Document:

<PAGE>   1
                                                                     EXHIBIT 4.4

                                                           Warrant Number: 01-02

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND IF AN EXEMPTION SHALL BE
APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

Void after 5:00 p.m., Dallas, Texas time, on February 27, 2006

                       WARRANT TO PURCHASE COMMON STOCK OF
                        INTEGRATED SECURITY SYSTEMS, INC.

         FOR VALUE RECEIVED, INTEGRATED SECURITY SYSTEMS, INC. (the "Company") a
Delaware corporation, hereby certifies that HBW Investment Partners II, L.P. or
its permitted assigns, is entitled to purchase from the Company, at any time or
from time to time commencing February 27, 2001, and prior to 5:00 p.m., Dallas,
Texas time, on February 27, 2006, a total of 131,228 fully paid and
non-assessable shares of the Common Stock, par value $.01 per share, of the
Company for the Per Share Warrant Price of $0.20. (Hereinafter, (i) said Common
stock, together with any other equity securities which may be issued by the
Company with respect thereto or in substitution therefore, is referred to as the
"Common Stock," (ii) the shares of the Common Stock purchasable hereunder are
referred to as the "Warrant Shares," (iii) the aggregate purchase price payable
hereunder for the Warrant Shares is referred to as the "Aggregate Warrant
Price," (iv) the price payable hereunder for each of the Warrant Shares is
referred to as the "Per Share Warrant Price," (v) this Warrant, and all warrants
hereafter issued in exchange or substitution for this Warrant are referred to as
the "Warrant" and (vi) the holder of this Warrant is referred to as the
"Holder.") The Per Share Warrant Price is subject to adjustment as hereinafter
provided; in the event of any such adjustment, the number of Warrant Shares
shall be adjusted by dividing the Aggregate Warrant Price by the Per Share
Warrant Price in effect immediately after such adjustment.

         1.       Exercise or Conversion of Warrant.

                  (a) This Warrant may be exercised, in whole at any time or in
part from time to time, commencing February 27, 2001, and prior to 5:00 p.m.,
Dallas, Texas time, on February 27, 2006 by the Holder of this Warrant by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 10(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for Warrant Shares shall be made
by certified or official bank check payable to the order of the Company. If this
Warrant is exercised in part, this Warrant must be exercised for a minimum of
100 shares of the Common Stock, and the Holder is entitled to receive a new
Warrant covering the number of Warrant Shares in respect of which this Warrant
has not been exercised and setting forth the proportionate part of the Aggregate
Warrant Price applicable to such Warrant Shares. Upon such surrender of this
Warrant, the Company will (a) issue a certificate or certificates in the name of
the Holder for the largest number of whole shares of the Common Stock to which
the Holder shall be entitled and, if this Warrant is exercised in whole, in lieu
of any fractional share of the Common Stock to which the Holder shall be
entitled, cash

<PAGE>   2

equal to the fair value of such fractional share (determined in such reasonable
manner as the Board of Directors of the Company shall determine), and (b)
deliver the proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of this Warrant.

                  No Warrant granted herein shall be exercisable after 5:00
p.m., Dallas, Texas time on February 27, 2006.

                  (b) In addition to and without limiting the rights of the
Holder under the terms of this Warrant, the Holder shall have the right (the
"Conversion Right") to convert this Warrant or any portion thereof into Warrant
Shares as provided in this Section 1(b) at any time or from time to time prior
to its expiration.

                           (i)    Upon  exercise of the  Conversion  Right with
respect to a particular number of Warrant Shares (the "Converted Shares"), the
Company shall deliver to the Holder, without payment by the Holder of any Per
Share Warrant Price or any cash or other consideration, that number of Warrant
Shares equal to the quotient obtained by dividing the Net Value (as hereinafter
defined in this paragraph 1(b)(i)) of the Converted Shares by the fair market
value (as defined in paragraph 1(b)(iii) below) of a single Warrant Share,
determined in each case as of the close of business on the Conversion Date (as
hereinafter defined). The "Net Value" of the Converted Shares shall be
determined by subtracting the aggregate Warrant Price of the Converted Shares
from the aggregate fair market value of the Converted Shares. No fractional
securities shall be issuable upon exercise of the Conversion Right, and if the
number of securities to be issued in accordance with the foregoing formula is
other than a whole number, the Company shall pay to the Holder an amount in cash
equal to the fair market value of the resulting fractional Warrant Share.

                           (ii)   The Conversion Right may be exercised by the
Holder by the surrender of this Warrant at the principal office of the Company
or at the office of the Company's stock transfer agent, if any, together with a
written statement specifying the Holder thereby intends to exercise the
Conversion Right. Such conversion shall be effective upon receipt by the Company
of this Warrant together with the aforesaid written statement, or on such later
date as is specified therein (the "Conversion Date"), but not later than the
expiration date of the Warrant. Certificates for the Converted Shares issuable
upon exercise of the Conversion Right, together with a check in payment of any
fractional Warrant Share and, in the case of a partial exercise a new warrant
evidencing the Warrant Shares remaining subject to the Warrant, shall be issued
as of the Conversion Date and shall be delivered to the Holder within seven (7)
days following the Conversion Date.

                           (iii)  For purposes of this Section 1, the "fair
market value" of a Warrant Share of as of a particular date shall be its "market
price," which, for purposes of this Section 1 shall mean, if the Warrant Shares
are traded on a securities exchange or on the Nasdaq National Market System, or,
if the Warrant Shares are otherwise traded in the over-the-counter market, the
average of the closing bid and ask price, in each case averaged over a period of
five consecutive trading days prior to the date as of which "market price" is
being determined. If at any time the Warrant Shares are not traded on an
exchange or the Nasdaq National Market System, or otherwise traded in the
over-the-counter market, the "market price" shall be deemed to be higher of (i)
the shareholders' equity thereof as of the last day of any month ending within
sixty (60) days preceding the date as of which the determination is to be made
as determined by the Board of Directors of the Company, or (ii) the fair value
thereof determined in good faith by the Board of Directors of the Company as of
a date which is within fifteen (15) days of the date as of which the
determination is to be made.

