# U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

# FORM 10-K

# ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

# FOR THE
FISCAL YEAR ENDED DECEMBER 28, 2002

Commission file number 0-14800

X-RITE, INCORPORATED(Name of registrant as specified in charter)

|Michigan
(State of Incorporation) | 38-1737300
(I.R.S. Employer Identification No.)
|--------------------------------- | -----------------------------------------------

3100 44th Street S.W., Grandville, Michigan 49418
                                     (Address of principal executive offices)

616-534-7663
                               (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: (none)
                            Securities registered pursuant to Section 12(g) of the Act:
                                  Common Stock, $.10 per share
                                                 (Title of Class)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. 
Yes [ X ]  No [     ]

Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this
chapter) is not contained herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. [     ]

Indicate by checkmark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  
Yes [ X ]  No [     ]

On March 3, 2003, the number of
shares of the registrants common stock, par value $.10 per share outstanding was
20,231,206.

The aggregate market value of the
common stock held by non-affiliates of the registrant (i.e., excluding shares held by
executive officers, directors and control persons as defined in Rule 405, 17 CFR 230.405)
as of the last business day of the second quarter of the Companys fiscal year was
$158,525,310 computed at the closing price on that date.

Portions of the Companys Proxy
Statement for the 2003 Annual Meeting of Shareholders are incorporated by reference into
Part III. Exhibit Index is located at Page 40.



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# PART IITEM 1.
BUSINESS

# (a)     General Development
of Business

X-Rite, Incorporated
(X-Rite or the Company) was organized in 1958 as a Michigan
corporation. The business currently conducted by the Company is the development and
marketing of instrument technologies in the fields of color, light and shape measurement.
The Company has successfully developed and marketed numerous quality control instruments
and accessories.

The Company made its initial public
offering of common stock during 1986. Proceeds from that public offering were used to
finance the construction of a new building for office, manufacturing and warehouse needs,
purchase new production and laboratory equipment, retire debt and provide working capital.

X-Rite has grown through internal
expansion and through acquisitions. In 1993 the Company established two foreign sales and
service subsidiaries; X-Rite GmbH, Cologne, Germany and X-Rite Asia-Pacific Limited, Hong
Kong. In 1994 the Company established an English subsidiary, X-Rite, Ltd., which acquired
the outstanding stock of an X-Rite dealer located near Manchester, England. Also in 1994,
the Company acquired the assets of Colorgen, Inc. (Colorgen), a
Massachusetts-based manufacturer of retail paint matching systems. In 1995, the Company
acquired the outstanding stock of Labsphere, Inc. (Labsphere) of New
Hampshire. Labsphere is a leading manufacturer of light measurement and light source
integrating systems and instrumentation. In 1997, the Company acquired the assets of Light
Source Computer Images, Inc. (Light Source) a California-based producer of
scanning, imaging and print optimization software. In 1998, the Company established a
French subsidiary, X-Rite Méditerranée SARL, which acquired a branch of an
X-Rite dealer located near Paris. In 2000, the Company acquired the assets of Optronik,
GmbH (Optronik) of Berlin, Germany, a leading developer and manufacturer of
non-contact, on-line color and light measurement technologies. Optroniks facility is
the Companys first research, development and manufacturing location in Europe. Also
in 2000, the Company formed a domestic subsidiary, Coherix Corporation
(Coherix), which acquired the assets of the HoloVision Products Group of
Veridian-ERIM International. The Coherix product line uses tunable laser technology to
provide three dimensional mapping of the surface of physical objects. In addition, in
2000, the Company formed a strategic venture capital group, XR Ventures, LLC. The
groups purpose is to direct and manage X-Rites investments in start up
companies in high technology fields. In 2002, the Company established a subsidiary located
in The Hague, Netherlands, X-Rite Europe, B.V. It provides sales and marketing support for
X-Rites international operations. Also in 2002, the Company opened X-Rite,
(Shanghai) International Trading Co. Ltd., a sales and service center incorporated in The
Peoples Republic of China. The company will work with previously opened representative
offices in Beijing and Tianjin to serve the Chinese markets.

The Companys annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments
to those reports will be made available free of charge through the Investors Relations
section of the Companys Internet website (http://www.xrite.com) as soon as
practicable after such material is electronically filed with or furnished to the
Securities and Exchange Commission.

# (b)     Financial
Information About Operating Segments

The Company operates in one segment:
quality control instruments and accessories. Accordingly, no separate operating segment
information is presented.

# (c)     Narrative
Description of Business

Principal ProductsThe Companys principal products
are proprietary quality control instruments, which utilize advanced optical and electronic
technologies. The principal types of products and markets served include:

|Color Products and Markets
|--------------------------
|                          



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| | Spectrodensitometerscombine the function of a densitometer with the functions of a colorimeter and a
spectrophotometer (see following paragraphs) to provide measurements for monitoring color
reproduction used for controlling the color of printed inks in graphic arts applications.
Digital imaging applications include products which calibrate image setters, raster image
processors and digital printers. The Companys products incorporate a spectral engine
which is the most accurate type of measurement technology available and offer precise,
repeatable and reliable measurements for pressroom quality control. Other similar Company
products include the micro-spot spectrodensitometer, the first hand held measurement
instrument to accurately read color bars and related micro sized color control elements,
and the Auto Tracking Densitometer designed specifically for newspaper presses to evaluate
and adjust gray balance in newspaper production.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Sensitometers
are used to expose various types of photographic film in a very precise manner for
comparison to a reference standard. The exposed film is processed and then
read with a densitometer to determine the extent of variation from the
standard.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Colorimeters
measure light much like the human eye using red, green and blue receptors and are utilized
to measure printed colors on packages, labels, textiles and other materials where a
products appearance is critical for buyer acceptance.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Spectrophotometers
are related to colorimeters, however, they measure light at many points over the entire
visible spectrum. Spectrophotometers are used in color formulation for materials such as
plastics, paints, inks, ceramics and metals. The Companys multi-angle
spectrophotometer, which is used to measure the color of metallic finishes is useful for
controlling the color consistency of automotive paints and other metallic and pearlescent
coatings. In addition, the Company produces a spherical spectrophotometer, which measures
the color of textured surfaces and is used in the textile, paint and plastics industries.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Point-of-purchase
paint matching systems are designed by the Company for use by paint stores, hardware
stores, mass merchants and home improvement centers. X-Rite has established a significant
market presence in the point-of-purchase paint matching business.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Color
formulation and quality control software packages are designed by the Company for use
with many of its products. This software is often combined with a computer and an
instrument and sold as a turn-key system. Marketing efforts with respect to this family of
related products are being directed at packaging material printers, textile, plastic,
paint, ink and coatings manufacturers.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Restorative
tooth shade matching instruments and software packages are designed by the Company for
use in cosmetic dental practices. The X-Rite ShadeVision® System is a significant
technological advance that improves patient care by replacing the subjective selection of
tooth color with an accurate measurement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Light Products and
MarketsThrough its subsidiaries, Labsphere
and Optronik, the Company produces integrating spheres and integrating sphere systems for
numerous applications including the testing of incandescent and fluorescent lamp output,
testing light emitting diodes and fiber optics, calibration of remote sensors and
reflectance and transmittance light measurements. Labsphere is also a supplier of
proprietary reflectance materials and coating services used in such products as
photographic processing equipment, check scanning systems, x-ray film analysis, backlight
illuminators and surface profiling equipment.

Shape Products and MarketsThe Coherix Corporation subsidiary
produces instruments that use tunable laser technology to provide three dimensional
mapping of the surface of physical objects. These products can serve many markets
including electronic component evaluation, micro-machines, automotive and metrology.

Distribution NetworksSales of the Companys products
are made by its own sales personnel and through independent manufacturers
representatives. Certain products not sold directly to end-users are distributed through a
network of independent dealers in seventy countries. Independent dealers are managed and
serviced by the Companys sales staff and by independent sales representatives.

Raw Materials  With few exceptions, raw materials
and components necessary for manufacturing products and providing services are generally
available from several sources. The Company does not foresee any unavailability of
materials or components which would have a material adverse effect on its overall
business.



---

PatentsThe Company owns 63 patents. In
addition, the Company currently has 42 patent applications on file. While the Company
follows a policy of obtaining patent protection for its products where appropriate, it
does not believe that the loss of any existing patent, or failure to obtain any new
patents, would have a material adverse impact on its current operations.

SeasonalityThe Companys business is
generally not subject to seasonal variations that significantly impact sales, production
or net income.

Working Capital PracticesThe Company does not believe that it,
or the industry in general, has any special practices or special conditions affecting
working capital items that are significant for an understanding of the Companys
business.

Significant CustomersNo single customer accounted for more
than 10% of total net sales in 2002, 2001 or 2000. The Company does not believe that the
loss of any single customer would have a material adverse effect on the Company.

BacklogThe Companys backlog of
scheduled but unshipped orders was $4.2 million at February 28, 2003 and $4.8 million at
February 23, 2002. The February 28, 2003 backlog is expected to be filled during the
current fiscal year.

CompetitionThe Company has few competitors
producing competing medical and photographic instruments and believes its share in those
markets is substantial. There are approximately ten firms producing competing products in
the graphic arts/digital imaging categories, and approximately five manufacturers of
competing products in the color and appearance market, some of whom have significant
resources and sales. The primary basis of competition for all the Companys products
is technology, design and service. The Company believes that technologically advanced
features are the primary advantages of its products.

Research, Development
and EngineeringDuring 2002, 2001 and 2000,
respectively, the Company expensed $12.4, $15.5 and $11.8 million on research, development
and engineering. X-Rite has no customer sponsored research and development activities.

Human ResourcesAs of March 1, 2003, the Company
employed 623 persons; 507 in its U.S. operations and 116 in its foreign subsidiaries. The
Company believes that its relations with employees are excellent.

# (d)     Financial
Information About Foreign and Domestic Operations

See Note 1 to the consolidated
financial statements contained in Part II, Item 8 of this report.



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# ITEM 2.   PROPERTIES

The Company and its subsidiaries own
or lease properties throughout the world, listed below are the principal properties owned
or leased as of March 1, 2003:

|Location               | Principal Uses                                                               | Owned/Leased
|---------------------- | ---------------------------------------------------------------------------- | ------------
|Grandville, MI         | Manufacturing, R,D&E, sales, customer service, warehouse and administration. | Owned       
|Grandville, MI         | Sales and training.                                                          | Leased      
|North Sutton, NH       | Manufacturing, R,D&E, sales, customer service, warehouse and administration. | Owned       
|Poynton, England       | Sales and customer service.                                                  | Leased      
|Cologne, Germany       | Sales and customer service.                                                  | Leased      
|Berlin, Germany        | Manufacturing, R,D&E, sales, customer service, warehouse and administration. | Leased      
|The Hague, Netherlands | Sales and administration.                                                    | Leased      
|Quarry Bay, Hong Kong  | Sales and customer service.                                                  | Leased      
|Brno, Czech Republic   | Sales and customer service.                                                  | Leased      
|Massy, France          | Sales and customer service.                                                  | Leased      
|Tokyo, Japan           | Sales and customer service.                                                  | Leased      
|Beijing , China        | Sales and customer service.                                                  | Leased      
|Tianjin, China         | Sales and customer service.                                                  | Leased      
|Shanghai, China        | Sales and customer service.                                                  | Leased      
|Origgio, Italy         | Sales and customer service.                                                  | Leased      

Collectively, X-Rite and its
subsidiaries own approximately 288,000 square feet of space and lease approximately 54,000
square feet. Management considers all the Companys properties and equipment to be
well maintained, in excellent operating condition, and suitable and adequate for the
Companys development, production, distribution and selling requirements.

# ITEM 3.   LEGAL PROCEEDINGS

The Company is not presently engaged
in any material litigation within the meaning of Item 103 of Regulation S-K. On February
19, 2002, Ivoclar Vivadent, Inc. and Shade Analyzing Technologies, Inc. sued the Company
in U.S. District Court for the Western District of New York, alleging infringement of
certain U.S. Patents by the Companys ShadeVision system, and seeking
injunctive relief and unspecified damages. The Company has reviewed the matter (with
patent counsel) and does not believe that it infringes any valid claim of any of the
plaintiffs patents. The Company has asked the court to declare that all of the
patent claims are invalid, unenforceable, and/or not infringed by its system. The suit is
in the preliminary stages of discovery and it is not possible to determine whether the
litigation will proceed to trial. Although it cannot be predicted with certainty,
management believes the ultimate resolution of this matter will not have a material
adverse effect on the Company. The Company is also involved in other legal proceedings and
litigation arising in the ordinary course of business.

# ITEM 4.   SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote
of security holders during the fourth quarter of the year ended December 28, 2002.



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# EXECUTIVE OFFICERS OF
THE REGISTRANT

The following table lists the names,
ages and positions of all of the Companys executive officers. Officers are elected
annually by the Board of Directors at the first meeting of the Board following the Annual
Meeting of Shareholders. Except as discussed, each of the named officers has served the
Company in an executive capacity for more than five years.

|Name                 | Age | Position                                | PositionHeld Since
|-------------------- | --- | --------------------------------------- | ------------------
|Michael C. Ferrara   | 60  | President, Chief Operating Officer      | 2001(1)           
|Bernard J. Berg      | 59  | Senior Vice President, Engineering      | 1983              
|Duane F. Kluting     | 53  | Vice President, Chief Financial Officer | 1992              
|Jeffrey L. Smolinski | 41  | Vice President, Operations              | 1994              
|Joan Mariani Andrew  | 44  | Vice President, International           | 1995              

(1) Prior to joining X-Rite, Mr.
Ferrara served as the Chief Executive Officer of Marine Optical Group, a worldwide design
and marketing company in the eyewear business, and he held that position for more than
five years.

# PART II.

# ITEM 5.   MARKET FOR
REGISTRANTS COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

The Companys common stock is
quoted in the NASDAQ  National Market System under the symbol XRIT. As of March 1,
2003, there were approximately 1,300 shareholders of record. Ranges of high and low sales
prices reported by The NASDAQ National Market System for the past two fiscal years appear
in the following table.

`Dividends
                                                    High                 Low              Per Share
    ---------------------------------------- -------------------- ------------------- -------------------
    Year Ended December 28, 2002:
             First Quarter                          $9.75                 $7.75              $.025
             Second Quarter                          9.27                  5.01               .025
             Third Quarter                           8.99                  6.87               .025
             Fourth Quarter                          8.40                  6.85               .025

    Year Ended December 29, 2001:
             First Quarter                         $10.31                 $6.50              $.025
             Second Quarter                         10.30                  8.15               .025
             Third Quarter                           9.75                  6.70               .025
             Fourth Quarter                         10.00                  6.75               .025`

The Board of Directors intends to
continue paying dividends at the current quarterly rate of 2.5 cents per share in the
foreseeable future.



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# ITEM 6.   SELECTED
FINANCIAL DATA

Selected quarterly financial data for
the two years ended December 28, 2002 is summarized as follows:

`(000 except per share data)
                                                                                         Diluted
                                                           Operating         Net        Earnings
                                               Gross         Income        Income        (Loss)
             QUARTER              Sales       Profit         (Loss)        (Loss)      Per Share (2)
    -------------------------- ------------ ------------ --------------- ------------ --------------
    2002:
      First Quarter (1)            $20,956      $12,284        $  (324)     $(7,874)        $(.39)
      Second Quarter                24,401       15,537          1,601       (5,488)         (.27)
      Third Quarter                 22,246       13,980            315          252           .01
      Fourth Quarter                30,865       19,768          4,839        3,701           .18
                                   -------      -------        --------     --------        ------
                                   $98,468      $61,569        $ 6,431      $(9,409)        $(.47)
                                   =======      =======        ========     ========        ======

    2001:
      First Quarter                $25,360      $16,263        $ 2,844      $ 2,429         $ .11
      Second Quarter                24,429       15,448          1,927        1,755           .08
      Third Quarter                 21,739       13,579         (1,199)         404           .02
      Fourth Quarter                20,130       11,781         (1,473)      (2,655)         (.12)
                                   -------      -------        --------     --------        ------
                                   $91,658      $57,071        $ 2,099      $ 1,933         $ .09
                                   =======      =======        ========     ========        ======`

|(1) | In the fourth quarter of 2002 the Company completed its transitional testing in
               connection with its adoption of Financial Accounting Standards Board Statement
               No. 142, Goodwill and Other Intangible Assets. See Note 4 to the
               financial statements. The resulting adjustment was recorded as a cumulative
               effect of change in accounting principle of $7.6 million, or 38 cents per share,
               retroactive to the first quarter of 2002 requiring a restatement of the loss and
               loss per share previously reported in that quarter of $(259) and $(.01).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In 2002 the Company incurred a loss, therefore, potentially dilutive shares are
               not considered in the per share amounts, because to do so would have an
               anti-dilutive effect on loss per share.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Selected financial data for the five
years ended December 28, 2002 is summarized as follows:

`(000 except per share data)

                                   2002          2001           2000           1999           1998
    -------------------------- ------------- -------------- -------------- -------------- --------------

    Net sales                    $  98,468       $  91,658       $103,449       $100,209        $94,811
    Operating income                 6,431           2,099         18,073         20,253         10,267
    Net income (loss)               (9,409)          1,933         12,408         13,649          6,862
    Earnings (loss) per share:
      Basic
      Diluted                         (.47)            .09            .59            .65            .33
    Dividends per share               (.47)            .09            .58            .62            .32
                                       .10             .10            .10            .10            .10

    Total assets                  $102,884        $118,952       $125,683       $107,819        $95,444
    Long-term debt                   -               -              -              -              -`



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# ITEM 7.  
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

OverviewThe following managements
discussion and analysis describes the principal factors affecting the results of
operations, liquidity, and capital resources, as well as the critical accounting policies,
of X-Rite, Incorporated (also referred to as X-Rite and the
Company). This discussion should be read in conjunction with the accompanying
audited financial statements, which include additional information about the
Companys significant accounting policies and practices and the transactions that
underlie its financial results.

X-Rite is a global leader in
providing color, light and shape measurement solutions across a broad spectrum of
industries and applications. The Companys business strategy is focused on providing
an array of sophisticated quality control instrumentation, software and services, to
assist its customers in measuring and controlling various facets of a products
appearance and functionality. The Company serves many industries, with an emphasis on
industrial and retail coatings, printing and imaging, telecommunications and medical and
dental products.

X-Rite generates revenue by selling
products and services through a direct sales force as well as select distributors. The
Company has sales and service facilities located in the United States, as well as key
locations in Europe and Asia.

The Companys cost of sales
consists primarily of the costs associated with manufacturing its products. Those costs
consist of materials, labor and manufacturing overhead. The Companys primary
manufacturing activities are conducted at facilities in Michigan and New Hampshire, in
addition to a smaller facility located in Germany. X-Rites gross profit historically
has fluctuated within a relatively narrow range. Principal drivers of gross profit include
production volumes, product mix, labor, facilities and materials costs.

Operating expenses are composed of
three categories, selling and marketing, general and administrative expenses and research,
development and engineering. Selling and marketing expenses are composed of wages,
commissions, facility costs, travel, advertising, media and product promotion costs.
General and administrative expenses include compensation and facilities costs for the
information systems, executive, human resources and finance departments, as well as
software, legal and consulting costs. Research, development and engineering expenses are
composed of wages, facilities, software and consulting costs. These costs are incurred for
both new product development, and the support and refinement of the existing product
lines.

There are many factors that affect
operating results; critical factors include the following:

The Company must be able to provide
products and services that are both technologically advanced and competitively priced. To
do so, requires a dedicated research and development effort that is customer focused and
timely in its new product delivery.

The Companys manufacturing
processes are vertically integrated. Therefore, it is important to efficiently manage the
cost structure for capital expenditures, materials and overhead, as well as operating
expenses such as wages and benefits.

X-Rites products are sold in
many markets and geographic regions, which requires a coordinated sales and marketing
effort that can deliver cost-effective measurement solutions to a variety of customers
both large and small.



