Unassociated Document


    INGERSOLL-RAND
      COMPANY LIMITED

    INCENTIVE
      STOCK PLAN OF 2007

    


    1.  Purpose
      of the Plan

     

    The
      purpose of the Plan is to aid the Company and its Affiliates in recruiting
      and
      retaining key employees and directors and to motivate such employees and
      directors to exert their best efforts on behalf of the Company and its
      Affiliates by providing incentives through the granting of Awards. The Company
      expects that it will benefit from the added interest which such key employees
      and directors will have in the welfare of the Company as a result of their
      proprietary interest in the Company’s success.

     

    2.  Definitions

     

    The
      following capitalized terms used in the Plan have the respective meanings set
      forth in this Section:

     

    	(a)  	
            Act:
              The Securities Exchange Act of 1934, as amended, or any successor
              thereto.

          


     

    	(b)  	
            Affiliate:
              With respect to the Company, any Person or entity directly or indirectly
              controlling, controlled by, or under common control with, the Company
              or
              any other Person or entity designated by the Board in which the Company
              or
              an Affiliate has an interest.

          


     

    	(c)  	
            Associate:
              With respect to a specified Person, means (i) any corporation,
              partnership, or other organization of which such specified Person is
              an
              officer or partner; (ii) 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 fiduciary capacity; (iii)
              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 Subsidiaries; and
              (iv)
              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.

          


     

    	(d)  	
            Award:
              An Option, Stock Appreciation Right or Other Stock-Based Award granted
              pursuant to the Plan.

          


    	 	 


    	(e)  
            	
            Beneficial
              Owner:
              A
              “beneficial owner”, as such term is defined in Rule 13d-3 under the Act
              (or any successor rule thereto) 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 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. 

          


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	(f)  	
            Board:
              The Board of Directors of the
              Company. 

          


    	 	 


    	(g)  	
            Change
              in Control:
              The date (i) 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 Ingersoll-Rand Company, a New
              Jersey corporation), is or becomes the Beneficial Owner of securities
              of
              the Company representing 30% or more of the combined voting power of
              the
              Company’s Voting Securities; (ii) the Continuing Directors fail to
              constitute a majority of the members of the Board; (iii) of consummation
              of any transaction or series of transactions under which the Company
              is
              merged or consolidated with any other company which is not an Affiliate;
              (iv) of any sale, lease, exchange or other transfer, in one transaction
              or
              a series of related transactions, of all, or substantially all, of
              the
              assets of the Company, other than any sale, lease, exchange or other
              transfer to any Person or entity where the Company owns, directly or
              indirectly, at least 80% of the combined voting power of the Voting
              Securities of such Person or entity or its parent corporation after
              any
              such transfer; or (v) any other event that the Continuing Directors
              determine to be a Change in Control; provided,
              however,
              that in the case of a transaction described in (i), (iii) or (v), above,
              there shall not be a Change in Control if the shareholders of the Company
              immediately prior to any such transaction own (or continue to own by
              remaining outstanding or by being converted into Voting Securities
              of the
              surviving entity or parent entity) more than 50% of the combined voting
              power of the Voting Securities of the Company, the surviving entity
              or any
              parent of either immediately following such transaction, in substantially
              the same proportion to each other as prior to such
              transaction. 

          


    	 	 


    	(h)  	
            Code:
              The Internal Revenue Code of 1986, as amended, or any successor
              thereto.

          


     

    	(i)  	
            Committee:
              The Compensation Committee of the Board (or a subcommittee thereof),
              or
              such other committee of the Board (including, without limitation, the
              full
              Board) to which the Board has delegated power to act under or pursuant
              to
              the provisions of the Plan.

          


     

    	(j)  	
            Company:
              Ingersoll-Rand Company Limited, a Bermuda
              company.

          


     

    	(k)  	
            Continuing
              Directors:
              A
              director who either was a member of the Board on December 1, 2006 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 on the Board 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 nominee for director, without due objection to such
              nomination, but excluding, for this purpose, any such individual whose
              initial assumption of office occurs as a result of an actual or threatened
              election contest with respect to the election or removal of directors
              or
              other actual or threatened solicitation of proxies or consents by or
              on
              behalf of a person or entity other than the
              Board.

