Document:

Albert R. Gamper, Jr.          The CIT Group, Inc.            T: 973 740-5395
Chairman, President and        650 CIT Drive                  F: 973 740-5772
Chief Executive Officer        Livingston, NJ 07039-5795      al.gamper@cit.com

CIT [LOGO]

                                              September 13, 2000

Mr. Joseph M. Leone
978 Arapaho Trail
Franklin Lakes, NJ 07417

Dear Joe,

      The purpose of this letter  agreement (the  "Employment  Agreement") is to
set forth the terms and conditions of your employment  with The CIT Group,  Inc.
(the "Company") as follows:

      1. Term.  This  Employment  Agreement will be effective as of September 1,
2000 (the "Effective Date"). The term of this Employment  Agreement (the "Term")
will begin on the Effective Date and, except as otherwise  provided in paragraph
4 below, end on December 31, 2002. This Employment Agreement and the Term may be
extended for one (1) or more additional  periods by written  agreement signed by
you and the Company at any time prior to the end of the Term then in effect.

      2. Duties.  During the Term, you will serve in such  capacities and devote
substantially  all of your  business  time and  energies to the  business of the
Company and faithfully,  diligently and competently  perform such duties, as are
assigned to you by the Chief  Executive  Officer of the  Company  (the "CEO") or
pursuant to his delegation.

      3.  Compensation  and  Benefits.  In full  consideration  for all services
rendered  by you in all  capacities  during  the  Term,  you  will  receive  the
following compensation and benefits:

            (a) Base Salary.  An annual base salary ("Base  Salary") of not less
than the amount  you  received  immediately  prior to the  commencement  of this
current  Employment  Agreement  payable in accordance with the customary payroll
practices of the Company.  Your Base Salary and performance  will be reviewed by
the CEO or pursuant to his delegation during the Term pursuant to normal Company
practices.  Your Base Salary may be increased  (but not reduced) by the CEO from
time to time, based upon your performance and responsibilities,  pursuant to the
Company's standard procedures for salary adjustments.

<PAGE>

            (b)  Bonuses.  You  will  participate  in all  executive  bonus  and
incentive compensation plans (collectively,  "Incentive Plans") now or hereafter
maintained by the Company for which your level of employment  makes you eligible
in accordance with the Company's policies and the terms of such Incentive Plans.

            (c)  Expense  Reimbursement.  The  Company  will  reimburse  you, in
accordance with applicable  policies and practices of the Company in effect from
time to time, for your ordinary and necessary business expenses.

            (d) Other  Benefits.  You will be  eligible  to  participate  in all
employee retirement and welfare benefit plans now or hereafter  maintained by or
on behalf of the Company,  including the Company's Executive Retirement Plan and
receive all fringe benefits,  vacations and supplemental  pension benefits,  for
which  your  level of  employment  makes you  eligible  in  accordance  with the
Company's policies and the terms of such plans.

            (e) Modifications.  The Company may at any time or from time to time
amend,  modify,  suspend or  terminate  any bonus or incentive  compensation  or
employee benefit plans or programs provided hereunder for any reason and without
your consent;  provided that,  without your consent,  the Company may not reduce
the aggregate  value of the employee  benefit plans or programs  provided to you
hereunder  unless  such  reduction  is  consistent  with  reductions   affecting
similarly situated employees of the Company.

      4. Termination of Your Employment.

            (a) By the Company. The Company may terminate your employment in its
sole discretion at any time during the Term, with or without Cause, upon fifteen
(15) days prior notice by the Company to you.  For  purposes of this  Employment
Agreement,  "Cause"  means any of the  following:  (1)  action by you  involving
willful malfeasance in connection with the performance of your duties hereunder,
(2) your  unreasonable  neglect  or  refusal to  perform  the  executive  duties
assigned to you under this Employment  Agreement,  (3) your being convicted of a
crime  constituting a felony under federal or applicable state or local law, (4)
your engaging in any activity that is directly or indirectly in competition with
the Company or any  affiliate  or in any  activity  that is inimical to the best
interests  of  the  Company  or any  affiliate,  or (5)  your  violation  of the
Company's  policy covering  standards of corporate  conduct as determined by the
Company's CEO. If the Company  terminates  your  employment  for Cause,  all the
Company's  obligations under this Employment Agreement shall thereupon cease and
terminate, except for those amounts specified in paragraph 5(a)(2).