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The following table sets forth
information derived from the Companys consolidated statements of operations
expressed as a percentage of net sales.

`2002           2001         2000
                                           -------------- ------------- ------------

    Net sales                                  100.0%        100.0%        100.0%
    Cost of sales                               37.5          37.7          35.7
                                               -----         -----         -----
      Gross profit                              62.5          62.3          64.3
    Operating expenses:
      Selling and marketing                     28.2          25.4          21.0
      General and administrative                15.2          16.8          14.5
      Research, development &
          engineering                           12.6          16.9          11.4
       Restructuring charges                    -              0.9          -
                                               -----         -----         -----
                                                56.0          60.0          46.9
                                               -----         -----         -----

    Operating income                             6.5           2.3          17.4
    Other income                                 -             1.0           1.0
    Write down of other
        investments                             (7.4)         (1.2)         -
                                               -----         -----         -----
    Income (loss) before income
        taxes and cumulative effect of
        change in accounting principle          (0.9)          2.1          18.4
    Income taxes                                 1.0           -             6.5
    Cumulative effect of change
        in accounting principle                 (7.7)          -            -
                                               -----         -----         -----
    Net income (loss)                           (9.6)%         2.1%         11.9%
                                               -----         -----         -----`

Net SalesRecord fourth quarter sales of $30.9
million helped the Company post a 7.4 percent increase in sales for 2002. Sales for the
year were $98.5 million, compared to $91.7 million in 2001. The 2001 sales were 11.4
percent lower than the 2000 sales of $103.4 million. These results were especially
pleasing in light of the difficult markets encountered in 2002. Capital goods spending
remained soft globally, particularly in several key markets, such as printing, imaging and
telecommunications. The Companys focus on continually providing its customers with
cost effective solutions has allowed sales to grow in difficult economic times.

The Color and Appearance product
groups capitalized on new product introductions to record combined sales of $38.0 million
a 23.4 percent increase over 2001 sales of $30.8 million. Color and Appearance sales were
$37.1 million in 2000. The industrial and refinishing market group recorded sales of $23.2
million, an 18.4 percent increase over the 2001 sales $19.6 million. Retail coating sales
were $14.8 million, an increase of 32.1 percent over 2001 sales of $11.2 million,
reflecting the popularity of the latest versions of the MatchRite ColorDesignersoftware enhancements.

Graphic Arts sales were $41.7 million
compared to $41.1 million in 2001 an increase of 1.5 percent. Printing line sales were
$21.3 million, an increase of 5.5 percent over 2001 sales of $20.2 million. The imaging
product line sales were $20.4 million in 2002 compared to $20.9 million in 2001, a
decrease of 2.4 percent. Graphic Arts sales in 2000 were $47.7 million.

Labsphere had a disappointing year,
as continued softness in the lighting and telecommunications industries hampered sales
efforts. Sales for 2002 were $11.9 million compared to $14.8 million in 2001, a decrease
of 19.8 percent. Sales in 2000 were $14.5 million.

X-Rites new ShadeVision dental
product continued to gain market acceptance in 2002, which helped the Bio Diagnostics
lines record a 41.1 percent increase in sales. Total biodiagnostic sales for the year were
$6.9 million compared to $4.9 and $4.1 million in 2001 and 2000, respectively.



---

Geographically, sales to the North
American and European markets were strong in 2002. Sales in North America increased 9.3
percent over 2001, while European sales were up 7.8 percent. Sales in the Asia Pacific
region were flat, with gains experienced in the Chinese market offset by weaknesses in
other Asian markets, primarily Japan.

Sales from the Coherix and Optronik
units, which were acquired in the third quarter of 2000, were nominal in 2002, 2001 and
2000, and accordingly, did not impact total sales.

Price changes had a marginal impact
on sales levels in 2002, 2001 and 2000.

Gross ProfitGross profit as a percent of net
sales was 62.5 percent in 2002 as compared to 62.3 and 64.3 percent in 2001 and 2000,
respectively. The manufacturing cost structure has remained consistent, but under absorbed
overhead and competitive pricing pressures has lowered gross profit.

Selling and Marketing
ExpensesThe Company continues to expand its
sales and marketing coverage to support new product introductions and geographic
expansion. Selling and marketing expense was $27.8 million for 2002 a 19.8 percent
increase over 2001 expenses of $23.2 million. Selling and marketing expenses in 2000 were
$21.7 million. The increased marketing costs were across most lines of business, with
particular emphasis on newer lines such as ShadeVision and Coherix. Additional marketing
costs were also incurred for new product rollouts for the 8000 Benchtop series,
ColorDesignerand ATD News for the printing group. Sales costs also
increased as a result of the additional staffing and travel costs to expand the
Companys global reach to Europe and Asia.

In 2002, we also completed the
opening of X-Rite, (Shanghai) International TradingCo. Ltd. in Shanghai. This
company serves as a sales and service center for China. Expanding our presence in China
will facilitate continued growth, and help X-Rite establish a position as that
countrys preferred provider of color measurement solutions.

General and
AdministrativeGeneral and administrative expenses
decreased 2.6 percent in 2002. Total expenditures were $15.0 million versus $15.4 million
in 2001. The 2000 expenses were also $15.0 million. The decrease reflects the impact of an
ongoing cost cutting initiative as well as a focus to leverage these costs over a higher
amount of sales.

Research, Development
and EngineeringResearch, Development and Engineering
(RD&E) expenditures in 2002 were $12.4 million compared to $15.5 million in 2001, a
decrease of $3.1 million or 20.0 percent. In 2000, RD&E expenditures were $11.8
million. The decrease in 2002 can be attributed to lower employee headcount, completion of
several new product projects during the year, and reduced contract engineering costs that
were directed at a specific development project.

In addition to the RD&E costs
reported as operating expenses, costs were incurred to develop new software products in
each of the last three years that were capitalized. Software development costs capitalized
totaled $1.7, $1.6 and $1.6 million in 2002, 2001 and 2000, respectively. The related
amortization expense was included in cost of sales (see Note 2 to the accompanying
consolidated financial statements).

Restructuring ChargeIn September 2001, the Company
announced a workforce reduction plan and recorded a $0.9 million pretax charge to
earnings. This charge has been classified separately as a component of Operating Expenses
under the caption of Restructuring charge and represents costs associated with
non-voluntary termination benefits for approximately 60 positions. Benefit payments began
during the fourth quarter of 2001. As of December 28, 2002, 60 positions have been
eliminated. The remaining unpaid benefits at December 28, 2002 of $0.2 million are
included in accrued liabilities.

Other IncomeOther income consists primarily of
dividend and interest income and foreign currency exchange gains and losses. The decline
in other income in 2002 is due to decreased yields in the tax-exempt markets as well as
less funds available for investment.

Write-Down of Other
InvestmentsOther investments include investments
made by the Companys strategic venture capital group, XR Ventures, LLC (XRV) (See
Other Investments, below). Each investment represents less than 20 percent of the
ownership of the respective investees. Since the Company does not exercise significant
influence over the operating and financial policies of each investee, the investments have
been recorded at cost. The Company periodically evaluates the carrying value of each
investment to determine whether a decline in fair value below cost has occurred.



---

If the
decline is determined to be other than temporary, the carrying value is adjusted to the
current fair value and a loss is recognized. A comprehensive assessment of the continuing
value of XRVs investments was performed in June 2002, and the conclusion was reached
that due to the continued erosion of the venture capital markets, and network middleware
and telecommunications sectors of the economy, the value of certain investments had been
permanently impaired. Accordingly, a charge of $6.6 million was recorded in the second
quarter.

In the fourth quarter of 2002, XRV
provided a working capital advance of $0.6 million to a company in which it had previously
invested and subsequently expensed that investment. This new funding was made in
conjunction with other previous third party investors. This funding was intended to
provide the investee operating cash for the next six months while it sought new sources of
investment capital. The investee has not been successful in securing new capital, and upon
further analysis, this investment was deemed to be impaired and the appropriate charge was
taken in the fourth quarter.

The Company performed a similar
assessment in the fourth quarter of 2001, and it was determined that certain investments
had been permanently impaired requiring a write-down of $1.1 million. No such write-downs
occurred in 2000.

Tax benefits related to these
write-downs may not be realizable and accordingly were not recorded for either year.

At December 28, 2002, the Company had
four venture capital investments for which impairment charges have not been recorded.
These companies are focused in the medical diagnostic device, market research and
telecommunications components industries.

Income TaxesThe Company recorded a tax provision
of $1.0 million in 2002 against a loss before taxes of $0.8 million and cumulative
effective of change in accounting principle. The provision was adjusted by the potential
non-deductible capital losses associated with the write-down of investments by XR
Ventures, LLC. Exclusive of these write-downs, the Company would have had approximately a
16 percent tax rate in 2002, compared to the U.S. statutory rate of 35 percent. This lower
rate benefited from tax reductions received as a result of the Companys foreign
sales operations.

The effective tax rate for 2001 was
zero percent, and approximately 35 percent for 2000.

Cumulative Effect of
Change in Accounting PrincipleEffective December 30, 2001, the
Company adopted SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 142
requires companies to discontinue amortizing goodwill and certain intangible assets with
an indefinite life. Instead, companies are required to review goodwill and intangible
assets with an indefinite useful life for impairment annually and as indicators of
impairment occur. As discussed further in Note 4 to the consolidated financial statements,
during 2002, the Company completed steps one and two of the transitional testing required
by SFAS No. 142, as well as, the annual impairment testing requirement. Step two testing
was completed with the assistance of an independent valuation firm during the fourth
quarter of 2002.

Under SFAS No.142, goodwill
impairment exists if the net book value of a reporting unit exceeds its estimated fair
value. The Company evaluated goodwill using three reporting units, Labsphere and Optronik
combined, Coherix, and X-Rite Mediterranee.

Upon completion of the step two
transitional testing for the Labsphere and Optronik combined reporting unit, it was
determined that an impairment of goodwill had occurred. Therefore, a non cash charge of
$7.6 million, or 38 cents per share, was recorded. The decline in fair value of the
Labsphere and Optronik reporting unit is primarily attributable to a decline in revenue
and profitability for the unit. This decline has led to a reduction in the three to five
year projection of operating earnings for the unit. The impairment is recorded under the
caption Cumulative effect of change in accounting principle in the
accompanying consolidated statement of operations, retroactive to the first quarter of
2002. The fair value of the remaining reporting units exceeded their net book value.
Therefore, no impairment charges were recorded for these units. In calculating the
impairment charge, the fair value of the reporting unit was determined by using a
discounted cash flow analysis. This methodology was selected over the market value
approach, due to a lack of comparable competitor data availability, which is necessary to
complete a market value study.

If the non-amortization provisions of
Statement No.142 had been applied in 2001 and 2000, amortization expense would have been
reduced by $0.9 and $0.6 million, respectively.

Liquidity and Capital
ResourcesApproximately $14.8 million of cash
was generated from operating activities in 2002, an increase of $2.8 million or 23.3
percent over 2001. Cash flow from operations in 2000 was $20.5 million. Non-cash
depreciation and amortization charged against net income was $5.6 million compared to $6.2
million and $5.7 million for 2001 and 2000, respectively. Amortization expenses in 2001
and 2000 include $0.9 and $0.6 million respectively, for amortization of goodwill, which
was not expensed in 2002, due to the adoption of SFAS No. 142 (see Note 4 to the
accompanying consolidated financial statements). In addition, the Company recorded
non-cash charges of $7.2 million for write- downs of XR Ventures, LLC investments, and
$7.6 million for goodwill impairments in connection with adoption of SFAS No.142. In 2001
XR Ventures, LLC recorded a write down of $1.1 million. There was no impairment recorded
in 2000.

Cash and short-term investments at
December 28, 2002, were $17.5 million as compared to $24.8 million at December 29, 2001.
The largest use of cash in 2002 was $11.2 million for the repurchase of Company common
stock through the Founders Stock Redemption program. Working capital at December 28, 2002,
was $42.6 million as compared to $52.1 million at December 29, 2001. The current ratio at
December 28, 2002 was 4.7:1, compared to 8.2:1 at December 29, 2001.



---

The Company anticipates that current
liquidity, future cash flows and a bank credit line will be sufficient to fund operations,
life insurance premiums, capital expenditures, and financing needs for the foreseeable
future. Should additional funding be required, supplemental borrowing arrangements are the
most probable alternative for meeting capital resource and liquidity needs. The Company
maintains a revolving line of credit of $20 million.

The Companys portfolio of
short-term investments consists primarily of tax-free municipal bonds, mutual funds and
preferred stocks. An allowance for unrealized gains and losses related to this portfolio
has been established. Changes to the allowance are reported as a component of other
comprehensive income. The allowance was $0.8 and $0.6 million at December 28, 2002 and
December 29, 2001, respectively.

Capital expenditures of $2.2 million
were made in 2002. These expenditures were made primarily for machinery, equipment,
building improvements, computer hardware and software. Capital expenditures in 2001 were
$5.0 million. The Company anticipates making capital expenditures in 2003 of approximately
$3.7 million.

During 1998, the Company entered into
agreements with its founding shareholders for the future purchase of 4.5 million shares of
common stock. The stock purchases will occur following the later of the death of each
founder and his spouse. The price the Company will pay the founders estates for
these shares will reflect a 10 percent discount from the market price, although the
discounted price may not be less than $10 per share (a total of $45.4 million) or more
than $25 per share (a total of $113.5 million).

The cost of the purchase agreements
will be funded by $160.0 million of proceeds from life insurance policies the Company has
purchased on the lives of certain of these individuals. The Company anticipates that stock
purchases will not coincide with the receipt of insurance proceeds; therefore, borrowed
funds may be required periodically to finance the Companys purchase obligations.
Insurance was purchased at the $160.0 million level in order to provide adequate funding
for both the maximum aggregate purchase price and anticipated borrowing costs. Life
insurance premiums total $4.3 million each year while all the policies remain in effect.
Of the $4.3 million paid in 2002, 2001 and 2000 approximately $1.4, $1.0 and $1.0, million
respectively, were classified as expense.

The Company purchased 1,120,000
shares at $10 per share or $11.2 million under the terms of the agreement in January 2002.
This founder was not insured; therefore, as anticipated at the time the agreement was
entered into, the Company funded this obligation with cash and short-term investments.

The Companys most significant
financing activities in 2002 were the payment of dividends to shareholders and the
repurchase of common stock through the Founders program, as previously discussed. During
the last three years dividends were paid at a rate of 10 cents per share or approximately
$2.0 million dollars annually. At the present time, the Board of Directors intends to
continue payments at this rate. In September 2000, the Board of Directors authorized a
common stock repurchase program of up to one million shares of outstanding stock. The
timing of the program and amount of the stock repurchases will be dictated by overall
financial and market conditions. There were no shares repurchased in 2002 under this
program. During 2001, the Company repurchased 231,364 shares at an average cost of $7.56
per share. There were no shares repurchased during 2000.

Other InvestmentsXR Ventures, LLC (XRV) is a strategic
venture capital group formed in 2000 and majority owned by X-Rite. Its mission is to
direct and manage the Companys investments in start up companies in high technology
fields. The Companys partners in the group are Dr. Peter M. Banks and Mr. James A.
Knister. Both have had extensive careers as executives in technology companies. In
addition to their roles with XR Ventures, both serve on the Board of Directors of X-Rite,
Incorporated. The venture group seeks out, but is not restricted to companies with
technologies that are directly related to current Company technologies, or technologies
that the Company is interested in pursuing including biosensors, micro mechanical systems,
telecommunication components and information technologies. At December 28, 2002 and
December 29, 2001, XRV held minority positions in eleven companies, with a total net
investment of $3.2 and $8.6 million, respectively. The Board of Directors of the Company
evaluated the fairness, on-going risks and uncertainty involved in partnering with two of
its directors. The arrangement was negotiated at arms-length with Dr. Banks and Mr.
Knister who were represented by their own counsel while the Company was represented by its
regular counsel.

Critical Accounting Policies and EstimatesThe preparation of financial
statements in accordance with generally accepted accounting principles in the United
States requires management to adopt accounting policies and make significant judgments and
estimates to develop amounts reflected and disclosed in the financial statements. In some
instances there may be alternative policies or estimation techniques that could be used.
Management maintains a thorough process to review the application of accounting policies
and to evaluate the appropriateness of the many estimates that are required to prepare the
financial statements. However, even under optimal circumstances, estimates routinely
require adjustment based on changing circumstances and the receipt of new or better
information.



---

The policies and estimates discussed
below include the financial statement elements that are either the most judgmental or
involve the selection or application of alternative accounting policies and are material
to the financial statements. Management has discussed the development and selection of
these accounting policies with the Audit Committee of the Board of Directors.

Accounts Receivable AllowancesAccounts receivable allowances are
based on known customer exposures, historic credit experience, and the specific
identification of potentially uncollectible accounts. In addition to known or judgmental
components, a policy that consistently applies reserve rates based on the age of
outstanding accounts receivables is followed. Actual collections can differ requiring
adjustments to the reserves.

Inventory ReservesInventories are valued at the lower
of cost or market. Reserves are established for excess and obsolete inventory, based on
material movement and a component of judgment for current events such as market conditions
or technological advancement. The amount of reserve required may be adjusted as these
underlying factors change.

Self-Insurance ReservesThe Company is self insured up to
certain limits for costs associated with benefits paid under employee health care
programs. The measurement of these costs requires the consideration of historic loss
experience and judgments about the present and expected levels of costs per claim. These
costs are accounted by developing estimates of the undiscounted liability for claims
incurred, including those claims incurred but not reported. This method provides estimates
of future ultimate claim costs based on claims incurred as of the balance sheet date.

Long-Lived AssetsEvaluations are periodically made of
long-lived assets and the Companys venture capital investments for indicators of
impairment when events or circumstances indicate that this risk may be present. Judgments
regarding the existence of impairment are based on several factors including but not
limited to, market conditions, operational performance, technological advancements and
estimated future cash flows. If the carrying value of a long-lived asset is considered
impaired, an impairment charge is recorded to adjust the asset to its fair value.

GoodwillThe Company has $2.1 million of
goodwill recorded as of December 28, 2002, related to prior acquisitions. New accounting
standards adopted in 2002, require that goodwill must be reviewed for impairment at least
annually and as indicators of impairment occur, and the cessation of amortization. The
annual evaluation of goodwill impairment requires the use of estimates about the future
cash flows of each reporting unit to determine estimated fair values. Changes in
forecasted operations and changes in discount rates can materially affect these estimates.
However, once an impairment of goodwill has been recorded it cannot be reversed.

Other MattersIn November of 2001, the
Companys Board of Directors adopted a Shareholder Protection Rights Plan (the
Plan), which became effective in the first quarter of 2002. The Plan is
designed to protect shareholders against unsolicited attempts to acquire control of the
Company in a manner that does not offer a fair price to all shareholders.

Under the Plan, one purchase right
automatically trades with each share of the Companys common stock. Each Right
entitles a shareholder to purchase 1/100 of a share of junior participating preferred
stock at a price of $30.00, if any person or group attempts certain hostile takeover
tactics toward the Company. Under certain hostile circumstances, each Right may entitle
the holder to purchase the Companys common stock at one-half its market value or to
purchase the securities of any acquiring entity at one-half their market value. Rights are
subject to redemption by the Company at $.005 per Right and, unless earlier redeemed, will
expire in the first quarter 2012. Rights beneficially owned by holders of 15 percent or
more of the Companys common stock, or their transferees and affiliates,
automatically become void.

