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                                                                    As Amended
                                                              December 9, 1998

                            HARVARD INDUSTRIES, INC.
                           1998 STOCK INCENTIVE PLAN


1.       Purpose

         The purpose of the Plan is to provide a means through which the
Company and its Subsidiaries and Affiliates may attract able persons to enter
and remain in the employ of the Company and its Subsidiaries and Affiliates and
to provide a means whereby employees, directors and consultants of the Company
and its Subsidiaries and Affiliates can acquire and maintain Common Stock
ownership, or be paid incentive compensation measured by reference to the value
of Common Stock, thereby strengthening their commitment to the welfare of the
Company and its Subsidiaries and Affiliates and promoting an identity of
interest between stockholders and these employees.

         So that the appropriate incentive can be provided, the Plan provides
for granting Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards,
Performance Share Unit Awards and Stock Bonus Awards, or any combination of the
foregoing. The Plan also provides for the automatic formula grant of
Nonqualified Stock Options to Non-Employee Directors.

2.       Definitions

         The following definitions shall be applicable throughout the Plan.

         (a) "Affiliate" means any affiliate of the Company within the meaning
of 17 CFR ss. 230.405.

         (b) "Award" means, individually or collectively, any Incentive Stock
Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock
Award, Phantom Stock Unit Award, Performance Share Unit Award, Stock Bonus
Award or Director Stock Award.

         (c) "Award Period" means a period of time within which performance is
measured for the purpose of determining whether an Award of Performance Share
Units has been earned.

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

         (e) "Cause" means the Company, a Subsidiary or Affiliate having cause
to terminate a Participant's employment or service under any existing
employment, consulting or any other agreement between the Participant and the
Company or a Subsidiary or


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Affiliate or, in the absence of such an employment, consulting or other
agreement, upon (i) the determination by the Committee that the Participant has
substantially and materially failed to perform his duties to the Company, a
Subsidiary or Affiliate (other than as a result of his incapacity due to
physical or mental illness or injury), (ii) the Committee's determination that
the Participant has engaged in conduct materially injurious to the Company, a
Subsidiary or Affiliate or (iii) the Participant having been convicted of a
felony.

         (f) "Change in Control" shall mean (i) the acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of the then outstanding shares of Common
Stock of the Company (the "Outstanding Company Common Stock"); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change of Control: (v) any acquisition by the Company or
any "affiliate" of the Company, within the meaning of 17 C.F.R. ss. 230.405 (an
"Affiliate"), (w) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate of the Company
or (x) any acquisition by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subsection (iii) of this Section 2;
or

         (ii)   individuals who, as of December 9, 1998, constitute the Board
                (the "Incumbent Board") cease for any reason to constitute at
                least a majority of the Board, unless the election or the
                nomination for election by the Company's shareholders of each
                new director was approved by a vote of at least three-quarters
                of the directors then still in office who were directors, or
                approved by directors at December 9, 1998; or

        (iii)   consummation of a reorganization, merger or consolidation or
                sale or other disposition of all or substantially all of the
                assets of the Company (a "Business Combination"), in each case,
                unless, following such Business Combination, (A) all or
                substantially all of the individuals and entities who were the
                beneficial owners, respectively, of the Outstanding Company
                Common Stock immediately prior to such Business Combination
                beneficially own, directly or indirectly, more than 50% of,
                respectively, the then outstanding shares of common stock and
                the combined voting power of the then outstanding voting
                securities entitled to vote generally in the election of
                directors, as the case may be, of the corporation


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                resulting from such Business Combination (including, without
                limitation, a corporation which as a result of such transaction
                owns the Company or all or substantially all of the Company's
                assets either directly or through one or more subsidiaries) in
                substantially the same proportions as their ownership,
                immediately prior to such Business Combination of the
                Outstanding Company Common Stock and (B) no Person (excluding
                any employee benefit plan (or related trust) sponsored or
                maintained by the Company or any Affiliate of the Company, or
                such corporation resulting from such Business Combination or
                any Affiliate of such corporation) beneficially owns, directly
                or indirectly, 50% or more (on a fully diluted basis) of,
                respectively, the then outstanding shares of common stock of
                the corporation resulting from such Business Combination and
                (C) at least a majority of the members of the board of
                directors of the corporation resulting from such Business
                Combination were members of the Incumbent Board at the time of
                the execution of the initial agreement, or of the action of the
                Board, providing for such Business Combination;

         (iv)   Approval by the shareholders of the Company of a complete
                liquidation or dissolution of the Company; or

          (v)   Sale of at least 50% of the assets or outstanding stock of the
                Company to an unrelated party, or completion of a transaction
                having a similar effect.

          (g) "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.

          (h) "Committee" means the full Board, the Compensation Committee of
the Board or such other committee of at least two people as the Board may
appoint to administer the Plan.

          (i) "Common Stock" means the common stock par value $0.01 per share,
of the Company.

          (j) "Company" means Harvard Industries, Inc., a Delaware corporation.

          (k) "Date of Grant" means the date on which the granting of an Award
is authorized or such other date as may be specified in such authorization.

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          (l) "Director Stock Option" means the Award of a Nonqualified Stock
Option to Non-Employee Directors pursuant to Section 12.

          (m) "Director Stock Option Agreement" means the agreement entered
into with respect to a Director Stock Option pursuant to Section 12.

          (n) "Disability" means disability as defined in the long-term
disability plan of the Company, a Subsidiary or Affiliate, as may be applicable
to the Participant in question, or, in the absence of such a plan, the complete
and permanent inability by reason of illness or accident to perform the duties
of the occupation at which a Participant was employed or served when such
disability commenced or, if the Participant was retired when such disability
commenced, the inability to engage in any substantial gainful activity, in
either case as determined by the Committee based upon medical evidence
acceptable to it.

          (o) "Disinterested Person" means a person who is (i) a "nonemployee
director" within the meaning of Rule 16b-3 under the Exchange Act, or any
successor rule or regulation and (ii) an "outside director" within the meaning
of Section 162(m) of the Code; provided, however, that clause (ii) shall apply
only with respect to grants of Awards with respect to which the Company's tax
deduction could be limited by Section 162(m) of the Code if such clause did not
apply.