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<PAGE>

            (b) By You. You may terminate  your  employment  with the Company at
any time during the Term,  with or without Good  Reason,  upon fifteen (15) days
prior notice by you to the Company.  For purposes of this Employment  Agreement,
"Good Reason" means (1) the assignment to you of duties and responsibilities not
commensurate  with your status as a senior  executive  of the  Company,  (2) the
failure of the Company to provide compensation and benefits to you at the levels
required herein, (3) following a Change of Control as defined in paragraph 7(d),
you are required by the Company,  or if applicable a Subsidiary,  or a successor
to the Company or a  Subsidiary,  without  your consent to relocate or perform a
significant  portion of your duties under this  Employment  Agreement  outside a
fifty (50) mile radius from your present principal place of employment,  (4) the
failure of the Company to adhere in any  substantial  manner to any of its other
covenants  herein,  or (5) the  failure  of the  Company  to offer to renew this
Employment  Agreement  on the terms and  conditions  (including  payment of base
salary and  participation  in Incentive Plans and benefit  programs) at least as
favorable in the final year of your last Employment  Agreement,  unless,  at the
time of the Company's failure to offer to renew this Employment  Agreement,  you
have reached the age of 65 and you can be lawfully required to retire.

      5. Severance Payment.

            (a) Without Cause and Good Reason  Termination.  If during the Term,
the Company  terminates  your  employment  without Cause or you  terminate  your
employment for Good Reason,  all  compensation  payable to you under paragraph 3
hereof will cease as of the effective date of such termination (the "Termination
Date") and the Company will pay to you, subject to paragraph 6 and, with respect
to paragraphs 5(a)(1), (3) and (4) subject to the condition that you execute and
deliver to the Company an  effective  general  release of any and all claims you
have or may have  against  the  Company as of the  Termination  Date,  in a form
prepared by the Company, the following:

                  (1)   An amount  equal to two (2) times your then current Base
                        Salary plus two (2) times the average  annual  bonus you
                        received in the prior two (2) years under The CIT Group,
                        Inc. Bonus Plan, plus a pro-rata annual bonus amount for
                        that  portion  of the bonus  year up to the  Termination
                        Date, based on the average annual bonus, if any, paid in
                        the  prior two (2) full  years.  This  payment  shall be
                        payable   fifty  percent  (50%)  in  twelve  (12)  equal
                        installments  at the  end of  each  of the  twelve  (12)
                        months following the Termination Date, and fifty percent
                        (50%)  in  a  lump  sum  on  the   anniversary   of  the
                        Termination Date. If, however,  prior to the anniversary
                        of the Termination Date, you violate the noncompetition

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                        provisions of paragraph  6(b)(i),  then the Company will
                        have no  obligation  to make  any of the  payments  that
                        remain  payable  by the  Company  under  this  paragraph
                        5(a)(1)  on  or  after  the  date  of  such   violation.
                        Notwithstanding   the   provisions  of  this   paragraph
                        5(a)(1), if you have received,  are scheduled to receive
                        or are otherwise  eligible to receive all or any portion
                        of a "Special Payment" in accordance with paragraph 7(b)
                        below,  the amount  payable to you under this  paragraph
                        5(a)(1)  shall be reduced by the amount of such "Special
                        Payment" paid or payable to you under paragraph 7(b).

                  (2)   All  previously  earned  and  accrued  entitlements  and
                        benefits   from   the   Company,   including   any  such
                        entitlements  and benefits under the Company's  pension,
                        disability,  life insurance and medical plans,  policies
                        and programs.