# FORWARD-LOOKING
STATEMENTS:

This discussion and analysis of
financial condition and results of operations, as well as other sections of the
Companys Form 10-K, contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act, as amended, that are based on managements



---

beliefs, assumptions, current
expectations, estimates and projections about the industries it serves, the economy, and
about the Company itself. Words such as anticipates, believes, 
estimates, expects, likely, plans,
projects, should, variations of such words and similar expressions
are intended to identify such forward looking statements. These statements, such as those
related to refining manufacturing processes, new products and new markets, are not
guarantees of future performance and involve certain risks, uncertainties, and assumptions
that are difficult to predict with regard to timing, extent, likelihood and degree of
occurrence. Therefore, actual results and outcomes may materially differ from what may be
expressed or forecasted in such forward-looking statements. Furthermore, X-Rite,
Incorporated undertakes no obligation to update, amend or clarify forward looking
statements, whether as a result of new information, future events or otherwise.

# ITEM 7A.   QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to a variety
of risks including foreign currency exchange fluctuations, and market volatility in its
investment and insurance portfolios. In the normal course of business the Company employs
established procedures to evaluate its risks and take corrective actions when necessary to
manage these exposures. The Company is not a party to any derivative instruments.

Foreign ExchangeForeign currency exchange risks arise
from transactions denominated in a currency other than the entitys functional
currency and from foreign denominated transactions translated into U.S. dollars. The
Companys largest exposures are to the Euro and British Pound Sterling. In 2002,
approximately 24 percent of the Companys sales were invoiced in foreign currencies.
As these currencies fluctuate relative to the dollar, it may cause profitability to
increase or decrease accordingly.

Founders Stock Redemption ProgramDuring 1998, the Company entered into
agreements with its founding shareholders for the future purchase of 4.5 million shares
(see Note 9 to the accompanying consolidated financial statements). The repurchases will
be funded by life insurance policies purchased on certain members of the founders group
and their spouses. These policies have cash value accumulation funds that provide
investment income that is used to offset increasing mortality charges as the insureds age.
The cash value funds are invested in a combination of equity and bond funds as well as
variable interest rate products issued by the underwriting carrier. Should the policies
experience prolonged investment losses, or lower than anticipated interest crediting rates
the policies may require additional cash deposits to keep them in force.



---

# ITEM 8.   FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA

The following report, financial
statements and notes are included with this report:

Report of Independent
Auditors Copy of the Report of Independent
Public Accountants Consolidated Balance Sheets Consolidated Statements of Operations
Consolidated Statements of Permanent Shareholders Investment Consolidated Statements
of Cash Flows Notes to Consolidated Financial Statements

# Report of Independent
Auditors

To the Shareholders and Board of
Directors of X-Rite, Incorporated

We have audited the accompanying consolidated
balance sheet of X-Rite, Incorporated and subsidiaries as of December 28, 2002, and the
related consolidated statements of operations, permanent shareholders investment and
cash flows for the year then ended. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit. The financial
statements of X-Rite, Incorporated for the years ended December 29, 2001 and December 30,
2000 were audited by other auditors who have ceased operations and whose report dated
January 29, 2002 expressed an unqualified opinion on those statements.

We conducted our audit in accordance
with auditing standards generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial
statements referred to above present fairly, in all material respects, the consolidated
financial position of X-Rite, Incorporated and subsidiaries at December 28, 2002, and the
consolidated results of their operations and their cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States.

As discussed above, the financial
statements of X-Rite, Incorporated as of December 29, 2001 and December 30, 2000, and for
the years then ended, were audited by other auditors who have ceased operations. As
described in Note 4, these financial statements have been revised to include the
transitional disclosures required by Statement of Financial Accounting Standards
(Statement) No. 142, Goodwill and Other Intangible Assets, which was
adopted by the Company as of December 30, 2001. Our audit procedures with respect to the
disclosures in Note 4 with respect to 2001 and 2000 included (a) agreeing the previously
reported net income to the previously issued financial statements and the adjustments to
reported net income representing amortization expense (including any related tax effects)
recognized in those periods related to goodwill as a result of initially applying
Statement No. 142 to the Companys underlying records obtained from management, and
(b) testing the mathematical accuracy of the reconciliation of adjusted net income to
reported net income, and the related earnings-per-share amounts. In our opinion, the
disclosures for 2001 and 2000 in Note 4 are appropriate. However, we were not engaged to
audit, review, or apply any procedures to the 2001 and 2000 financial statements of the
Company other than with respect to such disclosures and, accordingly, we do not express an
opinion or any other form of assurance on the 2001 and 2000 financial statements taken as
a whole.

As discussed in Note 4 to the
consolidated financial statements, in 2002 the Company changed its method of accounting
for goodwill and other intangible assets.

/s/ Ernst & Young LLP

Grand Rapids, MichiganJanuary 28, 2003



---

The following report is a copy of a
report previously issued by Arthur Andersen LLP in connection with the Companys
Annual Report and Form 10K for the years ended December 29, 2001 and December 30, 2000.
This opinion has not been re-issued by Arthur Andersen, LLP.

# Copy  Report of
Independent Public Accountants

To the Shareholders of
X-Rite, Incorporated:

We have audited the accompanying
consolidated balance sheets of X-Rite, Incorporated (a Michigan corporation) and
subsidiaries as of December 29, 2001 and December 30, 2000, and the related consolidated
statements of income, permanent shareholders investment and cash flows for each of
the three years in the period ended December 29, 2001. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance
with auditing standards generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
financial position of X-Rite, Incorporated and subsidiaries as of December 29, 2001 and
December 30, 2000, and the results of their operations and their cash flows for each of
the three years in the period ended December 29, 2001, in conformity with accounting
principles generally accepted in the United States.

/s/ Arthur Andersen LLP

Grand Rapids, Michigan,January 29, 2002



---

# X-RITE, INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS(in thousands)

`December 28,       December 29,
                                                                           2002               2001
                                                                       -----------        -----------
ASSETS
Current assets:
   Cash and cash equivalents                                             $ 10,100           $  9,164
   Short-term investments                                                   7,438             15,667
   Accounts receivable, less allowance of
     $1,207 in 2002 and $1,237 in 2001                                     19,773             12,048
   Inventories                                                             14,080             15,235
   Refundable income taxes                                                      -              4,079
   Deferred taxes                                                           1,602              2,139
   Prepaid expenses and other current assets                                1,141              1,022
                                                                         --------           --------
                                                                           54,134             59,354

 Property plant and equipment:
   Land                                                                     2,278              2,278
   Buildings and improvements                                              16,948             16,745
   Machinery and equipment                                                 15,399             14,364
   Furniture and office equipment                                          18,224             17,477
   Construction in progress                                                   157                377
                                                                         --------           --------

                                                                           53,006             51,241
   Less accumulated depreciation                                         (31,879)           (28,899)
                                                                         --------           --------
                                                                           21,127             22,342

Other assets:
   Cash surrender values (founders policies)                               16,123             13,197
   Goodwill                                                                 2,135              9,599
   Other investments                                                        3,210              8,634
   Capitalized software (net of accumulated amortization
     of $9,011 in 2002 and $7,392 in 2001)                                  2,862              2,779
   Deferred taxes                                                           1,683              1,834
   Other noncurrent assets                                                  1,610              1,213
                                                                         --------           --------
                                                                           27,623             37,256
                                                                         --------           --------

                                                                         $102,884           $118,952
                                                                         ========           ========`

The
accompanying notes are an integral part of these statements.



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# X-RITE, INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
 Continued(in thousands, except
share and per share data)

`December 28,       December 29,
                                                                           2002               2001
                                                                       -----------        -----------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
   Accounts payable                                                      $  3,323           $  1,713
     Accrued liabilities:
       Payroll and employee benefits                                        4,265              2,743
       Income taxes                                                         2,144                  -
       Other                                                                1,804              2,767
                                                                         --------           --------
                                                                           11,536              7,223

Temporary shareholders' investment:
   Value of shares subject to redemption agreements;
     3,420,000 and 4,540,000 shares issued and outstanding,
     respectively, in 2002 and 2001                                        34,200             45,400

Permanent shareholders' investment:
   Preferred stock, $.10 par value, 5,000,000 shares
     authorized; none issued                                                    -                  -
   Common stock, $.10 par value, 50,000,000 shares
     authorized; 16,803,525 and 16,761,118 shares
     issued and outstanding in 2002 and 2001 respectively,
     not subject to redemption agreements                                   1,680              1,676
   Additional paid-in capital                                               6,056              5,792
   Retained earnings                                                       50,001             61,431
   Accumulated other comprehensive loss                                     (330)            (2,208)
   Stock conversion program                                                 (259)              (362)
                                                                         --------           --------
                                                                           57,148             66,329
                                                                         --------           --------
                                                                         $102,884           $118,952
                                                                         ========           ========`

The
accompanying notes are an integral part of these statements.



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# X-RITE, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except
per share data)

`For the Year Ended
                                                          ----------------------------------------------
                                                          December 28,     December 29,      December 30,
                                                              2002             2001              2000
                                                          -----------      -----------       -----------

Net sales                                                  $ 98,468         $ 91,658           $103,449
Cost of sales                                                36,899           34,587             36,943
                                                           --------         --------           --------
   Gross profit                                              61,569           57,071             66,506

Operating expenses:
   Selling and marketing                                     27,769           23,231             21,685
   General and administrative                                14,993           15,380             14,977
   Research, development and engineering                     12,376           15,499             11,771
   Restructuring charge                                         -                862                -
                                                           --------         --------           --------
                                                             55,138           54,972             48,433
                                                           --------         --------           --------

     Operating income                                         6,431            2,099             18,073

Other income                                                     33              959              1,090
Write-down of other investments                              (7,237)          (1,125)               -
                                                           --------         --------           --------

     Income (loss) before income taxes                         (773)           1,933             19,163

Income taxes                                                  1,021              -                6,755
                                                           --------         --------           --------

Income (loss) before cumulative effect
   of change in accounting principle                         (1,794)           1,933             12,408

Cumulative effect of change in accounting
   principle                                                 (7,615)             -                  -
                                                           --------         --------           --------

Net income (loss)                                          $ (9,409)         $ 1,933           $ 12,408
                                                           ========         ========           ========

Earnings (loss) per share - basic:
   Earnings (loss) before cumulative effect of
     change in accounting principle                          $(.09)             $.09              $.59
   Cumulative effect of change in accounting
     principle                                                (.38)              -                  -
                                                           --------         --------           --------

                                                             $(.47)             $.09              $.59
                                                           ========         ========           ========

Earnings (loss) per share - diluted:
   Earnings (loss) before cumulative effect of
     change in accounting principle                          $(.09)             $.09             $ .58
   Cumulative effect of change in accounting
     principle                                                (.38)              -                  -
                                                           --------         --------           --------

                                                             $(.47)             $.09              $.58
                                                           ========         ========           ========`

The
accompanying notes are an integral part of these statements.



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# X-RITE, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF PERMANENT SHAREHOLDERS INVESTMENT(in thousands, except
share data)

`Accumulated
                                                                                    Other                         Total
                                         Additional                             Comprehensive       Stock       Permanent
                                Common     Paid-in     Retained   Shares in        Income         Conversion   Shareholders'
                                Stock      Capital     Earnings     Escrow         (Loss)          Program      Investment
                               -------   ----------    --------   ---------     -------------     ----------   ------------

BALANCES, 1/1/00               $1,670       $8,439     $51,347     $(4,820)         $(1,214)          $ -         $55,422

Net income                          -                   12,408           -                 -            -          12,408
Translation adjustment              -            -           -           -             (522)            -           (522)
Unrealized gain on short-
   term investments (net of tax)    -            -           -           -               162            -             162
                                                                                                                  -------
Total comprehensive income                                                                                         12,048
Cash dividends declared
   of $.10 per share                -            -      (2,116)        (13)                -            -         (2,129)
Issuance of 96,425 shares
   of common stock under
   employee benefit plans          10          467           -           -                 -            -             477
Sale of 257,264 shares
   by escrow fund                   -      (2,913)           -       4,833                 -            -           1,920
                               ------      -------     -------      ------           -------       ------         -------

BALANCES, 12/30/00              1,680        5,993      61,639           -           (1,574)            -          67,738

Net income                          -            -       1,933           -                 -            -           1,933
Translation adjustment              -            -           -           -             (565)            -           (565)
Unrealized loss on short-
   term investments (net of tax)    -            -           -           -              (69)            -            (69)
                                                                                                                  -------
Total comprehensive income                                                                                          1,299
Cash dividends declared
   of $.10 per share                -            -      (2,141)          -                 -            -         (2,141)
Issuance of 195,161 shares
   of common stock under
   employee benefit plans          19        1,525           -           -                 -         (517)          1,027
Repurchase of 231,364
   shares of common stock         (23)     (1,726)           -           -                 -            -         (1,749)
Stock conversion program            -            -           -           -                 -          155             155
                               ------      -------     -------      ------           -------       ------         -------

BALANCES, 12/29/01              1,676        5,792      61,431           -           (2,208)         (362)         66,329

Net loss                            -            -      (9,409)          -                 -            -         (9,409)
Translation adjustment              -            -           -           -             2,036            -           2,036
Unrealized loss on short-
   term investments (net
   of tax of 86)                    -            -           -           -             (158)            -           (158)
                                                                                                                  -------
Total comprehensive loss                                                                                          (7,531)
Cash dividends declared
   of $.10 per share                -            -      (2,021)          -                 -            -         (2,021)
Issuance of 58,049 shares
   of common stock under
   employee benefit plans           6          403           -           -                 -            -             409
Repurchase of 15,642
   shares of common stock         (2)        (139)           -           -                 -            -           (141)
Stock conversion program            -            -           -           -                 -          103             103

BALANCES, 12/28/02             $1,680       $6,056     $50,001      $    -           $ (330)       $(259)         $57,148
                               ======       ======     =======      ======           =======       ======         =======`

The
accompanying notes are an integral part of these statements.



---

# X-RITE, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)

`For the Year Ended
                                                                        ----------------------------------------------
                                                                        December 28,     December 29,      December 30,
                                                                            2002             2001              2000
                                                                        -----------      -----------       -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income (loss)                                                      $(9,409)         $ 1,933           $12,408
   Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
       Cumulative effect of change in accounting principle                  7,615                -                 -
       Depreciation and amortization                                        5,575            6,168             5,717
       Allowance for doubtful accounts                                        281              494               388
       Deferred income taxes                                                  774            4,082            (4,669)
       Write-down of other investments                                      7,237            1,125                 -
       Other                                                                  108              299                18
   Changes in operating assets and liabilities
     net of effects from acquisitions:
       Accounts receivable                                                 (7,239)           7,246               335
       Inventories                                                          1,394              700               415
       Prepaid expenses and other current assets                             (164)            (880)              144
       Accounts payable                                                     1,546             (806)              217
       Income taxes payable                                                 6,248           (9,142)            4,738
       Other accrued liabilities                                              819              775               792
                                                                          -------          -------           -------
         Net cash provided by operating activities                         14,785           11,994            20,503

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from maturities of short-term investments                       3,020            1,442             2,606
   Proceeds from sales of short-term investments                           11,762           24,273            19,420
   Purchases of short-term investments                                     (6,810)         (29,020)          (12,378)
   Capital expenditures                                                    (2,230)          (4,972)           (4,140)
   Acquisitions, less cash acquired                                             -                -            (4,505)
   Investment in founders life insurance                                   (2,926)          (3,279)           (3,302)
   Increase in other investments                                           (2,113)          (5,149)           (4,610)
   Increase in other assets                                                (1,697)          (1,641)           (1,628)
   Other investing activities                                                 100               56               (16)
                                                                          -------          -------           -------
         Net cash used for investing activities                              (894)         (18,290)           (8,553)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Dividends paid                                                          (2,021)          (2,141)           (2,129)
   Issuance of common stock                                                   375            1,027               477
   Repurchase of common stock                                             (11,341)          (1,749)                -
   Proceeds from sales of escrow investments                                    -                -             1,920
                                                                          -------          -------           -------
         Net cash provided by (used for) financing activities             (12,987)          (2,863)              268

EFFECT OF EXCHANGE RATE CHANGES
   ON CASH AND CASH EQUIVALENTS                                                32             (272)             (521)
                                                                          -------          -------           -------

NET INCREASE (DECREASE) IN
   CASH AND CASH EQUIVALENTS                                                  936           (9,431)           11,697

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                              9,164           18,595             6,898
                                                                          -------          -------           -------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                  $10,100          $ 9,164           $18,595`

The
accompanying notes are an integral part of these statements.



---

# X-RITE, INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

# NOTE 1  THE
COMPANY AND OTHER INFORMATION

X-Rite, Incorporated and its
subsidiaries (individually X-Rite and all of its subsidiaries the
Company) are engaged in the development, manufacture and sale of technically
sophisticated instrumentation and user friendly software solutions for a wide variety of
color, light and shape measurement applications. Principal markets for the Companys
products include the paint, plastic, textile, packaging, photographic, graphic arts and
medical industries, in addition to commercial and research laboratories. Based on the
nature of its products, customers and markets, the Companys management evaluates its
business as a single reportable operating segment.

Products are sold worldwide through
the Companys own sales personnel and through independent sales representatives. The
Company is headquartered in Grandville, Michigan and has other domestic operations in New
Hampshire. In addition, the Company has locations in Germany, England, Hong Kong, the
Czech Republic, France, Italy, the Netherlands China and Japan. Manufacturing is done in
the United States and Germany.

Sales to customers are attributed to
the geographic areas based upon the location of the customer. Long lived assets consist of
plant and equipment (in thousands):

`2002              2001             2000
                                                      --------          --------         --------
Domestic sales:
   U.S. operations                                     $56,123           $52,637         $ 65,136
International sales:
   U.S. operations export sales
     to unaffiliated customers                          12,165            13,530           12,002
   Foreign subsidiary sales                             30,180            25,491           26,311
                                                       -------           -------         --------

                                                        42,345            39,021           38,313
                                                       -------           -------         --------

                                                       $98,468           $91,658         $103,449
                                                       =======           =======         ========

Long lived assets:
   U.S. operations                                     $19,397           $21,054          $20,285
   International                                         1,730             1,288            1,581
                                                       -------           -------         --------

                                                       $21,127           $22,342          $21,866
                                                       =======           =======         ========`

No single customer accounted for more
than 10 percent of total net sales in 2002, 2001 or 2000.

# NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

Principles of ConsolidationThe consolidated financial statements
include the accounts of X-Rite, Incorporated and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated. The Companys fiscal
year ends on the Saturday closest to December 31. Each of the past three fiscal years has
contained 52 weeks.

Cash and Cash EquivalentsThe Company considers all highly
liquid financial instruments with maturities of three months or less when purchased to be
cash equivalents.

Accounts Receivable
AllowancesAccounts receivable allowances are
based on known customer exposures, historic credit experience, and the specific
identification of potentially uncollectible accounts. In addition to known or judgmental
components a policy that consistently applies reserve rates based on the age of
outstanding accounts receivables is followed. Actual collections can differ requiring
adjustments to the reserves.



---

# NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES, continued

InventoriesInventories are stated at the lower
of cost, determined on a first-in first-out basis, or market. Reserves are established for
excess and obsolete inventory, based on material movement and a component of judgment for
current events such as market conditions or technological advancement. Components of
inventories are summarized as follows (in thousands):

`2002                       2001
                                               ------                     ------

       Raw materials                          $ 4,564                    $ 6,079
       Work in process                          3,908                      5,078
       Finished goods                           5,608                      4,078
                                              -------                    -------
                                              $14,080                    $15,235
                                              =======                    =======`

Property, Plant, and Equipment and DepreciationPlant and equipment are stated at
cost and include expenditures for major renewals and betterments. Maintenance and repairs
that do not extend the lives of the respective assets are charged to expense as incurred.
Depreciation expense is computed using the straight-line method over the estimated useful
lives of the related assets. Estimated depreciable lives are as follows: buildings and
improvements, 5 to 40 years; machinery and equipment, 3 to 10 years; and furniture and
office equipment, 3 to 10 years.

Software Development CostsDevelopment costs incurred in the
research and development of new software products and enhancements to existing software
products are expensed as incurred until technological feasibility is achieved. After
technological feasibility is achieved, any additional development costs are capitalized
and amortized using the greater of the straight-line method over a three-year period, or
the amount computed by applying the ratio of current product revenues to total estimated
product revenues.

