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.

       

      
        
          
          

        

        
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      (c)  A
        Stock
        Award shall contain such terms and conditions as the Committee (or the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board) 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
        (or the Independent Directors Committee in the case of a grant to a Key Employee
        who is also a member of the Board) 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 (or the Independent Directors Committee in the
        case
        of a grant to a Key Employee who is also a member of the Board) 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 (or
        the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board) may establish such performance goals in writing
        at
        the time the Performance Stock Award is granted subject to these performance
        restrictions 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 (or the Independent Directors Committee, as
        the
        case may be) 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 (or the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board) 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 (or the Independent Directors Committee in the
        case
        of an Option grant to a Key Employee who is also a member of the Board),
        but in
        no instance shall be less than the Fair Market Value of a share of Common
        Stock
        on the date such Option is granted.

       

      
        
          
          

        

        
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      (b)  Each
        Option shall expire at such time as the Committee (or the Independent Directors
        Committee, as the case may be) may determine on the date such Option is granted,
        but no later than ten years from the date such Option is granted. The Committee
        (or the Independent Directors Committee, as the case may be) 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.

       

      (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.

       

      (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 (or the Independent Directors Committee in the case of a grant
        to a
        Key Employee who is also a member of the Board).

       

      (f)  Unless
        otherwise determined by the Committee (or the Independent Directors Committee
        in
        the case of a grant to a Key Employee who is also a member of the Board),
        each
        Option shall terminate if and when 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, or the Independent Directors Committee in
        the
        case of a grant to a Key Employee who is also a member of the Board, 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, or the Independent Directors
        Committee in the case of a grant to a Key Employee who is also a member of
        the
        Board, 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 (or the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board) 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.

       

      
        
          
          

        

        
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      (h)  The
        Committee (or the Independent Directors Committee in the case of a grant
        to a
        Key Employee who is also a member of the Board) may at any time and from
        time to
        time provide for the payment to an optionee of Dividend
        Equivalents.

       

      (i)  The
        Option agreements or Option grants authorized by the Plan may contain such
        other
        provisions as the Committee (or the Independent Directors Committee in the
        case
        of grants to Key Employees who are also members of the Board) shall deem
        advisable. Without limiting the foregoing, if so authorized by the Committee
        (or
        the Independent Directors Committee, as the case may be) and subject to such
        terms and conditions as are specified in the Option or by the Committee (or
        the
        Independent Directors Committee, as the case may be), 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.

       

      (j)  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.

       

      
        
          
          

        

        
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      (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 (or the Independent Directors
        Committee in the case of a grant to a Key Employee who is also a member of
        the
        Board):

       

      (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 (or the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board) 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 (or the Independent
        Directors Committee, as the case may be) at the time of the grant of the
        Stock
        Appreciation Rights but, unless otherwise determined by the Committee (or
        the
        Independent Directors Committee, as the case may be), 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
        (or
        the Independent Directors Committee, as the case may be) 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
        (or
        the Independent Directors Committee in the case of a grant to a Key Employee
        who
        is also a member of the Board), 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.

       

      (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 (or
        the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board), 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.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (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 (or the Independent Directors Committee in the
        case of
        a grant to a Key Employee who is also a member of the Board) 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 (or the
        Independent Directors Committee in the case of a grant to a Key Employee
        who is
        also a member of the Board) 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.

       

      SECTION
        8.    DIVIDEND
        EQUIVALENTS: A grant of Dividend Equivalents shall be made subject to such
        terms
        and conditions as the Committee (or the Independent Directors Committee in
        the
        case of a grant to a Key Employee who is also a member of the Board) 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
        (or
        the Independent Directors Committee in the case of a grant to a Key Employee
        who
        is also a member of the Board) 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 (or the
        Independent Directors Committee, as the case may be) 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.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      SECTION
        9.    OUTSIDE
        DIRECTORS’ OPTIONS:

       

      (a)  On
        the
        date of the first Board of Directors meeting after each annual meeting of
        the
        shareholders (commencing with the Board of Directors meeting after the 1995
        annual meeting of shareholders), each Outside Director shall automatically
        be
        granted Options to purchase 1,500 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.

       

      (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 (or the Independent Directors Committee
        in
        the case of grants to Key Employees who are also members of the Board) 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.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (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 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 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.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (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 April 30, 2000.

       

      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 “disinterested person” within the meaning of
        Rule 16b-3 under the Act (or any successor rule or regulation) and (ii) an
        “outside director” within the meaning of Section 162(m) of the Code and the
        regulations promulgated thereunder (or any successor provision, rules or
        regulations).

       

      (b)  The
        Committee shall have full authority to act for the Company under the Plan,
        except (i) to the extent the Plan delegates such authority to the Independent
        Directors Committee, (ii) the authority to amend or discontinue the Plan,
        which
        power shall be solely that of the Board, or (iii) to change the terms of
        any
        grant of Options to the Outside Directors from that provided for herein.
        All
        actions of the Independent Directors Committee shall be based upon
        recommendations of the Committee.

       

      (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 (or the Independent
        Directors Committee) under the Plan shall require the affirmative vote of
        a
        majority of all the members of the Committee (or the Independent Directors
        Committee, as the case may be). The Committee (or the Independent Directors
        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 (or the Independent Directors Committee), and any
        such
        written determination shall be as fully effective as a unanimous vote at
        a
        meeting.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      (e)  Members
        of the Committee and the Independent Directors 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 (or the Independent Directors Committee in the case of grants to
        Key
        Employees who are also members of the Board) 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 (or the Independent Directors Committee in the case of a grant
        to a
        Key Employee who is also a member of the Board) 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 (or the Independent Directors Committee in the case of a grant
        to a
        Key Employee who is also a member of the Board) 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 (or the Independent
        Directors Committee in the case of a grant to a Key Employee who is also
        a
        member of the Board) 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.

       

      (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 (or the Independent Directors Committee in the case of grants
        to Key Employees who are also members of the Board).

       

      (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 all applicable legal requirements.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      (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.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      (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 any provision of the Plan
        insofar as it applies specifically to Options granted or to be granted to
        Outside Directors, (v) amends Section 11 to extend the term of the Plan,
        or (vi)
        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.

       

      
        
          
          

        

          16