          


     

    
      
         

      

      
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    	(l)  	
            Duly
              Approved by the Continuing Directors:
              An action approved by the vote of at least two-thirds of the Continuing
              Directors then on the Board.

          


     

    	(m)  	
            Effective
              Date:
              June 1, 2007.

          


     

    	(n)  	
            Fair
              Market Value:
              On a given date, (i) if there should be a public market for the
              Shares on such date, the average between the high and low price of
              the
              Shares as reported on such date on the Composite Tape of the principal
              national securities exchange on which such Shares are listed or admitted
              to trading, or, if the Shares are not listed or admitted on any national
              securities exchange, the arithmetic mean of the per Share closing bid
              price and per Share closing asked price on such date as quoted on the
              National Association of Securities Dealers Automated Quotation System
              (or
              such market in which such prices are regularly quoted)(the “NASDAQ”), or,
              if no sale of Shares shall have been reported on the Composite Tape
              of any
              national securities exchange or quoted on the NASDAQ on such date,
              then
              the immediately preceding date on which sales of the Shares have been
              so
              reported or quoted shall be used, and (ii) if there should not be a
              public market for the Shares on such date, the Fair Market Value shall
              be
              the value established by the Committee in good
              faith.

          


     

    	(o)  	
            Full
              Value Awards:
              Awards of Shares under the Plan (including any future grants of restricted
              stock or phantom stock) that are not awards of Options, Stock Appreciation
              Rights or other similar awards.

          


     

    	(p)  	
            ISO:
              An Option that is also an incentive stock option granted pursuant to
              Section 6(d) of the Plan.

          


     

    	(q)  	
            Option:
              A
              stock option granted pursuant to Section 6 of the
              Plan.

          


     

    	(r)  	
            Option
              Price:
              The purchase price per Share of an Option, as determined pursuant to
              Section 6(a) of the Plan.

          


     

    	(s)  	
            Other
              Stock-Based Awards:
              Awards granted pursuant to Section 8 of the
              Plan.

          


     

    	(t)  	
            Participant:
              An employee or director who is selected by the Committee to participate
              in
              the Plan.

          


     

    	(u)  	
            Performance-Based
              Awards:
              Certain Other Stock-Based Awards granted pursuant to Section 8(b) of
              the
              Plan.

          


     

    
      
         

      

      
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    	(v)  	
            Person:
              A
              “person”, as such term is used for purposes of Section 13(d) or 14(d) of
              the Act (or any successor section thereto), including any Affiliate
              or
              Associate of the Company.

          


     

    	(w)  	
            Plan:
              The Ingersoll-Rand Company Limited Incentive Stock Plan of
              2007.

          


     

    	(x)  	
            Shares:
              Class A common shares of the Company.

          


     

    	(y)  	
            Stock
              Appreciation Right:
              A
              stock appreciation right granted pursuant to Section 7 of the
              Plan.

          


     

    	(z)  	
            Subsidiary:
              A
              subsidiary corporation, as defined in Section 424(f) of the Code (or
              any
              successor section thereto).

          


     

    	(aa)  	
            Voting
              Securities:
              The outstanding securities entitled to vote generally in election of
              directors.

          


     

    3.  Shares
      Subject to the Plan

     

    Subject
      to Section 9, the total number of Shares which may be issued under the Plan
      is
      14,000,000 and the maximum number of Shares for which ISOs may be granted is
      20%
      of the total number of Shares which may be issued under the Plan. Of the total
      available Shares which may be issued under the Plan, not more than 25% shall
      be
      in the form of Full Value Awards. The Shares may consist, in whole or in part,
      of unissued Shares or treasury Shares. The issuance of Shares upon the exercise
      of an Award or in consideration of the cancellation or termination of an Award
      shall reduce the total number of Shares available under the Plan, as applicable.
      Shares which are subject to Awards that terminate or lapse without the payment
      of consideration may be granted again under the Plan.