The Company capitalized $1.7, $1.6
and $1.6 million of software development costs during 2002, 2001 and 2000, respectively.
Amortization expense was $1.6, $1.2 and $1.4 million in 2002, 2001 and 2000, respectively.

GoodwillGoodwill results from the 1995
acquisition of Labsphere, Inc., and the 2000 acquisitions of the assets of Optronik GmbH
and the HoloVision Products group. Effective December 30, 2001 the Company adopted
Financial Accounting Standards Board Statement (SFAS) No.142, Goodwill and Other
Intangible Assets, which requires companies to discontinue amortizing goodwill and
certain intangible assets deemed to have an indefinite useful life. Instead companies are
required to review goodwill and intangible assets with an indefinite useful life for
impairment annually, or more frequently if indicators of impairment occur. The Company is
required to test the carrying value of goodwill impairment at the reporting unit level.

In years prior to 2002, the goodwill
associated with the Labsphere acquisition was amortized using the straight-line method
over twenty years. The goodwill associated with the Optronik GmbH and HoloVision Products
Group acquisitions were amortized using the straight-line method over ten years.

Long Lived AssetsPrior to December 30, 2001, the
Company evaluated the recoverability of long-lived assets by determining whether
un-amortized balances could be recovered through undiscounted future operating cash flows
over the remaining lives of the assets in accordance with the provisions of SFAS No.121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of. If the sum of the expected future cash flows was less than the
carrying value of the assets, an impairment loss was recognized for the excess of the
carrying value over the fair value. The estimated fair value was determined by discounting
the expected future cash flows at a rate that would have been required for a similar
investment with like risks. Effective December 30, 2001 the Company adopted SFAS No.144,
Accounting for the Impairment and Disposal of Long-Lived Assets . SFAS No.144
supercedes SFAS No.121, and the accounting and reporting provisions of the Accounting
Principles Board (APB) Opinion No.30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. SFAS No.144
retains the provisions of SFAS No.121 for recognition and measurement of impairment of
long-lived assets to be held and used, and measurement of long-lived assets to be



---

# NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES, continued

Long Lived Assets  continueddisposed of by sale. Discontinued
operations are no longer measured on a net realized value basis, and future operating
losses are no longer recognized before they occur. The impact of adopting SFAS No. 144 has
not been significant to the Companys financial statements. No impairments were
provided for in 2001 or 2000 under standards then in effect.

Investments Carried at CostIncluded in other investments in 2002
and 2001, respectively, are $3.2 and $8.6 million, net of valuation reserves, related to
investments made by the Companys strategic venture capital group, XR Ventures, LLC.
The Company funds acquisitions made by XR Ventures, LLC and in exchange, receives its
investment back in full before any distributions are made. Each investment represents less
than 20 percent of the ownership of the respective investee. Because the Company is unable
to exercise significant influence over the operating and financial policies of each
respective investee, the investments have been recorded at cost. The Company periodically
evaluates the carrying value of each investment to determine whether a decline in fair
value below the respective cost has occurred. If the decline is determined to be other
than temporary, the carrying value is adjusted to the then current fair value and a loss
is recognized. In June and December 2002, the Company performed comprehensive assessments
of the continuing value of each XR Ventures investment. Based on the continued erosion of
the venture capital markets and the network middleware and tele/data communications
sectors of the economy, the Company concluded that the value of certain investments had
been permanently impaired, and any related tax benefit of the write-downs may not be
realizable. Therefore, the Company recorded charges of $6.6 and $0.6 million in June and
December, respectively, for a combined total of $7.2 million for the year. In December
2001, the Company made a similar assessment and recorded impairment charges of $1.1
million.

Temporary and Permanent Shareholders InvestmentDuring 1998 the Company entered into
agreements with its founding shareholders for the future redemption of 4.54 million shares
(see Note 9). These shares have been reclassified on the balance sheet to a temporary
equity account. The Company records the results of its operations and all other equity
transactions as a component of permanent shareholders investment.

Income TaxesThe provision for income taxes is
based on earnings reported in the financial statements. Deferred income taxes are
recognized for all temporary differences between tax and financial reporting, and are
measured using the enacted tax rates expected to apply to the taxable income in the years
in which those temporary differences are expected to reverse.

Revenue RecognitionRevenue is recognized when earned in
accordance with applicable accounting standards. Revenue from sales of products and
services is recognized when a purchase order has been received, the product has been
shipped or the service has been performed, the sales price is fixed and determinable and
collection of any resulting receivable is probable.

Advertising CostsAdvertising costs are charged to
operations in the period incurred and totaled $1.0, $1.5 and $1.7 million in 2002, 2001
and 2000, respectively.

Self-Insurance ReservesThe Company is self insured up to
certain limits for costs associated with benefits paid under employee health care
programs. The measurement of these costs requires the consideration of historic loss
experience and judgments about the present and expected levels of costs per claim. These
costs are accounted for through actuarial methods, which develop estimates of the
undiscounted liability for claims incurred, including those claims incurred but not
reported. This method provides estimates of future ultimate claim costs based claims
incurred as of the balance sheet date.



---

# NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES, continued

Stock Option Plans-continuedAt December 28, 2002 the Company has
employee and outside director stock option plans which are described more fully in Note 8.
The Company follows Accounting Principles Board (APB) Opinion No. 25 Accounting
for Stock Issued to Employees,in accounting for its stock option plans.
Under Opinion No. 25, no compensation expense is recognized because the exercise price of
the companys stock option equals the market price of the underlying stock on the
date of the grant. Had compensation cost for the Companys stock based compensation
plans been determined based on fair value at the grant dates for the awards under those
plans consistent with the method of SFAS No. 123, Accounting for Stock Based
Compensation, the Companys net earnings and net earnings per share would have
been as follows:

`Net income (loss)                                                 2002            2001              2000
                                                               --------          ------           --------
     As reported                                              $ (9,409)          $1,933           $12,408
     Deduct: Compensation expense-fair value method               (627)            (739)             (726)
                                                              --------           ------           -------
     Pro forma net earnings (loss)                            $(10,036)          $1,194           $11,682
                                                              ========           ======           =======

Basic net earnings (loss) per share:
     As reported                                                 $(.47)            $.09              $.59
     Pro forma                                                   $(.50)            $.06              $.56

Diluted net earnings (loss) per share:
     As reported                                                 $(.47)            $.09              $.58
     Pro forma                                                   $(.50)             .06              $.55`

The weighted-average fair value per
share of options granted during 2002, 2001 and 2000 estimated on the date of grant using
the Black Scholes pricing model was $3.68, $4.11 and $4.30, respectively. The fair value
of options granted was estimated on the date of grant using the following assumptions:

`2002            2001               2000
                                                                   ----            ----               ----

Dividend yield                                                     1.0%             .9%                .9%
Volatility                                                          55%             52%                54%
Risk - free interest rates                                  4.0% - 4.5%     3.9% - 5.0%        5.7% - 6.7%
Expected term of options                                        5 years         5 years            5 years`

Black Scholes is a widely accepted
option pricing model; however, the ultimate value of stock options granted will be
determined by the actual lives of the options granted and future price levels of the
Companys common stock.

Per Share DataBasic earnings per share
(EPS) are computed by dividing net income by the weighted-average number of
common shares outstanding in each year. Diluted EPS is computed by dividing net income by
the weighted- average number of common shares outstanding plus all shares that would have
been outstanding if every potentially dilutive common share had been issued. The following
table reconciles the numerators and denominators used in the calculations of basic and
diluted EPS for each of the last three years:

`2002             2001             2000
                                                        ----             ----             ----
  Numerators:
    Net income (loss) numerators for both
      basic and diluted EPS (in thousands)           $(9,409)           $1,933          $12,408
                                                     =======            ======          =======

  Denominators:
    Denominators for basic EPS
      Weighted-average common
        shares outstanding                         20,211,200       21,394,775       21,171,963
    Potentially dilutive shares
    Shares subject to redemption
        agreements (see Note 9)                         -              384,252          358,722
      Stock options                                     -               51,542           37,768

    Denominators for diluted EPS                   20,211,200       21,830,569       21,568,453
                                                   ==========       ==========       ==========`



---

# NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES, continued

Per Share Data, continuedCertain exercisable stock options
were excluded from the calculations of diluted EPS because option prices were greater than
average market prices for the periods presented. The number of stock options excluded from
the calculations and the ranges of exercise prices were 1,022,900 and $10.13  $19.50
in 2001, and 1,005,800 and $7.03  $19.50 in 2000. In 2002 the Company incurred a
loss, therefore potentially dilutive shares are not included because to do so would have
an anti-dilutive effect on loss per share. Had the Company not recorded a loss, the number
of stock options excluded in the computation of diluted EPS and the range of exercise
prices would have been 1,333,400 and $7.38  $19.50.

Foreign Currency TranslationMost of the Companys foreign
operations use the local currency as their functional currency. Accordingly, foreign
currency balance sheet accounts are translated into U.S. dollars at the exchange rate in
effect at year end, and income statement accounts are translated at the average rate of
exchange in effect during the year. The resulting translation adjustments are recorded as
a component of accumulated other comprehensive income (loss) in the statements of
permanent shareholders investment. Gains and losses arising from re-measuring
foreign currency transactions into the appropriate currency are included in the
determination of net income.

Fair Value of Financial InstrumentsThe fair value of the Companys
financial instruments included in current assets and current liabilities approximates fair
value due to their short-term nature.

Use of EstimatesThe preparation of the Companys
consolidated financial statements requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities, the reported amounts of revenues
and expenses and the disclosure of contingent liabilities. Management makes its best
estimate of the ultimate outcome for these items based on the historic trends and other
information available when the financial statements are prepared. Changes in estimates are
recognized in accordance with the accounting rules for the estimate, which is typically in
the period when new information becomes available to management. Actual results could
differ from those estimates; however, management believes that any subsequent revisions to
estimates used would not have a material effect on the financial condition or results of
operations of the Company.

New Accounting StandardsIn July 2002, the Financial
Accounting Standards Board issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. SFAS No.146 requires that a liability for costs
associated with an exit or disposal activity be recognized when the liability is incurred,
at its fair value. Severance pay under SFAS No. 146, in many cases, would be recognized
over time rather than up front. If the benefit arrangement requires employees to render
future service beyond a minimum retention period a liability should be
recognized as employees render service over the future service period even if the benefit
formula used to calculate an employees termination benefit is based on length of
service. In accordance with SFAS No. 146, the Company will adopt these new rules for
restructuring activities, if any, that may occur after December 31, 2002.

In November 2002, the FASB issued
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements of
Guarantees, Including Indirect Guarantees of Indebtedness of Others. Interpretation
No. 45 changes current practice in accounting for, and disclosure of, guarantees and
requires certain guarantees to be recorded at fair value on the Companys balance
sheet. Interpretation No. 45 also requires a guarantor to make disclosures, even when the
likelihood of making payments under the guarantee is remote. These disclosure requirements
are effective immediately and are included in Note 10, Contingencies, Commitments
and Guarantees, to the consolidated financial statements. The initial recognition
and measurement provisions are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002. The Company does not expect that the implementation of
Interpretation No. 45 will have a material effect on its financial results.

In December 2002, the FASB issued
SFAS No. 148, Accounting for Stock-Based Compensation Transition and Disclosure
 an amendment to FASB Statement No. 123. SFAS No. 148 amends SFAS No.123, Accounting
for Stock-Based Compensation to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock based employee compensation
and requires disclosure in interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported results.
The Company does not intend to adopt a fair value based method of accounting for stock
based employee compensation and will continue to use APB 25.



---

# NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES, continued

ReclassificationsCertain prior year information has
been reclassified to conform to the current year presentation.

# NOTE 3  SHORT-TERM
INVESTMENTS

The Company classifies all of its
short-term investments as available-for-sale securities. Such short-term investments
consist primarily of United States federal agency securities, state and municipal
securities, mutual funds, corporate bonds and preferred stocks, which are stated at market
value with unrealized gains and losses on such securities reflected net of tax as other
comprehensive income (loss) in permanent shareholders investment. Realized gains and
losses are included in earnings and are derived using the specific identification method
for determining the cost of the securities. It is the Companys intent to maintain a
liquid portfolio to take advantage of investment opportunities; therefore, all securities
are considered to be available-for-sale and are classified as current assets. The
Companys short-term investments are generally due on demand with no set maturity.

The carrying value of the
Companys investments is as follows (in thousands):

`2002                     2001
                                                        --------------------      -------------------
                                                                      Market                   Market
                                                          Cost        Value         Cost       Value
                                                        --------    ---------     --------   ---------

Investments:
  U.S. federal agency obligations                             -           -       $ 2,570     $ 2,551
  State and municipal securities                       $ 5,515       $ 5,515       10,110      10,110
  Mutual funds                                           1,530           839        1,530       1,151
  Corporate bonds                                           100          102          820         809
  Preferred stocks                                        1,117          982        1,217       1,046
                                                       --------      -------      -------     -------

                                                          8,262        7,438       16,247      15,667
Unrealized losses                                          (824)          -          (580)         -
                                                       --------      -------      -------     -------

    Totals                                              $ 7,438      $ 7,438      $15,667     $15,667
                                                       ========      =======      =======     =======`

# NOTE 4GOODWILL AND
OTHER INTANGIBLE ASSETS

As discussed in Note 2, the Company
adopted SFAS No. 142, Goodwill and Other Intangible Assets effective December 30,
2001. SFAS No. 142 requires companies to discontinue amortizing goodwill and certain
intangible assets with an indefinite life. Instead, companies are required to review
goodwill and intangible assets with an indefinite useful life for impairment at least
annually or more frequently if indicators of impairment occur. During 2002, the Company
completed steps one and two of the transitional testing required by SFAS No. 142 as well
as the annual impairment testing requirement. Step two testing was completed with the
assistance of an independent valuation firm during the fourth quarter of 2002.

Under SFAS No.142, goodwill
impairment exists if the net book value of a reporting unit exceeds its estimated fair
value. The Company evaluated goodwill using three reporting units, Labsphere and Optronik
combined, Coherix, and X-Rite Mediterranee.

Upon completion of the step two
transitional testing for the Labsphere and Optronik combined reporting unit, it was
determined that an impairment of goodwill had occurred, therefore a non cash charge of
$7.6 million, or 38 cents per share was recorded and classified as a cumulative effect of
change in accounting principle as required by SFAS No. 142. This charge was not tax
benefited due to the majority of the underlying goodwill not previously being deductible
(see Note 7). The decline in fair value of the Labsphere and Optronik reporting unit is
primarily attributable to a decline in revenue and profitability for the unit. This
decline has led to a reduction in the three to five year projection of operating earnings
for the unit. The fair value of the remaining reporting units exceeded their net book
value, therefore, no impairment charges were recorded for these units. In calculating the
impairment charge, the fair value of the reporting unit was determined by using a
discounted cash flow analysis. This methodology was selected over the market value
approach, due to a lack of comparable competitor data availability, which is necessary to
complete a market value study.



---

# NOTE 4GOODWILL AND
OTHER INTANGIBLE ASSETS- continued

If the non-amortization provisions of
SFAS No.142 had been applied in 2001 and 2000, amortization expense would have been
reduced by $0.9 and $0.6 million, respectively. The table below reconciles reported net
earnings to adjusted net earnings for 2001 and 2000 had the non-amortization provisions of
SFAS No.142 been applied to those years.

`(in thousands, except per share data)                           2002             2001              2000
                                                               -------          -------           -------


         Reported net income (loss)                            $(9,409)          $1,933           $12,408
         Add back: Goodwill amortization, net of tax                -               984               621
                                                               -------           ------           -------
         Adjusted net income (loss)                            $(9,409)          $2,917           $13,029
                                                               =======           ======           =======


                                                                 2002             2001              2000
                                                               -------          -------           -------

         Basic earnings (loss) per share:
         Reported basic net income (loss) per share             $(.47)             $.09              $.59
         Goodwill amortization                                      -               .05               .03
                                                                -----              ----              ----
         Adjusted basic earnings (loss) per share               $(.47)             $.14              $.62
                                                                =====              ====              ====

         Diluted earnings (loss) per share:
         Reported earnings (loss) per share                     $(.47)             $.09              $.58
         Goodwill amortization                                      -               .04               .02
                                                                -----              ----              ----
         Adjusted earnings (loss) per share                     $(.47)             $.13              $.60
                                                                =====              ====              ====`

A summary of changes in goodwill
during the year ending December 28, 2002 by reporting unit is as follows (in thousands):

`Foreign
                                           December 29,        Currency                          December 28,
                                               2001           Adjustments     Impairments            2002
                                           -----------        -----------     -----------        -----------

         Labsphere                           $7,494              $121         $(7,615)            $    -
         Coherix                              1,941                 -               -              1,941
         X-Rite, Mediterranee                   164                30               -                194
                                             ------              ----         -------             ------

         Total                               $9,599              $151         $(7,615)            $2,135
                                             ======              ====         =======             ======`

On December 28, 2002, other intangibles consisting of Patents totaled $0.3 million, with accumulated amortization of $0.1 million.
Amortization expense for other intangibles for 2002 and five succeeding years is not significant.

NOTE 5--REVOLVING CREDIT AGREEMENT

The Company maintains a revolving line of credit agreement with a bank, which provides for maximum borrowings of $20 million with
interest at 1.5% over the "Effective Federal Funds Rate" (1.20% at December 28, 2002).  The borrowings are unsecured and no
compensating balances are required by the agreement.  There were no significant borrowings under this agreement during 2002, 2001 or
2000.

NOTE 6--RESTRUCTURING

In September 2001, the Company announced a workforce reduction plan and recorded a $0.9 million pretax charge to earnings.  The
charge was classified separately as a component of operating expense under the caption of "Restructuring Charge" and represented
costs associated with non-voluntary termination benefits for approximately 60 positions.  Benefit payments began during the fourth
quarter of 2001.  As of December 28, 2002, 60 positions have been eliminated.  The remaining unpaid benefits of $0.2 million have
been included in accrued liabilities.



---

NOTE 7--INCOME TAXES

The provision for income taxes consisted of the following (in thousands):

`2002             2001           2000
                                                       ------          -------        -------
              Current:
                  Federal                              $  192          $(4,264)       $10,988
                  State                                   157              180            254
                  Foreign                                 (16)             (35)            15
                                                       ------          -------        -------
                                                          333           (4,119)        11,257
              Deferred:
                  Federal                                 688            4,119         (4,502)
                                                       ------          -------        -------

                                                       $1,021          $   -          $ 6,755
                                                       ======          =======        =======`

Major components of the
Companys deferred tax assets and liabilities are as follows (in thousands):

`2002              2001
                                                         -----             -----
Assets:
  Inventory reserves                                    $  685            $  710
  Accounts receivable reserves                             253               355
  Amortization of intangible assets                      2,320             2,253
  Deferred income                                           -                185
  Impairment reserves                                    2,803               394
  Financial accruals and reserves
    not currently deductible                             1,613             1,159
                                                        ------            ------

                                                         7,674             5,056
  Valuation allowance                                   (3,135)               -
                                                        ------            ------

Deferred income tax assets                               4,539             5,056
                                                        ------            ------

Liabilities:
  Depreciation                                             258               117
  Software development costs                               996               966
                                                        ------            ------


Deferred income tax liabilities                          1,254             1,083
                                                        ------            ------

Net deferred income tax assets                          $3,285            $3,973
                                                        ======            ======`

A valuation reserve has been
recognized for investment impairment reserves and certain goodwill impairment reserves for
which there is uncertainty regarding the ultimate tax benefit.