          (p) "Effective Date" means the Effective Date as defined in the Plan
of Reorganization.

          (q) "Eligible Person" means any (i) person regularly employed by the
Company, a Subsidiary or Affiliate who satisfies all of the requirements of
Section 6; provided, however, that no such employee covered by a collective
bargaining agreement shall be an Eligible Person unless and to the extent that
such eligibility is set forth in such collective bargaining agreement or in an
agreement or instrument relating thereto; (ii) director of the Company, a
Subsidiary or Affiliate; or (iii) consultant to the Company, a Subsidiary or
Affiliate.

          (r) "Exchange Act" means the Securities Exchange Act of 1934.

          (s) "Fair Market Value" on a given date means (i) if the Stock is
listed on a national securities exchange, the average between the highest and
lowest sale prices reported as having occurred on the primary exchange with
which the Stock is listed and traded on the date prior to such date, or, if
there is no such sale on that date, then on the last preceding date on which
such a sale was reported; (ii) if the Stock is not listed on any national
securities exchange but is quoted in the National Market System of the National
Association of Securities Dealers Automated Quotation System on a last sale
basis, the average 


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between the highest and lowest sale prices reported on the date prior
to such date, or, if there is no such sale on that date, then on the last
preceding date on which a sale was reported; or (iii) if the Stock is not
listed on a national securities exchange nor quoted in the National Market
System of the National Association of Securities Dealers Automated Quotation
System on a last sale basis, the amount determined by the Committee to be the
fair market value based upon a good faith attempt to value the Stock accurately
and computed in accordance with applicable regulations of the Internal Revenue
Service.

          (t) "Holder" means a Participant who has been granted an Award.

          (u) "Incentive Stock Option" means an Option granted by the Committee
to a Participant under the Plan which is designated by the Committee as an
Incentive Stock Option pursuant to Section 422 of the Code.

          (v) "Non-Employee Director" means a director of the Company who is
not also an employee of the Company.

          (w) "Nonqualified Stock Option" means an Option granted by the
Committee to a Participant under the Plan which is not designated by the
Committee as an Incentive Stock Option.

          (x) "Normal Termination" means termination of employment or service
with the Company and all Subsidiaries and Affiliates:

              (i)   Upon retirement;

              (ii)  On account of Disability;

              (iii) With the written approval of the Committee;

              (iv)  By the Company, a Subsidiary or Affiliate without Cause; or

              (v)   In the case of an executive with an employment agreement,
                    which permits the executive to resign for "Good Reason" (or
                    similar concept), by the Executive for such Good Reason.


          (y) "Option" means an Award granted under Section 7 of the Plan.

          (z) "Option Period" means the period described in Section 7(c).

          (ab) "Option Price" means the exercise price set for an Option
described in Section 7(a).


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          (ac) "Participant" means an Eligible Person who has been selected by
the Committee to participate in the Plan and to receive an Award pursuant to
Section 6 and a Non-Employee Director who has received an automatic grant
pursuant to Section 12.

          (ad) "Performance Goals" means the performance objectives of the
Company, a Subsidiary or Affiliate during an Award Period or Restricted Period
established for the purpose of determining whether, and to what extent, Awards
will be earned for an Award Period or Restricted Period.

          (ae) "Performance Share Unit" means a hypothetical investment
equivalent equal to one share of Stock granted in connection with an Award made
under Section 9 of the Plan.

          (af) "Phantom Stock Unit" means a hypothetical investment equivalent
equal to one share of Stock granted in connection with an Award made under
Section 10 of the Plan.

          (ag) "Plan" means the Company's 1998 Stock Incentive Plan.

          (ah) "Plan of Reorganization" means the First Amended and Modified
Consolidated Plan under Chapter 11 of the United States Bankruptcy Code, dated
August 19, 1998, proposed by the Company and its debtor subsidiaries named
therein and filed in the United States Bankruptcy Court for the District of
Delaware on August 19, 1998.

          (ai) "Restricted Period" means, with respect to any share of
Restricted Stock or any Phantom Stock Unit, the period of time determined by
the Committee during which such Award is subject to the restrictions set forth
in Section 10.

          (aj) "Restricted Stock" means shares of Stock issued or transferred
to a Participant subject to forfeiture and the other restrictions set forth in
Section 10.

          (ak) "Restricted Stock Award" means an Award of Restricted Stock
granted under Section 10 of the Plan.

          (al) "Securities Act" means the Securities Act of 1933, as amended.

          (am) "Stock" means the Common Stock or such other authorized shares
of stock of the Company as the Committee may from time to time authorize for
use under the Plan.

          (an) "Stock Appreciation Right" or "SAR" means an Award granted under
Section 8 of the Plan.

          (ao) "Stock Bonus" means an Award granted under Section 11 of the
Plan.

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        (ap) "Stock Option Agreement" means the agreement between the Company
and a Participant who has been granted an Option pursuant to Section 7 which
defines the rights and obligations of the parties as required in Section 7(d).

          (aq) "Subsidiary" means any subsidiary of the Company as defined in
Section 424(f) of the Code.

          (ar) "Vested Unit" shall have the meaning ascribed thereto in Section
10(e).

3.       Effective Date, Duration and Stockholder Approval

         The Plan was adopted pursuant to authorization of the United States
Bankruptcy Court for the District of Delaware. The Plan was approved by the
stockholders of the Company in connection with the approval of the Plan of
Reorganization. The Plan is effective as of the Effective Date.

         The expiration date of the Plan, after which no Awards may be granted
hereunder, shall be the date that is ten years after the Effective Date;
provided, however, that the administration of the Plan shall continue in effect
until all matters relating to the payment of Awards previously granted have
been settled.

4.       Administration

         The Committee shall administer the Plan. Unless the full Board is
acting as the Committee, each member of the Committee shall, at the time he
takes any action with respect to an Award under the Plan, be a Disinterested
Person. The majority of the members of the Committee shall constitute a quorum.
The acts of a majority of the members present at any meeting at which a quorum
is present or acts approved in writing by a majority of the Committee shall be
deemed the acts of the Committee. While the ultimate decision with respect to
all Awards under the Plan lies in the sole discretion of the Committee, the
Chief Executive Officer of the Company, or his designate, may make
recommendations to the Committee as to the Eligible Persons to be granted
Awards and as to the nature and terms of Awards to be granted to such Eligible
Persons.