    
      
         

      

      
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    4.  Administration

     

    The
      Plan
      shall be administered by the Committee, which may delegate its duties and powers
      in whole or in part to any subcommittee thereof consisting solely of at least
      two individuals who are intended to qualify as “Non-Employee Directors” within
      the meaning of Rule 16b-3 under the Act (or any successor rule thereto),
“independent directors” within the meaning of The New York Stock Exchange’s
      listed company rules and “outside directors” within the meaning of Section
      162(m) of the Code (or any successor section thereto). Additionally, the
      Committee may delegate the authority to grant Awards under the Plan to any
      employee or group of employees of the Company or an Affiliate; provided,
      however,
      that
      such delegation and grants are consistent with applicable law and guidelines
      established by the Committee from time to time. Awards may, in the discretion
      of
      the Committee, be made under the Plan in assumption of, or in substitution
      for,
      outstanding awards previously granted by a company acquired by the Company
      or
      with which the Company and/or any of its Affiliates combines. The number of
      Shares underlying such substitute awards shall be counted against the aggregate
      number of Shares available for Awards under the Plan. The Committee is
      authorized to interpret the Plan, to establish, amend and rescind any rules
      and
      regulations relating to the Plan, and to make any other determinations that
      it
      deems necessary or desirable for the administration of the Plan. The Committee
      may correct any defect or supply any omission or reconcile any inconsistency
      in
      the Plan in the manner and to the extent the Committee deems necessary or
      desirable. Any decision of the Committee in the interpretation and
      administration of the Plan, as described herein, shall lie within its sole
      and
      absolute discretion and shall be final, conclusive and binding on all parties
      concerned (including, but not limited to, Participants and their beneficiaries
      or successors). The Committee shall have the full power and authority to
      establish the terms and conditions of any Award consistent with the provisions
      of the Plan and to waive any such terms and conditions at any time (including,
      without limitation, accelerating or waiving any vesting conditions). The
      Committee shall require payment of any amount it may determine to be necessary
      for federal, state, local or other taxes as a result of the exercise, grant
      or
      vesting of an Award. The Committee shall not be required to issue any Award
      under the Plan until such obligations described in the previous sentence have
      been satisfied in full. In no event shall the Committee cancel any outstanding
      Option or Stock Appreciation Right for the purpose of reissuing such Option
      or
      Stock Appreciation Right to the Participant at a lower exercise price nor shall
      the Committee reduce the exercise price of an outstanding Option or Stock
      Appreciation Right.

     

    5.  Limitations

     

    No
      Award
      may be granted under the Plan after the tenth anniversary of the Effective
      Date,
      but Awards theretofore granted may extend beyond that date.

     

    6.  Terms
      and Conditions of Options

     

    Options
      granted under the Plan shall be, as determined by the Committee, non-qualified
      or incentive stock options for United States federal income tax purposes, as
      evidenced by the related Award letters, and shall be subject to the foregoing
      and the following terms and conditions and to such other terms and conditions,
      not inconsistent therewith, as the Committee shall determine:

    
      
         

      

      
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    	(a)  	
            Option
              Price.
              The Option Price per Share shall be determined by the Committee, but
              shall
              not be less than 100% of the Fair Market Value of a Share on the date
              an
              Option is granted (other than as described in Section
              4).

          


     

    	(b)  	
            Exercisability.
              Options granted under the Plan shall be exercisable at such time and
              upon
              such terms and conditions as may be determined by the Committee, but
              in no
              event shall an Option be exercisable more than ten years after the
              date it
              is granted. 

          


     

    	(c)  	
            Exercise
              of Options.
              Except as otherwise provided in the Plan or in an Award letter, an
              Option
              may be exercised for all, or from time to time any part, of the Shares
              for
              which it is then exercisable. For purposes of Section 6 of the Plan,
              the
              exercise date of an Option shall be the later of the date a notice
              of
              exercise is received by the Company or its designee or administrative
              agent in the form and manner satisfactory to the Company and, if
              applicable, the date payment is received by the Company or its designee
              or
              administrative agent in accordance with the following sentence. The
              purchase price for the Shares as to which an Option is exercised shall
              be
              paid to the Company as designated by the Committee, pursuant to one
              or
              more of the following methods: (i) in cash or its equivalent (e.g.,
              by
              personal check) or (ii) if there is a public market for the Shares
              underlying the Options at such time, through the delivery of irrevocable
              instructions to a broker to sell Shares obtained upon the exercise
              of the
              Option and to deliver promptly to the Company an amount out of the
              proceeds of such sale equal to the aggregate Option Price for the Shares
              being purchased. 