The following table represents a
reconciliation of income taxes at the United Stated statutory rate with the effective rate
as follows (in thousands):

`2002          2001          2000
                                                                  ------         -----        ------
Income taxes (benefit) computed at statutory rate of 35%          $ (271)        $ 677        $6,707
Increase (decrease) in taxes resulting from
   Life insurance premiums                                           489           365           358
   Impairment reserves                                             3,135             -             -
   Non deductible goodwill                                             -           209           196
   Foreign sales corporation                                        (816)         (865)         (748)
   State income taxes                                                102           117           165
   Other                                                          (1,618)         (503)           77
                                                                  ------         -----        ------
                                                                  $1,021         $   -        $6,755
                                                                  ======         =====        ======`

Cash (refunded) or expended for
income taxes was $(5.9), $5.1 and $6.8 million in 2002, 2001 and 2000, respectively.



---

# NOTE 8  EMPLOYEE
BENEFIT AND STOCK PLANS

The Company maintains 401(k)
retirement savings plans for the benefit of substantially all full time U.S. employees.
Investment decisions are made by individual employees. Investments in Company stock are
not allowed under the plan. Participant contributions are matched by the Company based on
applicable matching formulas. The Companys matching expense for the plans was $0.4,
$0.4 and $0.6 million in 2002, 2001 and 2000, respectively.

The Company may sell up to one
million shares of common stock to its employees under an employee stock purchase plan.
Eligible employees who participate purchase shares quarterly at 85 percent of the market
price on the date purchased. During 2002, 2001 and 2000, employees purchased 28,549,
32,711 and 36,940 shares, respectively. The weighted average fair value of shares
purchased was $8.36, $8.54 and $9.47 in 2002, 2001 and 2000, respectively. At December 28,
2002, 735,284 shares were available for future purchases.

The Company has two stock option
plans covering 2.8 million shares of common stock. These plans permit options to be
granted to key employees and the Companys Board of Directors. Options are granted at
market price on the date of grant and are exercisable based on vesting schedules of six
months to two years, which is determined at the time of grant. No options are exercisable
after ten years from the date of grant. At December 28, 2002, 1.0 million shares were
available for future granting. A summary of shares subject to options follows:

`2002                     2001                     2000
                                             ---------------------    ---------------------    ---------------------
                                                          Weighted                 Weighted                 Weighted
                                                           Average                  Average                  Average
                                                          Exercise                 Exercise                 Exercise
                                                Shares      Prices       Shares      Prices       Shares      Prices
                                             ----------     ------    ----------     ------    ----------     ------

 Outstanding at beginning of year            1,687,400      $12.11    1,541,300      $12.53    1,305,200     $13.26
   Granted                                     252,500        7.68      266,500        8.63      247,500       8.69
   Exercised                                   (25,000)       6.93      (53,500)       6.35            -          -
   Canceled                                    (60,300)      10.73      (66,900)      12.56      (11,400)     12.33
                                               -------                  -------                  -------

 Outstanding at end of year                  1,854,600       11.62    1,687,400       12.11    1,541,300      12.53
                                             =========                =========                =========

Exercisable at end of year                   1,582,100       12.24    1,406,400       12.77    1,274,300      13.57
                                             =========                =========                =========`

A summary of stock options
outstanding at December 28, 2002 follows:

`Outstanding                                Exercisable
                          -------------------------------------           -------------------------
                                                       Weighted
                                         Weighted       Average                            Weighted
                                          Average      Remaining                            Average
                                         Exercise     Contractual                          Exercise
    Price Ranges            Shares         Price      Life(Years)            Shares          Price
    ------------            ------         -----      -----------            ------          -----

   $ 6.38 - $ 8.51           632,000       $ 7.32        7.8                 435,500        $ 7.19
     9.11 -  12.00           497,600        10.22        5.0                 421,600         10.42
    13.00 -  15.00           242,800        13.90        4.5                 242,800         13.90
    15.63 -  19.50           482,200        17.57        3.7                 482,200         17.57
                             -------                                         -------

                           1,854,600        11.62        5.6               1,582,100         12.24
                           =========                                       =========`

The Company has a Cash Bonus
Conversion Plan covering 400,000 shares of stock. This plan provides an opportunity for
certain executives of the Company to purchase restricted stock at 50 percent of market
value, in an amount equal to their annual cash bonus. Shares are issued in the name of the
employee, who has all rights of a shareholder, subject to certain restrictions on
transferability and a risk of forfeiture. The forfeiture provisions lapse by 20 percent
after six months and an additional 20 percent annually thereafter. During 2002, no shares
were issued under this plan, no shares were forfeited, and the forfeiture provisions
expired on 56,993 shares. At December 28, 2002, 90,180 shares remained subject to
forfeiture provisions and restrictions on transferability. During 2001, 106,450 shares
were issued under this plan, no shares were forfeited, and the forfeiture provisions
expired on 23,031 shares. During 2000, 59,485 shares were issued under this plan, no
shares were forfeited, and the forfeiture provisions expired on 11,273 shares.



---

# NOTE 8  EMPLOYEE
BENEFIT AND STOCK PLANS, continued

The difference between the purchase
price and the fair value of the restricted stock at the date of purchase, if any, for
remaining shares subject to forfeiture provisions has been recorded as unearned
compensation. This amount is included as a separate component of permanent
shareholders investment under the caption Stock Conversion Program. The unearned
compensation is being charged to expense as the forfeiture provisions lapse. The Company
also has a restricted stock plan covering 400,000 shares of common stock. Shares awarded
under this plan entitle the shareholder to all rights of common stock ownership except
that the shares may not be sold, transferred, pledged exchanged or otherwise disposed of
during the restriction period. The restriction period is determined by a committee,
appointed by the Board of Directors, but in no event shall have a duration period in
excess of ten years. Shares awarded were 4,500 and 2,500 in 2002 and 2001, respectively.
No shares were awarded in 2000. At December 28, 2002, there were 338,200 shares available
for future awards.

# NOTE 9  FOUNDERS
STOCK REDEMPTION AGREEMENTS

During 1998 the Company entered into
agreements with its founding shareholders for the future repurchase of 4.5 million shares
of the Companys outstanding stock. The stock purchases will occur following the
later of the death of each founder and his spouse. The price the Company will pay the
founders estates for these shares will reflect a 10 percent discount from the
average closing price for the ninety trading days preceding the later death of the founder
and his spouse, although the discounted price may not be less than $10 per share (a total
of $45.4 million) or more than $25 per share (a total of $113.5 million). The cost of the
purchase agreements will be funded by $160.0 million of proceeds from life insurance
policies the Company has purchased on the lives of certain of these individuals. The
Company anticipates that stock purchases will not coincide with the receipt of insurance
proceeds; therefore, borrowed funds may be needed from time to time to finance the
Companys purchase obligations. Insurance was purchased at the $160.0 million level
in order to cover both the maximum aggregate purchase price and anticipated borrowing
costs. Life insurance premiums total $4.3 million each year while all the policies remain
in effect. Of the $4.3 million paid in 2002, 2001 and 2000 approximately $1.4, $1.0 and
$1.0 were classified as expense.

The Company purchased 1.12 million
shares at $10 per share or $11.2 million under the terms of the agreement in January 2002.
This founder was not insured; therefore, as anticipated at the time the agreement was
entered into, the Company funded this obligation with cash and short-term investments. The
remaining shares subject to the agreements have been classified on the balance sheet as
temporary equity. The classification of $34.2 and $45.4 million for 2002 and 2001
respectively, was determined by multiplying the applicable shares by the minimum purchase
price of $10, because the average closing price of the Companys common stock, after
applying the 10 percent discount, for the ninety trading days preceding December 28, 2002
and December 29, 2001, respectively was less than $10.

# NOTE
10CONTINGENCIES, COMMITMENTS AND GUARANTEES

On February 19, 2002, Ivoclar
Vivadent, Inc. and Shade Analyzing Technologies, Inc. sued the Company in U.S. District
Court for the Western District of New York, alleging infringement of certain U.S. Patents
by the Companys ShadeVision system, and seeking injunctive relief and
unspecified damages. The Company has reviewed the matter (with patent counsel) and does
not believe that it infringes any valid claim of any of the plaintiffs patents. The
Company has asked the court to declare that all of the patent claims are invalid,
unenforceable, and/or not infringed by its system. The suit is in the preliminary stages
of discovery and it is not possible to determine whether the litigation will proceed to
trial. Although it cannot be predicted with certainty, management believes the ultimate
resolution of this matter will not have a material adverse effect on the Companys
consolidated financial statements.

The Company is also involved in other
legal proceedings, legal actions and claims arising in the normal course of business,
including proceedings related to product, labor and other matters. Such matters are
subject to many uncertainties, and outcomes are not predictable with assurance. The
Company records amounts for losses that are deemed probable and subject to reasonable
estimate. The Company does not believe that the ultimate resolution of these matters will
have a material adverse effect on its financial statements.

Pursuant to a standby letter of
credit agreement, the Company has provided a financial guarantee to a third party on
behalf of its subsidiary, located in England. The term of the letter of credit is one
year, with an automatic renewal provision at the grantors discretion. The face amount of
the agreement is 130,000 British pounds sterling or approximately $0.2 million at December
28, 2002.

The Companys product warranty
reserves and operating lease commitments are not significant.



---

# NOTE 11SHAREHOLDER
PROTECTION RIGHTS AGREEMENT

In November of 2001, the
Companys Board of Directors adopted a Shareholder Protection Rights Plan
(Plan), which was implemented in the first quarter of 2002. The Plan is
designed to protect shareholders against unsolicited attempts to acquire control of the
Company in a manner that does not offer a fair price to all shareholders.

Under the Plan, one purchase right
automatically trades with each share of the Companys common stock. Each Right
entitles a shareholder to purchase 1/100 of a share of junior participating preferred
stock at a price of $30.00, if any person or group attempts certain hostile takeover
tactics toward the Company. Under certain hostile circumstances, each Right may entitle
the holder to purchase the Companys common stock at one-half its market value or to
purchase the securities of any acquiring entity at one-half their market value. Rights are
subject to redemption by the Company at $.005 per Right and, unless earlier redeemed, will
expire in the first quarter of 2012. Rights beneficially owned by holders of 15 percent or
more of the Companys common stock, or their transferees and affiliates,
automatically become void.



---

# ITEM 9.   CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTINGAND FINANCIAL DISCLOSURE

X-Rite, Incorporated (the Company)
determined for itself and on behalf of its subsidiaries, to dismiss its independent
auditors, Arthur Andersen LLP (Arthur Andersen) and to engage the services of Ernst and
Young LLP (Ernst and Young) as its new independent auditors. The change in auditors was
approved by the Board of Directors of the Company, effective as of May 21, 2002. As a
result, Ernst and Young audited the consolidated financial statements of the Company and
its subsidiaries for the year ended December 28, 2002.

Arthur Andersens reports on the
Companys consolidated financial statements for the years ending December 29, 2001
and December 30, 2000 did not contain an adverse opinion or disclaimer of opinion, nor
were they qualified or modified as to uncertainty, audit scope or accounting principles.
During the years ended December 29, 2001 and December 30, 2000 and through May 21, 2002
(the Relevant Period), (1) there were no disagreements with Arthur Andersen on any matter
of accounting principles or practices, financial statement disclosure, or auditing scope
or procedure which, if not resolved to Arthur Andersens satisfaction, would have
caused Arthur Andersen to make reference to the subject matter of the disagreement(s) in
connection with its reports on the Companys consolidated financial statements for
such years; and (2) there were no reportable events as described in Item 304(a)(1)(v)
(Reportable Events) of the Commissions Regulation S-K.

During the Relevant Period, neither
the Company nor anyone acting on its behalf consulted with Ernst and Young regarding (i)
the application of accounting principles to a specified transaction, completed or
proposed, or the type of audit opinion that might be rendered on the Companys
consolidated financial statements, or (ii) any matters or reportable events as set forth
in Items 304(a)(2)(i) and (ii) of Regulation S-K.

The Company has not been able to
obtain after reasonable efforts, the re-issued reports or consent of Arthur Andersen, LLP,
related to the 2001 and 2000 consolidated financial statements and financial statement
schedule given the circumstances surrounding Arthur Andersens cessation of its
operations. Therefore, a copy of their previously issued report has been included.



---

# PART III

# ITEM 10.   DIRECTORS AND
EXECUTIVE OFFICERS OF THE REGISTRANT

# (a)     Directors

Information relating to directors
appearing under the caption Election of Directors in the definitive Proxy
Statement for the 2003 Annual Meeting of Shareholders and filed with the Commission is
incorporated by reference.

# (b)     Officers

Information relating to executive
officers is included in this report in the last section of Part I under the caption
Executive Officers of the Registrant.

# (c)     Compliance With
Section 16(a)

Information concerning compliance
with Section 16(a) of the Securities Exchange Act of 1934 appearing under the caption
Compliance With Reporting Requirements in the definitive Proxy Statement for
the 2003 Annual meeting of Shareholders and filed with the Commission is incorporated
herein by reference.

# ITEM 11.   EXECUTIVE
COMPENSATION

The information contained under the
caption Executive Compensation contained in the definitive Proxy Statement for
the 2003 Annual Meeting of Shareholders and filed with the Commission is incorporated
herein by reference.

# ITEM 12.   SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained under the
caption Securities Ownership of Management and Securities Ownership of
Beneficial Owners and Equity Compensation Plan Information contained in the
definitive Proxy Statement for the 2003 Annual Meeting of Shareholders and filed with the
Commission is incorporated herein by reference.

The following table provides
information about the Companys equity compensation plans as of December 28, 2002

`Number of
                                                                                                 securities remaining
                                                                                                 available for future
                                                  Number of                                      issuance under
                                                 securities to be          Weighted-average      compensations plans
                                                  issued upon              exercise price of     (excluding securities
                                                  exercise of              outstanding           reflected in the
                                                  outstanding options      options               first column)
                                                  -------------------      ----------------      ---------------------

Equity Compensation plans approved
  by shareholders                                       1,854,600 (1)                $11.62                  2,252,949`

(1) Represents outstanding options to purchase the Company's Common Stock granted under the X-Rite, Incorporated 1993 Employee Stock
Option Plan and the X-Rite, Incorporated 1993 Outside Directors Stock Option Plan.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained under the caption "Certain Relationships and Related Transactions" contained in the definitive Proxy
Statement for the 2003 Annual Meeting of Shareholders and filed with the Commission is incorporated by reference.

PART IV

ITEM 14.    EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company's management, including the CEO,
President and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures.  Based on
that evaluation, the Company's management, including the President and CFO, concluded that the Company's disclosure controls and
procedures were effective as of December 28, 2002.  There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to December 28, 2002.



---

ITEM 15.    EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

|(a)1 | The following financial statements, all of which are set forth in Item 8, are filed as a part of this report:                                                                                                                                                                                                                                                                                                                                                         
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Report of Independent Auditors
Report of Independent Public Accountants
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Permanent Shareholders Investment
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements                                                                                                                                                                               
|(a)2 | The following financial statements schedule is filed as a part of this report on page 37:                                                                                                                                                                                                                                                                                                                                                                             
|     | Report of Independent Auditors on Financial Statement Schedule and Schedule II Valuation and Qualifying Accounts and
         Reserves for the year ended December 28, 2002.
         Copy of the Report of Independent Public Accountants on Financial Statement Schedule and Schedule II Valuation and
         Qualifying Accounts and Reserves for the years ended December 29, 2001 and December 30, 2000.
         Schedule II Valuation and Qualifying Accounts
|(b)  | Press release announcing the retirement of Richard E. Cook, Chief Executive Officer of X-Rite, Incorporated (filed as
         exhibit to Form 8-K for on March 10, 2003 (Commission File No. 0-14800) and incorporated herein by reference)                                                                                                                                                                                                                          
|(c)  | See Exhibit Index located on page 40.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(d)  | All other schedules required by Form 10-K Annual Report have been omitted because they were inapplicable, included in the
         notes to the consolidated financial statements, or otherwise not required under the instructions contained in Regulation S-X.                                                                                                                                                                                                      



---

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.X-RITE, INCORPORATED

|March 25, 2003 | /s/ Michael C. Ferrara
__________________________________________________________
Michael C. Ferrara President and Chief Operating Officer   
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------
|March 25, 2003 | /s/ Duane F. Kluting
___________________________________________________________
Duane F. Kluting, Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below on this 25th day of March,
2003, by the following persons on behalf of the Registrant and in the capacities indicated.
Each director of the Registrant whose signature appears below, hereby appoints Michael C. Ferrara and Duane F. Kluting, and each of
them individually as his attorney-in-fact to sign in his name and on his behalf as a Director of the Registrant, and to file with the
Commission any and all amendments to this report on Form 10-K to the same extent and with the same effect as if done personally.

|/s/ Peter M. Banks
__________________________________
Dr. Peter M. Banks, Director         | /s/ Stanley W. Cheff
__________________________________
Stanley W. Cheff, Director           
|------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------
|/s/ James A. Knister    
__________________________________
James A. Knister, Director     | /s/ Paul R. Sylvester
__________________________________
Paul R. Sylvester, Director         
|/s/ Rufus S. Teesdale  
__________________________________
Rufus S. Teesdale, Director     | /s/ John E. Utley
__________________________________
John E. Utley, Director                 
|/s/ Ronald A. Vandenberg
__________________________________
Ronald A. VandenBerg, Director | /s/ Mark D. Weishaar  
__________________________________
         Mark D. Weishaar, Director



---

Report of Independent Auditors on Financial Statement Schedule

To the Shareholders and Board of Directors of X-Rite, Incorporated:
We have audited the consolidated financial statements of X-Rite, Incorporated and subsidiaries as of December 28, 2002 and for the
year then ended and have issued our report thereon dated January 28, 2003 (included elsewhere in this Form 10-K).  Our audit also
included the financial statement schedule listed in Item 15(a)2 of this Form 10-K.  This schedule is the responsibility of the
Company's management.  Our responsibility is to express an opinion based on our audit.
In our opinion, the financial statement schedule as of December 28, 2002 and for the year then ended, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
/s/Ernst & Young LLP
Grand Rapids, Michigan
January 28, 2003



---

The following report is a copy of a report previously issued by Arthur Andersen LLP in connection with the Company's Annual Report
and Form 10K for the years ended December 29, 2001 and December 30, 2000.  This opinion has not been reissued by Arthur Andersen LLP.

