SECURITIES & EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                                    Form 10-K

(Mark one)
[X]  Annual report pursuant to Section 13 or 15(d) of the Securities Act of 1934
     (Fee required) for the fiscal year ended January 1, 2000, or
[ ]  Transition  report  pursuant  to  Section  13  or  15(d) of the  Securities
     Exchange  Act of 1934  (No fee required) for  the  transition  period  from
     _______________to _________________

Commission file number 0-14800

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

                 Michigan                              38-1737300
     -------------------------------              --------------------
     (State or other jurisdiction of               (I.R.S. Employer
      incorporation or organization)               identification No.)

   3100 44th Street, SW, Grandville, MI                   49418
 -----------------------------------------------------------------
 (Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code (616) 534-7663
                                                          --------------
       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 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. [X]

As of March 1, 2000,  21,275,951  shares of the  registrant's  common stock, par
value $.10 per share, were outstanding. 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) on that date was  $201,668,060  computed  at the closing  price on that
date.

Portions  of the  Company's  Proxy  Statement  for the 2000  Annual  Meeting  of
Shareholders  are  incorporated  by reference  into Part III.  Exhibit  Index is
located at Page 38.
<PAGE>
                                     PART I

ITEM 1. BUSINESS

(a)  General Development of Business
------------------------------------
X-Rite,  Incorporated  ("X-Rite" or the  "Company")  was organized as a Michigan
corporation in 1958. The business currently  conducted by the Company is largely
an outgrowth of the Company's x-ray marking and identification system introduced
in 1961. The Company's  silver recovery  equipment,  introduced in 1968, and its
first quality  control  instruments,  introduced in 1975, were developed to meet
the needs of film  processors;  a customer  class known to the Company  from its
sales of radio-opaque x-ray marking tape.

The  Company  has  expanded  its  product  offerings  by  concentrating  on  its
instrument  technologies  and  developing  expertise  in the fields of light and
color measurement.  Pursuant to that strategy, X-Rite has successfully developed
and marketed numerous quality control instruments, software 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
purchased a foreign sales and service  subsidiary,  X-Rite  Limited,  Congleton,
Cheshire, England, and acquired certain assets of Colorgen, Inc. ("Colorgen"), a
Massachusetts-based  manufacturer  of retail  point-of-purchase  paint  matching
systems. In 1995 the Company acquired all of the outstanding stock of Labsphere,
Inc. ("Labsphere") of North Sutton, New Hampshire. Labsphere was founded in 1981
and is a leading  manufacturer of light measurement and light source integrating
systems and instrumentation. In 1997, the Company acquired substantially all the
assets of Light Source Computer Images, Inc. ("Light Source"). Light Source is a
California-based producer of scanning,  imaging and print optimization software.
In 1998, the Company established a French subsidiary,  X-Rite Mediterranee SARL,
which acquired the branch of an X-Rite dealer located near Paris.

(b)  Financial Information About Operating Segments
---------------------------------------------------
For purposes of the consolidated  financial  statements included as part of this
report,  all operations of the Company are classified in one operating  segment:
quality control instruments and accessories.
<PAGE>
(c)  Narrative Description of Business
--------------------------------------
Principal Products
The  Company  primarily  manufactures  and  sells  proprietary  quality  control
instruments which utilize advanced electronics and optics technologies.
The principal types of products produced include:

Densitometers
X-Rite's  first  densitometer  was  introduced  in 1975.  A  densitometer  is an
instrument  that  measures  optical  or  photographic  density,   compares  that
measurement to a reference  standard,  and signals the result to the operator of
the instrument. There are two types of densitometers;  transmission densitometer
and reflection densitometer.

A  transmission  densitometer  measures the amount of light that is  transmitted
through film.  Some models are designed for use in controlling  variables in the
processing of x-ray film in medical and  non-destructive  testing  applications.
Other  models  are  designed  to be used to  control  process  variables  in the
production of  photo-transparencies,  such as  photographic  film and microfilm.
Reflection  densitometers measure the amount of incident light that is reflected
from a surface, such as ink on paper.

X-Rite introduced its spectrodensitometer in 1990 which combines the function of
a densitometer with the functions of a colorimeter and a spectrophotometer  (see
following  paragraphs) to provide  measurements  for monitoring and  controlling
color reproduction. Also introduced in 1990 was the scanning densitometer, which
is used for controlling the color of printed inks in graphic arts applications.

In 1994 the Company  began  delivering  densitometer-based  products for digital
imaging  applications.  Products which  calibrate  image  setters,  raster image
processors  and digital  printers were the initial  entrants into the market for
use in desktop publishing and computer-based printing activities.

In 1998 X-Rite  launched  its 500 series  spectrodensitometer  which is the only
hand-held densitometer equipped with a spectral engine. Spectral engines are the
most  accurate  type  of  measurement   engines  available  and  offer  precise,
repeatable and reliable measurements for pressroom quality control.

The Company  continued to expand the 500 series in 1999 with the introduction of
the  micro-spot   spectrodensitometer.   This  device  is  the  first  hand-held
measurement  instrument  to accurately  read color bars and related  micro-sized
color control elements as small as 1/16" (1.6mm).

Sensitometers
Sensitometers  have been  manufactured  by X-Rite since 1975. This instrument is
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.
<PAGE>
Colorimeters
In 1989 the Company introduced its first colorimeter. Colorimeters measure light
much  like the human eye using  red,  green and blue  receptors  and are used to
measure printed colors on packages, labels, textiles and other materials where a
product's appearance is critical for buyer acceptance.  In 1990 X-Rite added the
spectrocolorimeter  which is a combination  instrument that performs colorimeter
functions by applying  spectrophotometric  techniques and  principles  (see next
paragraph),  thereby  greatly  improving  the  accuracy and  reliability  of the
instrument.

Spectrophotometers and Accessories
The  spectrophotometer,  introduced  in 1990,  is  related  to the  colorimeter;
however,  it measures  light at many points  over the entire  visible  spectrum,
generally with the high degree of accuracy required in laboratory  measurements.
Spectrophotometers are used in color formulation for materials such as plastics,
paints, inks, ceramics and metals.

In 1991 the Company introduced a multi-angle  spectrophotometer which is used to
measure  the  color  of  metallic  finishes.   This  instrument  is  useful  for
controlling  the color  consistency of automotive  paints and other metallic and
pearlescent   coatings.   In   1992   the   Company   introduced   a   spherical
spectrophotometer  which measures the color of textured  surfaces and is used in
the textile, paint and plastics industries.

During 1993 and 1994, X-Rite introduced a group of color formulation and quality
control software packages designed for use with its spectrophotometer  products.
This  software  is  sold  separately  or is  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.

In 1994 and 1995,  X-Rite  introduced  products  developed for desktop  graphics
professionals.  One of the  instruments in this product  category is a hand-held
spectrophotometer  which  captures  color from almost any item and sends it to a
personal  computer.  Once  there,  the color can be used in a variety of graphic
design  applications,  previewed and prepared for output,  and organized  into a
custom  electronic  color  library;  colors  can  also be  transmitted  to other
personal computers anywhere in the world using X-Rite's ColorMail software.

Another  1995  introduction  was  the  auto-tracking   spectrophotometer.   This
instrument  is used in the graphic  arts  industry to help control hard to match
colors such as pastels, reflex blue, dark reds and colors used in corporate logo
standards.

The 1995  acquisition  of Labsphere  expanded  the  Company's  product  lines to
include   standard   accessories   which  are  compatible  with  a  majority  of
commercially available spectrophotometers  worldwide. These accessories extend a
spectrophotometer's capabilities and enhance its performance.

In  1999  the   company   introduced   the  DTP41/T   series  of   auto-tracking
spectrophotometer.   These  instruments  enable  the  automated  measurement  of
transparent and semi-transparent material, as well as prints.
<PAGE>
In  addition  they  provide  transmission  and  ultraviolet  capabilities.  This
technology is ideal for use in commercial  photo labs, print for pay centers and
research facilities.

In 1999 the SP60,SP62,  and SP64 portable  sphere  spectrophotometer  series was
introduced.  These  instruments  were designed to provide a fast,  precise,  and
accurate color  measurement on a wide array of materials  ranging from paper and
paint to plastics and textiles.

The Company also released QA 2000 in 1999, a turnkey  software  package designed
to enhance and support the new multi-angle  sphere  spectrophotometer  products.
This product is a user  friendly  Windows based  software  that utilizes  client
/server database  technology.  The network capabilities allow for multiple users
in different locations to access a single database.

Point-of-Purchase Paint Matching Systems
In 1993 the Company  introduced  computerized  point-of-purchase  paint matching
systems  for use by paint  stores,  hardware  stores,  mass  merchants  and home
improvement centers.  After successfully  establishing its own line of products,
the  Company  acquired  certain  assets  of  Colorgen  in 1994.  Colorgen  had a
significant share of the U.S. point-of-purchase paint matching market. With that
acquisition,  X-Rite has established a significant market presence in the retail
point-of-purchase architectural paint matching business.

Integrating Spheres and Integrating Sphere Systems
With  the  acquisition  of  Labsphere,  X-Rite  added  integrating  spheres  and
integrating  sphere  systems  to  its  product  lines.  Applications  for  these
instruments   include  testing   incandescent   and  fluorescent   lamp  output,
calibration of remote  sensors,  laser power  measurement,  and  reflectance and
transmittance light measurement.

Reflectance Materials and Coatings
Labsphere  is also an OEM  supplier of  proprietary  reflectance  materials  and
coating  services.  These  materials  and services are used in such  products as
photographic processing equipment,  check scanning systems, x-ray film analysis,
backlight illuminators and surface profiling equipment.

Other Products
For many years,  X-Rite has also  manufactured  silver  recovery  equipment  and
radio-opaque  marking tape.  Collectively,  these other products  represent less
than five percent of the Company's consolidated net sales.

Sales 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 in the U.S.  through a network of fifteen  hundred
independent  dealers and  outside  the U.S.  through  four  hundred  independent
dealers in fifty foreign countries. Independent dealers are managed and serviced
by the Company's sales staff and by independent sales representatives.

Raw Materials
With  very  few   exceptions,   raw  materials  and  components   necessary  for
manufacturing  products and  providing  services are  generally  available  from
several sources.
<PAGE>
Subject  to  vendor  readiness  with  the year  2000  (see  Item  7.Management's
Discussion and Analysis of Financial  Condition and Results of Operations),  the
Company does not foresee any  unavailability  of materials or  components  which
would have a material adverse effect on its overall business in the near term.

Patents and Trademarks
The Company owns 29 U.S.  patents and 10 foreign  patents which are  significant
for products it  manufactures.  The Company  currently has 5 U.S. and 19 foreign
patent  applications  on file.  While the Company  follows a policy of obtaining
patent  protection  for its  products,  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 competitive position.

Seasonality
The  Company's  business is generally  not subject to seasonal  variations  that
would significantly impact sales, production or net income.

Significant Customers
No single customer  accounted for more than 10% of total net sales in 1999, 1998
or 1997. The Company does not believe that the loss of any single customer would
have a material adverse effect on the Company.

Backlog
The  Company's  backlog of scheduled  but  unshipped  orders was $6.8 million at
March 1, 2000 and $5.8  million at March 1, 1999.  The March 1, 2000  backlog is
expected to be filled during the current fiscal year.

Competition
The Company has few competitors  producing  competing  medical and  photographic
instruments and believes its share in that market 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.

The primary  basis of  competition  for all the  Company's  products is quality,
design and service.  The Company believes that superior quality and features are
competitive advantages for its products.


Research and Development
During  1999,  1998  and  1997,  respectively,  the  Company  spent  $8,420,000,
$8,135,000   and  $6,380,000  on  research  and   development.   X-Rite  has  no
customer-sponsored research and development activities.