          


     

    	(d)  	
            ISOs.
              The Committee may grant Options under the Plan that are intended to
              be
              ISOs. Such ISOs shall comply with the requirements of Section 422 of
              the
              Code (or any successor section thereto). No ISO may be granted to any
              Participant who at the time of such grant, owns more than ten percent
              of
              the total combined voting power of all classes of stock of the Company
              or
              of any Subsidiary, unless (i) the Option Price for such ISO is at
              least 110% of the Fair Market Value of a Share on the date the ISO
              is
              granted and (ii) the date on which such ISO terminates is a date not
              later than the day preceding the fifth anniversary of the date on which
              the ISO is granted. Any Participant who disposes of Shares acquired
              upon
              the exercise of an ISO either (A) within two years after the date of
              grant of such ISO or (B) within one year after the transfer of such
              Shares to the Participant, shall notify the Company of such disposition
              and of the amount realized upon such disposition. All Options granted
              under the Plan are intended to be nonqualified stock options, unless
              the
              applicable Award letter expressly states that the Option is intended
              to be
              an ISO. If an Option is intended to be an ISO, and if for any reason
              such
              Option (or portion thereof) shall not qualify as an ISO, then, to the
              extent of such nonqualification, such Option (or portion thereof) shall
              be
              regarded as a nonqualified stock option granted under the Plan;
              provided
              that such Option (or portion thereof) otherwise complies with the Plan’s
              requirements relating to nonqualified stock options. In no event shall
              any
              member of the Committee, the Company or any of its Affiliates (or their
              respective employees, officers or directors) have any liability to
              any
              Participant (or any other Person) due to the failure of an Option to
              qualify for any reason as an ISO.

          


     

    
      
         

      

      
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    	(e)  	
            Rights
              with Respect to Shares.
              No Participant shall have any rights to dividends or other rights of
              a
              shareholder with respect to Shares subject to an Option until the
              Participant has given written notice of exercise of the Option, paid
              in
              full for such Shares and, if applicable, has satisfied any other
              conditions imposed by the Committee pursuant to the
              Plan.

          


     

    7.  Terms
      and Conditions of Stock Appreciation Rights

     

    	(a)  	
            Grants.
              The Committee may grant (i) a Stock Appreciation Right independent of
              an Option or (ii) a Stock Appreciation Right in connection with an
              Option, or a portion thereof. A Stock Appreciation Right granted pursuant
              to clause (ii) of the preceding sentence (A) may only be granted
              at the time the related Option is granted, (B) shall cover the same
              number of Shares covered by an Option (or such lesser number of Shares
              as
              the Committee may determine) and (C) shall be subject to the same
              terms and conditions as such Option except for such additional limitations
              as are contemplated by this Section 7 (or such additional limitations
              as
              may be included in an Award letter).

          


     

    	(b)  	
            Terms.
              The exercise price per Share of a Stock Appreciation Right shall be
              an
              amount determined by the Committee but in no event shall such amount
              be
              less than the Fair Market Value of a Share on the date the Stock
              Appreciation Right is granted (other than as described in Section 4);
              provided,
              however,
              that in the case of a Stock Appreciation Right granted in conjunction
              with
              an Option, or a portion thereof, the exercise price may not be less
              than
              the Option Price of the related Option. Each Stock Appreciation Right
              granted independent of an Option shall entitle a Participant upon exercise
              to a number of Shares equal to (1) an amount that is (i) the excess
              of (A) the opening price of the Shares (as reported on the Composite
              Tape of the principal national securities exchange on which such shares
              are listed or admitted to trading) on the exercise date of one Share
              (the
              “Opening Price”) over (B) the exercise price per Share, multiplied by
              (ii) the number of Shares covered by the Stock Appreciation Right,
              divided by (2) the Opening Price. Each Stock Appreciation Right granted
              in
              conjunction with an Option, or a portion thereof, shall entitle a
              Participant to surrender to the Company the unexercised Option, or any
              portion thereof, and to receive from the Company in exchange therefore
              a
              number of Shares equal to (1) an amount that is (i) the excess of
              (A) the Opening Price over (B) the Option Price per Share,
              multiplied by (ii) the number of Shares covered by the Option, or
              portion thereof, which is surrendered, divided by (2) the Opening Price.
              Payment shall be made in Shares. Stock Appreciation Rights may be
              exercised from time to time upon actual receipt by the Company or its
              designee or administrative agent of written notice of exercise in the
              form
              and manner satisfactory to the Company stating the number of Shares
              with
              respect to which the Stock Appreciation Right is being exercised. The
              date
              a notice of exercise is received by the Company shall be the exercise
              date. No fractional Shares will be issued in payment for Stock
              Appreciation Rights, but instead the number of Shares will be rounded
              downward to the next whole Share. 