Copy-Report of Independent Public Accountants on Financial Statement Schedule

To the Shareholders of X-Rite, Incorporated:
We have audited in accordance with auditing standards generally accepted in the United States, the consolidated financial statements
of X-Rite, Incorporated included in this Form 10-K, and have issued our report thereon dated January 29, 2002.  Our audits were made
for the purpose of forming an opinion on the basic financial statements taken as a whole.  The schedule listed at Item 14(a)2 above
is the responsibility of the Company's management and is presented for the purpose of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements.  This schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the financial
data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
Grand Rapids, Michigan
January 29, 2002



---

Valuation and Qualifying Accounts
X-Rite, Incorporated
(in thousands)

`Additions    Deducted
                                                              Balance at     Charged to      from      Balance at
                                                               Beginning       Costs &      Costs &        End
                                                               of Period      Expenses     Expenses     of Period
                                                               ---------      --------     --------     ---------
Year ended December 28, 2002

Allowance for losses on accounts receivable                      $1,237         $281         $311       $1,207
Restructuring reserve                                               515           -           342          173

Year ended December 29, 2001

Allowance for losses on accounts receivable                       1,506          494          763        1,237
Restructuring reserve                                                 -          862          347          515

Year ended December 30, 2000

Allowance for losses on accounts receivable                       1,110          746          350        1,506`



---

# EXHIBIT INDEX

|3(a) |  | Restated Articles of Incorporation (filed as exhibit to Form S-18 dated April
               10, 1986 (Registration No. 33-3954C) and incorporated herein by reference)
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3(b) |  | Certificate of Amendment to Restated Articles of Incorporation adding Article IX
               (filed as exhibit to Form 10-Q for the quarter ended June 30, 1987 (Commission
               File No. 0-14800) and incorporated herein by reference)
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3(c) |  | Certificate of Amendment to Restated Articles of Incorporation amending Article
               III (filed as exhibit to Form 10-K for the year ended December 31, 1995
               (Commission File No. 0-14800) and incorporated herein by reference)
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3(d) |  | Certificate of Amendment to Restated Articles of Incorporation amending Article
               IV as filed with the Michigan Department of Consumer & Industry Services
               (filed as exhibit to Form 10-K for the year ended January 2, 1999 (Commission
               File No. 0-14800) and incorporated herein by reference)
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3(e) |  | Amended and Restated Bylaws of X-Rite, Incorporated, as amended and restated
               November 26, 2002.
|---- |  | --------------------------------------------------------------------------------------------------------------

|4(a) |  | X-Rite, Incorporated common stock certificate specimen (filed as exhibit to Form
               10-Q for the quarter ended June 30, 1986 (Commission File No. 0-14800) and
               incorporated herein by reference)
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(b) |  | Shareholder Protection Rights Agreement, dated as of March 29, 2002, including
               as Exhibit A the form of Rights Certificate and of Election to Exercise, and as
               Exhibit B the form of Certificate of Adoption of Resolution Designating and
               Prescribing Rights, Preferences and Limitations of Junior Participating
               Preferred Stock of the Company (filed as exhibit to Form 10K for the year ended
               December 29, 2001 (Commission File No. 0-14800) and incorporated herein by
               reference)
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following material contracts
identified with * preceding the exhibit number are agreements or compensation
plans with or relating to executive officers, directors or related parties.

|*10(a) |  | X-Rite, Incorporated Amended and Restated Outside Director Stock Option Plan,
               effective as of September 17, 1996 (filed as exhibit to Form 10-Q for the
               quarter ended September 30, 1996 (Commission File No. 0-14800) and incorporated
               herein by reference)
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(b) |  | X-Rite, Incorporated Cash Bonus Conversion Plan (filed as Appendix A to the
               definitive proxy statement dated April 8, 1996 relating to the Companys
               1996 annual meeting (Commission File No. 0-14800) and incorporated herein by
               reference)
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(c) |  | Form of Indemnity Contract entered into between the registrant and members of
               the board of directors (filed as exhibit to Form 10-Q for the quarter ended June
               30, 1996 (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(d) |  | Employment Agreement dated April 17,1998 between the registrant and Richard E.
               Cook (filed as exhibit to Form 10-K for the year ended January 2, 1999
               (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(f) |  | Form of X-Rite, Incorporated Founders Redemption Agreement entered into between
               the registrant and certain persons, together with a list of such persons (filed
               as exhibit to Form 10-Q for the quarter ended July 3, 1999 Commission File No.
               0-14800) and incorporated herein by reference)
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(g) |  | First Amendment to X-Rite, Incorporated Founders Redemption Agreement dated July
               16, 1999 between the registrant and Ted Thompson (filed as exhibit to Form 10-Q
               for the quarter ended July 3, 1999 (Commission File No. 0-14800) and
               incorporated herein by reference)
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(h) |  | Chairmans agreement dated July 16, 1999 between the registrant and Ted
               Thompson (filed as exhibit to Form 10-Q for the quarter ended July 3, 1999
               (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

|*10(i) |  | Employment arrangement effective upon a change in control entered into between
               the registrant and certain persons together with a list of such persons (filed
               as exhibit to Form 10-K for the year ended January 1, 2000 (Commission File No.
               0-14800) and incorporated herein by reference)
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(j) |  | Deferred compensation trust agreement dated November 23, 1999 between the
               registrant and Richard E. Cook. (filed as exhibit to Form 10-K for the year
               ended January 1, 2000 (Commission File No.0-14800) and incorporated herein by
               reference)
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(k) |  | Operating Agreement for XR Ventures, LLC dated September 14, 2000, by and
               between XR Ventures, LLC the registrant, Dr. Peter M. Banks and Mr. James A.
               Knister. (filed as exhibit to Form 10-Q for the quarter ended September 30, 2000
               (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(l) |  | Employment Agreement dated June 12, 2001 between the registrant and Michael C.
               Ferrara (filed as exhibit to Form 10-Q for the quarter ended June 30, 2001
               (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(m) |  | First Amendment to the X-Rite, Incorporated Amended and Restated Cash Bonus
               Conversion Plan dated May 24, 2001 (filed as exhibit to Form 10-Q for the
               quarter ended September 29, 2001 (Commission File No. 0-14800) and incorporated
               herein by reference)
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(n) |  | First Amendment to the Chairmans Agreement dated September 13, 2001
               entered into between the registrant and Ted Thompson (filed as exhibit to Form
               10-Q for the quarter ended September 29, 2001 (Commission File No. 0-14800) and
               incorporated herein by reference)
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(o) |  | Form of Indemnity Agreement entered into between the registrant and members of
               its board of directors and officers together with a list of such persons (filed
               as exhibit to Form 10-Q for the quarter ended September 28, 2002 (Commission
               File No. 0-14800) and incorporated herein by reference)
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(p) |  | Form of Indemnity Agreement entered into between the registrant and Paul R.
               Sylvester (filed as exhibit to Form 10-Q for the quarter ended September 28,
               2002 (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(q) |  | Form of Indemnity Agreement entered into between the registrant and Mark D.
               Weishaar (filed as exhibit to Form 10-Q for the quarter ended September 28, 2002
               (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(r) |  | X-Rite, Incorporated Amended and Restated Outside Director Stock Option Plan,
               effective as of January 26, 2002 (filed as Appendix A to the definitive proxy
               statement dated April 11, 2003 relating to the Companys 2003 annual
               meeting (Commission File No. 0-14800) and incorporated herein by reference)
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*10(s) |  | A Severance Agreement and Release entered into between the registrant and
               Richard E. Cook, effective as of March 7, 2003
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------

|16 |  | Letter from Arthur Andersen LLP regarding change in certifying accountant (filed as
exhibit to Form 8-K dated May 21, 2002 and incorporated herein by reference)
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|21 |  | Subsidiaries of the registrant
|-- |  | ------------------------------

|23(a) |  | Consent of independent auditors, Ernst & Young LLP, for the year ending
               December 28, 2002.
|----- |  | ---------------------------------------------------------------------------------------------------------

|23(b) |  | Information Concerning Consent of Arthur Andersen LLP.
|----- |  | ------------------------------------------------------

|99(a) |  | Certificate of the Chief Executive Officer of X-Rite, Incorporated pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|99(b) |  | Certificate of the Chief Financial Officer of X-Rite, Incorporated pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



---

EXHIBIT 3(e)

# AMENDED AND RESTATED BYLAWS 


of 



X-RITE, INCORPORATED 


A Michigan CorporationAs
Amended and Restated November 26, 2002

# ARTICLE I. OFFICES

Section
1. Registered Office. The registered office of the Corporation shall
be as specified in the Articles of Incorporation. The Corporation shall keep records
containing the names and addresses of all shareholders, the number, class and series of
shares held by each, and the dates when they respectively became holders of record
thereof, at its registered office or at the office of its transfer agent.

Section
2. Other Offices. The business of the Corporation may be transacted
in such locations other than the registered office, within or outside the State of
Michigan, as the Board of Directors may from time to time determine.

# ARTICLE II. CAPITAL
STOCK

Section
1. Stock Certificates. Certificates representing shares of the
capital stock of the Corporation shall be in such form as is approved by the Board of
Directors. Certificates shall be signed by the Chairman of the Board of Directors, Chief
Executive Officer, President or a Vice President, and may also be signed by another
officer designated by the Board of Directors, and shall be sealed with the seal of the
Corporation, or a facsimile thereof, if one be adopted. The signatures of the officers may
be facsimiles. In the event an officer who has signed, or whose facsimile signature has
been placed upon, a certificate ceases to be such officer before the certificate is
issued, it may be issued by the Corporation with the same effect as if he were such
officer at the date of issue.

Section
2. Replacement of Lost or Destroyed Certificates. In the event of the loss
or destruction of a stock certificate, no new certificate shall be issued in place thereof
until the Corporation has received from the registered holder such assurances,
representations, warranties and/or guarantees as the Board of Directors, in its sole
discretion, shall deem advisable, and until the Corporation receives sufficient
indemnification protecting it against any claim that may be made on account of such loss
or destroyed certificate, or the issuance of any new certificate in place thereof,
including an indemnity bond in such amount and with sureties, if any, as the Board of
Directors, in its sole discretion, deems advisable.

Section
3. Transfer of Shares. Shares of stock of the Corporation shall be
transferable only upon the books of the Corporation. The old certificates shall be
surrendered to the Corporation by delivery thereof to the person in charge of the stock
transfer books of the Corporation, or to such other person as the Board of Directors may
designate, properly endorsed for transfer, and such certificates shall be canceled before
a new certificate is issued. The Corporation shall be entitled to treat the person in
whose name any share, right or option is registered as the owner thereof for all purposes,
and shall not be bound to recognize any equitable or other claim with respect thereto,
regardless of any notice thereof, except as may be specifically required by the laws of
the State of Michigan.

Section
4. Rules Governing Stock Certificates. The Board of Directors shall have
the power and authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer and registration of certificates of stock, and may appoint
a transfer agent and a registrar of transfer, and may require all such certificates to
bear the signature of such transfer agent and of such registrar of transfers.

Section
5. Record Date for Stock Rights. The Board of Directors may fix in advance
a date not exceeding sixty (60) days preceding the date of payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, as a record date for the determination of the
shareholders entitled to receive payment of any such dividends, or any such allotment of
rights, or to exercise the rights with respect to any such change, conversion, or exchange
of capital stock; and in such case, only shareholders of record on the date so fixed shall
be entitled to receive payment of such dividends, or allotment of rights, or exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date is fixed.

In
the event the Board of Directors shall fail to fix a record date as provided in this
Section 5 of Article II, the record date for the purposes specified herein shall be the
close of business on the day on which the resolution of the Board of Directors relating
thereto is adopted.



---

Section
6. Dividends. The Board of Directors, in its discretion, may from time to
time declare and make a distribution to shareholders in respect of the Corporations
outstanding shares, payable in cash, the Corporations indebtedness (but not the
Corporations shares) or the Corporations other property, including the shares
or indebtedness of other corporations; provided, however, no such distribution shall be
made if, after giving effect to the distribution, the Corporation would not be able to pay
its debts as they become due in the usual course of business, or the Corporations
total assets would be less than its total liabilities plus the amount that would be needed
if the Corporation were to be dissolved at the time of the distribution to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution.

In
addition, the Board of Directors, in its discretion, from time to time may declare and
direct the payment of a share dividend of the Corporations shares, issued pro rata
and without consideration, to the Corporations shareholders or to the shareholders
of one or more classes or series; provided, however, shares of one class or series may not
be issued as a share dividend in respect of shares of another class or series unless the
Articles of Incorporation so authorize, a majority of the votes entitled to be cast by the
class or series to be issued approve the issue, or there are no outstanding shares of the
class or series to be issued.

Section
7. Treasury Shares. Shares that have been issued and reacquired by
the Corporation shall constitute authorized but unissued shares.

Section
8. Redemption of Control Shares. Control shares acquired in a control share
acquisition, with respect to which no acquiring person statement has been filed with the
Corporation, shall, at any time during the period ending 60 days after the last
acquisition of control shares or the power to direct the exercise of voting power of
control shares by the acquiring person, be subject to redemption by the Corporation. After
an acquiring person statement has been filed with the Corporation and after the meeting at
which the voting rights of the control shares acquired in a control share acquisition are
submitted to the shareholders, the shares shall be subject to redemption by the
Corporation unless the shares are accorded full voting rights by the shareholders as
provided in Section 798 of the Michigan Business Corporation Act. Redemptions of shares
pursuant to this bylaw shall be at the fair value of the shares pursuant to procedures
adopted by the Board of Directors of the Corporation.

The
terms control shares, control share acquisition, acquiring
person statement acquiring person and fair value as used in
this bylaw, shall have the meanings ascribed to them, respectively, in Chapter 7B of the
Michigan Business Corporation Act.

# ARTICLE III.
SHAREHOLDERS

Section
1. Place of Meetings. Meetings of shareholders shall be held at the
registered office of the Corporation or at such other place, within or outside the State
of Michigan, as may be determined from time to time by the Board of Directors; provided,
however, if a meeting of shareholders is to be held at a place other than the registered
office of the Corporation, the notice of the meeting shall designate such place.

Section
2. Annual Meeting. Annual meetings of shareholders for election of
directors and for such other business as may come before the meeting shall be held on such
date prior to June 1 of each year and at such time as may be fixed from year to year by
the Board of Directors.

Section
3. Special Meetings. Special meetings of shareholders may be called by the
Chairman or the Secretary, and shall be called by either of them pursuant to resolution
therefor by the Board of Directors, or upon receipt by them of a request in writing,
stating the purpose or purposes thereof, and signed by shareholders of record owning a
majority of the voting shares of the Corporation issued and outstanding.

Section
4. Record Date for Notice and Vote. The Board of Directors may fix a date
not more than sixty (60) days nor less than ten (10) days before the date of a
shareholders meeting as the record date for the purposes of determining shareholders
entitled to notice of and to vote at the meeting or adjournments thereof; provided,
however, that the record date shall not precede the date on which the Board takes action
to fix the record date. In the event the Board of Directors fails to fix a record date as
provided in this Section 4 of Article III, the record date for determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall be the
close of business on the day preceding the day on which notice is given, or if no notice
is given, the day next preceding the day on which the meeting is held.



---

Section
5. Notice of Shareholder Meetings.Written notice of the time, place, and
purposes of any meeting of shareholders shall be given to shareholders entitled to vote
thereat, not less than ten (10) nor more than sixty (60) days before the date of the
meeting, which notice may be given either by delivery in person to such shareholders or by
mailing such notice to shareholders at their addresses as the same appear on the stock
books of the Corporation. A shareholders attendance at a meeting will result in a
waiver of objection to lack of notice or defective notice unless the shareholder, at the
beginning of the meeting, objects to the holding of the meeting or the transaction of
business at the meeting, and a waiver of objection to consideration of a particular matter
at the meeting as not being within the purpose or purposes described in the meeting notice
unless the shareholder objects to considering the matter when it is presented.

Section
6. Voting Lists. The Corporations officer or agent having
charge of its stock transfer books shall prepare and certify a complete list of the
shareholders entitled to vote at a shareholders meeting or any adjournment thereof,
which list shall be arranged alphabetically within each class and series, and shall show
the address of, and the number of shares held by each share holder. The list shall be
produced at the time and place of the meeting of shareholders and be subject to inspection
by any shareholder at any time during the meeting. If for any reason the requirements with
respect to the shareholder list specified in this Section 6 of Article III have not been
complied with, any shareholder, either in person or by proxy, who in good faith challenges
the existence of sufficient votes to carry any action at the meeting, may demand that the
meeting be adjourned and the same shall be adjourned until the requirements are complied
with; provided, however, that failure to comply with such requirements does not affect the
validity of any action taken at the meeting before such demand is made.

Section
7. Voting. Each shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting, shall be entitled to one
(1) vote, in person or by proxy, for each share entitled to vote that is held by such
shareholder; provided, however, no proxy shall be voted after three years from its date
unless such proxy expressly provides for a longer period. A vote may be cast either orally
or in writing as announced or directed by the person presiding at the meeting prior to the
taking of the vote. When an action other than the election of directors is to be taken by
vote of the shareholders, it shall be authorized by a majority of the votes cast by the
holders of shares entitled to vote on the action, unless a greater vote is required by the
Michigan Business Corporation Act. Directors shall be elected by a plurality of the votes
cast in an election.

Section
8. Quorum. Shares equaling a majority of all of the voting shares of the
capital stock of the Corporation issued and outstanding represented in person or by proxy,
shall constitute a quorum at the meeting. Meetings at which less than a quorum is
represented may be adjourned by a vote of a majority of the shares present to a further
date without further notice other than the announcement at such meeting, and when the
quorum shall be present upon such adjourned date, any business may be transacted which
might have been transacted at the meeting as originally called. Shareholders present in
person or by proxy at any meeting of shareholders may continue to do business until
adjournment, notwithstanding the withdrawal of shareholders to leave less than a quorum.

Section
9. Conduct of Meetings. The officer who is to preside at meetings of
shareholders pursuant to Article V of these Bylaws, or his or her designee, shall
determine the agenda, the order in which business shall be conducted and rules for the
conduct of the meeting (which shall be fair to shareholders), unless the agenda, the order
of business and/or such rules have been fixed by the Board of Directors. Such officer or
designee shall call meetings of shareholders to order and shall preside, shall appoint a
person to act as secretary of the meeting, and may appoint a parliamentarian, who may be
the same person as the secretary.

Section
10. Inspectors of Elections.The Board of Directors may, in advance of a
meeting of shareholders, appoint one or more inspectors to act at the meeting or any
adjournment thereof. In the event inspectors are not so appointed, or an appointed
inspector fails to appear or act, the person presiding at the meeting of shareholders may
appoint one or more persons to fill such vacancy or vacancies, or to act as inspector. The
inspector(s) shall determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum, the validity and
effect of proxies, and shall receive votes, ballots, or consents, hear and determine
challenges and questions arising in connection with the right to vote, count and tabulate
votes, ballots or consents, determine the results, and do such acts as are proper to
conduct the election or vote with fairness to all shareholders.

# Section 11. Notice of
Shareholder Proposals.

(a)       
          Except for the election of directors, which is governed by Article V of the
          Corporations Articles of Incorporation, only such business shall be
          conducted at any meeting of shareholders, and only such proposals shall be acted
          upon at such meetings, as shall have been brought before the meeting: (i) by, or
          at the direction of, the Board of Directors; or (ii) by any shareholder of the
          Corporation who complies with the notice procedures set forth in this Section of
          these Bylaws. For a proposal to be properly brought before the meeting by a
          shareholder, the shareholder must have given timely notice thereof in writing to
          the Secretary of the Corporation.



---

To be timely, a shareholders notice must
          be delivered to, or mailed and received at, the principal executive offices of
          the Corporation not less than sixty (60) days nor more than ninety (90) days
          prior to the scheduled meeting date, regardless of any postponements, deferrals,
          or adjournments of that meeting to any later date; provided, however, that if
          less than seventy (70) days notice, or prior public disclosure of the date
          of a scheduled meeting is given or made, notice by the shareholder to be timely
          must be delivered or received not later than the close of business on the tenth
          (10) day following the earlier of the day on which such notice of the date of
          the scheduled meeting was mailed or the day on which such public disclosure was
          made. A shareholders notice to the Secretary shall set forth, as to each
          matter the shareholder proposes to bring before the meeting: (i) a brief
          description of a proposal desired to be brought before the meeting and the
          reasons for conducting such business at the meeting; (ii) the name and address,
          as they appear, on the Corporations stock record of the shareholder
          proposing such business and any other shareholders known by such shareholder to
          be supporting such proposal; (iii) the class and number of shares of the
          Corporations stock which are beneficially owned by the shareholder on the
          date of such shareholder notice and by any other shareholders known by such
          shareholder to be supporting such proposal on the date of such shareholder
          notice; and (iv) any financial interest of the shareholder in such proposal.

b)       
          If the presiding officer at the meeting of shareholders determines that a
          shareholder proposal was not made in accordance with the terms of this Section,
          the presiding officer shall declare the matter to be out of order and the matter
          shall not be acted upon at the meeting.

(c)       
          Nothing contained in this Section shall prevent the consideration and approval
          or disapproval at any meeting of shareholders of reports of officers, directors,
          and committees of the Board of Directors, but, in connection with such reports,
          no business shall be acted upon at such meeting unless stated, filed, and
          received as provided herein.

# ARTICLE IV. DIRECTORS

Section
1. Board of Directors.The authority and size of the Board of Directors,
and the procedures for nominating, electing and removing directors shall be as specified
in the Corporations Articles of Incorporation.