<PAGE>   3

         2.       Reservation of Warrant Shares. The Company agrees that, prior
to the expiration of this Warrant, the Company will at all times have authorized
and in reserve, and will keep available, solely for issuance or delivery upon
the exercise of this Warrant, the shares of the Common Stock as from time to
time shall be receivable upon the exercise of this Warrant.

         3.       Anti-Dilution Provisions.

                  (a) If, at any time or from time to time after the date of
this Warrant, the Company shall distribute to the holders of the Common Stock
(i) securities, other than shares of the Common Stock, or (ii) property, other
than cash, without payment therefore, with respect to the Common Stock, then,
and in each such case, the Holder, upon the exercise of this Warrant, shall be
entitled to receive the securities and properties which the Holder would hold on
the date of such exercise if, on the date of this Warrant, the Holder had been
the holder of record of the number of shares of the Common Stock subscribed for
upon such exercise and, during the period from the date of this Warrant to and
including the date of such exercise, had retained such shares and the securities
and properties receivable by the Holder during such period. Notice of each such
distribution shall be forthwith mailed to the Holder.

                  (b) In case the Company shall thereafter (i) pay a dividend or
make a distribution on its capital stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of (iv) issue by reclassification of its Common Stock any
shares of capital stock of the Company, the Per Share Warrant Price in effect
immediately prior to such action shall be adjusted so that if the Holder
surrendered this Warrant for exercise immediately thereafter the Holder would be
entitled to receive the number of shares of Common Stock or other capital stock
of the Company which he would have owned immediately following such action had
such Warrant been exercised immediately prior thereto. An adjustment made
pursuant to this subsection (b) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.

                  (c) In case of any consolidation or merger to which the
Company is a party other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or conveyance to another
entity of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the Holder shall be obligated to convert
this Warrant into the kind and amount of securities, cash or other property
which he would have owned or have been entitled to receive immediately after
such consolidation, merger, statutory exchange, sale or conveyance had such
Warrant been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale or conveyance and in any such
case, if necessary, appropriate adjustment shall be made in the application of
the provisions set forth in this Section 3 with respect to the rights and
interests thereafter of the Holder to the end that the provisions set forth in
this Section 3 shall thereafter correspondingly be made applicable, as nearly as
may reasonably be, in relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of this Warrant. The above
provisions of this subsection (c) shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyance. Notice of any
such consolidation, merger, statutory exchange, sale or conveyance and of said
provisions so proposed to be made, shall be mailed to the Holder not less than
30 days prior to such event. A sale of all or substantially all of the assets of
the Company for a consideration consisting primarily of securities shall be
deemed a consolidation or merger for the foregoing purposes.

<PAGE>   4

                  (d) Whenever the Per Share Warrant Price is adjusted as
provided in this Section 3 and upon any modification of the rights of the Holder
of this Warrant in accordance with this Section 3, the Company shall promptly
prepare a certificate of an officer of the Company, setting forth the Per Share
Warrant Price and the number of Warrant Shares after such adjustment or
modification, a brief statement of the facts requiring such adjustment or
modification and the manner of computing the same and cause a copy of such
certificate to be mailed to the Holder.

                  (e) If the Board of Directors of the Company shall declare any
dividend or other distribution in cash with respect to the Common Stock, the
Company shall mail notice thereof to the Holder not less than 15 days prior to
the record date fixed for determining shareholders entitled to participate in
such dividend or other distribution.

         4.       Fully Paid Stock; Taxes. The Company agrees that the shares of
the Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Warrant shall, at the time of such delivery,
be validly issued and outstanding, fully paid and non-assessable, and not
subject to preemptive rights, and the Company will take all such actions as may
be necessary to assure that the par value or stated value, if any, per share of
the Common Stock is at all times equal to or less than the then Per Share
Warrant Price. The Company further covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp or similar taxes that may
be payable in respect of the issue of any Warrant Share of certificate
therefore.

         5.       Transfer.

                  (a) Securities Laws. This Warrant has not been registered
under the Securities Act of 1933, as amended (the "Securities Act") or under any
state securities laws and unless so registered may not be transferred, sold
pledged, hypothecated or otherwise disposed of unless an exemption from such
registration is available. In the event Holder desires to transfer this Warrant,
the Holder must give the Company prior written notice of such proposed transfer
including the name and address of the proposed transferee. Such transfer may be
made only (i) upon receipt by the Company of an opinion of counsel to the
Company or other counsel to the Holder, which other counsel is reasonably
satisfactory to the Company to the effect that the proposed transfer will not
violate the provisions of the Securities Act, the Securities Exchange Act of
1934, as amended, or the rules and regulations promulgated under either such
act; or (ii) if the Warrant has been registered under the Securities Act and
there is in effect a current prospectus meeting the requirements of Subsection
10(a) of the Securities Act, which is being or will be delivered to the
purchaser or transferee at or prior to the time of delivery of the certificates
evidencing the Warrant to be sold or transferred.

                  (b) Conditions to Transfer. Prior to any proposed transfer
referred to in subparagraph (a) above, and as a condition thereto, if such
transfer is not made pursuant to an effective registration statement under the
Securities Act, the Holder will, if requested by the Company, deliver to the
Company (i) an investment covenant signed by the proposed transferee, (ii) an
agreement by such transferee to the impression of the restrictive investment
legend set forth herein on the certificate or certificates representing the
securities acquired by such transferee, (iii) an agreement by such transferee
that the Company may place a "stop transfer order" with its transfer agent or
registrar, and (iv) an agreement by the transferee to indemnify the Company to
the same extent as set forth in the next succeeding paragraph.