          


     

    
      
         

      

      
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    	(c)  	
            Limitations.
              The Committee may impose, in its discretion, such conditions regarding
              the
              exercisability of Stock Appreciation Rights as it may deem fit, but
              in no
              event shall a Stock Appreciation Right be exercisable more than ten
              years
              after the date it is granted.

          


     

    8.  Other
      Stock-Based Awards

     

    	(a)  	
            Generally.
              The Committee, in its sole discretion, may grant or sell Awards of
              Shares
              (including (i) Awards of Shares in lieu of any incentive or variable
              compensation to which a Participant is entitled to from the Company
              or its
              Subsidiaries and (ii) Awards of Shares granted to non-employee directors
              as all or a part of their retainer or other fees for services), Awards
              of
              restricted Shares and Awards that are valued in whole or in part by
              reference to, or are otherwise based on the Fair Market Value of, Shares
              (“Other Stock-Based Awards”). Such Other Stock-Based Awards shall be in
              such form, and dependent on such conditions, as the Committee shall
              determine, including, without limitation, the right to receive, or
              vest
              with respect to, one or more Shares (or the equivalent cash value of
              such
              Shares) upon the completion of a specified period of service, the
              occurrence of an event and/or the attainment of performance objectives.
              Other Stock-Based Awards may be granted alone or in addition to any
              other
              Awards granted under the Plan. Subject to the provisions of the Plan,
              the
              Committee shall determine to whom and when Other Stock-Based Awards
              will
              be made, the number of Shares to be awarded under (or otherwise related
              to) such Other Stock-Based Awards, and all other terms and conditions
              of
              such Awards (including, without limitation, the vesting provisions
              thereof
              and provisions ensuring that all Shares so awarded and issued shall
              be
              fully paid and non-assessable).

          


     

    	(b)  	
            Performance-Based
              Awards.
              Notwithstanding anything to the contrary herein, certain Other Stock-Based
              Awards, Options and Stock Appreciation Rights granted under this
              Section 8 may be granted in a manner which is intended to be
              deductible by the Company under Section 162(m) of the Code (or any
              successor section thereto) (“Performance-Based Awards”). A Participant’s
              Performance-Based Award shall be determined based on the attainment
              of
              written performance goals approved by the Committee for a performance
              period established by the Committee (i) while the outcome for that
              performance period is substantially uncertain and (ii) no more than
              90 days after the commencement of the performance period to which the
              performance goal relates or, if less, the number of days which is equal
              to
              25 percent of the relevant performance period. The performance goals,
              which must be objective, shall be based upon one or more of the following
              criteria: (i) consolidated earnings before or after taxes (including
              earnings before interest, taxes, depreciation and amortization); (ii)
              net
              income; (iii) operating income; (iv) earnings per Share; (v) book value
              per Share; (vi) return on shareholders’ equity; (vii) expense management;
              (viii) return on invested capital; (ix) improvements in capital structure;
              (x) profitability of an identifiable business unit or product; (xi)
              maintenance or improvement of profit margins or revenue; (xii) stock
              price; (xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi)
              available cash flow; (xvii) working capital; (xviii) return on assets;
              (xix) total shareholder return, (xx) productivity ratios, and (xxi)
              economic value added. In addition, to the degree consistent with
              Section 162(m) of the Code (or any successor section thereto), the
              performance goals may be calculated without regard to extraordinary
              items.
              The maximum amount of a Performance-Based Award during a calendar year
              to
              any Participant shall be: (x) with respect to Performance-Based Awards
              that are Options or Stock Appreciation Rights, 750,000 Shares and (y)
              with
              respect to Performance-Based Awards that are not Options or Stock
              Appreciation Rights, $10,000,000 on the date of the award. No
              Performance-Based Awards will be paid for a performance period until
              certification is made by the Committee that the criteria described
              in this
              Section 8(b) has been attained. The amount of the Performance-Based
              Award
              actually paid to a given Participant may be less than (but not greater
              than) the amount determined by the applicable performance goal formula,
              at
              the discretion of the Committee. The amount of the Performance-Based
              Award
              determined by the Committee for a performance period shall be paid
              to the
              Participant at such time as determined by the Committee in its sole
              discretion after the end of such performance period; provided,
              however,
              that a Participant may, if and to the extent permitted by the Committee
              and consistent with the provisions of Sections 162(m) and 409A of the
              Code, elect to defer payment of a Performance-Based
              Award.