Section
2. Place of Meetings and Records. The directors shall hold their meetings,
and maintain the minutes of the proceedings of meetings of shareholders, Board of
Directors, and executive and other committees, if any, and keep the books and records of
account for the Corporation, in such place or places, within or outside the State of
Michigan, as the Board may from time to time determine.

Section
3. Regular Meetings of the Board. Regular meetings of the Board of
Directors may be held at such times and places and pursuant to such notice, if any, as may
be established from time to time by resolution of the Board of Directors.

Section
4. Special Meetings of the Board.Special meetings of the Board of
Directors may be called by the Chairman of the Board, or the Secretary, and shall be
called by one of them upon the written request of a majority of the directors. Notice of
the time and place of special meetings of the Board shall be given to each director at
least twenty-four (24) hours prior thereto. Notices of special meetings may state a
purpose or purposes for the meeting, but such notices shall not be required to state any
purpose and shall not be deemed deficient if the statement or purpose is incomplete or
inaccurate. Notice of any meeting may be made by hand delivery, telephone, facsimile or
e-mail with confirmation, nationally recognized overnight mail service, or first class
mail, to each director at such location as he or she may have furnished to the
Corporation. The notice shall be deemed to have been given at the time of personal
delivery, or telephone contact, or the time of confirmation for facsimile or e-mail, and
as of the close of business on the first business day following the date delivered to the
overnight or government mail carrier.

Section
5. Quorum and Vote. A majority of the members of the Board then in office
constitutes a quorum for the transaction of business, and the vote of a majority of the
members present at any meeting at which a quorum is present constitutes the action of the
Board of Directors.

Section
6. Meeting Participation. A director may participate in a meeting of
the Board of Directors or any committee by means of conference telephone or similar
communications equipment through which all persons participating in the meeting can
communicate with all other participants. Participation in a meeting pursuant to this
Section shall constitute presence in person at the meeting.

Section
7. Action of the Board Without a Meeting. Any action required or permitted
to be taken pursuant to authorization voted at a meeting of the Board of Directors may be
taken without a meeting if, before or after the action, all members of the Board of
Directors consent thereto in writing. Such written consent shall be filed with the minutes
of the proceedings of the Board of Directors and the consent shall have the same effect as
a vote of the Board of Directors for all purposes.



---

Section
8. Report to Shareholders. At least once in each year the Board of
Directors shall cause a financial report of the Corporation for the preceding fiscal year
to be made and distributed to each shareholder within four months after the end of such
fiscal year. The report shall include the Corporations statement of income, its
year-end balance sheet and, if prepared by the Corporations statement of source and
application of funds.

Section
9. Corporate Seal. The Board of Directors may provide a suitable corporate
seal, which seal shall be kept in the custody of the Secretary.

Section
10. Compensation of Directors. Each of the directors shall be entitled to
receive compensation for service as a director and/or member of a committee of the Board
of Directors and shall be reimbursed their expenses for attendance at meetings of the
Board of Directors or any committee of which a director is a member, all in accordance
with resolutions adopted by the Board of Directors from time to time.

Section
11. Executive Committee. The Board of Directors may by resolution
establish an executive committee composed of two (2) or more of the directors to exercise
such powers and authority of the Board of Directors to the extent provided in such
resolution and not prohibited by the Michigan Business Corporation Act for the management
of the business and affairs of the Corporation. Such committee shall exist, and each
member thereof shall serve, at the pleasure of the Board of Directors.

Section
12. Other Committees. The Board of Directors shall establish a
compensation committee and an audit committee, each composed of two (2) or more directors
with such authority and responsibilities as are specified in the charters for those
committees that are approved by the Board of Directors. In addition, the Board of
Directors may, by resolution, establish such other committees from time to time as the
directors think advisable with such purposes, authority and membership as may be set forth
in the resolution establishing any such committee.

Section
13. Directors Emeritus. Any director of the Corporation who has at least
nine years of service as a director and who either resigns as a director or does not stand
for reelection, shall be entitled to be considered for the position of Director
Emeritus. If nominated by the Nominating committee and elected by the Board of
Directors, a Director Emeritus shall continue in that position for a period equal to the
time served as a regular director or until an earlier resignation or death. During their
tenure, Directors Emeritus shall be given notices of all meetings of the Board of
Directors, and they shall perform such consulting services for the Corporation as the
Board of Directors may reasonably request from time to time. Directors Emeritus shall be
entitled to attend and participate in all such meetings of the Board of Directors, except
that they may not vote and they shall not be counted for purposes of determining a quorum.
Directors Emeritus shall receive the same annual retainer fee as is provided for regular
directors and shall be entitled to reimbursement for expenses of attendance at meetings of
the Board, but they shall receive no other compensation from the Corporation.

# ARTICLE V. OFFICERS

Section
1. Designation of Officers. The officers of the Corporation shall consist
of such officers as the Board of Directors shall determine from time to time, and may
include a Chairman of the Board, a Chief Executive Officer, a President, a Secretary, a
Treasurer, one or more Vice Presidents, and such other or different offices as may be
established by the Board of Directors. The officers of the Corporation need not be
directors or shareholders. Any two or more offices may be held by the same person, but an
officer shall not execute, acknowledge or verify any instrument in more than one capacity
if the instrument is required by law to be executed, acknowledged or verified by two or
more officers.

Section
2. Election of Officers. The officers of the Corporation shall be elected
at the first meeting of the Board of Directors, or by action taken pursuant to written
consent, after the annual meeting of shareholders. Officers shall hold office for the term
of their election and until their respective successors are elected and qualified, or
until resignation or removal.

Section
3. Resignation and Removal. An officer may resign by written notice to the
Corporation, which resignation is effective upon its receipt by the Corporation or at a
subsequent time specified in the notice of resignation. Officers of the Corporation serve
at the pleasure of the Board of Directors and may be removed by the Board at any time,
with or without cause.

Section
4. Compensation of Officers. The Board of Directors, or an appropriate
committee if one be appointed, may establish compensation of officers for services to the
Corporation irrespective of the personal interest of any such director or committee
member.



---

Section
5. Chairman of the Board. The Chairman of the Board of Directors shall be
elected by the directors from among the directors then serving. The Chairman of the Board,
shall preside at all meetings of the Board of Directors and shareholders, and shall
perform such other duties as from time to time may be determined by resolution of the
Board of Directors not inconsistent with these Bylaws.

Section
6. Chief Executive Officer. The Chief Executive Officer of the Corporation
shall have such authority and shall perform such duties in the management of the
Corporation as are usually vested in or incident to the office of a chief executive
officer of a corporation. In the absence or nonelection of the Chairman of the Board of
Directors, the Chief Executive Officer shall preside at all meetings of the Board of
Directors and meetings of the shareholders.

Section
7. President. The President shall be the chief operating officer of the
Corporation and shall have such authority and shall perform such duties in the management
of the Corporation as from time to time may be determined by resolution of the Board of
Directors not inconsistent with these Bylaws.

Section
8. Vice Presidents. The Vice Presidents shall have such authority and shall
perform such duties as shall be assigned to them by the Board of Directors and may be
designated by such special titles as the Board of Directors shall approve.

Section
9. Treasurer. The Treasurer, if one be elected, shall have such authority
and responsibilities as may be determined by the Board of Directors from time to time.

Section
10. Secretary. The Secretary shall give, or cause to be given, notice of
all meetings of shareholders and directors and all other notices required by law or by
these Bylaws, and in the case of his or her absence or refusal or neglect to do so, any
such notice may be given by any person so directed by the Chief Executive Officer or by
the directors. The Secretary shall maintain a record of all of the proceedings of minutes
of shareholders, the Board of Directors and committees of the Board in one or more books
provided for that purpose, and shall perform all duties incident to the office of
Secretary, and such other duties as may be assigned by the Board of Directors.

Section
11. Other Offices. Other officers elected by the Board of Directors shall
have such authority and shall perform such duties in the management of the Corporation as
may be determined by resolution of the Board of Directors not inconsistent with these
Bylaws. In addition, the Chairman of the Board and the Chief Executive Officer may jointly
approve the employment of managerial employees for positions which may involve the use of
the title of Vice President or some other official title, without the
necessity of the Board of Directors election of such person as an officer of the
Corporation. In such case, such persons shall not constitute officers of the Corporation
within the meaning of the Corporations Articles of Incorporation or Bylaws, and they
shall have such duties and authority as may be assigned to them by the Chairman and the
Chief Executive Officer.

# ARTICLE VI.
MISCELLANEOUS

Section
1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents to enter into any contract or execute and deliver any instrument
in the name of and on behalf of the Corporation, and such authority may be general or
confined to specific instances.

Section
2. Loans. No loans shall be contracted on behalf of the Corporation,
and no evidences of indebtedness shall be issued in its name, unless authorized by a
resolution of the Board of Directors. Such authorization may be general or confined to
specific instances.

Section
3. Checks. All checks, drafts, or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the Corporation
shall be signed by such officer or officers, agent or agents of the Corporation and in
such manner as shall from time to time be determined by resolution of the Board of
Directors.

Section
4. Deposits. All funds of the Corporation, not otherwise employed,
shall be deposited from time to time to the credit of the Corporation in such banks, trust
companies, or other depositories as the Board of Directors may determine.

Section
5. Fiscal Year. The fiscal year of this Corporation shall be as determined
by the Board of Directors.

Section
6. Waiver of Notice. Whenever any notice is required to be
given under the provisions of any law, or the Articles of Incorporation for this
Corporation, or these Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.



---

Section
7. Voting of Securities. Securities of another corporation or other
equity interests standing in the name of this Corporation which are entitled to vote may
be voted in person or by proxy by any executive officer of this Corporation or such other
persons as may be designated by the Board of Directors.

Section
8. Interpretation. Unless the context of these Bylaws otherwise
requires, the terms used in these Bylaws shall have the meanings specified in, and these
Bylaws shall be interpreted and construed in accordance with, the Michigan Business
Corporation Act.

# ARTICLE VII. AMENDMENTS

These
Bylaws may be amended, repealed or new Bylaws adopted either by a majority vote of the
Board of Directors at any regular or special meeting of the Board, and without prior
notice of intent to do so, or by majority vote of shareholders at any annual or special
meeting, if notice of the proposed amendment, repeal, or adoption be contained in the
notice of such meeting.

# ARTICLE VIII.
INDEMNIFICATION

Section
1. Indemnification of Directors.The Corporation shall indemnify, to the
fullest extent authorized or permitted by the Michigan Business Corporation Act, any
person, and his or her estate and personal representatives, who is made or threatened to
be made a party to an action, suit, or proceeding, whether civil, criminal, administrative
or investigative, because such person is or was a director of the Corporation or served
any other enterprise at the request of the Corporation.

Section
2. Indemnification of Certain Officers.The Corporation shall indemnify, to
the fullest extent authorized or permitted by the Michigan Business Corporation Act, any
officer or former officer of the Corporation, and his or her estate and personal
representatives, who is made or threatened to be made a party to an action, suit, or
proceeding, whether civil, criminal, administrative or investigative, that in any way
involves or is related to such officer or former officers duties, as specifically
set forth by the Corporations Board of Directors, involving any of the following:
(i) dealing with persons buying, selling, proposing to buy or sell, or otherwise
holding any securities issued by the Corporation, (ii) dealing with securities
analysts or any other security industry professionals with respect to securities issued by
the Corporation, or (iii) signing any statements certifying to the public, to the
Securities Exchange Commission, or to any securities exchange, the Corporations
financial statements or any other reports of the Corporation. The determination as to
whether an officer or former officer of the Corporation is entitled to indemnification
under this provision shall be made by the Corporations Board of Directors, in its
sole discretion.



---

EXHIBIT 10(s)

# SEVERANCE AGREEMENT
AND RELEASE

This
Agreement is made effective as of March 7, 2003, between X-RITE, INCORPORATED, a
Michigan corporation, including its related and affiliated companies (hereinafter
collectively referred to as X-Rite), and RICHARD E. COOK (hereinafter
referred to as Mr. Cook).

# W I T N E S S E T H:

WHEREAS,
Mr. Cook has been employed by X-Rite since June 2, 1998, and at the time of his
retirement, held the position of Chief Executive Officer; and

WHEREAS,
on March 7, 2003, X-Rite and Mr. Cook agreed that Mr. Cook would retire from X-Rite
effective as of that date; and

WHEREAS,
X-Rite desires to provide Mr. Cook with certain severance benefits pursuant to his
Employment Agreement dated April 17, 1998 (the Employment Agreement), plus
other good and valuable consideration; and

WHEREAS,
X-Rite and Mr. Cook wish to fully and finally resolve any and all matters, issues and
disputes that may exist between them, whether known or unknown;

NOW,
THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1.       
          Resignations. Effective March 7, 2003 (hereinafter
          Separation Date), Mr. Cook retires from his employment with and
          position as an officer of X-Rite. Also effective on the Separation Date, Mr.
          Cook retires from his position as a director of X-Rite and any positions as a
          director, an officer, or a manager of X-Rites related and affiliated
          entities. Mr. Cooks retirement from the above positions effects a
          resignation of such positions. Mr. Cook shall have no duties or authority to
          speak or act for X-Rite after the Separation Date. X-Rites employment
          records will reflect that Mr. Cook retired. Except as expressly set forth in
          this Agreement, all forms of Mr. Cooks compensation, bonuses, stock
          options, insurance benefits, other benefits and perquisites also terminate on
          the Separation Date.

2.       
          Duty to Cooperate. Mr. Cook agrees to promptly communicate to a
          person or persons designated by X-Rite all information pertaining to Mr.
          Cooks pending projects, and to disclose any and all business-related
          opportunities Mr. Cook has identified. During the period of severance pursuant
          to Paragraph 6.b., Mr. Cook agrees to make himself reasonably available to
          X-Rite, upon the express request of X-Rite, to provide any information,
          transition assistance, or other reasonable services that pertain to any work he
          performed while employed by X-Rite, including, but not limited to, involvement
          in intellectual property matters, legal proceedings, and other customer/supplier
          disputes. In addition, Mr. Cook agrees to make himself reasonably available to
          provide services to X-Rite for a period of three and one-half years after the
          end of the period of severance in Paragraph 6.b. upon the express request of
          X-Rite, for which Mr. Cook will be compensated at an hourly rate based upon
          actual time expended similar to that rate Mr. Cook would charge for other
          clients for whom he provides service. If Mr. Cook is not providing services for
          other clients, he will be compensated at the same daily rate at which he was
          compensated on the date of his retirement from X-Rite. This duty to cooperate
          will not require Mr. Cook to spend amounts of time on X-Rite matters that would
          unreasonably interfere with any interests that Mr. Cook is then pursuing, or
          with Mr. Cooks reasonable personal time.



---

3.       
          Return of Company Property. Mr. Cook agrees that he will
          immediately return, or has already returned, any and all X-Rite property,
          equipment, intellectual property, confidential and proprietary information and
          records, and other X-Rite property and records that were in his possession or
          control. Such items include, but are not limited to, any and all customer lists,
          keys, financial information, business notes, business plans, credit cards,
          memoranda, specifications and other equipment, records or documents that Mr.
          Cook may have in his possession or control.As set forth in more detail
          below, Mr. Cook will be entitled to retain possession of his laptop computer,
          PDA, cellular phone, and X-Rite leased automobile.

4.       
          Notice. Mr. Cook acknowledges and agrees that notwithstanding
          anything to the contrary contained in the Employment Agreement, Mr. Cooks
          employment will terminate as of the Separation Date.

5.       
          Reimbursements. Provided Mr. Cook promptly provides X-Rite with a
          complete expense report, including receipts and other documentation suitable to
          X-Rite, X-Rite will promptly pay Mr. Cook for any normal and reasonable
          business-related expenses that he incurred on or before the Separation Date.
          Nothing in this Agreement shall affect Mr. Cooks right to obtain legal
          advice, at the expense of X-Rite pursuant to the authorization of X-Rites
          Compensation Committee, with respect to directors and officer liability under
          the Sarbanes-Oxley Act (or under this Agreement), which amount shall not exceed
          $3,000 in the aggregate or be incurred more than 30 days after the date of this
          Agreement. In addition, X-Rite will promptly pay Mr. Cook for any appropriately
          documented normal and reasonable business-related expenses that he incurs at the
          express request of X-Rite after the Separation Date.

6.       
          Severance Benefits. Provided Mr. Cook signs this Agreement and the
          attached ADEA Waiver, does not timely revoke them as set forth below, and
          continues to comply with the terms and conditions of this Agreement, X-Rite will
          provide Mr. Cook with the following severance benefits:

a.       
          Payment. X-Rite shall pay Mr. Cooks base weekly salary through the
          Separation Date, including base deferred compensation paid to the trust fund
          with Macatawa Bank as trustee established pursuant to the Amended and Restated
          Deferred Compensation Agreement between X-Rite and Mr. Cook (the Rabbi
          Trust).

b.       
          Severance Pay. For a period of seventy-eight weeks (78) weeks after
          execution of this Agreement, X-Rite will pay Mr. Cook severance pay as follows.
          On each of X-Rites regular weekly pay dates during the 78-week period of
          severance, beginning on March 21, 2003, and ending on September10, 2004, X-Rite
          will pay Mr. Cook the gross, weekly amount of $6,250.00, less applicable
          withholding for insurance and taxes.



---

Pursuant to the terms of the Rabbi Trust,
          these installment severance payments to Mr. Cook in 2003 will be reduced to an
          amount equal to the Social Security taxable wage base on an annualized basis and
          X-Rite will pay to the Trustee of the Rabbi Trust for Mr. Cooks account
          the balance of the installment severance payments set forth above, as provided
          in and pursuant to the terms of the Rabbi Trust. Because payments will not be
          made for a full 12 month period in 2004, the amount paid to Mr. Cook each week
          in 2004 will be reduced to an amount equal to the Social Security taxable wage
          base for 2004 divided by the number of weekly severance paychecks Mr. Cook will
          receive in 2004. X-Rite will pay the balance of the installment severance
          payments set forth above for 2004 to the Trustee of the Rabbi Trust for Mr.
          Cooks account, as provided in and pursuant to the terms of the Rabbi
          Trust.

In
the event of Mr. Cooks death prior to the expiration of the 78-week period of
severance, the portion of the installment payments that would have been paid to Mr. Cook
shall continue to be paid to Mr. Cooks spouse, if living, or his estate, if his
spouse is not living.

c.       
          Health and Dental Insurance. Pursuant to COBRA, Mr. Cook has an
          opportunity to elect to continue his health and dental insurance coverage
          through X-Rites group plans. Provided Mr. Cook pays the employee portion
          of the premiums and makes a timely COBRA election on behalf of himself and
          eligible dependents, X-Rite will pay the net cost of the COBRA premiums for as
          long as Mr. Cook is entitled to continue coverage under COBRA law. Since premium
          co-payments apply, the payments to be made hereunder pursuant to Paragraph 6.b.
          may, at the option of X-Rite, be reduced by the amount of such employee
          co-payments.

d.       
          Cash Bonus Conversion Plan. During the period of severance pursuant to
          Paragraph 6.b., Mr. Cooks shares under the Amended and Restated Cash Bonus
          Conversion Plan (CBCP) shall continue to vest as provided in the
          CBCP. Notwithstanding anything to the contrary, all of Mr. Cooks unvested
          shares under the CBCP will vest on the earlier of the end of the period of
          severance pursuant to Paragraph 6.b or the date of Mr. Cooks death. X-Rite
          will take any and all required action to allow such shares under the CBCP to
          vest as provided above.

e.       
          Stock Options. Notwithstanding anything to the contrary, all of Mr.
          Cooks rights to stock options shall immediately vest. X-Rite will take any
          and all required action to allow such stock options to immediately vest. Such
          stock options shall remain exercisable to the extent provided for in the stock
          option agreements to which they relate, but in no case for less than two years
          after the Separation Date.

f.       
          Rabbi Trust. The terms of the Rabbi Trust shall remain in full force and
          effect, and shall not be amended or superseded by this Agreement, including
          X-Rites obligation to pay the trustees fees for administration.
          Notwithstanding the preceding sentence, X-Rite shall continue to pay the
          trustees fees described in Mr. Cooks Deferred Compensation Agreement
          with X-Rite through the end of September, 2004. The funds in the Rabbi Trust
          will be paid out to Mr. Cook as set forth in Paragraph 6 of the Rabbi Trust.