Human Resources
As of  March  1,  2000,  the  Company  employed  687  persons;  607 in its  U.S.
operations  and 80 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.
<PAGE>
ITEM 2.  PROPERTIES

Listed below are the principal  properties owned or leased by X-Rite as of
March 1, 2000:
<TABLE>
                                                                Owned
           Location                   Principal Uses          or Leased
  -------------------------    ---------------------------    ---------
  <S>                          <C>                              <C>
  Grandville, MI               Manufacturing, R&D, sales,       Owned
                               customer service, warehouse
                               and administration

  North Sutton, NH             Manufacturing, R&D, sales,       Owned
                               customer service, warehouse
                               and administration

  Littleton, MA                Customer service, R&D, and       Leased
                               sales

  Poynton, England             Sales and customer service       Leased

  Cologne, Germany             Sales and customer service       Leased

  Quarry Bay, Hong Kong        Sales and customer service       Leased

  Brno, Czech Republic         Sales                            Leased

  MASSY, France                Sales and customer service       Leased

  Tokyo, Japan                 Sales                            Leased
</TABLE>

Collectively,  X-Rite and its subsidiaries own approximately 288,000 square feet
of space and lease approximately  33,000 square feet.  Management  considers all
the  Company's  properties  and  equipment to be well  maintained,  in excellent
operating condition, and suitable and adequate for their intended purposes.

ITEM 3.  LEGAL PROCEEDINGS

The  Company is not  presently  engaged in any  material  litigation  within the
meaning of Regulation S-K.

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

Not applicable.
<PAGE>
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.
<TABLE>
                                                           Position
         Name          Age             Position           Held Since
--------------------  -----  ---------------------------  ----------
<S>                    <C>   <C>                             <C>
Richard E. Cook         54   President and Chief             1998 (1)
                               Executive Officer
Bernard J. Berg         56   Senior Vice President,          1983
                               Engineering
Duane F. Kluting        50   Vice President,
                               Chief Financial Officer       1992
Jeffrey L. Smolinski    38   Vice President, Operations      1994
Joan Mariani Andrew     41   Vice President, Sales &
                               Marketing                     1995 (2)
</TABLE>

(1) Prior to joining  X-Rite,  Mr. Cook was the  President  and Chief  Operating
    Officer of Cascade  Engineering,  a developer  and  producer of plastic mold
    injection technology and products. Mr. Cook held that position for more than
    five years.

(2) Before joining X-Rite,  Ms. Andrew was Vice  President,  Sales and Marketing
    for Bell & Howell's Document  Management Products Company from 1992 to 1995,
    Vice President-Marketing and New Business Development from 1991 to 1992, and
    General Manager, Scanners from 1989 to 1991.
<PAGE>
                                     PART II

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

The Company's common stock is traded over the counter on The Nasdaq Stock Market
under the symbol  XRIT.  As of March 1, 2000,  there  were  approximately  1,600
shareholders  of record.  Ranges of high and low sales  prices  reported  by The
Nasdaq Stock Market for the past two fiscal years appear in the following table.
<TABLE>
                                                            Dividends
                                           High     Low     Per Share
                                          ------   ------   ---------
      <S>                                 <C>      <C>        <C>
      Year Ended January 1, 2000:
         Fourth Quarter                   $ 7.44   $ 5.75     $.025
         Third Quarter                      7.75     6.31      .025
         Second Quarter                     7.75     6.00      .025
         First Quarter                      8.87     6.18      .025
      Year Ended January 2, 1999:
         Fourth Quarter                    10.13     6.53      .025
         Third Quarter                     13.88     8.38      .025
         Second Quarter                    14.38    12.13      .025
         First Quarter                     19.00    12.50      .025
</TABLE>
The Board of  Directors  intends to  continue  paying  dividends  at the current
quarterly rate of 2.5 cents per share in the foreseeable  future, and retain the
balance of the Company's earnings for use in the expansion of its businesses.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA

Quarterly financial data are summarized as follows:
<TABLE>
                                      (in thousands except per share data)
                                                                        Diluted
                                                                        Earnings
                                                    Operating    Net     (Loss)
                                    Net     Gross    Income     Income    Per
          Quarter                  Sales    Profit   (Loss)     (Loss)   Share
---------------------------       -------  -------  ---------  -------  --------
<S>                              <C>      <C>       <C>        <C>       <C>
1999:
  First                           $23,688  $15,855   $ 4,376    $2,983    $.14
  Second                           24,331   16,107     4,956     3,326     .15
  Third                            23,764   15,420     4,613     3,104     .14
  Fourth                           28,426   18,609     6,308     4,236     .19
                                  -------  -------   -------    ------    ----
                                 $100,209  $65,991   $20,253   $13,649    $.62
                                  =======  =======   =======    ======    ====

1998:
  First                           $23,637  $15,616   $ 4,608   $ 3,110    $.15
  Second                           24,286   16,086     4,983     3,349     .16
  Third                            21,461   13,985     2,283     1,503     .07
  Fourth                           25,427   16,545     5,087     3,251     .15
                                  -------  -------   -------   -------    ----
 Totals before write-down
   of digital imaging assets      $94,811  $62,232   $16,961   $11,213    $.53

 Write-down of digital
   imaging assets                    -        -       (6,694)   (4,351)   (.21)
                                  -------  -------   -------   -------    ----
                                  $94,811  $62,232   $10,267    $6,862    $.32
                                  =======  =======   =======   =======    ====
</TABLE>

Selected  financial data for the five years ended January 1, 2000 are summarized
as follows:
<TABLE>
                                 (in thousands except per share data)
                             1999      1998      1997      1996      1995
                           -------   -------   -------   -------   -------
<S>                       <C>        <C>       <C>       <C>       <C>
Net sales                 $100,209   $94,811   $96,991   $84,394   $72,634
Net income                  13,649     6,862    18,022    15,381     9,871
Net income per share:
  Basic                        .65       .33       .85       .73       .47
  Diluted                      .62       .32       .85       .73       .47
Dividends per share            .10       .10       .10       .10       .10

Total assets               107,819    95,444    92,468    78,951    63,507
Long-term debt                 -0-       -0-       -0-       -0-       -0-
</TABLE>
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS


Liquidity and Capital Resources

X-Rite enhanced its already substantial financial position during 1999. Net cash
provided by operations in 1999 was a record $20.4 million, compared to $17.9 and
$20.0 million for 1998 and 1997 respectively. At January 1, 2000 the Company had
working  capital of $60.9 million as compared to 53.4 million at January 2,1999.
It's ratios of current assets to current liabilities was 9.7:1 and 11:1 for 1999
and 1998  respectively.  Since going public in 1986,  the Company has funded its
operations,  investing,  acquisitions,  and financing activities from internally
generated cash flows and cash reserves.

On January 1, 2000 the  Company  had cash and  short-term  investments  totaling
$29.0 million,  compared to 20.8 million at January 2, 1999. The Company expects
to use these funds for future acquisitions, capital expenditures and new product
development.  The Company  maintains a revolving line of credit in the amount of
$20 million. The line was not used during 1999.

Management  anticipates  that X-Rites current  liquidity,  future cash flows and
credit line will be sufficient to fund the Company's operations,  life insurance
premiums, capital expenditures, and dividends for the foreseeable future. Should
additional  funding  be  necessary,  additional  short  or  long-term  borrowing
arrangements are the most probable alternatives for meeting capital resource and
liquidity needs.

Net income was the principal  source of cash from  operations.  Certain expenses
included  in net income did not require  the use of cash.  The most  significant
non-cash expenses in 1999, which totaled $5.9 million,  were  depreciation,  and
amortization.  For 1998 and 1997 depreciation and amortization charges were $5.8
and $5.5 million  respectively.  The largest single non-cash expense in 1998 was
for the write down of digital imaging assets which was $6.7 million.

X-Rite's short term investments  consist  primarily of tax free municipal bonds,
high grade corporate bonds and preferred  stocks.  Historically  the cost of the
Company's investments has approximated market value.

Capital  expenditures  of $4.3 million  were made in 1999.  The largest of these
capital  investments  was $2.2  million  to  expand  manufacturing  and  storage
capacity  at  the  Labsphere   subsidiary  in  New   Hampshire.   The  remaining
expenditures   were  made   primarily   for   machinery,   equipment,   building
improvements,  and computer hardware and software.  Capital expenditures in 1998
were $4.2 million.  The Company expects to make capital  expenditures in 2000 of
approximately $3.5 million that consist mainly of machinery, equipment, building
improvements, and computer hardware and software.

During  1998,  the Company  announced it had entered  into  agreements  with its
founding  shareholders for the future redemption of 4.54 million shares, or 21.4
percent of the Company's outstanding stock. The stock redemptions
<PAGE>
will occur following the later of the death of each founder and his spouse.  The
cost of the redemption agreements will be funded by proceeds from life insurance
policies  totaling $160 million,  or $35.24 per share, the Company has purchased
on the lives of certain of these individuals. 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
or more than $25 per share.

At the maximum price,  the aggregate  stock purchases will total $113.5 million.
The Company  anticipates that certain 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 million level in order to cover both the maximum aggregate  purchase
price and anticipated  borrowing costs. Life insurance  premiums will total $4.3
million each year while all the policies  remain in effect.  Of the $4.3 million
paid in 1999 and 1998  approximately  $3.5 and $3.1  million  respectively  were
classified as cash surrender value.

The Company's most significant financing activity is the payment of dividends to
shareholders.  During 1999,  1998,  and 1997 dividends were paid at a rate of 10
cents per  share.  The total  value of  dividends  paid for each of those  years
approximated  $2.1 million  dollars.  At the present time the Board of Directors
intends to continue payments at this rate.

The  following  table  sets  forth   information   derived  from  the  Company's
consolidated statements of income expressed as a percentage of net sales.
<TABLE>
                                    1999       1998       1997
                                   -----      -----      -----
   <S>                             <C>        <C>        <C>
   Net sales                       100.0%     100.0%     100.0%
   Cost of sales                    34.1       34.4       34.0
                                   -----      -----      -----
     Gross profit                   65.9       65.6       66.0

   Operating expenses:
     Selling & marketing            20.1       21.6       18.5
     Engineering, general
       & administrative             17.2       17.6       13.1
     Research & development          8.4        8.6        6.6
     Write-down of digital
       imaging assets                -          7.0        -
                                   -----      -----      -----
                                    45.7       54.8       38.2
                                   -----      -----      -----
     Operating income               20.2       10.8       27.8

   Other income                      0.8        0.4        0.3
                                   -----      -----      -----
     Income before income taxes     21.0       11.2       28.1

   Income taxes                      7.4        4.0        9.5
                                   -----      -----      -----
     Net income                     13.6%       7.2%      18.6%
                                   =====      =====      =====
</TABLE>
<PAGE>
Net Sales

Net sales in 1999 were a Company record of $100.2 million, an increase 5.7% over
1998 sales of $94.8  million.  Sales in 1998 were a 2.2%  decline as compared to
1997.

Most  lines of  business  showed  increases  in 1999  from the prior  year.  The
Coatings and Printing  business units and related services  recorded the largest
percentage increases for the year.

Geographically,  increased demand in North America offset a continuing  softness
in the  European  markets.  The  Company's  efforts to develop an Asian  Pacific
marketing  initiative  continue to be rewarded.  During 1999 this regions  sales
increased 22.8%.

Price increases had a nominal effect on sales levels in 1999, 1998 or 1997.

Gross Profit

Despite an increasingly  competitive  global  marketplace  X-Rite has managed to
consistently maintain strong gross margins. Gross profit percentages were 65.9%,
65.6% and 66.0% in 1999, 1998 and 1997, respectively.

Selling and Marketing Expenses

The Company has  continued to fund it's sales and  marketing  efforts at a level
consistent with 1998. The 1999  expenditures of $20.1 million was a 2.0% decline
from 1998.  In 1998 the Company  significantly  increased  it's emphasis in this
area. The 1998  expenditures  of $20.5 were a 13.8% increase over the 1997 level
of $18.0 million.

These increased  efforts have been focused on development of a European presence
as well as emerging markets for products in Asia.

Engineering, General and Administrative

Engineering, general and administrative ("EG&A") expenses increased 3.3% in 1999
over 1998.  The increase was caused by wage  inflation for technical  talent and
corporate wide technology upgrades EG&A expenses in 1998 were higher compared to
1997 due primarily to life insurance premium expense incurred in connection with
the stock  redemption  program,  higher legal fees,  wage inflation and costs to
establish a new office in France.