          


     

    
      
         

      

      
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    9.  Adjustments
      Upon Certain Events

     

    Notwithstanding
      any other provisions in the Plan to the contrary (except for Section 17), the
      following provisions shall apply to all Awards granted under the
      Plan:

     

    	(a)  	
            Generally.
              In the event of any change in the outstanding Shares after the Effective
              Date by reason of any reorganization, recapitalization, merger,
              consolidation, spin-off, combination, combination or transaction or
              exchange of Shares or other corporate exchange, or any distribution
              to
              shareholders of Shares other than regular cash dividends or any
              transaction similar to the foregoing, the Committee in its sole discretion
              and without liability to any person shall make such substitution or
              adjustment, if any, as it deems to be equitable (subject to Section
              17),
              as to (i) the number or kind of Shares or other securities issued or
              reserved for issuance pursuant to the Plan or pursuant to outstanding
              Awards, (ii) the maximum number of Shares for which Options or Stock
              Appreciation Rights may be granted during a calendar year to any
              Participant (iii) the maximum amount of a Performance-Based Award that
              may
              be granted during a calendar year to any Participant, (iv) the Option
              Price or exercise price of any stock appreciation right and/or (v)
              any
              other affected terms of such Awards. In the event of any change in
              the
              outstanding Shares after the Effective Date by reason of any stock
              split
              (forward or reverse) or any stock dividend, all adjustments described
              in
              the preceding sentence shall occur automatically in accordance with
              the
              ratio of the stock split or stock dividend, unless otherwise determined
              by
              the Committee.

          


     

    
      
         

      

      
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      	(b)  	
              Change
                in Control.
                The
                provisions of this Section 9(b) shall apply in the event of a Change
                in Control, unless otherwise determined by the Committee in connection
                with the grant of an Award as reflected in the applicable Award letter.
                

            


    

     

    (i) All
      outstanding Options and Stock Appreciation Rights shall become immediately
      vested and exercisable; 

     
      

    (ii) All
      Other Stock-Based Awards shall become immediately vested and payable; and


     
      

    (iii) The
      performance period applicable to Performance-Based Awards shall lapse and the
      performance goals associated with such awards shall be deemed to have been
      met
      at their target level.

    


    Notwithstanding
      the foregoing, the Committee may (subject to Section 17), in its sole
      discretion, but shall not be obligated to, (A) cancel such Awards for fair
      value
      (as determined in the sole discretion of the Committee) which, in the case
      of
      Options and Stock Appreciation Rights, shall equal the excess, if any, of value
      of the consideration to be paid in the Change in Control transaction to holders
      of the same number of Shares subject to such Options or Stock Appreciation
      Rights (or, if no consideration is paid in any such transaction, the Fair Market
      Value of the Shares subject to such Options or Stock Appreciation Rights) over
      the aggregate exercise price of such Options or Stock Appreciation Rights,
      (B)
      provide for the issuance of substitute awards that will substantially preserve
      the otherwise applicable terms of any affected Awards previously granted
      hereunder as determined by the Committee in its sole discretion or (C) provide
      that for a period of at least 15 days prior to the Change in Control, such
      Options and Stock Appreciation Rights shall be exercisable as to all shares
      subject thereto and that upon the occurrence of the Change in Control, such
      Options and Stock Appreciation Rights shall terminate and be of no further
      force
      and effect.

    
      
         

      

      
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    10.  No
      Right to Employment or Awards

     

    The
      granting of an Award under the Plan shall impose no obligation on the Company
      or
      any Affiliate to continue the employment or service of a Participant and shall
      not lessen or affect the Company’s or Affiliate’s right to terminate the
      employment or service of such Participant. No Participant or other Person shall
      have any claim to be granted any Award, and there is no obligation for
      uniformity of treatment of Participants, or holders or beneficiaries of Awards.
      The terms and conditions of Awards and the Committee’s determinations and
      interpretations with respect thereto need not be the same with respect to each
      Participant (whether or not such Participants are similarly
      situated).

     

    11.  Successors
      and Assigns

     

    The
      Plan
      shall be binding on all successors and assigns of the Company and a Participant,
      including without limitation, the estate of such Participant and the executor,
      administrator or trustee of such estate, or any receiver or trustee in
      bankruptcy or representative of the Participant’s creditors.

     

    12.  Nontransferability
      of Awards

     

    Unless
      otherwise determined by the Committee, an Award shall not be transferable or
      assignable by the Participant otherwise than by will or by the laws of descent
      and distribution. An Award exercisable after the death of a Participant may
      be
      exercised by the legatees, personal representatives or distributees of the
      Participant.

     

    13.  Amendments
      or Termination

     

    The
      Board
      may amend, alter or discontinue the Plan, but no amendment, alteration or
      discontinuation shall be made, (a) without the approval of the shareholders
      of the Company, if such action would (except as is provided in Section 9 of
      the Plan), increase the total number of Shares reserved for the purposes of
      the
      Plan or change the maximum number of Shares for which Awards may be granted
      to
      any Participant or (b) without the consent of a Participant, if such action
      would diminish any of the rights of the Participant under any Award theretofore
      granted to such Participant under the Plan; provided,
      however,
      that
      the Committee may amend the Plan in such manner as it deems necessary to permit
      the granting of Awards meeting the requirements of the Code or other applicable
      laws (including, without limitation, to avoid adverse tax consequences to the
      Company or to Participants).

     

    14.  International
      Participants

     

    With
      respect to Participants who reside or work outside the United States of America
      and who are not (and who are not expected to be) “covered employees” within the
      meaning of Section 162(m) of the Code, the Committee may, in its sole
      discretion, amend the terms of the Plan or Awards with respect to such
      Participants in order to conform such terms with the requirements of local
      law
      or to obtain more favorable tax or other treatment for a Participant, the
      Company or an Affiliate.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    15.  Choice
      of Law

     

    The
      Plan
      shall be governed by and construed in accordance with the laws of the State
      of
      New Jersey without regard to conflicts of laws.

     

    16.  Effectiveness
      of the Plan

     

    The
      Plan
      shall be effective as of the Effective Date, subject to the approval of the
      shareholders of the Company.

     

    17.  Section
      409A

     

    Notwithstanding
      other provisions of the Plan or any Award letter thereunder, no Award shall
      be
      granted, deferred, accelerated, extended, paid out or modified under this Plan
      in a manner that would result in the imposition of an additional tax under
      Section 409A of the Code upon a Participant. In the event that it is reasonably
      determined by the Committee that, as a result of Section 409A of the Code,
      payments in respect of any Award under the Plan may not be made at the time
      contemplated by the terms of the Plan or the relevant Award letter, as the
      case
      may be, without causing the Participant holding such Award to be subject to
      taxation under Section 409A of the Code, the Company will make such payment
      on
      the first day that would not result in the Participant incurring any tax
      liability under Section 409A of the Code.

     

    Without
      limiting the generality of the foregoing, to the extent applicable,
      notwithstanding anything herein to the contrary, this Plan and Awards issued
      hereunder shall be interpreted in accordance with Section 409A of the Code
      and
      Department of Treasury regulations and other interpretative guidance issued
      thereunder, including without limitation any such regulations or other guidance
      that may be issued after the Effective Date. Notwithstanding any provision
      of
      the Plan to the contrary, in the event that the Committee determines that any
      amounts payable hereunder will be taxable to a Participant under Section 409A
      of
      the Code and related Department of Treasury guidance prior to payment to such
      Participant of such amount, the Company may (a) adopt such amendments to the
      Plan and Awards and appropriate policies and procedures, including amendments
      and policies with retroactive effect, that the Committee determines necessary
      or
      appropriate to preserve the intended tax treatment of the benefits provided
      by
      the Plan and Awards hereunder and/or (b) take such other actions as the
      Committee determines necessary or appropriate to avoid the imposition of an
      additional tax under Section 409A of the Code.

     

    
      
         

      

      
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