         Subject to the provisions of the Plan, the Committee shall have
exclusive power to:

          (a) Select the Eligible Persons to participate in the Plan;

          (b) Determine the nature and extent of the Awards, other than
Director Stock Options, to be made to each Participant;

          (c) Determine the time or times when Awards, other than Director
Stock Options, will be made;

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          (d) Determine the duration of each Award Period and Restricted
Period, except with respect to a Director Stock Option;

          (e) Determine the conditions to which the payment of Awards, other
than Director Stock Options, may be subject;

          (f) Establish the Performance Goals for each Award Period;

          (g) Prescribe the form or forms of Stock Option Agreement or other
form or forms evidencing Awards; and

          (h) Cause records to be established in which there shall be entered,
from time to time as Awards are made to Participants, the date of each Award,
the number of Incentive Stock Options, Nonqualified Stock Options, SARs,
Phantom Stock Units, Performance Share Units, shares of Restricted Stock and
Stock Bonuses awarded to each Participant, the expiration date, the Award
Period and the duration of any applicable Restricted Period.

          The Committee shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations and to make
all such determinations relating to the Plan as it may deem necessary or
advisable for the administration of the Plan. The Committee's interpretation of
the Plan or any documents evidencing Awards granted pursuant thereto and all
decisions and determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise determined by
the Board.

5.       Grant of Awards; Shares Subject to the Plan

         The Committee may, from time to time, grant Awards of Options, Stock
Appreciation Rights, Restricted Stock, Phantom Stock Units, Performance Share
Units and/or Stock Bonuses to one or more Eligible Persons (including
Non-Employee Directors), in its sole discretion; provided, however, that:

(a) Subject to Section 14, the maximum aggregate number of shares of Stock
available for issuance with respect to all Awards shall be [2,117,647] shares;

(b) Such shares shall be deemed to have been used in payment of Awards whether
they are actually delivered or the Fair Market Value equivalent of such shares
is paid in cash. In the event any Option, SAR not attached to an Option,
Restricted Stock, Phantom Stock Unit or Performance Share Unit shall be
surrendered, terminate, expire, or be forfeited, the number of shares of Stock
no longer subject thereto shall thereupon be released and shall thereafter be
available for new Awards under the Plan;

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          (c) Stock delivered by the Company in settlement of Awards under the
Plan may be authorized and unissued Stock or Stock held in the treasury of the
Company or may be purchased on the open market or by private purchase; and

          (d) No individual may be granted Options or SARs under the Plan with
respect to more than 1,500,000 shares of Stock in any calendar year.

6.       Eligibility

         Participation shall be limited to Eligible Persons who have received
written notification from the Committee, or from a person designated by the
Committee, that they have been selected to participate in the Plan and
Non-Employee Directors who receive Director Stock Options.

7.       Discretionary Grant of Stock Options

         The Committee is authorized to grant one or more Incentive Stock
Options or Nonqualified Stock Options to any Eligible Person; provided,
however, that no Incentive Stock Options shall be granted to any Eligible
Person who is not an employee of the Company or a Subsidiary. Each Option so
granted shall be subject to the following conditions, or to such other
conditions as may be reflected in the applicable Stock Option Agreement.

         (a) Option price. The exercise price per share of Stock for each
Option shall be set by the Committee at the time of grant but shall not be less
than the Fair Market Value of a share of Stock on the Date of Grant.

         (b) Manner of exercise and form of payment. Options which have become
exercisable may be exercised by delivery of written notice of exercise to the
Committee accompanied by payment of the Option Price. The Option Price shall be
payable in cash, by certified or bank cashiers check and/or by delivery of
shares of Stock valued at the Fair Market Value at the time the Option is
exercised (provided, however, that such surrendered shares have either been
held for six months or previously acquired on the open market) or, in the
discretion of the Committee, either (i) in other property having a fair market
value on the date of exercise equal to the Option Price, or (ii) by delivering
to the Committee a copy of irrevocable instructions to a stockbroker to deliver
promptly to the Company an amount of sale or loan proceeds sufficient to pay
the Option Price.

         (c) Option Period and Expiration. Options shall vest and become
exercisable in such manner and on such date or dates determined by the
Committee and shall expire after such period, not to exceed ten years, as may
be determined by the Committee (the "Option Period"); provided, however, that
notwithstanding any vesting dates set by the Committee, the Committee may in
its 


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sole discretion accelerate the exercisability of any Option, which
acceleration shall not affect the terms and conditions of any such Option other
than with respect to exercisability. If an Option is exercisable in
installments, such installments or portions thereof which become exercisable
shall remain exercisable until the Option expires. Unless otherwise stated in
the applicable Option Agreement or provided by the Committee, the Option shall
expire earlier than the end of the Option Period in the following
circumstances:

             (i)   If prior to the end of the Option Period, the Holder shall
                   undergo a Normal Termination, the Option shall expire on the
                   earlier of the last day of the Option Period or the date
                   that is three months after the date of such Normal
                   Termination. In such event, the Option shall remain
                   exercisable by the Holder until its expiration, only to the
                   extent the Option was exercisable at the time of such Normal
                   Termination.

            (ii)   If the Holder dies prior to the end of the Option Period and
                   while still in the employ or service of the Company, a
                   Subsidiary or Affiliate, or within three months of Normal
                   Termination, the Option shall expire on the earlier of the
                   last day of the Option Period or the date that is twelve
                   months after the date of death of the Holder. In such event,
                   the Option shall remain exercisable by the person or persons
                   to whom the Holder's rights under the Option pass by will or
                   the applicable laws of descent and distribution until its
                   expiration, only to the extent the Option was exercisable by
                   the Holder at the time of death.

           (iii)   If the Holder ceases employment or service with the Company
                   and all Subsidiaries and Affiliates for reasons other than
                   Normal Termination or death, the Option shall expire
                   immediately upon such cessation of employment or service.

