INSTRUMENT SYSTEMS CORPORATION
                       OUTSIDE DIRECTOR STOCK AWARD PLAN

     1. Purpose.  Instrument Systems Corporation and its subsidiaries (the
"Company") wish to establish an Outside Director Stock Award Plan (the "Plan").
The purposes of the Plan are to attract and retain well-qualified persons for
service as directors, who are not salaried employees of the Company or any of
its subsidiaries ("Outside Directors"); and to provide such Outside Directors
with the opportunity to increase their proprietary interest in the Company, and
thereby to increase their personal interest in the Company's continued success,
through the payment of a portion of directors' fees in shares of the Company's
Common Stock, $.25 par value ("Common Stock").

     2. Administration.  The Board of Directors of the Company (the "Board")
will have the responsibility and authority to administer and interpret the
provisions of this Plan. All determinations of the Board with respect to the
Plan shall be final and binding upon all persons.

     In administering the Plan, the Board may employ attorneys, consultants,
accountants or other persons, and the Company and the Board shall be entitled to
rely upon the advice, opinions or valuations of any such persons. All usual and
reasonable expenses of the Board shall be paid by the Company. No member of the
Board shall be personally liable for any action, determination or interpretation
taken or made with respect to the Plan or awards made thereunder, and all
members of the Board shall be fully indemnified and protected by the Company in
respect of any such action, determination or interpretation, in the absence of
any fraudulent act or omission.

     3. Eligibility.  Awards under the Plan shall be available to all Outside
Directors; provided, that no director who is an employee of the Company shall be
eligible for participation in the Plan.

     4. Awards.  At each meeting of the Board next following the Annual Meeting
of Stockholders of the Company beginning with the meeting to be held on February
8, 1994 (the "Effective Date"), each Outside Director shall be awarded shares of
the Company's Common Stock valued at $10,000 based upon the closing price of the
Company's Common Stock on the New York Stock Exchange or such other exchange
upon which the Company's Common Stock is listed for the twenty (20) consecutive
trading days preceding the Annual Meeting date, subject to and in accordance
with the terms of Section 5. Each such award shall be evidenced by written
agreement, executed by the Outside Director and the Company. Common Stock
awarded to each Outside Director shall vest over a period of three years,
subject to forfeiture under certain conditions.

     Each share certificate issued in respect of any grant under this Plan shall
be registered in the name of the Outside Director to whom it is granted
hereunder and shall be deposited by and on behalf of such director, together
with a stock power properly endorsed in blank and any other documentation
requested by the Company, with the Company. The Company shall hold and retain
such share certificates in a custodial capacity until the relevant restrictions
have been satisfied by such Outside Director.

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     5. Terms and Conditions.  (a) Up to 300,000 shares of Common Stock may be
issued pursuant to the Plan. Such shares may not be sold, assigned, transferred
or otherwise disposed of in the absence of an effective registration statement
covering such shares, or unless such registration is not required by reason of
an exemption available under the Securities Act of 1933, as amended (the "Act").
Shares awarded under the Plan shall be certificated. Certificates for shares
issued under the Plan shall include the following legend:

     "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933 (THE "ACT") AND, ACCORDINGLY, MAY NOT BE
     OFFERED, SOLD OR OTHERWISE PLEDGED, HYPOTHECATED OR TRANSFERRED UNLESS (A)
     PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (B) AN
     APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS
     AVAILABLE. IN ADDITION, THE TRANSFERABILITY OF THIS CERTIFICATE AND THE
     SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
     CONTAINED IN THE INSTRUMENT SYSTEMS CORPORATION OUTSIDE DIRECTOR STOCK
     AWARD PLAN."

     (b) No award of Common Stock received under the Plan may be sold, assigned,
transferred or otherwise disposed of until vested. If an Outside Director ceases
to be a director by reason of voluntary termination or failure to be reelected,
all shares not yet vested shall be forfeited. In the case of death, disability
or retirement as a director (retirement shall mean termination as a director
after reaching 65 years of age) all shares shall become fully vested.

     (c) An award of Common Stock hereunder, received by an Outside Director,
shall be shown in the Company's proxy statement for the year in which the Common
Stock was granted, and the Outside Director, as of the date of receipt of the
Common Stock, shall be registered as a "Stockholder of Record" and shall
immediately become entitled to all dividends paid on the Company's Common Stock
and to all voting rights accorded the Company's Common Stock and shares shall be
shown on the appropriate form for reporting beneficial ownership of securities
pursuant to Section 16 of the Securities Exchange Act of 1934.

     (d) The Board shall appropriately adjust the number of shares for which
awards may be granted pursuant to the Plan in the event of reorganization,
recapitalization, stock split, reverse stock split, stock dividend, exchange or
combination of shares, merger, consolidation, rights offering, or any change in
capitalization.

     6. Regulatory Compliance and Listing.  The delivery of any shares under
this Plan may be postponed by the Company for such period as may be required to
comply with Federal or State securities laws, including listing requirements,
national securities exchange requirements and any other law or regulation
applicable to the delivery of such shares. The Company shall not be obligated to
deliver any shares under this Plan if such delivery shall constitute a violation
of any provision of any law or any regulation of any governmental authority or
any national securities exchange. In addition, the shares when delivered may be
subject to conditions, including transfer restrictions, if such conditions are
required to comply with applicable securities laws.

     7. Dividends.  An Outside Director shall have the right (a) to receive all
dividends and other distributions paid with respect to the restricted shares
granted to such director under this Plan and registered in such director's name,
and (b) to vote or execute proxies in respect of the restricted shares granted
to such director under this Plan and registered in such director's name.

     8. Taxes.  Any taxes that are required to be withheld as a result of any
stock grant to any Outside Director pursuant to this Plan shall be paid to the
Company in cash by such Outside Director unless deducted and withheld to the
extent permitted by applicable law, from any cash fees payable by the Company to
such Outside Director.

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     9. Limitations and Conditions.  Prior to each grant of any restricted
shares of Common Stock pursuant to this Plan, an Outside Director may be
required to make reasonable representations satisfactory to the Company to the
effect that such shares are to be held for investment purposes only and not with
a view to or for resale or distribution, except in compliance with the Act and
the rules and regulations thereunder, and each such director may be required to
submit a written undertaking to the Company in form and substance reasonably
satisfactory to it that such Outside Director will not publicly offer to sell or
otherwise distribute such shares other than (a) in the manner and to the extent
permitted by SEC Rule 144, as promulgated under the Act, (b) pursuant to any
other exemption from the registration provisions of the Act, or (c) pursuant to
an effective registration statement filed under the Act.

     10. Transferability.  The restricted shares of Common Stock granted under
this Plan and held in custody by the Company, and any rights created thereby or
thereunder in any person, shall not be assigned, transferred, encumbered, sold,
pledged or otherwise disposed of or hypothecated by any person, including
without limitation, by operation of law, execution, garnishment, attachment or
bankruptcy, until such time as the relevant restrictions are satisfied and all
provisions of any applicable federal or state securities law, rule or regulation
have been complied with.

     11. No Right to Continue as an Outside Director.  Nothing contained in this
Plan shall be construed as conferring upon the Outside Director the right to
continue to be associated with the Company as an Outside Director or in any
other capacity.

     12. Unfunded Status of this Plan.  This Plan shall be an unfunded plan. The
Company shall not be required to establish a special or separate fund or reserve
or to make any other segregation of assets to assure the issuance of any shares
granted under this Plan, except for the 300,000 shares reserved pursuant to
Section 5 herein.

     13. Amendment or Discontinuance.  The Board of Directors of the Company may
at any time amend, rescind or terminate the Plan, as it shall deem advisable;
provided, however, (i) that no change may be made in awards theretofore granted
under the Plan which would impair participants' rights without their consent,
and (ii) that no amendment to the Plan shall be made without approval of the
Company's stockholders if the effect of such amendment would be to (a) increase
the number of shares reserved for issuance under the Plan; (b) change the
requirements for eligibility under the Plan; or (c) materially modify the method
of determining the number of shares awarded under the Plan.

     14. Governing Law.  This Plan and all determinations made and actions taken
hereto shall be governed by the laws of the State of New York pertaining to
contracts made and to be performed wholly within such jurisdiction, except as
Federal law may apply.

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