Research and Development

Innovative  product  research  and  development  ("R&D")  has been a hallmark of
X-Rite  since its  inception.  The Company has  reaffirmed  this  commitment  by
increasing  its  investment  in R&D in  each  of the  last  three  years.  While
continuing  to  improve  its  traditional  products,  the  Company  has  focused
additional  resources on  development  of products  for  emerging  technologies.
Research and development costs for 1999, 1998 and 1997 were $8.4, $8.1, and $6.4
million respectively.
<PAGE>
In addition to the R&D costs  reported as operating  expenses,  there were costs
incurred to develop new  software  products in each of the last three years that
were not  included  with R&D  expenses.  Those  costs were  capitalized  and the
related  amortization  expense was  included in cost of sales (see Note 2 to the
accompanying  financial  statements).  Software  development  costs  capitalized
totaled $1.3, $1.2 and $1.3 million in 1999, 1998 and 1997, respectively.

Write-Down of Digital Imaging Assets

The Company recognized a nonrecurring  charge of $6,694,000 in the third quarter
of 1998 for the write-down of certain digital imaging assets associated with the
1997  acquisition  of Light  Source  Computer  Images,  Inc.  (see Note 8 to the
accompanying financial statements). Increased competition in the digital imaging
business and a continued rapid decline in the demand for certain digital imaging
instruments,  software  and  technology  were the primary  factors  that led the
Company to  reevaluate  the markets Light Source sells into and the Light Source
product lines, which then forced the recognition of this charge. Digital imaging
markets have been  changing  rapidly and the demand for newer  products at lower
prices with enhanced  performance has impacted the Company's  ability to compete
in certain of these markets.  In addition,  the Company has decided these assets
would  not  be  employed  in a  separate  strategic  business  unit  within  the
reorganized  corporate  structure  that was announced at that time.  The Company
will continue developing other digital imaging products for markets where it has
more experience and greater name recognition.

Other Income

Other income in 1999, 1998 and 1997 consisted mainly of interest earned on funds
invested in tax exempt  municipal and corporate  securities.  Interest income in
1999 was larger than 1998 due to the growth of funds available for investment.

Income Taxes

The effective tax rate in 1999 was 35.3%  compared to 35.8% in 1998 and 34.0% in
1997.

Inflation

The Company has  experienced  the effects of inflation  on its business  through
increases in the cost of services,  employee  compensation  and fringe benefits.
Although  modest  adjustments  to selling  prices have  deterred  the effects of
inflation,  the Company  continues to explore ways to improve  productivity  and
reduce operating costs. The Company does not anticipate any significant  adverse
impact from inflation in the coming year.

Most of the Company's transactions are invoiced and paid in U.S. dollars.
<PAGE>
YEAR 2000 READINESS DISCLOSURE

X-Rite senior  management  assembled a project team to  pro-actively  assess and
address  remediation  solutions  related to Year 2000  ("Y2K")issues  at Company
headquarters as well as all subsidiary locations.  The project was begun in 1998
and  substantially  completed during the third quarter of 1999. The team focused
it emphasis on four primary areas, IT systems,  products,  physical  plant,  and
third  parties.  In addition to problem  assessment,  solution  development  and
implementation, the team also developed a comprehensive contingency plan.

As of the date of this  report the  Company  has not  experienced  any  problems
related to Y2K. All IT systems, product lines and facilities systems,  machinery
and equipment have  performed as expected.  The Company also is not aware of Y2K
failures at critical  suppliers or strategic  customers.  Contingency plans will
remain  in  place  through  the  remainder  of the  year,  but  management  does
anticipate having to implement them at this time.

Costs to Address the Company's Y2K Issues:

Y2K  readiness  costs  incurred to date,  are not material to the results of the
Company's  operations,  financial  position or cash flows.  Although the Company
purchased new mainframe hardware and software in 1995, it did not accelerate the
timing of replacing these systems in order to accommodate Y2K readiness.

SAFE HARBOR PROVISIONS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995.

Statements  in this filing  that are not  historical  facts are  forward-looking
statements,  which  involve  risks  and  uncertainties  that  could  affect  the
Company's  results of  operations,  financial  position  and cash flows.  Actual
results  may differ  materially  from  those  projected  in the  forward-looking
statements, due to a variety of factors, some of which may be beyond the control
of the  Company.  Readers are  cautioned  not to place  undue  reliance on these
forward-looking statements, which speak only as of the date of this report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Registrant's market risk sensitive financial  instruments do not subject the
Registrant to material market risk exposures.
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

    Report of Independent Public Accountants
    Consolidated Balance Sheets
    Consolidated Statements of Temporary and Permanent Shareholders'
      Investment
    Consolidated Statements of Income
    Consolidated Statements of Permanent Shareholders' Investment
    Consolidated Statements of Cash Flows
    Notes to Consolidated Financial Statements
<PAGE>
                    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 January 1, 2000 and
January 2, 1999,  and the  related  consolidated  statements  of  temporary  and
permanent shareholders'  investment,  income, permanent shareholders' investment
and cash flows for each of the three years in the period ended  January 1, 2000.
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 financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of X-Rite,  Incorporated  and
subsidiaries as of January 1, 2000 and January 2, 1999, and the results of their
operations  and their cash flows for each of the three years in the period ended
January 1, 2000, in conformity with accounting  principles generally accepted in
the United States.



                                        /s/ Arthur Andersen LLP


Grand Rapids, Michigan,
January 26, 2000
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
<TABLE>
                                              January 1,     January 2,
                                                 2000           1999
                                             -----------    -----------
ASSETS
<S>                                          <C>            <C>
CURRENT ASSETS:
  Cash and cash equivalents                  $ 6,898,000    $ 1,536,000
  Short-term investments                      22,129,000     19,268,000
  Accounts receivable, less allowances of
   $1,110,000 in 1999 and $798,000 in 1998    20,249,000     19,589,000
  Inventories                                 15,410,000     15,871,000
  Deferred taxes                               1,642,000      1,495,000
  Prepaid expenses and other current assets    1,565,000        980,000
                                             -----------    -----------
      Total current assets                    67,893,000     58,739,000

PLANT AND EQUIPMENT:
  Land                                         2,278,000      2,278,000
  Buildings and improvements                  15,501,000     12,528,000
  Machinery and equipment                     13,368,000     12,507,000
  Furniture and office equipment              13,169,000     11,737,000
  Construction in progress                        90,000      1,308,000
                                             -----------    -----------
                                              44,406,000     40,358,000
  Less accumulated depreciation              (23,351,000)   (19,836,000)
                                             -----------    -----------
                                              21,055,000     20,522,000

OTHER ASSETS:
  Costs in excess of net assets acquired       8,036,000      8,572,000
  Cash surrender values - Founders policies    6,616,000      3,091,000
  Other noncurrent assets                      4,219,000      4,520,000
                                             -----------    -----------
                                              18,871,000     16,183,000
                                             -----------    -----------
                                            $107,819,000    $95,444,000
                                            ============    ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS--Continued
<TABLE>
                                              January 1,     January 2,
                                                 2000           1999
                                             -----------    -----------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S>                                          <C>            <C>
CURRENT LIABILITIES:
  Accounts payable                           $ 2,277,000    $ 1,772,000
  Accrued liabilities--
    Payroll and employee benefits              2,043,000      1,618,000
    Income taxes                                 325,000        309,000
    Other                                      2,352,000      1,626,000
                                             -----------    -----------
      Total current liabilities                6,997,000      5,325,000


TEMPORARY SHAREHOLDERS INVESTMENT:
  Value of shares subject to redemption
   agreements; 4,540,000 shares issued
   and outstanding in 1999 and 1998           45,400,000     45,400,000


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; 16,700,896 and
    16,638,179 shares issued and outstanding
    in 1999 and 1998 respectively,
    not subject to redemption agreements.      1,670,000      1,664,000
  Additional paid-in capital                   8,439,000      8,143,000
  Retained earnings                           51,347,000     39,793,000
  Shares in escrow; 257,064 in 1999 and
    257,064 in 1998                           (4,820,000)    (4,794,000)
  Accumulated other comprehensive loss        (1,214,000)       (87,000)
                                             -----------    -----------
                                              55,422,000     44,719,000
                                             -----------    -----------
                                            $107,819,000    $95,444,000
                                            ============    ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF TEMPORARY AND PERMANENT SHAREHOLDERS' INVESTMENT
<TABLE>

For the years ended January 1, 2000, January 2,1999 and January 3,1998
                                                                                            Total Temporary
                                                      Temporary            Permanent         and Permanent
                                                      Shareholders'        Shareholders'     Shareholders'
                                                      Investment           Investment         Investment
                                                     ----------           ------------      -------------
<S>                                                  <C>                 <C>                <C>
 Balances December 31, 1996                          $    -              $ 72,962,000       $ 72,962,000

 Net changes in Permanent Shareholders Investment                          13,118,000         13,118,000
                                                     ----------           -----------        -----------
 Balances January 3, 1998                                -                 86,080,000         86,080,000

Allocation of Permanent Shareholders' Investment
 to Temporary Shareholders' Investment,
 4,540,000 shares                                      45,400,000         (45,400,000)            -

 Net changes in Permanent Shareholders Investment                           4,039,000          4,039,000
                                                     ------------         -----------         ----------
 Balances January 2, 1999                              45,400,000          44,719,000         90,119,000

 Net changes in Permanent Shareholders Investment                          10,703,000         10,703,000
                                                     ------------         -----------         ----------
 Balances January 1, 2000                            $ 45,400,000        $ 55,422,000      $ 100,822,000
                                                     ============        ============      =============

</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
                                            For the year ended
                                  ---------------------------------------
                                   January 1,    January 2,    January 3,
                                      2000          1999          1998
                                  -----------   -----------   -----------
<S>                              <C>            <C>           <C>
Net sales                        $100,209,000   $94,811,000   $96,991,000
Cost of sales                      34,218,000    32,579,000    32,933,000
                                  -----------   -----------   -----------
  Gross profit                     65,991,000    62,232,000    64,058,000

Operating expenses:
  Selling & marketing              20,096,000    20,478,000    17,969,000
  Engineering, general
    & administrative               17,222,000    16,658,000    12,664,000
  Research & development            8,420,000     8,135,000     6,380,000
  Write-down of digital
    imaging assets                     -          6,694,000         -
                                  -----------   -----------   -----------
                                   45,738,000    51,965,000    37,013,000
                                  -----------   -----------   -----------
  Operating income                 20,253,000    10,267,000    27,045,000

Other income                          827,000       425,000       267,000
                                  -----------   -----------   -----------
  Income before income taxes       21,080,000    10,692,000    27,312,000

Income taxes                        7,431,000     3,830,000     9,290,000
                                  -----------   -----------   -----------

  NET INCOME                      $13,649,000   $ 6,862,000   $18,022,000
                                  ===========   ===========   ===========

Earnings per share:

  Basic                                  $.65          $.33          $.85
                                         ====          ====          ====
  Diluted                                $.62          $.32          $.85
                                         ====          ====          ====
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF PERMANENT SHAREHOLDERS' INVESTMENT
<TABLE>
                                                                                        Accumulated
                                                                                          Other           Total
                                             Additional                                Comprehensive    Permanent
                               Common        Paid-in       Retained        Shares in      Income      Shareholders'
                                Stock        Capital       Earnings         Escrow        (Loss)       Investment
                             ----------      ----------    -----------    -----------  -------------  ------------
<S>                          <C>             <C>          <C>             <C>           <C>            <C>
BALANCES,
  DECEMBER 31, 1996          $2,107,000      $6,908,000    $64,059,000    $      -      $ (112,000)    $72,962,000

Net income                         -               -        18,022,000           -            -         18,022,000
Cash dividends declared
  of $.10 per share                -               -        (2,112,000)          -            -         (2,112,000)
Issuance of 84,556 shares
  of common stock under
  employee benefit plans          8,000         968,000           -              -            -            976,000
Purchase of 184,300 shares
  by escrow fund                   -               -              -       (3,449,000)         -         (3,449,000)
Translation adjustment             -               -              -              -        (319,000)       (319,000)
                             ----------      ----------    -----------    -----------    ---------     -----------
BALANCES,
 JANUARY 3, 1998              2,115,000       7,876,000     79,969,000    (3,449,000)     (431,000)     86,080,000