         (d) Stock Option Agreement - Other Terms and Conditions. Each Option
granted under the Plan shall be evidenced by a Stock Option Agreement, which
shall contain such provisions as may be determined by the Committee and, except
as may be specifically stated otherwise in such Stock Option Agreement, which
shall be subject to the following terms and conditions:

             (i)   Each Option or portion thereof that is exercisable shall be
                   exercisable for the full amount or for any part thereof.

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            (ii)   Each share of Stock purchased through the exercise of an
                   Option shall be paid for in full at the time of the
                   exercise. Each Option shall cease to be exercisable, as to
                   any share of Stock, when the Holder purchases the share or
                   exercises a related SAR or when the Option expires.

           (iii)   Subject to Section 13(k), Options shall not be transferable
                   by the Holder except by will or the laws of descent and
                   distribution and shall be exercisable during the Holder's
                   lifetime only by him.

            (iv)   Each Option shall vest and become exercisable by the Holder
                   in accordance with the vesting schedule established by the
                   Committee and set forth in the Stock Option Agreement.

             (v)   Each Stock Option Agreement may contain a provision that,
                   upon demand by the Committee for such a representation, the
                   Holder shall deliver to the Committee at the time of any
                   exercise of an Option a written representation that the
                   shares to be acquired upon such exercise are to be acquired
                   for investment and not for resale or with a view to the
                   distribution thereof. Upon such demand, delivery of such
                   representation prior to the delivery of any shares issued
                   upon exercise of an Option shall be a condition precedent to
                   the right of the Holder or such other person to purchase any
                   shares. In the event certificates for Stock are delivered
                   under the Plan with respect to which such investment
                   representation has been obtained, the Committee may cause a
                   legend or legends to be placed on such certificates to make
                   appropriate reference to such representation and to restrict
                   transfer in the absence of compliance with applicable
                   federal or state securities laws.

            (vi)   Each Incentive Stock Option Agreement shall contain a
                   provision requiring the Holder to notify the Company in
                   writing immediately after the Holder makes a disqualifying
                   disposition of any Stock acquired pursuant to the exercise
                   of such Incentive Stock Option. A disqualifying disposition
                   is any disposition (including any sale) of such Stock before
                   the later of (a) two years after the Date of Grant of the
                   Incentive Stock Option or (b) one year after the date the
                   Holder acquired the Stock by exercising the Incentive Stock
                   Option.

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         (e) Incentive Stock Option Grants to 10% Stockholders. Notwithstanding
anything to the contrary in this Section 7, if an Incentive Stock Option is
granted to a Holder who owns stock representing more than ten percent of the
voting power of all classes of stock of the Company or of a Subsidiary, the
Option Period shall not exceed five years from the Date of Grant of such Option
and the Option Price shall be at least 110 percent of the Fair Market Value (on
the Date of Grant) of the Stock subject to the Option.

         (f) $100,000 Per Year Limitation for Incentive Stock Options. To the
extent the aggregate Fair Market Value (determined as of the Date of Grant) of
shares of Stock for which Incentive Stock Options are exercisable for the first
time by any Participant during any calendar year (under all plans of the
Company and its Subsidiaries) exceeds $100,000, Incentive Stock Options
relating to such shares shall be treated as Nonqualified Stock Options.

         (g) Prohibition on Repricing of Options. The Committee may not effect
a repricing of Options once issued.

8.       Stock Appreciation Rights

         Any Option granted under the Plan may include SARs, either at the Date
of Grant or, except in the case of an Incentive Stock Option, by subsequent
amendment. The Committee also may award SARs to Eligible Persons independent of
any Option. An SAR shall be subject to such terms and conditions not
inconsistent with the Plan as the Committee shall impose, including, but not
limited to, the following:

         (a) Vesting. SARs granted in connection with an Option shall become
exercisable, be transferable and shall expire according to the same vesting
schedule, transferability rules and expiration provisions as the corresponding
Option. An SAR granted independent of an Option shall become exercisable, be
transferable and shall expire in accordance with a vesting schedule,
transferability rules and expiration provisions as established by the Committee
and reflected in an Award agreement.

         (b) Automatic exercise. If on the last day of the Option Period (or in
the case of an SAR independent of an Option, the period established by the
Committee after which the SAR shall expire), the Fair Market Value of the Stock
exceeds the Option Price (or in the case of an SAR granted independent of an
Option, the Fair Market Value of the Stock on the Date of Grant), the Holder
has not exercised the SAR or the corresponding Option, and neither the SAR nor
the corresponding Option has expired, such SAR shall be deemed to have been
exercised by the Holder on such last day and the Company shall make the
appropriate payment therefor.

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         (c) Payment. Upon the exercise of an SAR, the Company shall pay to the
Holder an amount equal to the number of shares subject to the SAR multiplied by
the excess, if any, of the Fair Market Value of one share of Stock on the
exercise date over the Option Price, in the case of an SAR granted in
connection with an Option, or the Fair Market Value of one share of Stock on
the Date of Grant, in the case of an SAR granted independent of an Option.

         (d) Method of exercise. A Participant may exercise an SAR at such time
or times as may be determined by the Committee at the time of grant by filing
an irrevocable written notice with the Committee or its designee, specifying
the number of SARs to be exercised, and the date on which such SARs were
awarded.

         (e) Expiration. Except as otherwise provided in the case of SARs
granted in connection with Options, an SAR shall expire on a date designated by
the Committee which is not later than ten years after the Date of Grant of the
SAR.

9.       Performance Shares

         (a) Award grants. The Committee is authorized to establish Performance
Share Unit programs to be effective over designated Award Periods determined by
the Committee. At the beginning of each Award Period, the Committee will
establish in writing Performance Goals based upon financial objectives for the
Company for such Award Period and a schedule relating the accomplishment of the
Performance Goals to the Awards to be earned by Participants. Performance Goals
may include, earnings per share, absolute or relative growth in earnings per
share or rate of return on stockholders' equity, or rate or time of repayment
of debt and may be determined on an individual basis or by categories of
Participants. The Committee shall determine the number of Performance Share
Units to be awarded, if any, to each Participant who is selected to receive
such an Award. The Committee may add new Participants to a Performance Share
program after its commencement by making pro rata grants.

         (b) Determination of Award. At the completion of a Performance Share
Award Period, or at other times as specified by the Committee, the Committee
shall calculate the number of shares of Stock earned with respect to each
Participant's Performance Share Unit Award by multiplying the number of
Performance Share Units granted to the Participant by a performance factor
representing the degree of attainment of the Performance Goals.

         (c) Partial Awards. A Participant for less than a full Award Period,
whether by reason of commencement or termination of employment or otherwise,
shall receive such portion of an Award, if any, for that Award Period as the
Committee shall determine.

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         (d) Payment of Performance Share Unit Awards. Performance Share Unit
Awards shall be payable in that number of shares of Stock determined in
accordance with Section 9(b); provided, however, that, at its discretion, the
Committee may make payment to any Participant in the form of cash upon the
specific request of such Participant. The amount of any payment made in cash
shall be based upon the Fair Market Value of the Stock on the day prior to
payment. Payments of Performance Share Unit Awards shall be made as soon as
practicable after the completion of an Award Period.

         (e) Adjustment of Performance Goals. The Committee shall, during the
Award Period, make such equitable adjustments to Performance Goals as it may
deem appropriate, to compensate for, or reflect, (i) extraordinary or
non-recurring events experienced during an Award Period by the Company or by
any other corporation whose performance is relevant to the determination of
whether Performance Goals have been attained; (ii) any significant changes that
may have occurred during such Award Period in applicable accounting rules or
principles or changes in the Company's method of accounting or in that of any
other corporation whose performance is relevant to the determination of whether
an Award has been earned or (iii) any significant changes that may have
occurred during such Award Period in tax laws or other laws or regulations that
alter or affect the computation of the measures of Performance Goals used for
the calculation of Awards; provided, however, that with respect to such Awards
intended to qualify as "performance-based compensation" under Section 162(m) of
the Code, such adjustment shall be made only to the extent that the Committee
determines that such adjustments may be made without a loss of deductibility
for such Award under Section 162(m) of the Code.

                                      14
<PAGE>

10.      Discretionary Restricted Stock Awards and Phantom Stock Units

         (a) Award of Restricted Stock and Phantom Stock Units.

             (i)   The Committee shall have the authority (1) to grant
                   Restricted Stock and Phantom Stock Unit Awards to Eligible
                   Persons, (2) to issue or transfer Restricted Stock to
                   Participants, and (3) to establish terms, conditions and
                   restrictions applicable to such Restricted Stock and Phantom
                   Stock Units, including the Restricted Period, which may
                   differ with respect to each grantee, the time or times at
                   which Restricted Stock or Phantom Stock Units shall be
                   granted or become vested and the number of shares or units
                   to be covered by each grant.

            (ii)   The Holder of a Restricted Stock Award shall execute and
                   deliver to the Company an Award agreement with respect to
                   the Restricted Stock setting forth the restrictions
                   applicable to such Restricted Stock. If the Committee
                   determines that the Restricted Stock shall be held in escrow
                   rather than delivered to the Holder pending the release of
                   the applicable restrictions, the Holder additionally shall
                   execute and deliver to the Company (i) an escrow agreement
                   satisfactory to the Committee, and (ii) the appropriate
                   blank stock powers with respect to the Restricted Stock
                   covered by such agreements. If a Participant shall fail to
                   execute a Restricted Stock agreement and, if applicable, an
                   escrow agreement and stock powers, the Award shall be null
                   and void. Subject to the restrictions set forth in Section
                   10(b), the Holder shall generally have the rights and
                   privileges of a stockholder as to such Restricted Stock,
                   including the right to vote such Restricted Stock. At the
                   discretion of the Committee, cash dividends and stock
                   dividends with respect to the Restricted Stock may be either
                   currently paid to the Holder or withheld by the Company for
                   the Holder's account, and interest may be paid on the amount
                   of cash dividends withheld at a rate and subject to such
                   terms as determined by the Committee. Cash dividends or
                   stock dividends so withheld by the Committee shall not be
                   subject to forfeiture.

                                      15
<PAGE>

           (iii)   Upon the Award of Restricted Stock, the Committee shall
                   cause a stock certificate registered in the name of the
                   Holder to be issued and, if it so determines, deposited
                   together with the stock powers with an escrow agent
                   designated by the Committee. If an escrow arrangement is
                   used, the Committee shall cause the escrow agent to issue to
                   the Holder a receipt evidencing any stock certificate held
                   by it registered in the name of the Holder.

            (iv)   The terms and conditions of a grant of Phantom Stock Units
                   shall be reflected in a written Award agreement. No shares
                   of Stock shall be issued at the time a Phantom Stock Unit
                   Award is made, and the Company will not be required to set
                   aside a fund for the payment of any such Award. Holders of
                   Phantom Stock Units may, in the Committee's discretion,
                   receive an amount equal to the cash dividends paid by the
                   Company upon one share of Stock for each Phantom Stock Unit
                   then credited to such Holder's account ("Dividend
                   Equivalents"). The Committee shall, in its sole discretion,
                   determine whether to credit to the account of, or to
                   currently pay to, each Holder of an Award of Phantom Stock
                   Units such Dividend Equivalents. Dividend Equivalents
                   credited to a Holder's account shall be subject to
                   forfeiture on the same basis as the related Phantom Stock
                   Units, and may bear interest at a rate and subject to such
                   terms as are determined by the Committee.

         (b) Restrictions.

             (i)   Restricted Stock awarded to a Participant shall be subject
                   to the following restrictions until the expiration of the
                   Restricted Period, and to such other terms and conditions as
                   may be set forth in the applicable Award agreement: (1) if
                   an escrow arrangement is used, the Holder shall not be
                   entitled to delivery of the stock certificate; (2) the
                   shares shall be subject to the restrictions on
                   transferability set forth in the Award agreement; (3) the
                   shares shall be subject to forfeiture to the extent provided
                   in subparagraph (d) and the Award agreement and, to the
                   extent such shares are forfeited, the stock certificates
                   shall be returned to the Company, and all rights of the
                   Holder to such shares and as a shareholder shall terminate
                   without further obligation on the part of the Company.

                                      16
<PAGE>

            (ii)   Phantom Stock Units awarded to any Participant shall be
                   subject to (1) forfeiture until the expiration of the
                   Restricted Period, to the extent provided in subparagraph
                   (d) and the Award agreement, and to the extent such Awards
                   are forfeited, all rights of the Holder to such Awards shall
                   terminate without further obligation on the part of the
                   Company and (2) such other terms and conditions as may be
                   set forth in the applicable Award agreement.

           (iii)   The Committee shall have the authority to remove any or all
                   of the restrictions on the Restricted Stock and Phantom
                   Stock Units whenever it may determine that, by reason of
                   changes in applicable laws or other changes in circumstances
                   arising after the date of the Restricted Stock Award or
                   Phantom Stock Award, such action is appropriate.

         (c) Restricted Period. The Restricted Period of Restricted Stock and
Phantom Stock Units shall commence on the Date of Grant and shall expire from
time to time as to that part of the Restricted Stock and Phantom Stock Units
indicated in a schedule established by the Committee.

         (d) Forfeiture Provisions. Except to the extent determined by the
Committee and reflected in the underlying Award agreement, in the event a
Holder terminates employment with the Company and all Subsidiaries and
Affiliates during a Restricted Period, that portion of the Award with respect
to which restrictions have not expired ("Non-Vested Portion") shall be treated
as follows.

             (i)   Upon the voluntary resignation (other than a Normal
                   Termination) of a Participant or discharge by the Company, a
                   Subsidiary or Affiliate for Cause, the Non-Vested Portion of
                   the Award shall be completely forfeited.

            (ii)   Upon Normal Termination, the Non-Vested Portion of the Award
                   shall be prorated for service during the Restricted Period
                   and shall be received as soon as practicable following
                   termination.

           (iii)   Upon death, the Non-Vested Portion of the Award shall be
                   prorated for service during the Restricted Period and paid
                   to the Participant's beneficiary as soon as practicable
                   following death.

         (e) Delivery of Restricted Stock and Settlement of Phantom Stock
Units. Upon the expiration of the Restricted Period with 



                                      17
<PAGE>

respect to any shares of Stock covered by a Restricted Stock Award,
the restrictions set forth in Section 10(b) and the Award agreement shall be of
no further force or effect with respect to shares of Restricted Stock which
have not then been forfeited. If an escrow arrangement is used, upon such
expiration, the Company shall deliver to the Holder, or his beneficiary,
without charge, the stock certificate evidencing the shares of Restricted Stock
which have not then been forfeited and with respect to which the Restricted
Period has expired (to the nearest full share) and any cash dividends or stock
dividends credited to the Holder's account with respect to such Restricted
Stock and the interest thereon, if any.

         Upon the expiration of the Restricted Period with respect to any
Phantom Stock Units covered by a Phantom Stock Unit Award, the Company shall
deliver to the Holder, or his beneficiary, without charge, one share of Stock
for each Phantom Stock Unit which has not then been forfeited and with respect
to which the Restricted Period has expired ("Vested Unit") and cash equal to
any Dividend Equivalents credited with respect to each such Vested Unit and the
interest thereon, if any; provided, however, that, if so noted in the
applicable Award agreement, the Committee may, in its sole discretion, elect to
pay cash or part cash and part Stock in lieu of delivering only Stock for
Vested Units or Dividend Equivalents. If cash payment is made in lieu of
delivering Stock, the amount of such payment shall be equal to the Fair Market
Value of the Stock as of the date on which the Restricted Period lapsed with
respect to such Vested Unit.

         (f) Stock Restrictions. Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend until the lapse of all
restrictions with respect to such Stock:

              "Transfer of this certificate and the shares represented hereby
         is restricted pursuant to the terms of a Restricted Stock Agreement,
         dated as of           , between Harvard Industries, Inc. and         . 
         A copy of such Agreement is on file at the offices of the Company at 3 
         Werner Way, 2nd Floor, Suite 210, Lebanon, N.J. 08833."

              Stop transfer orders shall be entered with the Company's transfer
         agent and registrar against the transfer of legended securities.

11.      Stock Bonus Awards

         The Committee may issue unrestricted Stock under the Plan to Eligible
Persons, alone or in tandem with other Awards, in such amounts and subject to
such terms and conditions as the Committee shall from time to time in its sole
discretion determine. Stock Bonus Awards under the Plan shall be granted as, or
in payment of, a bonus, or to provide incentives or recognize special
achievements or contributions.

                                      18
<PAGE>

12.      Automatic Grants of Stock and Stock Options to Non-Employee Directors

         As of December 9, 1998, each Non-Employee Director shall be
automatically granted a Nonqualified Stock Option to purchase 20,000 shares of
Stock. On the same date, and annually thereafter, beginning in 1999, for the
remainder of the term of the Plan and provided he remains a Non-Employee
Director of the Company, on the date of each of the Company's Annual Meeting of
Stockholders, each Non-Employee Director shall be automatically granted without
further action by the Board or the Committee a number of shares of Stock equal
to $15,000 divided by the Fair Market Value of one share of Stock on December
9, 1998, or on the date of such Annual Meeting, as applicable. All Options
granted to Non-Employee Directors shall hereinafter be referred to as Director
Stock Options.

         (a) Option Price; Vesting; Term. All Director Stock Options granted
pursuant to this Section 12 shall have an Option Price per share equal to the
closing price of a share of Stock on the exchange or trading system with the
largest volume on the Date of Grant. All Director Stock Options granted
pursuant to this Section 12 shall be fully vested and exercisable with respect
to 4,000 shares of Stock as of the Effective Date and thereafter shall vest and
become exercisable with respect to 4,000 additional shares of Stock on each of
the first, second, third and fourth anniversaries of the Effective Date. The
term of each Director Stock Option ("Term"), after which each such Option shall
expire, shall be ten years from the Date of Grant.

         (b) Expiration. If prior to the expiration of the Term of a Director
Stock Option the Non-Employee Director shall cease to be a member of the Board
for any reason other than his death, the Director Stock Option shall expire on
the earlier of the expiration of the Term or the date that is three months
after the date of such cessation. If prior to the expiration of the Term of a
Director Stock Option a Non-Employee Director shall cease to be a member of the
Board by reason of his death, the Director Stock Option shall expire on the
earlier of the expiration of the Term or the date that is one year after the
date of such cessation. In the event a Non-Employee Director ceases to be a
member of the Board for any reason, any unexpired Director Stock Option shall
thereafter be exercisable until its expiration only to the extent that such
Option was exercisable at the time of such cessation.

         (c) Director Stock Option Agreement. Each Director Stock Option shall
be evidenced by a Director Stock Option Agreement, which shall contain such
provisions as may be determined by the Committee.

         (d) Nontransferability. Subject to Section 13(k), Director Stock
Options shall not be transferable except by will or the 



                                      19
<PAGE>

laws of descent and distribution and shall be exercisable during the
Non-Employee Director's lifetime only by him.


13.      General

         (a) Additional Provisions of an Award. Awards under the Plan also may
be subject to such other provisions (whether or not applicable to the benefit
awarded to any other Participant) as are not otherwise inconsistent with the
terms of the Plan and as the Committee determines appropriate including,
without limitation, provisions to assist the Participant in financing the
purchase of Stock upon the exercise of Options, provisions for the forfeiture
of or restrictions on resale or other disposition of shares of Stock acquired
under any Award, provisions giving the Company the right to repurchase shares
of Stock acquired under any Award in the event the Participant elects to
dispose of such shares, and provisions to comply with Federal and state
securities laws and Federal and state tax withholding requirements. Any such
provisions shall be reflected in the applicable Award agreement.

         (b) Privileges of Stock Ownership. Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of stock
ownership in respect of shares of Stock which are subject to Awards hereunder
until such shares have been issued to that person.

         (c) Government and Other Regulations. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as
may be required. Notwithstanding any terms or conditions of any Award to the
contrary, the Company shall be under no obligation to offer to sell or to sell
and shall be prohibited from offering to sell or selling any shares of Stock
pursuant to an Award unless such shares have been properly registered for sale
pursuant to the Securities Act with the Securities and Exchange Commission or
unless the Company has received the advice of counsel, satisfactory to the
Company, that such shares may be offered or sold without such registration
pursuant to an available exemption therefrom and the terms and conditions of
such exemption have been fully complied with. The Company shall use its best
efforts to as soon as practicable register for sale under the Securities Act
all of the shares of Stock to be offered or sold under the Plan. If the shares
of Stock offered for sale or sold under the Plan are offered or sold pursuant
to an exemption from registration under the Securities Act, the Company may
restrict the transfer of such shares and may legend the Stock certificates
representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.

                                      20
<PAGE>

         (d) Tax Withholding. Notwithstanding any other provision of the Plan,
the Company, a Subsidiary or an Affiliate, as appropriate, shall have the right
to deduct from all Awards and payment with respect thereto cash and/or Stock,
valued at Fair Market Value on the date of payment, in an amount necessary to
satisfy all Federal, state or local taxes as required by law to be withheld
with respect to such Awards and Award payments and, in the case of Awards paid
in Stock, the Holder or other person receiving such Stock may be required to
pay to the Company or a Subsidiary, as appropriate, prior to delivery of such
Stock, the amount of any such taxes which the Company or Subsidiary is required
to withhold, if any, with respect to such Stock. Subject in particular cases to
the disapproval of the Committee, the Company may accept shares of Stock of
equivalent Fair Market Value in payment of such withholding tax obligations if
the Holder of the Award elects to make payment in such manner.

         (e) Claim to Awards and Employment Rights. No employee or other person
shall have any claim or right to be granted an Award under the Plan or, having
been selected for the grant of an Award, to be selected for a grant of any
other Award. Neither the Plan nor any action taken hereunder shall be construed
as giving any Participant any right to be retained in the employ or service of
the Company, a Subsidiary or an Affiliate.

         (f) Designation and Change of Beneficiary. Each Participant may file
with the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the amounts payable with respect
to an Award of Performance Share Units, Phantom Stock Units or Restricted
Stock, if any, due under the Plan upon his death. A Participant may, from time
to time, revoke or change his beneficiary designation without the consent of
any prior beneficiary by filing a new designation with the Committee. The last
such designation received by the Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Committee prior to the Participant's death,
and in no event shall it be effective as of a date prior to such receipt. If no
beneficiary designation is filed by the Participant, the beneficiary shall be
deemed to be his or her spouse or, if the Participant is unmarried at the time
of death, his or her estate.

         (g) Payments to Persons Other Than Participants. If the Committee
shall find that any person to whom any amount is payable under the Plan is
unable to care for his affairs because of illness or accident, or is a minor,
or has died, then any payment due to such person or his estate (unless a prior
claim therefor has been made by a duly appointed legal representative) may, if
the Committee so directs the Company, be paid to his spouse, child, relative,
an institution maintaining or having custody of such person, or any other
person deemed by the Committee to be a proper recipient on behalf of such
person 


                                      21
<PAGE>

otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Committee and the Company therefor.

         (h) No Liability of Committee Members. No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim
against any such person. 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 Articles of Incorporation or By-Laws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.

         (i) Governing law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to
the principles of conflicts of law thereof.

         (j) Funding. Except as provided under Section 10, no provision of the
Plan shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets,
nor shall the Company maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or
administered fund for such purposes. Holders shall have no rights under the
Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation
by performance of services, they shall have the same rights as other employees
under general law.

         (k) Nontransferability. A person's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred
or otherwise disposed of, mortgaged, pledged or encumbered except, in the event
of a Holder's death, to a designated beneficiary to the extent permitted by the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution; provided, however, the Committee may, in its sole discretion,
either at the time of grant or at any time prior to exercise, allow for
transfer of 


                                      22
<PAGE>

Awards other than Incentive Stock Options to a member or members of
the Holder's family, subject to such conditions or limitations as it may
establish.

         (l) Reliance on Reports. Each member of the Committee and each member
of the Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good faith,
upon any report made by the independent public accountant of the Company and
its Subsidiaries and Affiliates and upon any other information furnished in
connection with the Plan by any person or persons other than himself.

         (m) Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary except as otherwise specifically provided in such other plan.

         (n) Expenses. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries and Affiliates.

         (o) Pronouns. Masculine pronouns and other words of masculine gender
shall refer to both men and women.

         (p) Titles and Headings. The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings shall
control.

         (q) Termination of Employment. For all purposes herein, a person who
transfers from employment or service with the Company to employment or service
with a Subsidiary or Affiliate or vice versa shall not be deemed to have
terminated employment or service with the Company, a Subsidiary or Affiliate.

14.      Changes in Capital Structure

         Awards granted under the Plan and any agreements evidencing such
Awards, the maximum number of shares of Stock subject to all Awards and the
maximum number of shares of Stock with respect to which any one person may be
granted Options or SARs during any year shall be subject to adjustment or
substitution, as determined by the Committee in its sole discretion to be
equitable, as to the number, price or kind of a share of Stock or other
consideration subject to such Awards or as otherwise determined by the
Committee to be equitable (i) in the event of changes in the outstanding Stock
or in the capital structure of the Company by reason of stock dividends, stock
splits, reverse stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Date of Grant of any such Award or (ii) in
the event of any change in applicable 


                                      23
<PAGE>

laws or any change in circumstances which results in or would result
in any substantial dilution or enlargement of the rights granted to, or
available for, Participants in the Plan, or which otherwise warrants equitable
adjustment because it interferes with the intended operation of the Plan. In
addition, in the event of any such adjustments or substitution, the aggregate
number of shares of Stock available under the Plan and the per person limits
shall be appropriately adjusted by the Committee, whose determination shall be
conclusive. Any adjustment in Incentive Stock Options under this Section 14
shall be made only to the extent not constituting a "modification" within the
meaning of Section 424(h)(3) of the Code, and any adjustments under this
Section 14 shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange Act. Further, with
respect to Awards intended to qualify as "performance-based compensation" under
Section 162(m) of the Code, such adjustments or substitutions shall be made
only to the extent that the Committee determines that such adjustments or
substitutions may be made without a loss of deductibility for Awards under
Section 162(m) of the Code. The Company shall give each Participant notice of
an adjustment hereunder and, upon notice, such adjustment shall be conclusive
and binding for all purposes.

         Notwithstanding the above, in the event of any of the following:

         A.       The Company is merged or consolidated with another
                  corporation or entity and, in connection therewith,
                  consideration is received by shareholders of the Company in a
                  form other than stock or other equity interests of the
                  surviving entity;

         B.       All or substantially all of the assets of the Company are 
                  acquired by another person (other than an Affiliate);

         C.       The liquidation or dissolution of the Company; or

         D.       The Company shall enter into a written agreement to undergo
                  an event described in clauses A, B or C above,

then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Awards and pay to the
Holders thereof, in cash or, unless the Award by its terms would otherwise be
settled in cash, stock, or any combination thereof, the value of such Awards
based upon the price per share of Stock received or to be received by other
shareholders of the Company in the event. The terms of this Section 14 may be
varied by the Committee in any particular Award agreement.

15.      Effect of Change in Control

                                      24
<PAGE>

         Except to the extent otherwise specifically provided in a particular
Award agreement:

         (a) In the event of a Change in Control, notwithstanding any schedule
for vesting or exercisability with respect to an Award of Options (including
Director Stock Options), SARs or Phantom Stock Units, such Option or SAR shall
become immediately vested and exercisable with respect to 100 percent of the
shares subject to such Option or SAR, and the Restricted Period shall expire
immediately with respect to 100 percent of such Phantom Stock Units. With
respect to any outstanding shares of Restricted Stock, in the event of a Change
in Control, the restrictions shall lapse on a proportionate number of shares of
Restricted Stock equal to that portion of the Restricted Period that has
elapsed between the Date of Grant and the date of the Change in Control.

         (b) In the event of a Change in Control, all incomplete Award Periods
in effect on the date the Change in Control occurs shall end on the date of such
change, and the Committee shall (i) determine the extent to which Performance
Goals with respect to each such Award Period have been met based upon such
audited or unaudited financial information then available as it deems relevant,
(ii) cause to be paid to each Participant partial or full Awards with respect to
Performance Goals for each such Award Period based upon the Committee's
determination of the degree of attainment of Performance Goals, and (iii) cause
all previously deferred Awards to be settled in full as soon as possible.

         (c) In addition, in the event of a Change in Control, the Committee
may in its discretion and upon at least 10 days' advance notice to the affected
persons, cancel any outstanding Awards and pay to the Holders thereof, in cash
or stock, or any combination thereof, the value of such Awards based upon the
price per share of Stock received or to be received by other shareholders of
the Company in the event.

         (d) The obligations of the Company under the Plan shall be binding
upon any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Company. The Company agrees that it will make appropriate
provisions for the preservation of Participant's rights under the Plan in any
agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets.

16.      Nonexclusivity of the Plan

         Neither the adoption of this Plan by the Board nor the submission of
this Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the


                                      25
<PAGE>

power of the Board to adopt such other incentive arrangements as it
may deem desirable, including, without limitation, the granting of stock
options otherwise than under this Plan, and such arrangements may be either
applicable generally or only in specific cases.

17.      Amendments and Termination

         The Board may at any time terminate the Plan. Subject to Section 14,
with the express written consent of an individual Participant, the Board or the
Committee may cancel or reduce or otherwise alter outstanding Awards if, in its
judgment, the tax, accounting, or other effects of the Plan or potential
payouts thereunder would not be in the best interest of the Company. The Board
or the Committee may, at any time, or from time to time, amend or suspend and,
if suspended, reinstate, the Plan in whole or in part; provided, however, that
(i) no such action shall adversely effect the rights of Participants with
respect to Awards previously issued thereto and (ii) without further
stockholder approval neither the Board nor the Committee shall make any
amendment to the Plan which would:

(a) Materially increase the maximum number of shares of Stock which may be
issued pursuant to Awards or the maximum number of shares with respect to which
Options or SARs may be granted to any individual in any calendar year, except
as provided in Section 14;

(b)      Change the minimum Option Price;

(c)      Alter the eligibility with respect to Incentive Stock Options;

(d)      Extend the maximum Option Period; or

(e)      Extend the termination date of the Plan.



                                     * * *



As approved by stockholders in connection with the approval of the Plan of
Reorganization, adopted on the Effective Date pursuant to authorization of the
United States Bankruptcy Court for the District of Delaware, and amended by the
Board of Directors of Harvard Industries, Inc. December 9, 1998.


                                      26