                  (3)   (a)  Continued  benefit  coverage  which  permits you to
                        continue  to  receive,   for  two  (2)  years  from  the
                        Termination  Date,  at  the  Company's   expense,   life
                        insurance and medical, dental and disability benefits at
                        least comparable to those provided by the Company to you
                        on the  Termination  Date,  provided  that such benefits
                        shall  cease  if  you  obtain  other   employment   with
                        comparable  benefits,  as determined by the Company; and
                        (b) two (2) years  additional  benefit  service  and age
                        credit  under  the  Company's  Retirement  Plan  and the
                        Executive Retirement Plan, except that to the extent you
                        participate  in the cash balance  arrangement  under the
                        Company's Retirement Plan, rather than receiving two (2)
                        years  additional  benefit  service and age credit under
                        the Company's Retirement Plan, your cash balance account
                        will be increased as of the  Termination  Date as if you
                        had received two (2) years of  additional  contributions
                        based on your  compensation as of the Termination  Date.
                        (The amount of any  benefit  payable as a result of such
                        two (2) year additional  service and age credit shall be
                        paid from the applicable  benefit or retirement  plan as
                        permitted by the provisions of such

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<PAGE>

                        applicable  benefit or retirement  plan and the Code, or
                        in the  event not paid from the  applicable  benefit  or
                        retirement  plan,  such  benefit  shall  be  paid by the
                        Company).

                  (4)   Outplacement  services, not to exceed a reasonable cost,
                        until such time as you accept new employment.

                  (5)   Any awards  due to you under the terms of the  Company's
                        Long-Term  Equity  Compensation  Plan (the "ECP") or any
                        successor plan as may have been hereafter adopted by the
                        Company. Upon such payment, all of your rights under all
                        such plans will then terminate.

                  (6)   All  benefits   payable  to  you  under  the  terms  and
                        conditions of the Company's  Executive  Retirement Plan,
                        if any.

      All of the amounts and  benefits to be provided  pursuant to clauses  (3),
(4), (5) and (6) above shall be provided without duplication for the amounts and
benefits to be provided pursuant to clause (2) above.

            (b) For Cause Termination or Termination By You Without Good Reason.
If your  employment  is  terminated by the Company for Cause or if you terminate
your employment for any reason other than Good Reason, you will receive only the
amounts specified in paragraph 5(a)(2).

            (c)  Death  or  Disability.  In the  event  of  your  death  or your
disability due to physical or mental illness or other  disability  which renders
you  unable,  on other than a  temporary  basis,  to perform  the duties of your
employment,  the Term will  terminate as of the date of your death or disability
and you or your  beneficiary  will receive the benefits  specified in paragraphs
5(a)(2),(5)  and (6) plus an amount  equal to your Base  Salary on such date for
one (1) year.  Disability  will be  determined in a manner  consistent  with the
Company's Long-Term Disability Plan.

      6. Confidentiality and Competitive Activity.

            (a) Confidential information. You acknowledge that you have acquired
and will continue to acquire during the Term, confidential information regarding
the business of the Company,  Dai-Ichi Kangyo Bank ("DKB") and their  respective
subsidiaries and affiliates.  Accordingly,  you agree that,  without the written
consent of the Board,  you will not, at any time,  disclose to any  unauthorized
person or otherwise  use any such  confidential  information.  For this purpose,
confidential

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information means non-public information concerning the financial data, business
strategies,  product development (and proprietary product data), customer lists,
marketing plans, and other proprietary information concerning the Company or DKB
and their  respective  subsidiaries  and  affiliates,  except for specific items
which have become  publicly  available  other than as a result of your breach of
this Employment Agreement.

            (b) Competition and Solicitation.  If (1) you resign with or without
Good Reason,  (2) your  employment  is terminated by the Company with or without
Cause,  (3) you retire under the terms of the Company's  Retirement Plan, or (4)
solely for the purposes of (ii) below,  you resign  following the  expiration of
this Employment Agreement,  then for one (1) year after the Termination Date, in
the case of clause (i) below, and for two (2) years after the Termination  Date,
in the case of clause (ii) below,  you will not,  without the written consent of
the Board, directly or indirectly,  (i) knowingly engage or be interested in (as
owner, partner,  stockholder,  employee, director, officer, agent, consultant or
otherwise),  with or without compensation,  any business in the United States or
Canada  which  is in  competition  with  any  line of  business  actively  being
conducted  on the  Termination  Date by the Company or any of its  subsidiaries;
provided that if your  employment  has been  terminated  by the Company  without
Cause or you have  terminated  your employment with the Company for Good Reason,
you may so compete in which event you shall forfeit your right to receive future
severance  payments pursuant to paragraph 5(a)(1) hereof and (ii) whether or not
your termination of employment  occurred without Cause or for Good Reason,  hire
any  person  who was  employed  by the  Company  or any of its  subsidiaries  or
affiliates (other than persons employed in a clerical or other  non-professional
position) within the six-(6)month period  preceding the date of such hiring,  or
solicit, entice, persuade or induce any person or entity doing business with the
Company or DKB and their respective  subsidiaries  and affiliates,  to terminate
such  relationship  or to refrain from  extending or renewing the same.  Nothing
herein,  however,  will prohibit you from acquiring or holding not more than one
percent (1%) of any class of publicly  traded  securities of any such  business;
provided  that such  securities  entitle you to no more than one percent (1%) of
the total  outstanding  votes  entitled  to be cast by  securityholders  of such
business in matters on which such securityholders are entitled to vote.

            (c) Remedy for Breach. You hereby acknowledge that the provisions of
this paragraph 6 are reasonable and necessary for the protection of the Company,
DKB, and their respective subsidiaries and affiliates.  In addition, you further
acknowledge  that  the  Company,  DKB  and  their  respective  subsidiaries  and
affiliates  will be irrevocably  damaged if such covenants are not  specifically
enforced.  Accordingly, you agree that, in addition to any other relief to which
the Company  may be  entitled,  the Company  will be entitled to seek and obtain
injunctive  relief  (without  the  requirement  of any  bond)  from a  court  of
competent  jurisdiction  for the purposes of restraining  you from any actual or
threatened  breach of such  covenants.  In  addition,  and without  limiting the
Company's other remedies, in the event of any

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breach by you of such covenants,  the Company will have no obligation to pay any
of the amounts that remain payable by the Company under paragraph 5(a)(1).

            (d) Enforceability. If a court determines that any of the provisions
of this paragraph 6 are  unenforceable  because of the duration or  geographical
scope of such provisions, the parties hereto agree that the duration or scope of
such  provisions,  as the case may be,  shall be reduced so that such  provision
becomes  enforceable  and, in its reduced  form,  such  provision  shall then be
enforceable and shall be enforced.

      7. Change of Control.

            (a)  Contract  Extension.  If during the Term, a "Change of Control"
occurs  as  defined  in  paragraph  7(d),  the  Term  of your  employment  shall
automatically  be extended until the second  anniversary  date of such Change of
Control.

            (b) Special  Payment.  In addition to the  compensation and benefits
already required under the provisions of your Employment Agreement, if while you
are an active  employee of the Company,  a Change of Control  should occur on or
prior to December 31, 2002,  you will  receive a special  payment (the  "Special
Payment"). The amount of such Special Payment shall equal the sum of your annual
bonuses, if any, for the two (2) immediately  preceding calendar years under The
CIT Group,  Inc.  Bonus Plan and will be payable  over a two (2) year  period as
follows:  one-third (1/3) of the payment shall be paid to you within thirty (30)
days after the date of the Change of Control;  one-third  (1/3) shall be paid to
you on or before  the first  anniversary  date of such  Change of  Control;  and
one-third (1/3) shall be paid to you on or before the second anniversary date of
such Change of Control, provided,  however, the Company, in its sole discretion,
may accelerate the payment of all or any part of the Special Payment  determined
in accordance with this paragraph 7(b). Notwithstanding the foregoing provisions
of this paragraph,  all or any part of such Special Payment shall not be payable
to you if during the two (2) year period  commencing  on the date of a Change of
Control,  and ending on the second anniversary of such date: (1) your employment
is  involuntarily  terminated  by the  Company  for  "Cause"  as  defined in the
Employment Agreement;  (2) you voluntarily terminate employment with the Company
for any reason other than "Good Reason" as defined in the Employment  Agreement;
or (3) you breach any confidentiality or competition  covenant under paragraph 6
of the Employment Agreement.  For purposes of this paragraph 7(b), a termination
of your  employment  on account of your death,  disability  or  retirement on or
after age fifty-five (55) under the terms of the Company's Retirement Plan shall
constitute  a  termination  for "Good  Reason."  In the  absence  of a  separate
beneficiary  designation,  your beneficiary  under the Group Life Insurance Plan
will receive any Special Payment remaining to be paid upon your death.