---

g.       
          Company Owned Property. Mr. Cook shall be entitled to retain possession
          of his laptop computer, PDA, and cellular phone for the period of severance
          pursuant to Paragraph 6.b. and his X-Rite leased automobile until the expiration
          of the lease term. Mr. Cooks use of such property other than the
          automobile is subject to X-Rites pre-approval and is subject to
          X-Rites discretion. Mr. Cooks use of the automobile is subject to
          the terms and conditions of X-Rites executive automobile program. X-Rite
          shall pay the lease payments on such automobile and the applicable monthly fee
          with respect to the cellular phone in accordance with X-Rites policies.
          Mr. Cook agrees to cooperate with X-Rite to surrender such property at a time
          and location convenient to both parties so that the property is timely returned.

h.       
          Unemployment Benefits. Mr. Cook is eligible to apply for unemployment
          benefits following the Separation Date. X-Rite will not contest Mr. Cooks
          application for unemployment benefits. Mr. Cook, however, acknowledges and
          agrees that the severance benefits that he will receive pursuant to this
          Agreement may affect his eligibility for and/or the amount of unemployment
          benefits he would otherwise be eligible to receive.

i.       
          Reference Letter. X-Rite will provide Mr. Cook with a letter stating Mr.
          Cooks dates of his employment, the title he held at the time of retirement
          and the fact that he retired, as well as any mutually agreeable statements upon
          Mr. Cooks written request.

7.       
          Release of Claims. Except for any claims Mr. Cook may have under
          the Age Discrimination in Employment Act, as amended (ADEA), and except as
          prohibited by law, Mr. Cook releases X-Rite, its related and affiliated
          companies, and their former and current owners, directors, officers, employees,
          agents, insurers and representatives from any and all claims, liability and
          damages of any kind or nature that he may have against them, whether known or
          unknown, and whether arising under local, state or federal common, equitable,
          statutory or administrative law or other law. As to any claims Mr. Cook may have
          under the ADEA, for any release to be effective, Mr. Cook must sign the attached
          ADEA Waiver.

Mr.
          Cook will have up to twenty-one (21) days from the date he receives this
          Agreement and the attached ADEA Waiver in which to consider and sign them. If
          Mr. Cook fails to sign this Agreement and the attached ADEA Waiver before the
          21-day period expires, this offer of severance automatically and immediately
          expires. Mr. Cook acknowledges that he has been advised by X-Rite to consult
          with legal counsel prior to signing this Agreement and the attached ADEA Waiver.
          Mr. Cook shall have seven (7) days after he signs this Agreement and the
          attached ADEA Waiver in which to revoke them. This Agreement and the attached
          ADEA Waiver will not become enforceable unless and until the seven-day
          revocation period expires without Mr. Cook making a proper revocation. If Mr.
          Cook fails to sign or timely revokes this Agreement and/or the attached ADEA
          Waiver, this Agreement and the Attached ADEA Waiver shall be null and void.

8.       
          Confidential and Proprietary Information. Mr. Cook shall forever
          hold in strictest confidence and shall not use or disclose any confidential
          information, technique, process, development, or experimental work, trade
          secret, customer lists, or other secret and confidential matter relating to the
          products, services, sales, employees, or business of X-Rite.



---

In addition, Mr.
          Cook agrees that he will not use such information for his benefit or the benefit
          of any third party. Mr. Cook also agrees that X-Rite owns and retains all rights
          to any intellectual property that Mr. Cook may have developed by himself or with
          others while employed by X-Rite, and which pertains to X-Rites historical,
          current or prospective businesses. Mr. Cook hereby assigns all rights and
          interests that he may have in such intellectual property to X-Rite, and agrees
          to cooperate with X-Rite with respect to, and to sign documents necessary to,
          perfect any of X-Rites intellectual property rights or protections such as
          domestic or foreign copyrights or patents.

9.       
          Covenant Not to Compete. Mr. Cook agrees that for a period
          of two (2) years following the Separation Date, he will not, without the prior
          written approval of X-Rite: (i) participate directly or indirectly, in the
          ownership, management, financing or control of any business which is, or is
          about to become, a competitor of X-Rite or its subsidiaries; (ii) provide
          consulting services or serve as an officer or director for any such business; or
          (iii) solicit, encourage or facilitate employees of X-Rite to terminate their
          employment with X-Rite in favor of any other employer. Mr. Cook is not
          prohibited by this Paragraph, however, from owning stock of any corporation
          whose shares are publicly traded so long as that ownership is in no case more
          than five percent (5%) of such shares of the corporation.

10.       
          Executive Liability Insurance Coverage and Indemnification. With
          respect to Mr. Cooks authorized work-related activities and duties while
          employed as an officer of X-Rite, with respect to his duties as a director of
          X-Rite and with respect to the services Mr. Cook provides to X-Rite pursuant to
          this Agreement, nothing in this Agreement shall deprive Mr. Cook of the benefits
          of X-Rites existing executive liability insurance coverage, subject to the
          terms and conditions of such coverage, nor of any right to indemnification under
          either X-Rites Articles of Incorporation or Bylaws or the Indemnity
          Agreement between X-Rite and Mr. Cook made as of September 24, 2002, subject to
          the limitations set forth therein.

11.       
          Non-Disparagement and Non-Interference. During the period while
          X-Rite provides any benefit to Mr. Cook pursuant to this Agreement, Mr. Cook
          agrees that he will not disparage, criticize, condemn, or impugn X-Rite, its
          related and affiliated companies, their products nor any of the other persons
          identified in Paragraph 7 above. Mr. Cook also agrees that he will not directly
          or indirectly interfere with, adversely affect, or attempt to interfere with or
          adversely affect, X-Rites business relationships, reputation, contracts,
          pricing or other relationships that X-Rite has with its former, current or
          prospective customers, suppliers, clients, employees, businesses, financial
          institutions, shareholders or others persons or entities with whom X-Rite
          interacts or relates.

12.       
          Indemnification. Mr. Cook agrees to indemnify X-Rite, and any of
          the other persons identified in this Agreement, for any costs, expenses and
          damages resulting from his breach of this Agreement. Such costs, expenses and
          damages include, but are not limited to, actual attorneys fees.

13.       
          Complete Agreement. Except as expressly set forth in this
          Agreement, this Agreement is the complete and only surviving and continuing
          agreement between the parties. Except as expressly stated otherwise in this
          Agreement, this Agreement supersedes all prior employment agreements, change of
          control agreements, and other written or oral agreements or understandings
          between the parties.



---

14.       
          Modification. No modification of or supplement to this Agreement
          will be enforceable, unless it is in writing, signed by Mr. Cook and the
          Chairman of X-Rite.

15.       
          Voluntary and Knowing Consent. Mr. Cook attests that he signed
          this Agreement voluntarily, that he understands its content, meaning and effect,
          and that he had the opportunity to consult advisors of his choice prior to
          signing this Agreement.

16.       
          Non-Admission of Liability. By entering into this Agreement,
          X-Rite does not admit that it acted wrongfully or violated any federal, state,
          or local criminal or civil laws.

17.       
          Severability. If any term, clause, or provision of this Agreement
          is deemed unlawful, void, or otherwise unenforceable or invalid by a competent
          tribunal (including an arbitrator), the tribunal may modify this Agreement to
          the extent necessary to make it enforceable to the maximum extent permitted by
          law. If a term, clause or provision is not enforceable to any degree, then only
          that term, clause, or provision shall be deemed ineffective and thereby severed
          from the remainder of this Agreement. The remaining terms, clauses, and
          provisions of this Agreement shall remain in full effect, to the maximum extent
          permitted by law.

18.       
          Binding Effect. This Agreement shall be binding upon the parties,
          their spouses, family, heirs, administrators, successors, and assigns.

19.       
          Governing Law and Stipulated Venue. This Agreement shall be
          construed according to the laws of the state of Michigan, without regard to its
          conflicts of laws principles. The parties agree that the only courts of
          competent jurisdiction are those state or federal courts situated in and having
          jurisdiction over claims in Kent County, Michigan.

20.       
          Arbitration of Disputes. Any disputes between the parties that
          arise from or pertain to this Agreement and the attached ADEA Waiver shall be
          resolved exclusively by arbitration in accordance with the rules for commercial
          arbitration promulgated by the American Arbitration Association. The arbitration
          shall be conducted in Grand Rapids, Michigan. Any award shall be final and
          binding upon the parties; and, judgment shall be entered in accordance with the
          arbitrators decision in a court of competent jurisdiction. The cost and
          fees of the arbitrator shall be shared equally by the parties. Each party shall
          be responsible for his or its own attorney fees and costs associated with
          arbitration.

21.       
          Miscellaneous. Mr. Cook agrees that he has carefully read this
          Agreement, understands its contents, and has been given the opportunity to
          discuss its terms with an attorney of his choice. This Agreement may be executed
          in multiple copies, each having the same effect as the original.



---

22.       
          Successors. X-Rite shall require any successor (whether direct or
          indirect, by purchase, merger, consolidation, or otherwise) to all or
          substantially all of the business and/or assets of X-Rite, by agreement in form
          and substance reasonably satisfactory to Mr. Cook, to expressly assume and agree
          to perform this Agreement in the same manner and to the same extent that X-Rite
          would be required to perform it if no such succession had taken place. Failure
          of X-Rite to obtain such agreement prior to the effectiveness of any succession
          shall be a breach of this Agreement and shall entitle Mr. Cook to compensation
          from X-Rite in the same amount and on the same terms as Mr. Cook would be
          entitled hereunder. As used in this Agreement, X-Rite shall mean
          X-Rite and any successor to X-Rites business and/or assets as aforesaid
          which executes and delivers the agreement provided for in this Paragraph 22 or
          which otherwise becomes bound by all the terms and provisions of this Agreement
          by operation of law.

23.       
          Counterparts. This Agreement may be executed in one or more
          counterparts, each of which shall be deemed an original, but all of which
          together shall constitute one and the same document.

|                                    | X-RITE, INCORPORATED               
|----------------------------------- | -----------------------------------
|Dated Effective as of
March 7, 2003 | By                                 
|Dated Effective as of
March 7, 2003 | /s/ Richard E. Cook
Richard E. Cook



---

# ADEA WAIVER

In
conjunction with the consideration provided in my Confidential Severance Agreement and
Release, and except as prohibited by law, I agree, knowingly and voluntarily, to waive any
and all claims, liability and damages that I might have under the Age Discrimination in
Employment Act of 1967, as amended, against X-Rite, Incorporated and its related and
affiliated companies, and their former and current owners, directors, officers, employees,
agents, insurers, and representatives, and which occurred on or before the date of this
ADEA Waiver. I understand that this Waiver does not prevent me from later challenging the
knowing and voluntary nature of this ADEA Waiver, nor does this Waiver attempt to waive
any rights that under applicable law cannot be waived. I acknowledge that I have been
advised to consult with an attorney prior to signing this ADEA Waiver and have been
provided twenty-one (21) days within which to consider the ADEA Waiver. I further
understand that I have seven (7) days after I sign this ADEA Waiver in which to revoke the
ADEA Waiver. Lastly, I acknowledge that the consideration provided to me pursuant to the
foregoing Confidential Severance Agreement and Release was in excess of any amounts that I
was otherwise entitled to receive as a result of my separation from employment with
X-Rite.

|Date: | March 26, 2003 |  | /s/ Richard E. CookRichard E. Cook | 
|----- | -------------- |  | ---------------------------------- | 



---

# EXHIBIT 21

# X-RITE, INCORPORATED LIST OF CONSOLIDATED
SUBSIDIARIES

|1. |  | X-Rite International, Inc., a Barbados Corporation, is a wholly owned
               subsidiary of X-Rite, Incorporated, being utilized as a foreign sales
               corporation.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | X-Rite Holdings, Incorporated., a U.S. Corporation, is a wholly owned
               subsidiary of X-Rite, Incorporated, being utilized as a stockholder of certain
               foreign subsidiaries.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | X-Rite GmbH, a German Corporation, is wholly owned by X-Rite Global,
               Incorporated and X-Rite Holdings, Incorporated, and being utilized as a sales
               and service office.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | X-Rite Asia Pacific Limited, a Hong Kong Corporation, is wholly owned by
               X-Rite Global, Incorporated and X-Rite Holdings, Incorporated, and being
               utilized as a sales and service office.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | X-Rite Ltd., a United Kingdom Corporation, is wholly owned by X-Rite
               Global, Incorporated and X-Rite Holdings, Incorporated and being utilized as a
               sales and service office.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | X-Rite MA, Incorporated, a U.S. Corporation, is wholly owned by X-Rite,
               Incorporated and being utilized as a sales and service office.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|7. |  | OTP, Incorporated, a U.S. Corporation, is wholly owned by X-Rite,
               Incorporated and was used to execute a real estate transaction.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

|8. |  | Labsphere, Inc., a U.S. Corporation, is wholly owned by X-Rite,
               Incorporated and is a manufacturer of light measurement systems and related
               proprietary materials.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. |  | X-Rite Méditerranée SARL, a French Corporation, is wholly
               owned by X-Rite Global, Incorporated and X-Rite Holdings, Inc., and being
               utilized as a sales and service office.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. |  | X-Rite Global, Inc., a U.S. Corporation, is a wholly owned subsidiary of
               X-Rite, Incorporated, being utilized as a stockholder of certain foreign
               subsidiaries.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. |  | XR Ventures, LLC, a U.S. Limited Liability Corporation, is a majority
               owned subsidiary of X-Rite, Incorporated, being utilized as a venture capital
               company.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. |  | Coherix, Corporation, a U.S. Corporation, is majority owned by X-Rite,
               Incorporated and is a manufacturer of laser based measurement systems and
               related proprietary materials.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. |  | Optronik GmbH, a German Corporation, is a wholly owned subsidiary of
               X-Rite GmbH, and is a manufacturer of color and light measurement systems and
               related proprietary materials.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14. |  | X-Rite Europe, B.V., a Netherlands Corporation, is wholly owned by X-Rite
               Global, Incorporated and X-Rite Holdings, Inc., and being utilized as a sales
               and service office.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15. |  | X-Rite, (Shanghai) International Trading Co. Ltd. a Chinese Corporation,
               is wholly owned by X-Rite Asia Pacific Limited, and being utilized as a sales
               and service office.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16. |  | Light Source Acquisition Company, a U.S. Corporation, is wholly owned by
               X-Rite, Incorporated and was used to acquire substantially all of the assets of
               Light Source Computer Images, Inc. in 1997.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

# EXHIBIT 23 (a)

# CONSENT OF INDEPENDENT
AUDITORS

We consent to the incorporation by
reference in the Registration Statement File Numbers 33-29288, 33-29290, 33-82258 and
33-82260 on Form S-8 of our report dated January 28, 2003, with respect to the
consolidated financial statements and schedule of X-Rite, Incorporated and subsidiaries as
of December 28, 2002 and for the year then ended included in the Form 10-K for the year
ended December 28, 2002.

/s/ Ernst & Young LLP

Grand Rapids, Michigan,March 26, 2003



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# EXHIBIT 23 (b)

# Information Concerning
Consent of Arthur Andersen LLP

We are unable to obtain after
reasonable efforts, a re-issued report or consent of Arthur Andersen LLP related to the
2001 and 2000 financial statements included in this report on Form 10-K, given the
circumstances surrounding the cessation of Arthur Andersens operations. Therefore,
we have included a copy of their previously issued report.

Because we are unable to obtain the
above-referenced consent of Arthur Andersen LLP, we are required to disclose any resulting
limitations on recovery by investors. Section 11(a) of the Securities Act of 1933 allows,
under certain circumstances, a person acquiring a security to assert a claim against,
among others, an accountant who has consented to be named as having prepared any report
for use in connection with the registration statement if part of a registration statement
at the time it becomes effective contains an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make the statements
therein no misleading. Because Arthur Andersen LLP has not consented to being named in
this Form 10-K, it will not be liable under section 11(a) of the Securities Act for any
untrue statements or omissions of material fact contained in the financial statements
audited by Arthur Andersen LLP.



---

Certifications

I, Michael C. Ferrara, certify that:

1.        I have
reviewed this annual report on Form 10-K of X-Rite, Inc.

2.        Based on my
knowledge, this annual report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this quarterly report;

3.        Based on my
knowledge, the financial statements, and other financial information included in this
annual report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
annual report;

4.        The
registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the registrant and we have:

a)        designed
such disclosure controls and procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this annual report is being
prepared;

b)        evaluated
the effectiveness of the registrants disclosure controls and procedures as of a date
within 90 days prior to the filing date of this annual report (the Evaluation
Date); and

c)        presented
in this annual report our conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation Date;

5.        The
registrants other certifying officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit committee of registrants
board of directors (or persons performing the equivalent functions):

a)        all
significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and

b)        any fraud,
whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls; and

6.        The
registrants other certifying officers and I have indicated in this annual report
whether there were significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and
material weaknesses.

| | Date: | March 25, 2003
/s/ Michael C. Ferrara
______________________
Michael C. Ferrara
President and Chief Operating Officer
| | ----- | ---------------------------------------------------------------------------------------------------------------------



---

Certifications

I, Duane F. Kluting, certify that:

1.        I have
reviewed this annual report on Form 10-K of X-Rite, Inc.

2.        Based on my
knowledge, this annual report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this annual report;

3.        Based on my
knowledge, the financial statements, and other financial information included in this
quarterly report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in
this annual report;

4.        The
registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the registrant and we have:

a)        designed
such disclosure controls and procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this annual report is being
prepared;

b)        evaluated
the effectiveness of the registrants disclosure controls and procedures as of a date
within 90 days prior to the filing date of this annual report (the Evaluation
Date); and

c)        presented
in this quarterly report our conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the Evaluation Date;

5.        The
registrants other certifying officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit committee of registrants
board of directors (or persons performing the equivalent functions):

a)        all
significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and

b)        any fraud,
whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls; and

6.        The
registrants other certifying officers and I have indicated in this annual report
whether there were significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and
material weaknesses.

| | Date: | March 25, 2003
/s/ Duane F. Kluting
______________________
Duane F. Kluting
Vice President and Chief Financial
Officer
| | ----- | ----------------------------------------------------------------------------------------------------------------------



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# EXHIBIT 99.1

# Certificate of the President of X-Rite,
Incorporated.

Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

I,
Michael C. Ferrara, President and Chief Operating Officer of X-Rite, Incorporated,
certify, to the best of my knowledge and belief, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) that:

(1)  The
annual report on Form 10-K for the year ending December 28, 2002, which this statement
accompanies, fully complies with requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and;

(2)  The
information contained in this annual report on Form 10-K for the year ending December 28,
2002 fairly presents, in all material respects, the financial condition and results of
operations of X-Rite, Incorporated.

|                     | X-Rite, Incorporated
|-------------------- | --------------------
|Date: March 25, 2003 | By:                 
|                     | Its:                



---

# EXHIBIT 99.2

# Certificate of the Chief Financial Officer of X-Rite,
Incorporated.

Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350):

I,
Duane F. Kluting, Chief Financial Officer of X-Rite, Incorporated, certify, to the best of
my knowledge and belief, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. 1350) that:

(1)  The
annual report on Form 10-K for the annual period ended December 28, 2002, which this
statement accompanies, fully complies with requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and;

(2)  The
information contained in this annual report on Form 10-K for the annual period ending
December 28, 2002 fairly presents, in all material respects, the financial condition and
results of operations of X-Rite, Incorporated.

|                     | X-Rite, Incorporated
|-------------------- | --------------------
|Date: March 25, 2003 | By:                 
|                     | Its: