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                          CENTRAL SPRINKLER CORPORATION

                          1996 EQUITY COMPENSATION PLAN

         The purpose of the Central Sprinkler Corporation 1996 Equity
Compensation Plan (the "Plan") is to provide (i) designated key employees of
Central Sprinkler Corporation (the "Company") and its subsidiaries
("Employees"), and (ii) members of the Board of Directors of the Company (the
"Board") who are not employees of the Company or its subsidiaries ("Non-Employee
Directors") with the opportunity to receive grants of incentive stock options
and nonqualified stock options. The Company believes that the Plan will cause
the participants to contribute materially to the growth of the Company, thereby
benefitting the Company's stockholders, and will align the economic interests of
the participants with those of the stockholders.

         1. Administration

         (a) The Plan shall be administered and interpreted by a committee (the
"Committee") consisting of "outside directors" as defined under section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code") and related
Treasury regulations, and "non-employee directors" as defined under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
However, notwithstanding anything in the Plan to the contrary, the Board must
ratify or approve any grants made to Non-Employee Directors. References in the
Plan to the "Committee" shall be deemed to include the Board, with respect to
ratification or approval of grants made to Non-Employee Directors.

         (b) The Committee shall have the sole authority to (i) determine the
individuals to whom grants shall be made under the Plan, (ii) determine the
type, size and terms of the grants to be made to each such individual, (iii)
determine the time when the grants will be made and the duration of any
applicable exercise or restriction period, including the criteria for vesting
and the acceleration of vesting, (iv) establish the terms of any non-compete
provisions applicable to grants and the terms of any applicable stockholder's
agreement, and (v) deal with any other matters arising under the Plan.

         (c) The Committee shall have full power and authority to administer and
interpret the Plan, to make factual determinations and to adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and for
the conduct of its business as it deems necessary or advisable, in its sole
discretion. The Committee's interpretations of the Plan and all determinations
made by the Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interest in the Plan or in any
awards granted hereunder. All powers of the Committee shall be executed in its
sole discretion, in the best interest of the Company and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.



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         2. Grants

         Awards under the Plan shall consist of Incentive Stock Options and
Nonqualified Stock Options, as defined in Section 5 ("Options"). All Options
shall be subject to the terms and conditions set forth herein and to those other
terms and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the individual
in a grant instrument (the "Grant Instrument") or in an amendment to the Grant
Instrument. The Committee shall approve the form and provisions of each Grant
Instrument. Grants under a particular Section of the Plan need not be uniform as
among the grantees.

         3. Shares Subject to the Plan

         (a) Subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company ("Company Stock") that may be issued under
the Plan is 800,000 shares. The maximum aggregate number of shares of Company
Stock that may be subject to Options granted to any individual during any
calendar year shall be 300,000 shares. The shares may be authorized but unissued
shares of Company Stock or reacquired shares of Company Stock, including shares
purchased by the Company on the open market for purposes of the Plan. If and to
the extent Options granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised, the shares
subject to such Options shall again be available for purposes of the Plan.

         (b) If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization,
stock split, or combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation in which the Company is the surviving
corporation, (iii) by reason of a reclassification or change in par value, or
(iv) by reason of any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Options, the maximum number of shares of Company Stock for
which any individual participating in the Plan may be granted Options in any
year, the number of shares covered by outstanding Options, the kind of shares
issued under the Plan, and the price per share of such Options shall be
appropriately adjusted by the Committee to reflect any increase or decrease in
the number or kind of issued shares of Company Stock to preclude the enlargement
or dilution of rights and benefits under such Options; provided, however, that
any fractional shares resulting from such adjustment shall be eliminated. The
adjustments determined by the Committee shall be final, binding and conclusive.

         4. Eligibility for Participation

         (a) All Employees and Non-Employee Directors shall be eligible to
receive Options under the Plan. The Committee shall select the Employees and
Non-Employee Directors to

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receive Options and shall determine the number of shares of Company Stock
subject to a particular grant in such manner as it determines. Employees and
Non-Employee Directors who receive Options under this Plan shall hereinafter be
referred to as "Grantees".

         (b) Nothing contained in this Plan shall be construed to (i) limit the
right of the Committee to make grants under this Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including options
granted to employees thereof who become Employees, or for other proper corporate
purpose, or (ii) limit the right of the Company to grant stock options or make
other awards outside of this Plan.

         5. Stock Options

         (a) Number of Shares. The Committee shall determine the number of
shares of Company Stock that will be subject to each grant of Options.

         (b) Type of Option and Price.

                  (i) The Committee may grant Options that are intended to
qualify as "incentive stock options" within the meaning of section 422 of the
Code ("Incentive Stock Options") or options that are not intended so to qualify
("Nonqualified Stock Options") or any combination of Incentive Stock Options and
Nonqualified Stock Options, all in accordance with the terms and conditions set
forth herein. Only persons who are employees of the Company or its parent or
subsidiary corporations may receive Incentive Stock Options.

                  (ii) The purchase price (the "Exercise Price") of Company
Stock subject to an Option shall be determined by the Committee and may be equal
to, greater than, or less than the Fair Market Value (as defined below) of a
share of Company Stock on the date the Option is granted; provided, however,
that (x) the Exercise Price of an Incentive Stock Option shall be equal to, or
greater than, the Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (y) an Incentive Stock Option may not be
granted to a person who, at the time of grant, owns stock possessing more than
10 percent of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary of the Company, unless the Exercise Price
per share is not less than 110% of the Fair Market Value of Company Stock on the
date of grant.

                  (iii) If the Company Stock is traded in a public market, then
the Fair Market Value per share shall be determined as follows: (x) if the
principal trading market for the Company Stock is a national securities exchange
or the National Market segment of the Nasdaq Stock Market, the last reported
sale price thereof on the relevant date or (if there were no trades on that
date) the latest preceding date upon which a sale was reported, or (y) if the
Company Stock is not principally traded on such exchange or market, the mean
between the last reported "bid" and "asked" prices of Company Stock on the
relevant date, as reported on Nasdaq or, if not

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so reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not traded in a public market or
subject to reported transactions or "bid" or "asked" quotations as set forth
above, the Fair Market Value per share shall be as determined by the Committee.

         (c) Option Term. The Committee shall determine the term of each Option,
which shall not exceed 10 years from the date of grant. However, an Incentive
Stock Option may not be granted to a person who, at the time of grant, owns
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary of the Company,
unless the Option term does not exceed five years from the date of grant.

         (d) Exercisability of Options. Options shall become exercisable in
accordance with the terms and conditions determined by the Committee and
specified in the Grant Instrument. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.

         (e) Termination of Employment, Disability or Death.

                  (i) Except as provided in the Grant Instrument or as otherwise
provided below, an Option may only be exercised while the Grantee is associated
with the Company or any subsidiary of the Company as an Employee or a
Non-Employee Director (a "Company Relationship"). If a Grantee ceases to have a
Company Relationship for any reason other than a "disability", death, or
"termination for cause", any Option which is otherwise exercisable by the
Grantee shall terminate (except as provided in the Grant Instrument) unless
exercised within 90 days of the date on which the Grantee ceases to have a
Company Relationship (or within such other period of time as may be specified in
the Grant Instrument), but in any event no later than the date of expiration of
the Option term. Any of the Grantee's Options that are not otherwise exercisable
as of the date on which the Grantee ceases to have a Company Relationship shall
terminate as of such date.

                  (ii) If a Grantee ceases to have a Company Relationship on
account of a "termination for cause," any Option held by the Grantee shall
terminate as of the date the Grantee ceases to have a Company Relationship.

                  (iii) If a Grantee ceases to have a Company Relationship
because the Grantee is "disabled", any Option which is otherwise exercisable by
the Grantee shall terminate (except as provided in the Grant Instrument) unless
exercised within one year after the date on which the Grantee ceases to have a
Company Relationship (or within such other period of time as may be specified in
the Grant Instrument), but in any event no later than the date of expiration of
the Option term. Any of the Grantee's Options which are not otherwise
exercisable as of the date on which the Grantee ceases to have a Company
Relationship shall terminate as of such date.

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                  (iv) If a Grantee ceases to have a Company Relationship due to
his or her death while a Company Relationship exists or within 90 days after the
termination of a Company Relationship under Section 5(e)(i) above (or within
such other period of time as may be specified in the Grant Instrument), any
Option that is otherwise exercisable by the Grantee shall terminate (except as
provided in the Grant Instrument) unless exercised within one year after the
date on which the Grantee ceases to have a Company Relationship (or within such
other period of time as may be specified in the Grant Instrument), but in any
event no later than the date of expiration of the Option term. Any of the
Grantee's Options that are not otherwise exercisable as of the date on which the
Grantee ceases to have a Company Relationship shall terminate as of such date.

                  (v) For purposes of this Section 5(e):

                           (A) "Disability" shall mean a Grantee's becoming
         disabled within the meaning of section 22(e)(3) of the Code.

                           (B) "Termination for cause" shall mean, except to the
         extent otherwise provided in a Grantee's Grant Instrument, a finding by
         the Committee, after full consideration of the facts presented, that
         (i) the Grantee committed a material breach of his or her employment or
         service contract with the Grantee's employer, (ii) the Grantee has been
         engaged in disloyalty to his or her employer, including, without
         limitation, fraud, embezzlement, theft, commission of a felony or
         proven dishonesty in the course of his or her employment or service,
         (iii) the Grantee has disclosed trade secrets or confidential
         information of the Company or its subsidiaries to persons not entitled
         to receive such information, or (iv) the Committee determines that, for
         any other reason, the Grantee's employment should be terminated for
         cause. In the event a Grantee's Company Relationship is terminated for
         cause, in addition to the immediate termination of all Options, the
         Grantee shall automatically forfeit all Option shares for any exercised
         portion of an Option for which the Company has not yet delivered the
         share certificates, upon refund by the Company of the Exercise Price
         paid by the Grantee for such shares.

         (f) Exercise of Options. The Grantee shall pay the Exercise Price for
an Option as specified in the Grant Instrument (x) in cash, (y) with the
approval of the Committee, by delivering shares of Company Stock owned by the
Grantee (including Company Stock acquired in connection with the exercise of an
Option, subject to such restrictions as the Committee deems appropriate) and
having a Fair Market Value on the date of exercise equal to the Exercise Price
or (z) by such other method as the Committee may approve, including payment by
tendering the Grantee's promissory note, in such form and on such terms as the
Committee shall determine, or payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board. Shares of
Company Stock used to exercise an Option shall have been held by the Grantee for
the requisite period of time to avoid adverse accounting consequences to the
Company with respect to the Option. The Grantee shall pay the Exercise Price and
the amount of any withholding tax due (pursuant to Section 6) at the time of
exercise. Shares of

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Company Stock shall not be issued upon exercise of an Option until the Exercise
Price is fully paid and any required withholding is made.

         (g) Limit on Incentive Stock Options. Each Incentive Stock Option shall
provide that, if the aggregate Fair Market Value of the stock on the date of the
grant with respect to which Incentive Stock Options are exercisable for the
first time by a Grantee during any calendar year, under the Plan or any other
stock option plan of the Company or a parent or subsidiary, exceeds $100,000,
then the option, as to the excess, shall be treated as a Nonqualified Stock
Option.

         6. Withholding of Taxes

         (a) All grants under the Plan shall be subject to applicable federal
(including FICA), state and local tax withholding requirements. The Company may
require the Grantee or other person receiving shares upon the exercise of an
Option to pay to the Company the amount of any such taxes that the Company is
required to withhold with respect to such Option, or to make other arrangements
satisfactory to the Committee, including, if the Committee so permits, payment
by tendering the Grantee's promissory note in such form and on such terms as the
Committee may determine, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Option.

         (b) If the Grant Instrument (or an amendment) so provides, a Grantee
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option by having shares withheld up to an amount that does not
exceed the Grantee's maximum marginal tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and may be subject to the prior approval of the
Committee.

         7. Transferability of Options

         (a) Except as provided in the Grant Instrument or as otherwise provided
below, (i) only the Grantee may exercise rights under an Option during the
Grantee's lifetime and (ii) the Grantee may not transfer those rights except by
will or by the laws of descent and distribution or, with respect to Nonqualified
Stock Options, if permitted in any specific case by the Committee pursuant to a
domestic relations order (as defined under the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the regulations
thereunder). When a Grantee dies, the representative or other person entitled to
succeed to the rights of the Grantee ("Successor Grantee") may exercise such
rights. A Successor Grantee must furnish proof satisfactory to the Company of
his or her right to receive the Grant under the Grantee's will or under the
applicable laws of descent and distribution.

         (b) Notwithstanding the foregoing, the Committee may provide, in a
Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to
family members or other

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persons or entities according to such terms as the Committee may specify in the
Grant Instrument, provided that the transferred Option continues to be subject
to the same terms and conditions as were applicable to the Option immediately
before the transfer.

         8. Change of Control of the Company

         As used herein, a "Change of Control" shall be deemed to have occurred
if:

         (a) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes a "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the voting power of the then outstanding
securities of the Company;

         (b) The stockholders of the Company approve (or, if stockholder
approval is not required, the Board approves) an agreement providing for (i) the
merger or consolidation of the Company with another corporation where the
stockholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, immediately after the merger or consolidation, shares
entitling such stockholders to more than 50% of all votes to which all
stockholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), or where the members of the Board,
immediately prior to the merger or consolidation, would not, immediately after
the merger or consolidation, constitute a majority of the board of directors of
the surviving corporation, (ii) the sale or other disposition of all or
substantially all of the assets of the Company, or (iii) a liquidation,
dissolution or statutory exchange of the Company; or

         (c) After the date this Plan is approved by the stockholders of the
Company, directors are elected such that a majority of the members of the Board
shall have been members of the Board for less than two years, unless the
election or nomination for election of each new director who was not a director
at the beginning of such two-year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period.

         9. Consequences of a Change of Control

         (a) Upon a Change of Control, unless the Committee determines
otherwise, (i) the Company shall provide each Grantee who holds outstanding
Options written notice of such Change of Control and (ii) all outstanding
Options that are not then exercisable shall automatically accelerate and become
fully exercisable.

         (b) Unless the Committee determines otherwise, upon a Change of Control
where the Company is not the surviving corporation (or survives only as a
subsidiary of another corporation), all outstanding Options shall be assumed by,
or replaced with comparable options by, the surviving corporation.

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         (c) Notwithstanding the foregoing, subject to subsection (d) below, in
the event of a Change of Control, the Committee may take one or both of the
following actions: the Committee may (i) require that Grantees surrender their
outstanding Options in exchange for a payment by the Company, in cash or Company
Stock as determined by the Committee, in an amount equal to the amount by which
the then Fair Market Value of the shares of Company Stock subject to the
Grantee's outstanding Options exceeds the Exercise Price of the Options, or (ii)
after giving Grantees an opportunity to exercise their outstanding Options,
terminate any or all unexercised Options at such time as the Committee deems
appropriate. Such surrender or termination shall take place as of the date of
the Change of Control or such other date as the Committee may specify.

         (d) Notwithstanding anything in the Plan to the contrary, in the event
of a Change of Control, the Committee shall not have the right to take actions
described in the Plan (including without limitation actions described in
Subsection (c) above) that would make the Change of Control ineligible for
pooling of interests accounting treatment or that would make the Change of
Control ineligible for desired tax treatment if, in the absence of such right,
the Change of Control would qualify for such treatment and the Company intends
to use such treatment with respect to the Change of Control.

         10. Requirements for Issuance of Shares

         No Company Stock shall be issued or transferred in connection with any
grant hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any grant made to any Grantee hereunder on such Grantee's undertaking in writing
to comply with such restrictions on his or her subsequent disposition of such
shares of Company Stock as the Committee shall deem necessary or advisable as a
result of any applicable law, regulation or official interpretation thereof and
certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued under the
Plan will be subject to such stop-transfer orders and other restrictions as may
be applicable under such laws, regulations and other obligations of the Company,
including any requirement that a legend or legends be placed thereon.

         11. Amendment and Termination of the Plan

         (a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that any amendment that increases the aggregate number of
shares of Company Stock that may be issued under the Plan (other than by
operation of Section 3(b)) shall be subject to approval by the stockholders of
the Company, and provided, further, that the Board shall not amend the Plan
without stockholder approval if such approval is required by Section 162(m) of
the Code.

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         (b) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or unless it is extended by the Board
with the approval of the stockholders.

         (c) Termination and Amendment of Outstanding Options. A termination or
amendment of the Plan that occurs after a grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 17(b). The termination of the Plan shall not impair
the power and authority of the Committee with respect to an outstanding Grant.
Whether or not the Plan has terminated, an outstanding Grant may be terminated
or amended under Section 17(b) or may be amended by agreement of the Company and
the Grantee consistent with the Plan.

         (d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.

         12. Funding of the Plan

         This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any benefits under this Plan. In no event shall
interest be paid or accrued on any grant, including unpaid installments of
Options.

         13. Rights of Participants

         Nothing in this Plan shall entitle any Employee or Non-Employee
Director or other person to any claim or right to be granted an Option under
this Plan. Neither this Plan nor any action taken hereunder shall be construed
as giving any individual any rights to be retained by or in the employ of the
Company or any other employment rights.

         14. No Fractional Shares

         No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any gant. The Committee shall determine whether cash,
other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.

         15. Headings

         Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

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         16. Effective Date of the Plan.

         This Plan shall be effective as of December 1, 1996, subject to
approval by the shareholders of the Company.

         17. Miscellaneous

         (a) Substitute Options. The Committee may make a grant of Options to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company or any of its subsidiaries in substitution for
a stock option granted by such corporation. The terms and conditions of the
substitute grant may vary from the terms and conditions required by the Plan and
from those of the substituted stock incentives. The Committee shall prescribe
the provisions of the substitute Options.

         (b) Compliance with Law. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Company Stock with
respect to Options shall be subject to all applicable laws and to approvals by
any governmental or regulatory agency as may be required. With respect to
persons subject to Section 16 of the Exchange Act, it is the intent of the
Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under such Act. The
Committee may revoke any grant if it is contrary to law or modify a grant to
bring it into compliance with any valid and mandatory government regulation. The
Committee may, in its sole discretion, agree to limit its authority under this
Section.

         (c) Ownership of Stock. A Grantee or Successor Grantee shall have no
rights as a stockholder with respect to any shares of Company Stock covered by a
Option until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.

         (d) Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the Commonwealth of 
Pennsylvania.

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