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<PAGE>

            (c)  Awards  Granted  Under the ECP.  Upon a Change of  Control  (as
defined in paragraph  7(d)),  (1) all Awards  granted under The CIT Group,  Inc.
Long-Term  Equity   Compensation   Plan  (the  "Plan")  shall  vest  and  become
exercisable;  (2) any Period of  Restriction  (as defined in the Plan) and other
restrictions  imposed on Restricted  Stock (as defined in the Plan) shall lapse;
and (3) the  Performance  Target (as  defined  in the Plan) with  respect to all
outstanding  Awards  shall be  deemed  to have  been  attained  upon a Change of
Control.

            (d) Change of  Control  Defined.  For  purposes  of this  Employment
Agreement,  a "Change of Control"  shall be deemed to have  occurred if: (1) any
Person or Group other than DKB or an  Affiliate  becomes the  Beneficial  Owner,
directly or  indirectly,  of securities  representing a majority of the combined
voting power of the Company's then outstanding  securities generally entitled to
vote for the  election of directors  (capitalized  terms not  otherwise  defined
herein  are used as  defined  under  the  Securities  Exchange  Act of 1934,  as
amended,  and the rules and  regulations  promulgated  thereunder);  or (2) as a
result of a cash tender offer,  merger or other business  combination,  sales of
assets or contested election,  or any combination of the foregoing  transactions
(a  "Transaction"),  the  combination  of the persons who were  directors of the
Company  immediately  before the  Transaction,  and  persons  designated  by the
persons who were directors of the Company  immediately  before the  transaction,
shall  cease to  constitute  a  majority  of the Board of the  Company or of any
successor to the Company.  Notwithstanding  the  foregoing,  a Change of Control
resulting from a Change of Control of DKB shall not require the extension of the
Term hereunder.

      8. Miscellaneous.

      (a) Survival;  Notices.  The obligations of the Company in paragraph 5 and
your  obligations in paragraph 6 will survive the termination of this Employment
Agreement.  Any  notice,  consent  or  other  communication  made  or  given  in
connection with this Employment  Agreement will be in writing and will be deemed
to have been duly given when  delivered  or five (5) days after mailed by United
States registered or certified mail, return receipt requested, to the parties at
the address set forth on the first page of this Employment Agreement (attention:
General Counsel, if to the Company).

            (b) Entire  Agreement.  This  Employment  Agreement  supersedes  and
renders null and void any and all existing agreements and understandings between
you and the Company or any of its  subsidiaries  or  affiliates  relating to the
terms and conditions of your employment.

            (c)  Amendments  and  Waivers.  No  provisions  of  this  Employment
Agreement may be amended,  modified, waived or discharged except as agreed to in
writing by you and the  Company.  The  failure of a party to insist  upon strict
adherence to any term of this Employment Agreement on any occasion will not

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be considered a waiver thereof or deprive that party of the right  thereafter to
insist upon strict  adherence to that term or any other term of this  Employment
Agreement.

            (d) Successors.  This Employment Agreement shall be binding upon and
inure to the  benefit of you and the Company and its  successors  and  permitted
assigns.  Neither this Employment Agreement nor any of the rights of the parties
hereunder  may be assigned by either  party  hereto  except that the Company may
assign its rights and  obligations  hereunder to a  corporation  or other entity
that acquires  substantially  all of its assets.  Any  assignment or transfer of
this Employment Agreement in violation of the foregoing provisions will be void.

            (e) Governing Law. This Employment Agreement will be governed by and
construed in  accordance  with the laws of the State of New York  applicable  to
agreements made and to be performed in that State.

            (f) Legal Counsel;  Offsets and Reductions.  In the event you obtain
legal  counsel to enforce  your  rights  under this  Employment  Agreement,  the
Company  will pay your  reasonable  legal fees if you recover any amount on such
claim.  Except as provided  herein,  if your  employment  is  terminated  by the
Company,  your  severance  shall not be subject to any offsets or reductions for
your  subsequently  earned  income  or  reduction  by reason of any claim by the
Company.

            (g) Severability.  If any provision of this Employment  Agreement is
invalid or unenforceable,  the balance of this Employment  Agreement will remain
in effect,  and if such provision is inapplicable to any person or circumstance,
it will nevertheless remain applicable to all other persons and circumstances.

            (h)  Withholding.  The Company is  authorized  to withhold  from any
benefit  provided or payment due hereunder the amount of  withholding  taxes due
any federal, state, or local authority in respect of such benefit or payment and
to take such other  action as may be  necessary in the opinion of the Company to
satisfy all obligations for the payment of such withholding taxes.

            (i) Tax Gross-Up. In the event that any payment made to you pursuant
to this  Employment  Agreement with the Company  becomes subject to excise taxes
under  Section 4999 of the Code,  the Company will pay to you the amount of such
excise taxes plus all federal, state and local taxes applicable to the Company's
payment of such excise taxes  including  any  additional  excise taxes due under
Section  4999 of the  Code  with  respect  to  payments  made  pursuant  to this
Employment Agreement.

      The  determination  of amounts  required to be paid under this  Employment
Agreement  shall  be made by an  independent  auditor  selected  and paid by the
Company. Such independent auditor shall be a nationally recognized United

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States public accounting firm, which may be the independent accounting firm used
by the Company to audit its financial statements.

      If you are in agreement with: the terms of this letter, please so indicate
by signing and returning the enclosed copy of this letter, whereupon this letter
shall constitute a binding agreement between you and the Company.

                                       Very truly yours,

                                       THE CIT GROUP, INC.

                                       By: /s/ Albert R. Gamper, Jr.
                                          --------------------------------------
                                           Name:  Albert R. Gamper, Jr.
                                           Title: Chairman, President & CEO

Agreed:

/s/ Joseph M. Leone
-------------------------------

                                       10The CIT Group, Inc.

                       Long-Term Equity Compensation Plan

                              Amended and Restated

                               as of July 26, 2000

<PAGE>

                                Table of Contents

                                                                        Page

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

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

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                                                                            Page

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

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

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

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

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

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

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

                                       ii
<PAGE>

                                                                            Page

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

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

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

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

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

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

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

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

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

                                       iii
<PAGE>

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

      Article 1. Establishment, Objectives, and Duration

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

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

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

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

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

      Article 2. Definitions

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

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

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

<PAGE>

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

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

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

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

      2.6. "Change of Control"

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

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

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

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

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

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

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

                                       2
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       3
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                       4
<PAGE>

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

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

      Article 3. Administration

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

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

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

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

      Article 4. Shares Subject to the Plan and Maximum Awards

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

                                       5
<PAGE>

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

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

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

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

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

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

                                       6
<PAGE>

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

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

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

      Article 5. Eligibility and Participation

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

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

      Article 6. Annual Incentive Awards

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

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

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

      6.4. Termination of Employment with the Company.

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

                                       7
<PAGE>

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

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

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

      Article 7. Stock Options

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

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

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

                                       8
<PAGE>

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

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

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

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

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

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

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

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

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

                                       9
<PAGE>

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

      7.9. Nontransferability of Options.

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

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

      Article 8. Stock Appreciation Rights.

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

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

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

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

                                       10
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                       11
<PAGE>

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

      Article 9. Restricted Stock

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

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

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

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

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

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

                                       12
<PAGE>

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

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

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

      Article 10. Performance Units and Performance Shares.

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

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

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

                                       13
<PAGE>

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

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

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

      Article 11. Beneficiary Designation

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

                                       14
<PAGE>

      Article 12. Deferrals

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

      Article 13. Change of Control

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

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

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

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

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

                                       15
<PAGE>

      Article 14. Amendment, Adjustment, and Termination.

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

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

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

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

      Article 15 Withholding.

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

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

                                       16
<PAGE>

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

      Article 16. Successors.

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

      Article 17. Legal Construction.

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

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

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

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

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

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

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

                                       17
<PAGE>

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

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

                                       18

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