                  (c) Indemnity. The Holder acknowledges that the Holder
understands the meaning and legal consequences of this Section 5, and the Holder
hereby agrees to indemnify and hold harmless the Company, its representatives
and each officer and director thereof from and against any and all loss, damage
or liability (including all attorneys' fees and costs incurred in enforcing this
indemnity provision)

<PAGE>   5

due to or arising out of (a) the inaccuracy of any representation or the breach
of any warranty of the Holder contained in, or any other breach of this Warrant,
(b) any transfer of any of the Warrant or the Warrant Shares in violation of the
Securities Act, the Securities Exchange Act of 1934, as amended, or the rules
and regulations promulgated under either of such acts, (c) any transfer of the
Warrant or any of the Warrant Shares not in accordance with this Warrant or (d)
any untrue statement or omission to state any material fact in connection with
the investment representations or with respect to the facts and representations
supplied by the Holder to counsel to the Company upon which its opinion as to a
proposed transfer shall have been based.

                  (d) Transfer. Subject to the restrictions contained herein,
this Warrant and the Warrant Shares issued may be transferred by the Holder in
whole or in part at any time or from time to time. Upon surrender of this
Warrant to the Company or at the office of its stock transfer agent, if any,
with assignment documentation duly executed and funds sufficient to pay any
transfer tax, and upon compliance with the foregoing provisions, the Company
shall, without charge, execute and deliver a new Warrant in the name of the
assignee named in such instrument of assignment, and this Warrant shall promptly
be canceled. Any assignment, transfer, pledge, hypothecation or other
disposition of this Warrant attempted contrary to the provisions of this
Warrant, or any levy of execution, attachment or other process attempted upon
the Warrant, shall be null and void and without effect.

                  (e) Legend and Stop Transfer Orders. The Company shall
instruct its transfer agent to enter stop transfer orders with respect to the
shares of Common Stock issuable upon exercise of the Warrants, and all
certificates representing Warrant Shares shall bear on the face thereof
substantially the following legend:

                  "The shares of common stock represented by this
                  certificate have not been registered under the
                  Securities Act of 1933, as amended, and may not be
                  sold, offered for sale, assigned, transferred or
                  otherwise disposed of unless registered pursuant to
                  the provisions of that Act or an opinion of counsel
                  to the Company is obtained stating that such
                  disposition is in compliance with an available
                  exemption from such registration."

         6.       Registration Rights. If holders of at least 51% of the Series
F Preferred Stock (or Common Stock issued upon conversion of the Series F
Preferred Stock, or a combination of such Common Stock and the Series F
Preferred Stock) request that the Company file a registration statement under
the Securities Act of 1933 covering such shares, the Company will use its best
efforts to cause such shares to be registered. The Company will not be obligated
to affect more than one registration of such shares.

                  If the Company proposes to file a registration statement for
its Common Stock, the holders of the warrants related to the Series F Preferred
Stock will be entitles to include their shares in such registration statement.
This right is not limited to any particular number of registration statements.

         7.       Expenses. For purposes of this Section 7, "Registration
Expenses" shall mean any and all expenses, except Selling Expenses as defined
below, incurred by the Company in complying with this warrant, including without
limitation, (a) all Securities and Exchange Commission and stock exchange or
National Association of Securities Dealers registration and filing fees, (b) all
fees and expenses of complying with securities or blue sky laws (including
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the registered securities), (c) all printing,
messenger and delivery expenses, (d) the fees and disbursements of counsel for
the Company and of its independent public accountants, including the expenses of
any special audits and/or "cold comfort" letters required by or incident to such
performance and compliance and (e) any reasonable fees and expenses of

<PAGE>   6

any special experts retained in connection with the registration, but excluding
underwriting discounts and commissions and transfer taxes, if any. "Selling
Expenses" shall mean all underwriting discounts, selling commissions and stock
transfer taxes applicable to the securities registered by the Holders and,
except as set forth in the definition of Registration Expenses, all reasonable
fees and disbursements of one counsel for Holders, as chosen by a simple
majority of such Holders.

         All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Warrant shall be borne by the
Company. All Selling Expenses relating to securities registered on behalf of
Holders in any registration, qualification or compliance pursuant to this
Warrant shall be borne by the Holders pro rata based on the number of shares to
be registered.

         8.       Loss, etc. of Warrant. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like date,
tenor and denomination.

         9.       Warrant Holder Not Shareholder. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a shareholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.

         10.      Communication. No notice or other communication under this
Warrant shall be effective unless the same is in writing and is mailed by
first-class mail, postage prepaid, addressed to:

                  (a) the Company at 8200 Springwood Drive, Suite 230, Irving,
Texas 75063, or such other address as the Company has designated in writing to
the Holder, or

                  (b) the Holder at 13355 Noel Road, Suite 1650, Dallas, Texas
75240 or such other address as the Holder has designated in writing to the
Company.

         11.      Headings. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.

         12.      Applicable Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Texas.

         IN WITNESS WHEREOF, INTEGRATED SECURITY SYSTEMS, INC., has caused this
Warrant to be signed by its President and its corporate seal to be hereunto
affixed and attested by its Secretary this 27th day of February, 2001.

                                      INTEGRATED SECURITY SYSTEMS, INC.

                                      By: /s/ C.A. Rundell, Jr.
                                         ------------------------------------
                                         C. A. Rundell, Jr.
                                         Chairman and Chief Executive Officer

ATTEST:

-----------------------------

[Corporate Seal]

<PAGE>   7

                        WARRANT CONVERSION EXERCISE FORM

TO:      INTEGRATED SECURITY SYSTEMS, INC.

         Pursuant to Section 1(b) of the Warrant Certificate Number 01-02 from
Integrated Security Systems, Inc. (the "Company") to the undersigned Holder, the
Holder hereby irrevocably elects to convert Warrants with respect to Shares of
the Company into 131,228 Shares of the Company.

         The undersigned requests that certificate(s) for such Shares be issued
as follows:

                  Name:             HBW Investment Partners II, L.P.
                  Address:          13355 Noel Road, Suite 1650
                                    Dallas, Texas  75240

                  Deliver to:       William D. Breedlove, President
                                    HBW Investments, Inc., its General Partner

and that a new Warrant Certificate for the balance remaining of the Warrants, if
any, subject to the Warrant be registered in the name of, and deliver to, the
undersigned at the address stated above.

         Dated:  February 27, 2001

                                         HBW Investment Partners II, L.P.

                                         -----------------------------------
                                         William D. Breedlove, President
                                         HBW Investments, Inc.

                             * * * * * * * * * * * *

                       CALCULATION OF WARRANT CONVERSION
<TABLE>

<S>                          <C> <C>
      Converted Securities   =   Net Value
                                 ---------
                                    fmv
                       fmv   =   $
                                  --------

                 Net Value   =   aggregate fmv - aggregate Exercise Price

                             =   $             - $
                                  ------------    ------------
                             =   $
                                  ------------
          Converted Shares   =                   (to be issued)
                                 ----------------

         Fractional Shares                        (value to be paid in cash)
                                 ----------------
</TABLE><PAGE>   1
                                                                  Exhibit 10.11

                                  AMENDMENT OF
                                SPX CORPORATION
                          1992 STOCK COMPENSATION PLAN
                (As amended and Restated Effective December 10,
               1997 and Further Amended Effective August 26, 1998
                              and April 28, 1999)

         WHEREAS, SPX Corporation (the "Company") maintains the SPX Corporation
1992 Stock Compensation Plan (the "Plan"); and

         WHEREAS, amendment of the Plan is now deemed desirable;

         NOW THEREFORE, pursuant to the amending authority reserved to the
Company under Section 14, of the Plan, the Plan is hereby amended effective
January 1, 2000, subject to the approval of the Company's stockholders, by
substituting the following for the last sentence of Subsection 5.1 of the Plan:

         "The maximum aggregate number of shares of Common Stock (including
         Options, Restricted Stock, Stock Appreciation Rights and Performance
         Units to be paid out in shares of Common Stock) that may be granted or
         that may vest with respect to awards granted in any one fiscal year to
         a Participant shall be 2,000,000, subject to adjustment upon the
         occurrence of any of the events indicated in Subsection 5.3."

<PAGE>   2
                                  AMENDMENT TO
                                SPX CORPORATION
                          1992 STOCK COMPENSATION PLAN
            (As Amended and Restated Effective December 10, 1997 and
                   Further Amended Effective August 26, 1998)

         WHEREAS, SPX Corporation (the "Company") maintains the SPX Corporation
1992 Stock Compensation Plan (the "Plan"); and

         WHEREAS, it is now deemed desirable and in the best interests of the
Company and its stockholders to increase the number of shares available for
issuance under the Plan, subject to the approval of the Company's stockholders;

         NOW, THEREFORE, by virtue and in exercise of the amending authority
reserved to the Company under Section 14 of the Plan, the Plan is hereby
amended, subject to the approval of the Company's stockholders, by deleting
Subsection 5.1 of the Plan and substituting the following therefor:

         "5.1. Number. The total number of shares of Common Stock of the Company
subject to issuance under the Plan, and subject to adjustment upon occurrence of
any of the events indicated in Subsection 5.3, may not exceed 5,000,000. Of this
total number, up to 200,000 shares of Common Stock may be granted to
Participants in the form of Restricted Stock. The shares to be delivered under
the Plan may consist, in whole or in part, of authorized but unissued stock or
treasury stock not reserved for any other purpose. The maximum aggregate number
of shares of Common Stock (including Options, Restricted Stock, Stock
Appreciation Rights and Performance Units to be paid out in shares of Common
Stock) that may be granted or that may vest with respect to awards granted in
any one fiscal year to a Participant shall be 100,000 subject to adjustment upon
the occurrence of any of the events indicated in Subsection 5.3."

<PAGE>   3
                                  AMENDMENT OF
                                SPX CORPORATION
                          1992 STOCK COMPENSATION PLAN
             (As amended and Restated Effective December 10, 1997)

         FURTHER RESOLVED, that the Plan be and it hereby is amended so that the
aggregate number of shares of SPX Common Stock available for issuance in
connection with grants under the Plan shall be up to 3 million shares (as the
same may be adjusted from time to time to reflect changes in the Corporation's
capitalization), and such amendment be, and it hereby is, approved and adopted,
subject to the approval of the stockholders of the Corporation;

<PAGE>   4
                                SPX CORPORATION
                          1992 STOCK COMPENSATION PLAN
               (Amended and Restated Effective December 10, 1997)

SECTION 1.         ESTABLISHMENT, PURPOSES AND EFFECTIVE DATE OF PLAN

1.1. Establishment.  SPX Corporation, a Delaware corporation, has established
the "1992 Stock Compensation Plan" (the "Plan").  The Plan, which originally
amended and restated the prior "Stock Compensation Plan," permits the awarding
of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock and Performance Units.

1.2. Purposes. The purpose of the Plan is to advance the interests of the
Company and its Subsidiaries and divisions by (a) encouraging and providing for
the acquisition of equity interests in the Company by Key Employees, thereby
increasing the stake in the future growth and prosperity of the Company, and
furthering Key Employees' identity of interest with those of the Company's
shareholders, and (b) enabling the Company to compete with other organizations
in attracting, retaining, promoting and rewarding the services of Key Employees.

1.3. Effective Dates. On April 28, 1993, the Company's shareholders approved the
adoption of the Plan effective as of December 15, 1992. On December 11, 1996,
the Board adopted certain amendments to the Plan, which were approved by the
Company's shareholders on April 23, 1997. Effective December 10, 1997, the Plan
is amended and restated, as set forth herein and as approved by the Board on
December 10, 1997.

SECTION 2.         DEFINITIONS.

2.1. Definitions.  Whenever used herein, the following terms shall have their
respective meanings set forth below:

(a) "Board" means the Board of Directors of the Company.

(b) "Code" means the Internal Revenue Code of 1986, as amended.

(c) "Committee" means the Compensation Committee of the Board, which shall
consist of not less than three persons appointed by the Board from among those
Board members who are not employees of the Company or any of its subsidiaries or
divisions. The Committee shall administer the Plan pursuant to the provisions of
Section 4.

(d) "Common Stock" means the Common Stock, par value $10.00, of the Company or
such other class of shares or other securities as may be applicable pursuant to
the provisions of Subsection 5.3.

(e) "Company" means SPX Corporation, a Delaware corporation.

<PAGE>   5
(f) "Fair Market Value" means, as to any date, the fair market value of Common
Stock determined by such methods or procedures as shall be established from time
to time by the Committee or, if not otherwise determined, fair market value
means the closing price of a share of Common Stock as reported in the
"NYSE-Composite Transactions" section of the Midwest Edition of The Wall Street
Journal for such date (or, if no prices are quoted for such date, on the next
preceding date on which such prices of Common Stock are so quoted).

(g) "Key Employee" means an employee of the Company or of a Subsidiary,
including an officer or director, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of the Company or a
Subsidiary. Key Employees also may include those employees identified by the
Committee to be in situations of extraordinary performance, promotion, retention
or recruitment. The awarding of a grant under this Plan to an employee by the
Committee shall be deemed a determination by the Committee that such employee is
a Key Employee.

(h) "Mature Common Stock" means Common Stock that has been acquired by the
holder thereof on the open market or that has been acquired pursuant to this
Plan or another employee benefit arrangement of the Company and held for at
least six months.

(i) "Options" means the right to purchase stock at a stated price for a
specified period of time. For purposes of the Plan an Option may be either (a)
an "incentive stock option" within the meaning of Code Section 422, or (b) a
"nonqualified stock option" which is intended not to fall under the provisions
of Code Section 422.

(j) "Option Price" means the price at which each share of Common Stock subject
to an Option may be purchased, determined in accordance with Subsection 7.3.

(k) "Participant" means any individual designated by the Committee to
participate in this Plan pursuant to Subsection 3.1.

(l) "Period of Restriction" means the period during which the transfer of shares
of Restricted Stock is restricted pursuant to Section 9.

(m) "Restricted Stock" means the Common Stock granted to a Participant pursuant
to Section 9.

(n) "Stock Appreciation Right" means the right to receive a cash payment from
the Company equal to the excess of the Fair Market Value of a share of Common
Stock at the date of exercise of the Right over a specified price fixed by the
Committee at grant (exercise price), which shall not be less than 100% of the
Fair Market Value of the Common Stock on the date of grant. In the case of a
Stock Appreciation Right which is granted in conjunction with an Option, the
specified price shall be the Option Price.

(o) "Subsidiary" means a corporation at least 50% or more of the voting power of
which is owned, directly or indirectly, by the Company.

<PAGE>   6
2.2. Gender and Number.  Except when otherwise indicated by the context, words
in the masculine gender when used in the Plan shall include the feminine gender,
the singular shall include the plural, and the plural shall include the
singular.

SECTION 3.         ELIGIBILITY AND PARTICIPATION

Participants in the Plan shall be selected by the Committee from among those
employees of the Company who are considered Key Employees.

SECTION 4.         ADMINISTRATION

4.1. Administration. The Plan shall be administered by a Committee to be known
as the "Compensation Committee," which shall consist of not less than three
directors of the Company designated by the Board; provided, however, that no
director who is an employee of the Company, a Subsidiary or a division shall be
appointed to the Committee. For purposes of any award granted under the Plan by
the Committee that is intended to be exempt from the restrictions of Section
16(b) of the Securities Exchange Act of 1934 (the "Act"), the Committee shall
consist only of directors who qualify as "non-employee directors," as defined in
Rule 16b-3 under the Act. For purposes of any award granted under the Plan by
the Committee that is intended to qualify for the performance-based compensation
exemption to the $1 million deductibility limit under Code Section 162(m), the
Committee shall consist only of directors who qualify as "outside directors," as
defined in Code Section 162(m) and the related regulations. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business, and the vote of the majority of those members present at any meeting
shall decide any question brought before that meeting. In addition, the
Committee may take any action otherwise proper under the Plan by the unanimous
written consent of its members.

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

SECTION 5.         STOCK SUBJECT TO PLAN

5.1. Number. The total number of shares of Common Stock of the Company subject
to issuance under the Plan, and subject to adjustment upon occurrence of any of
the events indicated in Subsection 5.3, may not exceed 1,900,000. Of this total
number, up to 200,000 shares of Common Stock may be granted to Participants in
the form of Restricted Stock. The shares to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued stock or treasury stock
not reserved for any other purpose. The maximum aggregate number of shares of
Common Stock (including Options, Restricted Stock, Stock Appreciation Rights and

<PAGE>   7
Performance Units to be paid out in shares of Common Stock) that may be granted
or that may vest with respect to awards granted in any one fiscal year to a
Participant shall be 100,000, subject to adjustment upon the occurrence of any
of the events indicated in Subsection 5.3.

5.2. Unused Stock. In the event any shares of Common Stock that are subject to
an Option which, for any reason, expires, terminates or is canceled as to such
shares, or any shares of Common Stock subject to a Restricted Stock award made
under the Plan are reacquired by the Company pursuant to the Plan, or any Stock
Appreciation Right expires unexercised, such shares and rights again shall
become available for issuance under the Plan. Any shares of Common Stock
withheld or tendered to pay withholding taxes pursuant to Subsection 15.2 or
withheld or tendered in full or partial payment of the exercise price of an
Option pursuant to Subsection 7.6 shall again become available for issuance
under the Plan. In addition, all shares which reverted back to the Stock
Compensation Plan due to the expiration or termination of an award under the
terms of the Stock Compensation Plan or the 1982 Stock Option Plan have been
carried forward and are considered available for issuance under the terms of
this Plan.

5.3. Adjustment in Capitalization. In the event of any change in the outstanding
shares of Common Stock that occurs after ratification of the Plan by the
shareholders of the Company by reason of a Common Stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change, the aggregate number of shares of Common Stock
subject to each outstanding Option, and its stated Option Price, shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive; provided, however, that fractional shares shall be rounded to the
nearest whole share. In such event, the Committee also shall have discretion to
make appropriate adjustments in the number and type of shares subject to
Restricted Stock grants then outstanding under the Plan pursuant to the terms of
such grants or otherwise. The Committee also shall make appropriate adjustments
in the number of outstanding Stock Appreciation Rights and Performance Units and
the related grant values.

SECTION 6.         DURATION OF PLAN

         The Plan shall remain in effect, subject to the Board's right to
earlier terminate the Plan pursuant to Section 14 hereof, until all Common Stock
subject to it shall have been purchased or acquired pursuant to the provisions
hereof. However, no Option, Stock Appreciation Right, Restricted Stock or
Performance Unit may be granted under the Plan on or after December 15, 2002,
which is the tenth anniversary of the Plan's effective date.

SECTION 7.         STOCK OPTIONS

7.1. Grant of Options. Subject to the provisions of Sections 5 and 6, Options
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete discretion in
determining the number of Options granted to each Participant. The Committee
also shall determine whether an Option is an incentive stock option within the
meaning of Code Section 422, or a nonqualified stock option. However, in no
event shall the Fair Market Value (determined at the date of grant) of Common
Stock for which incentive stock options become exercisable for the first time in
any calendar year exceed $100,000, computed in accordance with Code Section
422(b)(7). In addition, no incentive stock

<PAGE>   8
option shall be granted to any person who owns, directly or indirectly, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company. Nothing in this Section 7 shall be deemed to prevent the
grant of nonqualified stock options in excess of the maximum established by Code
Section 422.

7.2. Option Agreement. Each Option shall be evidenced by an Option Agreement
that shall specify the type of Option granted, the Option Price, the duration of
the Option, the number of shares of Common Stock to which the Option pertains,
and such other provisions as the Committee shall determine. The Option Agreement
shall specify whether the Option is intended to be an incentive stock option
within the meaning of Code Section 422, or a nonqualified stock option which is
intended not to fall under the provisions of Code Section 422.

7.3. Option Price.  The Option Price shall be determined by the Committee.
However, no Option granted pursuant to the Plan shall have an Option Price that
is less than the Fair Market Value of the Common Stock on the date the Option is
granted.

7.4. Duration of Options.  Each option shall expire at such time as the
Committee shall determine at the time it is granted, provided, however, that no
Option shall be exercisable later than the tenth anniversary of its grant date.

7.5. Exercise of Options.  Options granted under the Plan 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 all
Participants.

7.6. Method of Exercise and Payment of Option Price. Options shall be exercised
pursuant to the methods and procedures as shall be established from time to time
by the Committee. The Committee shall determine the acceptable form or forms and
timing of payment of the Option Price. Acceptable forms of paying the Option
Price upon exercise of any Option shall include, but not be limited to, (a) cash
or its equivalent, (b) tendering shares of previously acquired Common Stock
having a Fair Market Value at the time of exercise equal to the total Option
Price, (c) directing the Company to withhold shares of Common Stock, which may
include attesting to the ownership of the equivalent number of shares of
previously-acquired Mature Common Stock having a Fair Market Value at the time
of exercise equal to the total Option Price, (d) other approved property or (e)
by a combination of (a), (b), (c) and/or (d). The proceeds from such a payment
shall be added to the general funds of the Company and shall be used for general
corporate purposes. As soon as practicable, after Option exercise and payment,
the Company shall deliver to the Participant Common Stock certificates in an
appropriate amount based upon the number of Options exercised, issued in the
Participant's name.

7.7. Restrictions on Common Stock Transferability. The Committee shall impose
such restrictions on any shares of Common Stock acquired pursuant to the
exercise of an Option under the Plan as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities law, under
the requirements of any stock exchange upon which such shares of Common Stock
are then listed and under any blue sky or state securities laws applicable to
such shares.

<PAGE>   9
7.8. Termination of Employment Due to Death, Disability or Retirement. In the
event the employment of a Participant is terminated by reason of death, any
outstanding Options shall become immediately fully vested and exercisable within
such period following the Participant's death as shall be determined by the
Committee, but in no event beyond the expiration of the term of the Option, by
such person or person as shall have acquired the Participant's rights under the
Option by will or by the laws of descent and distribution. In the event the
employment of a Participant is terminated by reason of retirement or disability
(as such terms are defined under the applicable rules of the Company), any
outstanding Options shall become immediately fully vested and exercisable within
such period after such date of termination of employment as shall be determined
by the Committee, but in no event beyond the expiration of the term of the
Option.

7.9. Termination of Employment Other Than for Death, Disability or Retirement.
If the employment of the Participant terminates for any reason other than death,
disability or retirement, the Participant shall have the right to exercise the
Option within such period after the date of his termination as shall be
determined by the Committee, but in no event beyond the expiration of the term
of the Option and only to the extent that the Participant was entitled to
exercise the Option at the date of his termination of employment. Regardless of
the reasons for termination of employment, incentive stock options must be
exercised within the Code Section 422 prescribed time period in order to receive
the favorable tax treatment applicable thereto.

7.10. Nontransferability of Options. Except as provided in this Subsection 7.10,
no Option 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, and all Options granted to a Participant under the
Plan shall be exercisable during his lifetime only by such Participant. Under
such rules and procedures as the Committee may establish, the holder of an
Option may transfer such Option to members of the holder's immediate family
(i.e., children, grandchildren and spouse) or to one or more trusts for the
benefit of such family members or to partnerships in which such family members
are the only partners, provided that (i) the agreement, if any, with respect to
such Option, expressly so permits or is amended to so permit, (ii) the holder
does not receive any consideration for such transfer, and (iii) the holder
provides such documentation or information concerning any such transfer or
transferee as the Committee may reasonably request. Any Options held by any
transferees shall be subject to the same terms and conditions that applied
immediately prior to their transfer. The Committee may also amend the agreements
applicable to any outstanding Options to permit such transfers. Any Option not
granted pursuant to any agreement expressly permitting its transfer or amended
expressly to permit its transfer shall not be transferable. Such transfer rights
shall in no event apply to any incentive stock option.

7.11. Non-Qualified Replacement Options. The Committee may grant to any Key
Employee a replacement Option to purchase additional shares of Common Stock
equal to the number of shares delivered by the Key Employee and/or withheld by
the Company in satisfaction of the exercise price and/or tax withholding
obligations with respect to an Option. The terms of a replacement Option shall
be identical to the terms of the exercised Option, except that the exercise
price shall be not less than the Fair Market Value on the grant date of the
replacement Option. At the discretion of the Committee, the Option Agreement for
any Option under the

<PAGE>   10
Plan (including any previously granted and outstanding nonqualified stock
option, where the applicable Option Agreement is appropriately amended) may
provide for the automatic grant of such a replacement Option or for the
automatic grants of multiple replacement Options over the term of the initial
Option.

SECTION 8.         STOCK APPRECIATION RIGHTS

8.1. Grant of Stock Appreciation Rights. Subject to the terms and provisions of
this Plan, Stock Appreciation Rights may be granted to Participants either
independent of Options or in conjunction with nonqualified stock options at any
time and from time to time as shall be determined by the Committee.

8.2. Exercise of Stock Appreciation Rights Granted in Conjunction with a
Nonqualified Option. Stock Appreciation Rights granted in conjunction with a
nonqualified stock option may be exercised at any time during the life of the
related stock option, with a corresponding reduction in the number of shares
available under the Option. Option shares with respect to which the Stock
Appreciation Right shall have been exercised may not again be subject to an
Option under this Plan.

8.3. Exercise of Stock Appreciation Rights Granted Independent of Options. Stock
Appreciation Rights granted independent of Options may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes on
the Stock Appreciation Right including, but not limited to, a corresponding
proportional reduction in previously granted Options.

8.4. Payment of Stock Appreciation Right Amount.  Upon exercise of a Stock
Appreciation Right, the holder shall be entitled to receive payment of an amount
(subject to Subsection 8.5 below) determined by multiplying:

(a) The difference between the Fair Market Value of a share of Common Stock at
the date of exercise over the price fixed by the Committee at the date of grant,
by

(b) The number of shares with respect to which the Stock Appreciation Right is
exercised.

8.5. Form of Payment.  Payment to the Participant, upon the exercise of a Stock
Appreciation Right, will be made in cash.

8.6. Limit on Appreciation.  The Committee, in its sole discretion, may
establish (at the time of grant) a maximum amount per share which will be
payable upon exercise of a Stock Appreciation Right.

8.7. Term of Stock Appreciation Right.  The term of a Stock Appreciation Right
granted under the Plan shall not exceed ten years.

<PAGE>   11
8.8. Termination of Employment. In the event that the employment of a
Participant is terminated by reason of death, disability or retirement, or for
any other reason, the exercisability of any outstanding Stock Appreciation
Rights granted in conjunction with an Option shall terminate in the same manner
as specified for their related Options under Subsections 7.8 and 7.9. The
exercisability of any outstanding Stock Appreciation Rights granted independent
of Options also shall terminate in the manner provided under Subsections 7.8 and
7.9.

8.9. Nontransferability of Stock Appreciation Rights. No Stock Appreciation
Right 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 Stock Appreciation Rights granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.

SECTION 9.           RESTRICTED STOCK

9.1. Grant of Restricted Stock. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant shares of
Restricted Stock to such Participants and in such amounts as it shall determine.
It is contemplated that Restricted Stock grants will be made only in
extraordinary situations of performance, promotion, retention or recruitment.

9.2. Restricted Stock Agreement.  Each Restricted Stock grant shall be evidenced
by a Restricted Stock Agreement that shall specify the restriction period or
periods, the number of Restricted Stock shares granted, and such other
provisions as the Committee shall determine.

9.3. Transferability. Except as provided in this Section 9, the shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated until the termination of the
applicable Period of Restriction or for such period of time as shall be
established by the Committee and as shall be specified in the Restricted Stock
Agreement, or upon earlier satisfaction of other conditions as specified by the
Committee in its sole discretion and set forth in the Restricted Stock
Agreement. All rights with respect to the Restricted Stock granted to a
Participant under the Plan shall be exercisable during his lifetime only by such
Participant.

9.4. Other Restrictions. The Committee shall impose such other restrictions on
any shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions under applicable Federal
or state securities laws, and may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.

9.5. Certificate Legend.  In addition to any legends placed on certificates
pursuant to Subsection 9.4, each certificate representing shares of Restricted
Stock granted pursuant to the Plan shall bear the following legend:

<PAGE>   12
                  "The sale or other transfer of the shares of stock represented
         by this certificate, whether voluntary, involuntary or by operation of
         law, is subject to certain restrictions on transfer set forth in the
         1992 Stock Compensation Plan of SPX Corporation, rules and
         administration adopted pursuant to such Plan, and a Restricted Stock
         grant dated _____________________. A copy of the Plan, such rules and
         such Restricted Stock grant may be obtained from the Secretary of SPX
         Corporation."

9.6. Removal of Restrictions. Except as otherwise provided in this Section,
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 Period of Restriction. Once the shares are released from the restrictions,
the Participant shall be entitled to have the legend required by Subsection 9.5
removed from his Common Stock certificate.

9.7. 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.

9.8. Dividends and Other Distributions. During the Period of Restriction,
Participants holding shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those shares while they are so held. If any such dividends or distributions are
paid in shares of Common Stock, the shares shall be subject to the same
restrictions on transferability as the shares of Restricted Stock with respect
to which they were paid.

9.9. Termination of Employment Due to Retirement. In the event that a
Participant terminates his employment with the Company because of normal
retirement (as defined under the then established rules of the Company), any
remaining Period of Restriction applicable to the Restricted Stock pursuant to
Subsection 9.3 shall automatically terminate and, except as otherwise provided
in Subsection 9.4, the shares of Restricted Stock shall thereby be free of
restrictions and freely transferable. In the event that a Participant terminates
his employment with the Company because of early retirement (as defined under
the then established rules of the Company), the Committee, in its sole
discretion, may waive the restrictions remaining on any or all shares of
Restricted Stock pursuant to Subsection 9.3 and add such new restrictions to
those shares of Restricted Stock as it deems appropriate.

9.10. Termination of Employment Due to Death or Disability. In the event a
Participant's employment is terminated because of death or disability (as
defined under the then established rules of the Company), any remaining Period
of Restriction applicable to the Restricted Stock pursuant to Subsection 9.3
shall automatically terminate and, except as otherwise provided in Subsection
9.4, the shares of Restricted Stock shall thereby be free of restrictions and
fully transferable.

9.11. Termination of Employment for Reasons Other Than Death, Disability or
Retirement. In the event that a Participant terminates his employment with the
Company for any reason other than those set forth in Subsections 9.9 and 9.10
during the Period of Restrictions, then any shares of Restricted Stock still
subject to restrictions as of the date of such termination shall

<PAGE>   13
automatically be forfeited and returned to the Company; provided, however, that,
in the event of an involuntary termination of the employment of a Participant by
the Company, the Committee, in its sole discretion, may waive the automatic
forfeiture of any or all such shares and may add such new restrictions to such
shares of Restricted Stock as it deems appropriate.

SECTION 10.        PERFORMANCE UNITS

         Performance units may be granted subject to such terms and conditions
as the Committee in its discretion shall determine. Performance units may be
granted either in the form of cash units or in share units which are equal in
value to one share of Common Stock or a combination thereof. The Committee shall
establish the performance goals to be attained in respect of the performance
units, the various percentages of performance unit value to be distributed upon
the attainment, in whole or in part, of the performance goals and such other
performance unit terms, conditions and restrictions as the Committee shall deem
appropriate. As soon as practicable after the termination of the performance
period, the Committee shall determine the payment, if any, which is due on the
performance unit in accordance with the terms thereof. The Committee shall
determine, among other things, whether the payment shall be made in the form of
cash or shares of Common Stock, or a combination thereof.

SECTION 11.        BENEFICIARY DESIGNATION

         Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his death. Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Committee, and will be effective only when filed by
the Participant in writing with the Committee during his lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to his estate.

SECTION 12.        RIGHTS OF EMPLOYEES

12.1. Employment.  Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time,
nor confer upon any Participant any right to continue in the employ of the
Company.

12.2. Participation.  No employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.

SECTION 13.        MERGER OR CONSOLIDATION

13.1. Treatment of Options and Stock Appreciation Rights. Upon a dissolution or
a liquidation of the Company, each Participant shall have the right to exercise
any unexercised Options or Stock Appreciation Rights, whether or not then
exercisable, subject to the provisions of the Plan immediately prior to such
dissolution or liquidation. If not exercised within a reasonable time period, of
not less than 30 days from the date of such dissolution or liquidation, as
determined by the Committee, all outstanding Options and Stock Appreciation
Rights shall terminate. In the

<PAGE>   14
event of a merger or consolidation in which the Company is not the surviving
corporation, each Participant shall be offered a firm commitment whereby the
resulting or surviving corporation will tender to the Participant new Options
and Stock Appreciation Rights in the surviving corporation, with terms and
conditions, both as to number of shares and otherwise, which will substantially
preserve to the Participant the rights and benefits of the Options and Stock
Appreciation Rights outstanding hereunder.

13.2. Treatment of Restricted Stock. In the event of a dissolution or a
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving corporation, all restrictions shall lapse on the shares of
Restricted Stock granted under the Plan and thereafter such shares shall be
freely transferable by the Participant, subject to applicable Federal or state
securities laws.

SECTION 14.        AMENDMENT, MODIFICATION AND TERMINATION OF PLAN

         The Board may at any time terminate, and from time to time may amend or
modify, the Plan; provided, however, that no such action of the Board, without
approval of the shareholders, may:

(a) Increase the total amount of Common Stock which may be issued under the
Plan, except as provided in Subsections 5.1 and 5.3.

(b) Change the provisions of the Plan regarding the Option Price except as
permitted by Subsection 5.3.

(c) Materially increase the cost of the Plan or materially increase the benefits
to Participants.

(d) Extend the period during which Options, Stock Appreciation Rights,
Restricted Stock or Performance Units may be granted.

(e) Extend the maximum period after the date of grant during which Options or
Stock Appreciation Rights may be exercised.

No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options, Stock Appreciation Rights or Restricted Stock
previously granted under the Plan, without the consent of the Participants.

SECTION 15.        TAX WITHHOLDING

15.1. Tax Withholding.  The Company, as appropriate, shall have the right to
deduct from all payments any Federal, state or local taxes required by law to be
withheld with respect to such payments.

15.2. Stock Withholding. With respect to withholding required upon the exercise
of nonqualified stock options, or upon the lapse of restrictions on Restricted
Stock, Participants may elect, subject to the approval of the Committee, to
satisfy the withholding required, in whole

<PAGE>   15
or in part, by having the Company withhold shares of Common Stock having a value
equal to the amount required to be withheld. Participants may also elect to
satisfy all or a portion of the tax withholding (up to the maximum legally
permissible withholding amount) by (a) tendering shares of previously acquired
Common Stock having a value equal to the amount of tax to be withheld or (b) by
directing the Company to withhold Shares of Common Stock, including attesting to
the ownership of Mature Common Stock having a value equal to the amount of tax
to be withheld (in the manner provided in Subsection 7.6). The value of the
shares to be withheld, tendered or attested is to be determined by such methods
or procedures as shall be established from time to time by the Committee. All
elections shall be irrevocable and shall be made in writing, signed by the
Participant, and shall satisfy such other requirements as the Committee shall
deem appropriate.

SECTION 16.        INDEMNIFICATION

         Each person who is or shall have been a member of the Committee or of
the Board shall be indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit or
proceeding to which he may be a party or in which he may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the Company's approval,
or paid by him in satisfaction of any judgment in any such action, suit or
proceeding against him, provided he shall give the Company an opportunity, at
its expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Certificate of Incorporation or Bylaws, as a matter
of law or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.

SECTION 17.        REQUIREMENTS OF LAW

17.1. Requirements of Law. The granting of Options, Stock Appreciation Rights,
Restricted Stock or Performance Units, and the issuance of shares of Common
Stock with respect to an Option exercise or Performance Unit award, 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.

17.2. Governing Law.  The Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of Michigan.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]