Net income                         -               -         6,862,000           -            -          6,862,000
Cash dividends declared
  of $.10 per share                -               -        (2,092,000)      (25,000)         -         (2,117,000)
Issuance of 28,798 shares
  of common stock under
  employee benefit plans          3,000         267,000           -              -            -            270,000
Purchase of 72,764 shares
  by escrow fund                   -               -              -       (1,320,000)         -         (1,320,000)
Value of shares subject to
  redemption agreements        (454,000)           -       (44,946,000)          -            -        (45,400,000)
Translation adjustment             -               -              -              -         344,000         344,000
                             ----------      ----------    -----------    -----------    ---------     -----------
BALANCES,
 JANUARY 2, 1999              1,664,000       8,143,000     39,793,000    (4,794,000)      (87,000)     44,719,000

Net income                         -               -        13,649,000           -            -         13,649,000
Cash dividends declared
  of $.10 per share                -               -        (2,095,000)      (26,000)         -         (2,121,000)
Issuance of 62,717 shares
  of common stock under
  employee benefit plans          6,000         296,000           -              -            -            302,000
Translation adjustment             -               -              -              -        (659,000)       (659,000)
Unrealized loss on short-term
  investments                      -               -              -              -        (468,000)       (468,000)
                             ----------      ----------    -----------    -----------    ---------     -----------
BALANCES,
 JANUARY 1, 2000             $1,670,000      $8,439,000    $51,347,000   $(4,820,000)  $(1,214,000)    $55,422,000
                             ==========      ==========    ===========   ============  ============    ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
                                                                       For the year ended
                                                            ---------------------------------------
                                                             January 1,    January 2,    January 3,
                                                                2000          1999          1998
                                                            -----------   -----------   -----------
<S>                                                        <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                               $ 13,649,000   $ 6,862,000   $18,022,000
  Adjustments to reconcile net income to net
    cash provided by operating activities-
      Depreciation and amortization                           5,862,000     5,836,000     5,488,000
      Provision for doubtful accounts                           412,000       266,000       220,000
      Deferred income taxes                                    (246,000)   (2,629,000)      187,000
      Write-down of digital imaging assets                          -       6,694,000           -
      Other                                                     (58,000)      (15,000)      172,000
      Changes in operating assets and liabilities
        net of effects from acquisitions:
          Accounts receivable                                (1,576,000)    1,189,000    (2,944,000)
          Inventories                                           278,000      (623,000)        2,000
          Other current and noncurrent assets                  (547,000)      892,000      (831,000)
          Accounts payable                                      638,000       163,000      (548,000)
          Other accrued liabilities                           1,953,000      (693,000)      191,000
                                                             -----------   -----------   -----------
     Net cash provided by operating activities               20,365,000    17,942,000    19,959,000

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from maturities of investments                     1,258,000     2,030,000     2,042,000
  Proceeds from sales of investments                         19,875,000     5,323,000     9,223,000
  Purchases of investments                                  (24,473,000)  (16,056,000)  (11,653,000)
  Capital expenditures                                       (4,343,000)   (4,176,000)   (4,288,000)
  Acquisitions, less cash acquired                                -          (382,000)   (6,960,000)
  Deposit to escrow fund in connection
    with Light Source acquisition                                  -             -       (4,638,000)
  Investment in founders' life insurance                     (3,525,000)   (3,091,000)         -
  Purchases of other assets                                  (1,373,000)   (1,279,000)   (1,344,000)
  Other investing activities                                     85,000       113,000        40,000
                                                            ------------  ------------  ------------
     Net cash used for investing activities                 (12,496,000)  (17,518,000)  (17,578,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid                                             (2,121,000)   (2,117,000)   (2,112,000)
  Issuance of common stock                                      302,000       270,000       976,000
                                                            -----------   -----------   -----------
     Net cash used for financing activities                  (1,819,000)   (1,847,000)   (1,136,000)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
  CASH EQUIVALENTS                                             (688,000)      151,000      (24,000)
                                                            -----------   -----------   -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          5,362,000   (1,272,000)    1,221,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                1,536,000    2,808,000     1,587,000
                                                            -----------   -----------   -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR                    $ 6,898,000  $ 1,536,000   $ 2,808,000
                                                            ===========   ===========   ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1--THE COMPANY AND OTHER INFORMATION

X-Rite,  Incorporated and its wholly-owned  subsidiaries  (individually "X-Rite"
and with  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-critical
applications,   including  corporate  branding,  medical  diagnostics,  consumer
products and on-line  commerce.  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, the Company considers its business to be a single
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,  and
Massachusetts.
  In addition,  the Company has locations in Germany,  England, Hong Kong, Czech
Republic, France and Japan. All manufacturing is done in the United States.

Geographic sales information is as follows:
<TABLE>
                                        1999         1998         1997
                                    -----------  -----------  -----------
  <S>                               <C>          <C>          <C>
  Domestic sales:
    U.S. operations                 $65,732,000  $62,875,000  $65,180,000
  International sales:
    U.S. operations' export sales
      to unaffiliated customers      11,023,000   14,628,000   22,010,000
    Foreign subsidiary sales         23,454,000   17,308,000    9,801,000
                                    -----------  -----------  -----------
                                     34,477,000   31,936,000   31,811,000
                                    -----------  -----------  -----------
                                   $100,209,000  $94,811,000  $96,991,000
                                    ===========  ===========  ===========
</TABLE>
No single customer  accounted for more than 10% of total net sales in 1999, 1998
or 1997.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:
The  consolidated   financial   statements   include  the  accounts  of  X-Rite,
Incorporated  and  its  wholly-owned  domestic  and  foreign  subsidiaries.  All
significant inter-company accounts and transactions have been eliminated.

Effective  January 1, 1997,  the Company  adopted a 4-4-5  quarterly  accounting
cycle to  accommodate  manufacturing  schedules  that were  developed to improve
customer service.  Accordingly,  1999 ended on January 1, 2000 and 1998 ended on
January 2, 1999, and 1997 ended on January 3, 1998. The Company's 1999, 1998 and
1997 results from operations would have been approximately the same if the years
had ended on December 31 rather  than on January 1, 2000,  January 2, 1999,  and
January 3,1998 .

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

Short-Term Investments:
Short-term   investments  consist  primarily  of  municipal  bonds,   tax-exempt
industrial revenue bonds and preferred stocks.  All of the Company's  short-term
investments are stated at market value and are classified as available for sale.
Adjustments to market value are included in Other Comprehensive  Income and Loss
(see Note 3) Short-term  investments at January 1, 2000 include  securities with
original  maturities  of greater than three months and  remaining  maturities of
less than one year.

Inventories:
Inventories are stated at the lower of cost,  determined on a first-in first-out
basis, or market. Components of inventories are summarized as follows:
<TABLE>
                                      January 1,    January 2,
                                         2000          1999
                                     -----------   -----------
       <S>                           <C>           <C>
       Raw materials                 $ 6,351,000   $ 6,575,000
       Work in process                 5,381,000     5,623,000
       Finished goods                  3,678,000     3,673,000
                                     -----------   -----------
                                     $15,410,000   $15,871,000
                                     ===========   ===========
</TABLE>
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Plant, Equipment and Depreciation:
Plant 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 Costs:
Development  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 straight-line method over a three-year period.

The  Company  capitalized  $1,334,000,  $1,248,000  and  $1,344,000  of software
development costs during 1999, 1998 and 1997, respectively. Amortization expense
was $1,249,000,  $1,107,000 and $992,000 in 1999,  1998 and 1997,  respectively.
The net  capitalized  software  development  costs included in other assets were
$2,160,000   and  $2,076,000  as  of  January  1,  2000  and  January  2,  1999,
respectively.

Costs in Excess of Net Assets  Acquired and Other  Long-Lived  Assets:  Costs in
excess of net assets acquired  resulted  primarily from the 1995  acquisition of
Labsphere,  Inc. and the 1997 acquisition of the assets of Light Source Computer
Images,  Inc. (see Note 8). The costs associated with the Labsphere  acquisition
are being amortized using the straight-line  method over twenty years. The costs
resulting from the Light Source  acquisition  were written off in 1998 (see Note
8).  Accumulated  amortization  of excess  acquisition  costs was $2,790,000 and
$2,254,000 at January 1, 2000 and January 2, 1999, respectively.

The Company evaluates the recoverability of its long-lived assets by determining
whether  unamortized  balances  can be  recovered  through  undiscounted  future
operating cash flows over the remaining  lives of the assets in accordance  with
the provisions of Statement of Financial Accounting Standards (SFAS) No. 121. If
the sum of the expected future cash flows is less than the carrying value of the
assets,  an impairment  loss is recognized  for the excess of the carrying value
over the fair value.  The estimated fair value is determined by discounting  the
expected  future  cash  flows at a rate  that  would be  required  for a similar
investment with like risks.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Temporary  and  Permanent  Shareholders'  Investment:  During  1998 the  Company
entered into agreements with its founding shareholders for the future redemption
of 4.54 million  shares or 21.4 percent of its  outstanding  stock (see Note 7).
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 Taxes:
The  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.

Revenue Recognition:
Revenue is recognized when a product is shipped or a service is performed.

Advertising Costs:
Advertising  costs are charged to operations in the period  incurred and totaled
$2,047,000, $2,389,000 and $2,053,000 in 1999, 1998 and 1997, respectively.

Per Share Data:
Basic  earnings  per share  ("EPS") is 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:
<TABLE>
                                       1999          1998          1997
                                    ----------   -----------   -----------
  <S>                              <C>           <C>           <C>
  Numerators:
    Net income numerators for
      both basic and diluted EPS   $13,649,000   $ 6,862,000   $18,022,000
                                    ==========   ===========   ===========
  Denominators:
    Denominators for basic EPS-
      Weighted-average common
        shares outstanding          20,951,692    20,913,400    21,122,347
    Potentially dilutive shares-
      Shares subject to
        redemption agreements        1,155,096       159,522         -
      Stock options                      6,985        58,630       166,204
                                    ----------    ----------    ----------
    Denominators for diluted EPS    22,113,773    21,131,552    21,288,551
                                    ==========    ==========    ==========
</TABLE>
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Per Share Data, continued:
During 1999 and the fourth quarter of 1998, certain shares subject to redemption
agreements (see Note 7) were considered dilutive.

Certain  exercisable  stock  options  were not included in the  calculations  of
diluted EPS because  option  prices were greater than average  market prices for
the periods  presented.  The number of stock options  outstanding  at the end of
each year  presented  not  included  in the  calculation  of diluted EPS and the
ranges of exercise  prices were 984,500 and $7.03 - $19.52 in 1999,  583,000 and
$14.50 - $19.50 in 1998, and 98,500 and $18.38 - $19.50 in 1997.

Foreign Currency Translation:
Foreign  currency  balance  sheet  accounts are  translated  into United  States
dollars at the exchange rate in effect at year end.  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 shareholders' investment.

Use of Estimates:
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
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.

Reclassifications:
Certain prior year  information has been  reclassified to conform to the current
year presentation.


NOTE 3--COMPREHENSIVE INCOME

Comprehensive income consisted of net income, foreign currency translation,  and
unrealized  loss  on  short-term   investments,   which  are  presented  in  the
accompanying  statements  of  shareholders'  investment.   Comprehensive  income
totaled $  12,522,000,  $  7,206,000  and  $17,703,000  in 1999,  1998 and 1997,
respectively.


NOTE 4--REVOLVING CREDIT AGREEMENT

The Company  maintains a revolving  line of credit  agreement  with a bank which
provides for maximum  borrowings of  $20,000,000  with interest at 1.5% over the
"Effective Federal Funds Rate" (3.99% at January 1, 2000).
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4--REVOLVING CREDIT AGREEMENT, continued

The  borrowings are unsecured and no  compensating  balances are required by the
agreement.  There were no significant  borrowings  under this  agreement  during
1999, 1998 or 1997.

NOTE 5--INCOME TAXES

The provision for income taxes consisted of the following:
<TABLE>
                                    1999         1998         1997
                                 ----------   ----------   ----------
  <S>                            <C>          <C>          <C>
  Current-
    Federal                      $7,386,000   $6,111,000   $8,689,000
    State                           256,000      220,000      259,000
    Foreign                          35,000      128,000      155,000
                                 ----------   ----------   ----------
                                  7,677,000    6,459,000    9,103,000
  Deferred-
    Federal                        (246,000)  (2,629,000)     187,000
                                 ----------   ----------   ----------
                                 $7,431,000   $3,830,000   $9,290,000
                                 ==========   ==========   ==========
</TABLE>
The provisions for income taxes  reflected  effective tax rates of 35.3%,  35.8%
and 34.0% in 1999, 1998 and 1997,  respectively,  compared to the U.S. statutory
rate of 35%. The  Company's  effective  tax rates were  impacted by state income
taxes, goodwill amortization and benefits from a foreign sales corporation.

Major  components of the Company's  deferred tax assets and  liabilities  are as
follows:
<TABLE>
                                             January 1,    January 2,
                                                2000          1999
                                             ----------    ----------
<S>                                          <C>           <C>
Assets:
  Inventory reserves                         $  947,000    $1,076,000
  Accounts receivable reserves                  105,000        -
  Amortization of intangible assets           2,629,000     2,554,000
  Financial accruals and reserves
    not currently deductible                    638,000       563,000
                                             ----------    ----------
                                             $4,319,000    $4,193,000
                                             ==========    ==========
Liabilities:
  Depreciation                               $  143,000    $  197,000
  Software development costs                    756,000       727,000
  Other                                          34,000       129,000
                                             ----------    ----------
                                             $  933,000    $1,053,000
                                             ==========    ==========
</TABLE>
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5--INCOME TAXES, continued

Cash  expended for income taxes was  $7,551,000,  $5,733,000  and  $9,733,000 in
1999, 1998 and 1997, respectively.

NOTE 6--EMPLOYEE BENEFIT AND STOCK PLANS

The  Company  maintains  401(k)  retirement  savings  plans for the  benefit  of
substantially  all  full-time  U.S.  employees.  Participant  contributions  are
matched by the Company  based on  applicable  matching  formulas.  The Company's
matching expense for the plans was $469,000, $473,000 and $336,000 in 1999, 1998
and 1997, respectively.

The Company may sell up to  1,000,000  shares of common  stock to its  employees
under an employee  stock  purchase  plan.  Eligible  employees  who  participate
purchase  shares  quarterly  at 85% of the market  price on the date  purchased.
During  1999,  1998 and 1997,  employees  purchased  40,137,  21,798  and 17,201
shares,  respectively.  The weighted  average fair value of shares  purchased in
1999 was $5.42.  At January  1,2000,  833,484  shares were  available for future
purchases.

The Company  has two stock  option  plans  covering  2,800,000  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  determined at the time of
grant.  No options are  exercisable  after ten years from the date of grant.  At
January 1, 2000,  1,592,993 shares were available for future granting. A summary
of shares subject to options follows:
<TABLE>
                           1999               1998              1997
                    ------------------  ----------------  ----------------
                              Weighted          Weighted          Weighted
                               Average           Average           Average
                              Exercise          Exercise          Exercise
                      Shares   Prices   Shares   Prices   Shares   Prices
                    --------- --------  ------- --------  ------- --------
<S>                 <C>        <C>      <C>      <C>      <C>      <C>
 Outstanding at
  beginning of year 1,093,100  $14.54   890,100  $14.33   723,300  $13.30
   Granted            244,500    7.08   221,500   15.10   259,500   15.90
   Exercised          (10,000)   2.47   ( 7,000)   4.06   (61,700)   8.08
   Canceled           (22,400)  13.39   (11,500)  14.93   (31,000)  15.98
                    ---------           -------           -------
 Outstanding at
  end of year       1,305,200   13.26  1,093,100  14.54   890,100   14.33
                    =========          =========           =======
 Exercisable at
  end of year       1,076,500   14.27   943,100   14.25   735,600   14.09
                    =========           =======           =======
 Weighted average
  fair value of
  options granted       $2.85             $6.23             $6.40
                        =====             =====             =====
</TABLE>
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6--EMPLOYEE BENEFIT AND STOCK PLANS, continued

A summary of stock options outstanding at January 1, 2000 follows:
<TABLE>
                               Outstanding                 Exercisable
                    ---------------------------------   -----------------
                                          Weighted
                               Weighted    Average               Weighted
                                Average   Remaining               Average
                               Exercise  Contractual             Exercise
    Price Ranges      Shares     Price   Life (Years)    Shares    Price
  ---------------   ---------  --------  ------------   -------  --------
<S>                 <C>         <C>          <C>        <C>       <C>
  $ 6.19 - $ 7.50     306,000   $ 6.95       7.6        126,000   $ 6.74
   10.13 -  12.00     217,100    11.11       3.9        217,100    11.11
   13.00 -  15.00     275,700    13.95       7.5        229,000    14.07
   15.63 -  19.52     504,400    17.61       6.6        504,000    17.61
                    ---------                           -------
                    1,305,200    13.26       6.6      1,076,500    14.27
                    =========                           =======
</TABLE>
The Company  accounts for its employee  stock purchase plan and its stock option
plans under APB Opinion 25; therefore, no compensation costs are recognized when
employees  purchase  stock or when  stock  options  are  authorized,  granted or
exercised.  If  compensation  costs  had  been  computed  under  SFAS  No.  123,
"Accounting for Stock-Based Compensation," the Company's net income and earnings
per share (basic and diluted) would have been reduced by approximately  $492,000
and $.02 in 1999, $924,000 and $.04 in 1998, and $1,109,000 and $.05 in 1997.

For purposes of computing  compensation costs of stock options granted, the fair
value of each stock  option  grant was  estimated on the date of grant using the
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions:
<TABLE>
                                     1999          1998          1997
                                 -----------   -----------   -----------
  <S>                            <C>           <C>           <C>
  Dividend yield                     .7%           .6%           .5%
  Volatility                         40%           40%           35%
  Risk-free interest rates       4.7% - 5.9%   5.5% - 5.6%   5.8% - 6.8%
  Expected term of options         5 years       5 years       5 years
</TABLE>
Black-Scholes  is a widely  accepted stock option pricing  model,  however,  the
ultimate  value of stock options  granted will be determined by the actual lives
of options granted and future price levels of the Company's common stock.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6--EMPLOYEE BENEFIT AND STOCK PLANS, continued

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.
No shares were  awarded in 1999,  1998 or 1997.  At January 1, 2000,  there were
345,200 shares available for future awards.


NOTE 7--FOUNDERS STOCK REDEMPTION AGREEMENTS

During 1998, the Company entered into agreements with its founding  shareholders
for the  future  redemption  of 4.54  million  shares  or  21.4  percent  of the
Company's  outstanding  stock.  The stock  redemptions  will occur following the
later of the death of each  founder and his spouse.  The cost of the  redemption
agreements  will be funded by proceeds from life insurance  policies the Company
has  purchased  on the  lives of  certain  of these  individuals.  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.  The  discounted  price
may not be less than $10 per share or more than $25 per share.

The shares subject to the agreements  have been  reclassified  on the January 2,
1999  balance  sheet to a temporary  equity  account.  The  reclassification  of
$45,400,000 was determined by multiplying  the applicable  shares by the minimum
redemption price of $10, since the average closing price of the Company's common
stock,  after  applying  the 10 percent  discount,  for the ninety  trading days
preceding January 1, 2000 was less than $10.


NOTE 8--ACQUISITION & WRITE-DOWN OF DIGITAL IMAGING ASSETS

In May of 1997 the Company acquired substantially all the assets of Light Source
Computer Images, Inc. ("Light Source") for $6,955,000 in cash. Light Source is a
California-based producer of scanning,  imaging and print optimization software.
The  acquisition  was accounted for under the purchase  method of accounting and
was funded by proceeds from sales of short-term investments.

The asset purchase agreement provides for future contingent consideration if net
sales of certain  products  reaches or exceeds  agreed upon sales  goals  during
twelve month periods that end in July 1998, 1999 and 2000.
<PAGE>
X-RITE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 8--ACQUISITION & WRITE-DOWN OF DIGITAL IMAGING ASSETS, continued

The  Company has paid  $4,638,000  in cash into an escrow fund which is equal to
the maximum contingent cash consideration that could be earned by the sellers if
such sales goals are  realized.  The escrow fund  payment is not included in the
acquisition price stated in the preceding paragraph.  If any contingent payments
are  made,  those  amounts  will be  accounted  for as  additional  costs of the
acquired  assets and  amortized  over the remaining  lives of the assets.  As of
January 1, 2000, no additional consideration had been paid from the escrow fund.

The  investment of escrow funds must be made in accordance  with the terms of an
escrow  agreement,  which allows for certain  money market  securities or X-Rite
common stock.  On January 1, 2000, the escrow fund held 257,064 shares of X-Rite
common  stock at a cost of  $4,769,000,  plus  $51,000  in  dividends  received.
Accordingly,  that portion of the escrow fund is  presented in the  accompanying
balance  sheet  as a  reduction  to  permanent  shareholders'  investment.  This
contractual agreement remains in effect until July of 2000.

During the third quarter of 1998,  increased  competition in the digital imaging
business and a continued rapid decline in the demand for certain digital imaging
instruments,  software and  technology led the Company to reevaluate its digital
imaging  markets and product  lines,  which forced the  recognition  of an asset
impairment  loss.  The non-cash,  pre-tax  write down of $6,694,000  ($4,351,000
after tax) consisted of $6,294,000 in goodwill, and $400,000 in fixed assets and
other  capitalized  start-up costs  associated  with the 1997 Light Source asset
acquisition.
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

Not applicable.



                                    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 2000 Annual  Meeting of
shareholders and filed with the Commission is incorporated herein 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 2000 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 1999 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  captioned   "Securities  Ownership  of
Management"  contained in the  definitive  Proxy  Statement  for the 1999 Annual
Meeting of  Shareholders  and filed with the  Commission is hereby  incorporated
herein by reference.
<PAGE>
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.


                                     Part IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a) The following  financial  statements,  all of which are set forth in Item 8,
    are filed as a part of this report:

      Report of Independent Public Accountants
      Consolidated Balance Sheets
      Consolidated Statements of Temporary and Permanent Shareholders'
       Investment
      Consolidated Statements of Income
      Consolidated Statements of Permanent Shareholders' Investment
      Consolidated Statements of Cash Flows
      Notes to Consolidated Financial Statements


(b) No reports on Form 8-K were filed for the 3-month  period  ended  January 1,
    2000.


(c) See Exhibit Index located on page 38.


(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.
<PAGE>
                                   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 30, 2000     /s/ Richard E. Cook
                                  Richard E. Cook, President and Chief
                                    Executive Officer

               March 30, 2000     /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 30th day of March,  2000,  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
Richard  E.  Cook 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/ Ted Thompson                      /s/ Peter M. Banks
Ted Thompson, Director                Dr. Peter M. Banks, Director


/s/ Stanley W. Cheff                  /s/ Richard E. Cook
Stanley W. Cheff, Director            Richard E. Cook, Director


/s/ Rufus S. Teesdale                 /s/ James A. Knister
Rufus S. Teesdale, Director           James A. Knister, Director


/s/ Charles Van Namen                 /s/ Ronald A. VandenBerg
Charles Van Namen, Director           Ronald A. VandenBerg, Director
<PAGE>
                                  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)   Bylaws,  as amended and restated January 20, 1998 (filed as exhibit to
          Form 10-K for the year  ended  January  3, 1998  (Commission  File No.
          0-14800) and incorporated herein by reference)

   3(f)   Bylaws, as amended and restated November 18, 1999 (Commission
          File No. 0-14800).

   4      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)


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)
<PAGE>
                                  EXHIBIT INDEX
   --------------------------------------------------------------------------

 *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(e)   Asset Purchase Agreement entered into between Light Source
          Acquisition Company and Light Source Computer Images, Inc.
          including Escrow Agreement by and between Light Source
          Acquisition Company and Light Source Computer Images, Inc. and
          U.S. Trust Company of California, N.A. (filed as exhibit to
          Form 8-K dated June 2, 1997 (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. (Commission File No. 0-14800)

 *10(j)   Deferred compensation trust agreement dated November 23, 1999
          between the registrant and Richard E. Cook. (Commission File No.
          0-14800)

  21      Subsidiaries of the registrant

  23      Consent of independent accountants

  27      Financial Data Schedule
<PAGE>
                              X-RITE, INCORPORATED
                             EMPLOYMENT ARRANGEMENT
                       EFFECTIVE UPON A CHANGE IN CONTROL


     THIS  AGREEMENT  entered  into as of the day of , 19____,  (the  "Execution
Date")   by   and   between   X-Rite,    Incorporated   (the   "Company"),   and
____________________________________ (the "Executive").

     WHEREAS,  the Board of Directors of the Company  (the  "Board")  recognizes
that the threat of, or the  occurrence  of a Change in Control  (as  hereinafter
defined) can result in significant  distractions of its key management personnel
because of the uncertainties inherent in such a situation;

     WHEREAS,  the Board has  determined  that it is in the best interest of the
Company and its  shareholders  to retain the  services of the  Executive  in the
event of a threat or  occurrence  of a Change  in  Control,  and to  ensure  the
Executive's continued dedication and efforts in such event without undue concern
for personal financial and employment security; and

     WHEREAS,  the  Company  desires  to  enter  into  this  Agreement  with the
Executive to provide the Executive with certain  benefits during the term of his
employment  following  a Change  in  Control,  in the event  his  employment  is
terminated  as a result of, or in  connection  with a Change in  Control  and to
provide the Executive with the Gross-Up Payment (as hereinafter  defined).

     NOW,  THEREFORE,  in  consideration  of the  respective  agreements  of the
parties contained herein, it is agreed as follows:
<PAGE>
     1. Duration

          (a) The duration of this  Agreement  shall  commence on the  Execution
     Date and shall continue until either (i) the  termination of the employment
     relationship   between  the  Company  and  the   Executive   prior  to  the
     commencement  of the  Employment  Term or (ii) upon written notice from the
     Company to the  Executive  of the  Company's  election  to  terminate  this
     Agreement  effective not less than twelve (12) months after the date of the
     notice;  provided,  however, that such election to terminate by the Company
     shall not be effective in the event the Employment  Term commences prior to
     the effective date of the termination specified in the notice.

          (b) The "Employment Term" shall commence on the date on which a Change
     in Control  occurs  (the  "Effective  Date") and shall  expire on the third
     anniversary of the Effective Date;  provided,  however,  if the Executive's
     employment is involuntarily  terminated prior to the Effective Date and the
     Executive reasonably  demonstrates that such termination was at the request
     of a  Third  Party,  or  otherwise  occurred  in  connection  with,  or  in
     anticipation  of a Change in Control,  then for purposes of this Agreement,
     the  Effective  Date shall mean the date  immediately  prior to the date of
     such termination of the Executive's employment.

     2. Employment

          (a) Subject to the provisions of Section 8 hereof,  the Company agrees
     to continue to employ the Executive  and the Executive  agrees to remain in
     the employ of the Company during the Employment Term. During the Employment
     Term,  the Executive  shall be employed by the Company in the same position
     as on the Effective Date or in such other senior executive  capacity as may
     be  mutually  agreed to in  writing by the  parties.  The  Executive  shall
     perform  the  duties,  undertake  the  responsibilities  and  exercise  the
     authority  customarily  performed,  undertaken  and  exercised  by  persons
     situated in a similar executive capacity.

          (b) During the Employment Term, excluding periods of vacation and sick
     leave to which the Executive is entitled,  the  Executive  agrees to devote
     reasonable  attention and time during usual  business hours to the business
     and  affairs of the  Company  to the  extent  necessary  to  discharge  the
     responsibilities assigned to the
<PAGE>
     Executive  hereunder.  The  Executive  may  serve  on  corporate,  civil or
     charitable boards or committees, and manage personal investments so long as
     such activities do not significantly  interfere with the performance of the
     Executive's responsibilities hereunder.

     3. Compensation

          (a) Base Salary. During the Employment Term, the Company agrees to pay
     or cause to be paid to the Executive  annual base salary at a rate at least
     equal to the  highest  rate of the  Executive's  annual  base  salary as in
     effect at any time within ninety (90) days  preceding  the Effective  Date,
     and as may be increased from time to time  (hereinafter  referred to as the
     "Base  Salary").  Such Base Salary shall be payable in accordance  with the
     Company's customary practices applicable to its executives.

          (b) Annual Bonus.  In addition to Base Salary,  the Executive shall be
     awarded,  for each fiscal year ending during the Employment Term, an annual
     bonus (the  "Annual  Bonus") in cash at least  equal to the  average of the
     annual bonus paid or payable during the three full fiscal years ended prior
     to the Effective  Date (or such lesser period for which the annual  bonuses
     were paid or payable to the  Executive).  Each such  Annual  Bonus shall be
     paid in accordance with the Company's customary practices applicable to its
     executives or, in the event there are no such practices,  no later than the
     end of the third  month of the fiscal year next  following  the fiscal year
     for which the Annual Bonus is awarded.

     4. Employee  Benefits.  During the Employment  Term, the Executive shall be
entitled to  participate in all employee  benefit plans,  practices and programs
maintained by the Company and made available to employees generally,  including,
without limitation, all pension,  retirement,  profit sharing, savings, medical,
hospitalization,  disability,  dental, life or travel accident insurance benefit
plans.  Unless otherwise  provided herein,  the compensation and benefits under,
and the Executive's participation in such plans, practices and programs shall be
on the same  basis and  terms as are  applicable  to  employees  of the  Company
generally,  but in no event on a basis less favorable in terms of benefit levels
and coverages than the most favorable of such plans, practices and
<PAGE>
programs  covering the Executive at any time within  ninety (90) days  preceding
the Effective Date, or if more favorable, at any time thereafter.

     5. Executive  Benefits.  During the Employment Term, the Executive shall be
entitled to participate in all executive benefit or incentive compensation plans
maintained  or   established  by  the  Company  for  the  purpose  of  providing
compensation  and/or  benefits to executives of the Company  including,  but not
limited to, the  Company's  Cash Bonus  Conversion  Plan,  and any  supplemental
retirement,   salary   continuation,   stock  option,   deferred   compensation,
supplemental medical or life insurance or other bonus or incentive  compensation
plans.  Unless otherwise  provided herein,  the compensation and benefits under,
and the Executive's  participation in, such plans shall be on the same basis and
terms as other similarly situated executives of the Company,  but in no event on
a basis less favorable in terms of benefit levels or reward  opportunities  than
the most  favorable  benefit levels and reward  opportunities  applicable to the
Executive at any time within ninety (90) days  preceding the Effective  Date, or
if more favorable,  at any time thereafter.  No additional compensation provided
under any of such plans shall be deemed to modify or otherwise  affect the terms
of this Agreement or any of the Executive's entitlements hereunder.

     6. Other Benefits

          (a) Fringe Benefits and  Perquisites.  During the Employment Term, the
     Executive shall be entitled to all fringe  benefits and perquisites  (e.g.,
     company cars, club dues, physical examinations,  financial planning and tax
     preparation  services)  generally  made  available  by the  Company  to its
     executives.  Unless  otherwise  provided  herein,  the fringe  benefits and
     perquisites  provided to the Executive shall be on the same basis and terms
     as other  similarly  situated  executives  of the Company,  but in no event
     shall be less  favorable  than  the  most  favorable  fringe  benefits  and
     perquisites applicable to the Executive at any time within ninety (90) days
     preceding the Effective Date, or if more favorable, at any time thereafter.
<PAGE>
          (b)  Expenses.  The  Executive  shall be  entitled  to receive  prompt
     reimbursement  of all expenses  reasonably  incurred in connection with the
     performance  of duties  hereunder or for  promoting,  pursuing or otherwise
     furthering the business or interests of the Company.

     7. Vacation and Sick Leave.  During the Employment Term, at such reasonable
times as the  Board  shall in its  discretion  permit,  the  Executive  shall be
entitled,   without  loss  of  pay,  to  absent  himself  voluntarily  from  the
performance of his employment under this Agreement, provided that:

          (a) The Executive  shall be entitled to annual  vacation in accordance
     with the policies as  periodically  established  by the Board for similarly
     situated  executives of the Company,  but in no event shall the Executive's
     annual vacation entitlement be less than four (4) weeks per year.

          (b) The  Executive  shall be entitled to sick leave  (without  loss of
     pay) in accordance  with the  Company's  policies as in effect from time to
     time.

     8.  Termination.  During the Employment  Term, the  Executive's  employment
hereunder may be terminated under the following circumstances;

          (a) Cause.  The Company may terminate the  Executive's  employment for
     Cause." A  termination  of  employment  is for "Cause" if the Executive (1)
     engaged in conduct involving dishonesty or fraud or is convicted of a crime
     involving moral turpitude,  (2)  intentionally  engaged in conduct which is
     materially injurious to the Company,  monetarily or otherwise, (3) fails to
     substantially  perform  assigned  duties  consistent with paragraph 2 above
     (other  than  any  failure  resulting  from an  illness  or  other  similar
     incapacity or  disability),  or to comply with  policies  applicable to all
     Company executives, after a demand for performance or compliance is made to
     Executive which  specifically  identifies the manner in which it is alleged
     that the Executive has not substantially performed or complied.

          (b) Disability.  The Company may terminate the Executive's  employment
     in the event of the Executive's Disability. For purposes of this Agreement,
     "Disability" means a physical or mental infirmity which
<PAGE>
     impairs the Executive's  ability to substantially  perform his duties under
     this Agreement  which continues for a period of at least one hundred eighty
     (180)  consecutive  days.   Notwithstanding   anything  contained  in  this
     Agreement to the contrary, until the Termination Date specified in a Notice
     of  Termination  (as each  term is  hereinafter  defined)  relating  to the
     Executive's  Disability,  the Executive  shall be entitled to return to his
     position with the Company as set forth in this  Agreement in which event no
     Disability of the Executive will be deemed to have occurred.

          (c) Good Reason.  (1) The Executive may terminate his  employment  for
     "Good Reason." For purposes of this Agreement, "Good Reason" shall mean the
     occurrence,  after a Change in Control,  of any of the events or conditions
     described in Subsections (i) through (viii) hereof:

               (i) a  change  in the  Executive's  status,  title,  position  or
          responsibilities    (including   reporting   responsibilities)   which
          represents a material adverse change from the status,  title, position
          or   responsibilities   in  effect  immediately  prior  thereto;   the
          assignment  to  the  Executive  of  any  new or  different  duties  or
          responsibilities  which are materially  inconsistent  with his status,
          title,  position or  responsibilities  as in effect  immediately prior
          thereto, or any removal of the Executive from, or failure to reappoint
          or  reelect  him  to any of  such  offices  or  positions,  except  in
          connection  with the termination of his employment for (w) Disability,
          (x) Cause, (y) as a result of his death, or (z) by the Executive other
          than for Good Reason;

               (ii) a reduction in the Executive's Base Salary or any failure to
          pay the Executive any compensation or benefits to which he is entitled
          promptly after of the date due;

               (iii) a failure to increase the Executive's  Base Salary at least
          annually  at a  percentage  of Base  Salary no less  than the  average
          percentage   increases  (other  than  increases   resulting  from  the
          Executive's  promotion) granted to the Executive during the three full
          years ended  prior to a Change in Control  (or such  lesser  number of
          full years during which the Executive was employed);

               (iv) the  Company's  requiring  the  Executive to be based at any
          place other than that in
<PAGE>
          effect on the Effective Date, except for reasonably required travel on
          the  Company's   business  which  is  not  greater  than  such  travel
          requirements prior to the Change in Control;

               (v) the insolvency of, or the filing (by any party, including the
          Company) of a petition for bankruptcy of the Company, if that petition
          is not dismissed  within ninety (90) days;

               (vi) any material  breach by the Company of any provision of this
          Agreement;

               (vii) any purported termination of the Executive's employment for
          Cause by the  Company  which does not comply with the terms of Section
          8(a); or

               (viii)  the  failure  of the  Company  to  obtain  an  agreement,
          reasonably satisfactory to the Executive, from any successor or assign
          of the  Company  to assume  and agree to perform  this  Agreement,  as
          contemplated in Section 14 hereof.

                    (2) Any event or condition  described in Section  8(c)(1)(i)
               through  (viii) which  occurs  prior to a Change in Control,  but
               which the Executive reasonably demonstrates was at the request of
               a Third  Party,  or otherwise  arose in  connection  with,  or in
               anticipation of a Change in Control, shall constitute Good Reason
               for purposes of this Agreement.

                    (3)  The  Executive  right's  to  terminate  his  employment
               pursuant  to this  Section  8(c)  shall  not be  affected  by his
               incapacity due to physical or mental illness.

          (d) Voluntary Termination. The Executive may voluntarily terminate his
     employment  hereunder  at any  time,  by  giving  the  Company  a Notice of
     Termination.

          (e) Termination  Without Cause. The Company may terminate  Executive's
     employment  at any time,  without  cause,  by giving  Executive a Notice of
     Termination.

     9.  Compensation  Upon  Termination.  Upon  termination of the  Executive's
employment  during the Employment  Term, the Executive  shall be entitled to the
following benefits:

          (a) If the  Executive's  employment with the Company is terminated (1)
     by the Company for
<PAGE>
     Cause or Disability,  (2) by reason of the Executive's death, or (3) by the
     Executive  other  than for Good  Reason or during the  Window  Period,  the
     Company shall pay the Executive all amounts  earned or accrued  through the
     Termination  Date but not paid as of the  Termination  Date,  including (i)
     Base Salary and (ii)  reimbursement  for reasonable and necessary  expenses
     incurred by the Executive on behalf of the Company during the period ending
     on the Termination Date (collectively, "Accrued Compensation").

          (b) If the  Executive's  employment  with the  Company  is  terminated
     (other than by reason of death), (1) by the Company other than for Cause or
     Disability,  (2) by the  Executive  for Good Reason or (3) by the Executive
     for any reason within the Window Period, the Executive shall be entitled to
     the following:

               (i) the Company shall pay the Executive all Accrued  Compensation
          and a Pro-Rata Bonus;

               (ii) at its election,  the Company shall either:  (y) continue to
          pay  the  Executive's  Base  Salary  in  normal  installments  for the
          remainder  of  the  Employment  Term,  or (z)  pay  the  Executive  as
          severance  pay,  and in lieu of any further  compensation  for periods
          subsequent to the Termination Date, in a single payment,  an amount in
          cash equal to the  Executive's  Base  Salary that would  otherwise  be
          payable in installments  for the remainder of the Employment  Term. In
          addition,  the Company  shall pay the  Executive a Pro Rata Bonus with
          respect  to the then  current  fiscal  year,  plus the  average of the
          annual  bonuses paid or payable to the  Executive  during the previous
          three (3) full  fiscal  years  (or such  lesser  period  for which the
          annual  bonuses  were payable to the  Executive),  times the number of
          full fiscal years remaining in the Employment Term;

               (iii) for the remainder of the Employment Term (the "Continuation
          Period"),  the Company shall at its expense  continue on behalf of the
          Executive and his dependents  and  beneficiaries  the life  insurance,
          disability,  medical, dental and hospitalization benefits provided (x)
          to the  Executive  at any time during the 90-day  period  prior to the
          Effective  Date or at any time  thereafter  or (y) to other  similarly
          situated  executives  who continue in the employ of the Company during
          the Continuation  Period,  whichever the Company elects.  The coverage
          and  benefits  (including  deductibles  and  costs)  provided  in this
          Section 9(b)(iii) during the Continuation
<PAGE>
          Period shall be no less  favorable to the Executive and his dependents
          and  beneficiaries,  than the most  favorable  of such  coverages  and
          benefits during any of the periods  referred to in clauses (x) and (y)
          above.  The  Company's   obligation  hereunder  with  respect  to  the
          foregoing  benefits  shall be limited to the extent that the Executive
          obtains any such benefits pursuant to a subsequent  employer's benefit
          plans,  in which  case the  Company  may reduce  the  coverage  of any
          benefits it is required to provide the Executive  hereunder so long as
          the aggregate  coverages and benefits of the combined benefit plans is
          no less  favorable to the  Executive  than the  coverages and benefits
          required to be provided hereunder.  This Subsection (iii) shall not be
          interpreted  so as to limit any benefits to which the  Executive,  his
          dependents or beneficiaries may be entitled under any of the Company's
          employee   benefit  plans,   programs  and  practices   following  the
          Executive's  termination of employment,  including without limitation,
          retiree medical and life insurance benefits;

               (iv)  the  restrictions  on  any  outstanding   incentive  awards
          (including  restricted stock and granted  performance shares or units)
          granted to the Executive under any of the Company's incentive plans or
          arrangements  shall lapse and such  incentive  award shall become 100%
          vested, all stock options and stock appreciation rights granted to the
          Executive  shall become  nonforfeitable  and shall become 100% vested,
          and all  performance  units  granted  to the  Executive  shall be 100%
          vested.

          (c) The amount of any payment  provided  for in this Section 9 of this
     Agreement  shall be reduced by the amount of any  compensation  or benefits
     provided  to  the  Executive  in  any  subsequent   employment  during  the
     Employment Term; provided,  however,  that compensation being received from
     sources other than the Company at the time such payment commences shall not
     be counted to reduce payments hereunder.

          (d) The  severance  pay and  benefits  provided  for in this Section 9
     shall be in lieu of any other  severance  pay to which the Executive may be
     entitled under any Company severance plan, program or arrangement.
<PAGE>
     10. Definitions

          (a) Change in Control.  For purposes of this  Agreement,  a "Change in
     Control" shall mean any of the following events:

               (1) An acquisition  (other than directly from the Company) of any
          voting  securities  of the Company  (the "Voting  Securities")  by any
          "Person" (as the term person is used for purposes of Section  13(d) or
          14(d)  of  the  Securities  Exchange  Act of  1934,  as  amended  (the
          "Exchange Act")),  immediately after which such Person has "Beneficial
          Ownership"  (within  the meaning of Rule 13d-3  promulgated  under the
          Exchange Act) of thirty  percent (30%) or more of the combined  voting
          power of the Company's then outstanding Voting  Securities;  provided,
          however,  in  determining  whether a Change in Control  has  occurred,
          Voting  Securities  which are acquired in a "Non-Control  Acquisition"
          (as  hereinafter  defined) shall not  constitute an acquisition  which
          would cause a Change in Control.  A  "Non-Control  Acquisition"  shall
          mean  an  acquisition  by (i) an  employee  benefit  plan  (or a trust
          forming  a part  thereof)  maintained  by (A) the  Company  or (B) any
          corporation or other Person of which a majority of its voting power or
          its voting equity securities or equity interest is owned,  directly or
          indirectly,  by the  Company  (for  purposes  of  this  definition,  a
          "Subsidiary")  (ii) the  Company  or its  Subsidiaries,  or (iii)  any
          Person in connection with a "Non-Control  Transaction" (as hereinafter
          defined);

               (2) The individuals  who, as of the Execution Date are members of
          the Board (the "Incumbent Board"),  cease for any reason to constitute
          at least  two-thirds of the members of the Board;  provided,  however,
          that if the  election,  or  nomination  for election by the  Company's
          shareholders,  of any new  director was approved by a vote of at least
          two-thirds  of the  Incumbent  Board,  such new  director  shall,  for
          purposes  of this Plan,  be  considered  as a member of the  Incumbent
          Board;  provided  further,  that no  individual  shall be considered a
          member of the Incumbent  Board if such  individual  initially  assumed
          office  as a result  of  either  an  actual  or  threatened  "Election
          Contest" (as described in Rule 14a-11  promulgated  under the Exchange
          Act) or other actual or threatened solicitation of proxies or consents
          by or on behalf of a Person other than the Board (a "Proxy
<PAGE>
          Contest")  including by reason of any  agreement  intended to avoid or
          settle any Election Contest or Proxy Contest; or

                    (3) Approval by shareholders of the Company of:

               (i) A  merger,  consolidation  or  reorganization  involving  the
          Company,  unless such merger,  consolidation  or  reorganization  is a
          "Non-Control  Transaction." A "Non-Control  Transaction"  shall mean a
          merger, consolidation or reorganization of the Company where:

                    (A) the shareholders of the Company, immediately before such
               merger,   consolidation  or   reorganization,   own  directly  or
               indirectly  immediately  following such merger,  consolidation or
               reorganization,  at least  seventy  percent (70%) of the combined
               voting  power  of  the  outstanding   voting  securities  of  the
               corporation  resulting  from  such  merger  or  consolidation  or
               reorganization (the "Surviving Corporation") in substantially the
               same  proportion  as their  ownership  of the  Voting  Securities
               immediately before such merger, consolidation or reorganization,

                    (B) the  individuals who were members of the Incumbent Board
               immediately prior to the execution of the agreement providing for
               such merger,  consolidation or reorganization constitute at least
               two-thirds  of the  members  of the  board  of  directors  of the
               Surviving Corporation,  or a corporation beneficially directly or
               indirectly  owning a  majority  of the Voting  Securities  of the
               Surviving Corporation, and

                    (C)  no  Person  other  than  (i)  the  Company,   (ii)  any
               Subsidiary, (iii) any employee benefit plan (or any trust forming
               a  part  thereof)  maintained  by  the  Company,   the  Surviving
               Corporation,   or  any  Subsidiary,   or  (iv)  any  Person  who,
               immediately prior to such merger, consolidation or reorganization
               had  Beneficial  Ownership of thirty percent (30%) or more of the
               then outstanding Voting Securities,  has Beneficial  Ownership of
               thirty percent (30%) or more of the combined  voting power of the
               Surviving Corporation's then outstanding voting securities.
<PAGE>
               (ii) A complete liquidation or dissolution of the Company; or

               (iii) An agreement  for the sale or other  disposition  of all or
          substantially  all of the assets of the  Company to any Person  (other
          than a transfer to a Subsidiary).

                    (4) Notwithstanding the foregoing, a Change in Control shall
               not be deemed to occur  solely  because any Person (the  "Subject
               Person") acquired Beneficial Ownership of more than the permitted
               amount of the then outstanding  Voting  Securities as a result of
               the  acquisition of Voting  Securities by the Company  which,  by
               reducing  the  number  of  Voting  Securities  then  outstanding,
               increases the proportional number of shares Beneficially Owned by
               the Subject  Persons,  provided that if a Change in Control would
               occur (but for the operation of this sentence) as a result of the
               acquisition of Voting  Securities by the Company,  and after such
               share acquisition by the Company,  the Subject Person becomes the
               Beneficial  Owner  of  any  additional  Voting  Securities  which
               increases  the   percentage  of  the  then   outstanding   Voting
               Securities  Beneficially  Owned  by the  Subject  Person,  then a
               Change in Control shall occur.

          (b) Notice of Termination.  For purposes of this Agreement,  a "Notice
     of   Termination"   shall  mean  a  notice  which  indicates  the  specific
     termination provision in this Agreement,  if any, relied upon and shall set
     forth in reasonable detail the facts and circumstances claimed to provide a
     basis for termination of the Executive's  employment under the provision so
     indicated.  Any  purported  termination  by the Company or by the Executive
     shall be  communicated  by written Notice of Termination to the other.  For
     purposes of this  Agreement,  no such  purported  termination of employment
     shall be effective without such Notice of Termination.

          (c) Pro Rata Bonus.  For purposes of this Agreement,  "Pro Rata Bonus"
     shall  mean the  average  of the  annual  bonuses  paid or  payable  to the
     Executive  during the preceding three (3) full fiscal years (or such lessor
     period  for  which  the  annual  bonuses  were  payable  to the  Executive)
     multiplied  by a fraction,  the numerator of which is the number of days in
     the  then  current  fiscal  year  through  the  Termination  Date  and  the
     denominator of which is 365.
<PAGE>
          (d)   Termination   Date,   Etc.  For  purposes  of  this   Agreement,
     "Termination  Date" shall mean in the case of the  Executive's  death,  the
     date of death,  or in all other cases,  the date specified in the Notice of
     Termination;  provided,  however, the Executive's  employment is terminated
     for Good Reason or during a Window Period, the date specified in the Notice
     of  Termination  shall be not less than  thirty (30) days and not more than
     sixty  (60) days from the date the  Notice of  Termination  is given to the
     Company.

          (e) Third Party.  For purposes of this Agreement,  "Third Party" shall
     mean a person or entity who has indicated an intention,  or has taken steps
     reasonably calculated to effect a Change in Control, and who does, in fact,
     effectuate a Change in Control.

          (f) Window Period.  For purposes of this  Agreement,  "Window  Period"
     shall mean that period of time  commencing  one hundred  eighty  (180) days
     after  the  Effective  Date and  ending  on the  first  anniversary  of the
     Effective Date.

     11. Excise Tax Payments

          (a) In the event that any  payment or benefit  (within  the meaning of
     Section  280G(b)(2)  of the Internal  Revenue Code of 1986, as amended (the
     "Code")),  paid or payable or distributed or distributable to the Executive
     or for his benefit  pursuant to the terms of this Agreement or otherwise in
     connection  with, or arising out of, his  employment  with the Company or a
     change in ownership or effective control of the Company or of a substantial
     portion of its assets (a "Payment" or "Payments"),  would be subject to the
     excise tax imposed by Section 4999 of the Code or any interest or penalties
     are incurred by the Executive  with respect to such excise tax (such excise
     tax,  together  with any  such  interest  and  penalties,  are  hereinafter
     collectively  referred to as the "Excise Tax"),  then the Executive will be
     entitled to receive an  additional  payment (a  "Gross-Up  Payment")  in an
     amount such that after payment by the Executive of all taxes (including any
     interest or penalties,  other than interest and penalties imposed by reason
     of the  Executive's  failure to file timely a tax return or pay taxes shown
     due on his return,  imposed with respect to such taxes and the Excise Tax),
     including any Excise Tax imposed
<PAGE>
     upon the Gross-Up Payment,  the Executive retains an amount of the Gross-Up
     Payment equal to the Excise Tax imposed upon the Payments.

          (b) A  determination  as to  whether a Gross-Up  Payment  is  required
     pursuant to this Agreement and the amount of such Gross-Up Payment shall be
     made at the Company's expense by an accounting firm selected by the Company
     and reasonably  acceptable to the Executive (the  "Accounting  Firm").  The
     Accounting  Firm shall  provide its  determination  (the  "Determination"),
     together with detailed  supporting  calculations  and  documentation to the
     Company and the  Executive as promptly as practical  after the  Termination
     Date, and if the Accounting  Firm  determines that no Excise Tax is payable
     by the  Executive  with respect to a Payment or Payments,  it shall furnish
     the Executive with an opinion  reasonably  acceptable to the Executive that
     no Excise Tax will be imposed with respect to any such Payment or Payments.
     The Gross-Up Payment, if any, as determined pursuant to this Section 11a(b)
     shall be paid by the  Company  to the  Executive  within  five  days of the
     receipt of the Accounting Firm's Determination.  The Determination shall be
     binding,  final and conclusive upon the Company and the Executive,  subject
     to the application of Section 11(c) below.

          (c)  Notwithstanding  anything  contained  in  this  Agreement  to the
     contrary, in the event that, according to the Determination,  an Excise Tax
     will be imposed on any Payment or  Payments,  the Company  shall pay to the
     applicable  governmental taxing authorities as Excise Tax withholding,  the
     amount of the Excise Tax that the Company has  actually  withheld  from the
     Payment or Payments.

     12.  Unauthorized  Disclosure.  During the  period  that the  Executive  is
actively employed by the Company,  the Executive shall not make any Unauthorized
Disclosure. For purposes of this Agreement, "Unauthorized Disclosure" shall mean
disclosure  by the  Executive  without  the  consent  of the Board  (other  than
pursuant to a court order) to any person,  other than an employee or director of
the  Company  or  a  person  to  whom  disclosure  is  reasonably  necessary  or
appropriate in connection with the performance by the Executive of his duties as
an  executive  of the  Company or as may be legally  required,  of any  material
confidential information
<PAGE>
obtained  by the  Executive  while in the employ of the Company  (including  any
material confidential information with respect to any of the Company's customers
or methods of distribution)  the disclosure of which is materially  injurious to
the  Company;  provided,  however,  that such term shall not  include the use or
disclosure by the Executive, without consent, of any information known generally
to the public  (other than a result of  disclosure  by him in  violation of this
Section  12)  or any  information  not  otherwise  considered  confidential  and
material by a reasonable  person  engaged in the same business as that conducted
by the Company.

     13.  Noncompetition.  In the event of a termination  of employment  for any
reason other than a  termination  by the Executive for Good Reason or during the
Window Period,  for the duration of the original  Employment Term, the Executive
shall not:

          (a) engage in any activity  competitive to the business of the Company
     anywhere  in the world as a  proprietor,  partner,  holder of any shares of
     capital  stock or other  equity  interests  in any  entity  engaged  in any
     business competitive to the Company, or as an officer, director,  employee,
     consultant,  agent,  representative  of  any  such  competitor;   provided,
     however,  that the ownership of equity securities of a publicly-held issuer
     in an  amount  equal to less  than  five  percent  (5%) of the  outstanding
     interests of that class, shall not be deemed a violation of the Executive's
     obligations under this subsection;

          (b) solicit, induce, or otherwise encourage any person employed by the
     Company to terminate his or her employment with the Company; or

          (c)  contact any  customer of the Company in order to secure  business
     from that customer of any kind whatsoever.

In the event any portion of this Section 13 is deemed  unenforceable  by a court
of competent  jurisdiction  as a result of its  duration or scope,  such portion
shall be deemed automatically  reduced to the extent necessary,  in the judgment
of such court, to render it enforceable.
<PAGE>
     14. Successors and Assigns

          (a) This  Agreement  shall be  binding  upon  and  shall  inure to the
     benefit of the Company,  its successors and assigns,  and the Company shall
     require any successor or assignee to expressly  assume and agree to perform
     this  Agreement  in the same manner and to the same extent that the Company
     would be required to perform it if no such  succession  or  assignment  had
     taken place.  The term "successors and assigns" as used herein shall mean a
     corporation or other entity acquiring all or  substantially  all the assets
     and business of the Company (including this Agreement) whether by operation
     of law or otherwise.

          (b) Neither this Agreement nor any right or interest  hereunder  shall
     be assignable or transferable by the Executive,  his beneficiaries or legal
     representatives, except by will or by the laws of descent and distribution.
     This  Agreement  shall  inure to the benefit of and be  enforceable  by the
     Executive's legal personal representative.

     15. Fees and  Expenses.  The  Company  shall pay all legal fees and related
expenses  (including  the costs of experts,  evidence  and  counsel)  reasonably
incurred by the  Executive to the extent the  Executive is successful in seeking
to obtain or enforce any right or benefit provided by this Agreement.

     16.  Notice.  For the  purposes  of this  Agreement,  notices and all other
communications   provided  for  in  the  Agreement   (including  the  Notice  of
Termination)  shall be in  writing  and shall be deemed to have been duly  given
when personally  delivered or sent by certified mail, return receipt  requested,
postage prepaid,  addressed to the respective addresses last given by each party
to the other,  provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company.  All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third  business  day after the  mailing  thereof,  except that
notice of change of address shall be effective only upon receipt.

     17.  Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit,  bonus,
incentive or other plan or program provided by the
<PAGE>
Company or any of its subsidiaries and for which the Executive may qualify,  nor
shall  anything  herein  limit or reduce such rights as the  Executive  may have
under any other agreements with the Company or any of its subsidiaries.  Amounts
which are vested  benefits  or which the  Executive  is  otherwise  entitled  to
receive  under any plan or  program of the  Company  or any of its  subsidiaries
shall be payable in accordance  with such plan or program,  except as explicitly
modified by this Agreement.

     18.  Settlement of Claims.  The  Company's  obligation to make the payments
provided  for in  this  Agreement  and  otherwise  to  perform  its  obligations
hereunder  shall  not be  affected  by  any  circumstances,  including,  without
limitation, any set-off, counterclaim, defense, recoupment, or other right which
the Company may have against the Executive or others.

     19. Miscellaneous.  No provision of this Agreement may be modified,  waived
or  discharged  unless such  waiver,  modification  or discharge is agreed to in
writing and signed by the Executive  and the Company.  No waiver by either party
hereto at any time of any breach by the other  party  hereto  of, or  compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereto
have  been  made by  either  party  which  are not  expressly  set forth in this
Agreement.

     20.  Governing Law. This Agreement shall be governed by and constructed and
enforced in  accordance  with the laws of the state of Michigan  without  giving
effect to its conflict of laws  principles.  Any action  brought by any party to
this  Agreement  shall  be  brought  and  maintained  in a  court  of  competent
jurisdiction in Kent County Michigan.

     21.  Severability.  The  provisions  of  this  Agreement  shall  be  deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.
<PAGE>
     22. No Guaranteed  Employment.  The  Executive and the Company  acknowledge
that,  except as may  otherwise be provided  under any other  written  agreement
between the  Executive and the Company,  the  employment of the Executive by the
Company is "at will" and,  prior to the  Effective  Date,  may be  terminated by
either  the  Executive  or the  Company at any time.  Moreover,  if prior to the
Effective Date, the  Executive's  employment  with the Company  terminates,  the
Executive shall have no further rights under this Agreement,  except as provided
in Sections 1(b) and 8(c)(2).

     23. Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between  the  parties  hereto  and  supersedes  all  prior  agreements,  if any,
understandings  and  arrangements,  oral or written,  between the parties hereto
with respect to the subject matter hereof.




IN WITNESS WHEREOF,  the Company has caused this Agreement to be executed by its
duly authorized  officer and the Executive has executed this Agreement as of the
day and year first above written.
                                              X-RITE, INCORPORATED

                                              By ______________________________

                                                 Its __________________________


                                              _________________________________


X-Rite,  Incorporated's  Change of Control  Agreement in the foregoing form have
been entered into between the registrant and the following persons:

1.  Joan Mariani Andrew
2.  Bernard Berg
3.  Duane Kluting
4.  Jeffrey Smolinski
<PAGE>
                           DEFERRED COMPENSATION TRUST
                               FOR RICHARD E. COOK

     This Trust Agreement is made by and between X-Rite Corporation,  a Michigan
corporation  (the  "Company")  and Macatawa  Bank, a Michigan  corporation  (the
"Trustee"). This Agreement is made with reference to the following:

     A. The Company has adopted the Deferred Compensation  Agreement for Richard
E.  Cook  dated  November  23,  1999 (the  "Plan")  as a  nonqualified  deferred
compensation plan;

     B. The Company  wishes to establish a trust as a means for paying  benefits
under the Plan, but wishes to have the trust assets remain subject to the claims
of the  creditors of the Company so that the Plan will qualify as an  "unfunded"
arrangement  that will be exempt from most of the  requirements  of the Employee
Retirement Security Act of 1974 ("ERISA").

     NOW,  THEREFORE,  the parties  hereby  establish the Deferred  Compensation
Trust for Richard E. Cook which will be held and administered as follows:

                                    ARTICLE I
                             ESTABLISHMENT OF TRUST

     1.1  Company  hereby  deposits  with  Trustee  $100 which  will  become the
principal  of the Trust to be held,  administered  and disposed of by Trustee as
provided in this Trust Agreement.

     1.2 The Trust hereby established will be irrevocable.

     1.3 The Trust is intended to be a grantor  trust,  of which  Company is the
grantor,  within the  meaning of subpart  E, part I,  subchapter  J,  chapter 1,
subtitle  A of the  Internal  Revenue  Code of  1986,  as  amended,  and will be
construed accordingly.

     1.4 The  assets  of the  Trust  will be used  exclusively  for the uses and
purposes of Plan  participants and general  creditors as herein set forth.  Plan
participants  and their  beneficiaries  will have no preferred  claim on, or any
beneficial  ownership  interest in, any assets of the Trust.  Any rights created
under  the Plan and this  Trust  Agreement  will be mere  unsecured  contractual
rights of Plan participants and their beneficiaries  against Company. Any assets
held by the Trust will be subject to the claims of Company's  general  creditors
under  federal and state law in the event of  Insolvency,  as defined in Section
3(a).

     1.5 Company may make additional deposits of cash or other property in trust
with Trustee to augment the principal to be held,  administered  and disposed of
by Trustee as provided in this Trust Agreement.
<PAGE>
                                   ARTICLE II
              PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES

     2.1 Company will deliver to Trustee from time to time written  instructions
concerning  payment  of  benefits  from  the  Trust  to or in  respect  of  Plan
participants. Except as otherwise provided herein, Trustee will make payments to
the  Plan   participants  and  their   beneficiaries  in  accordance  with  such
instructions.  The Trustee will make provision for the reporting and withholding
of any  federal,  state or local taxes that may be required to be withheld  with
respect to payments to plan participants and beneficiaries, and will pay amounts
withheld to the  appropriate  taxing  authorities or determine that such amounts
have been reported, withheld and paid by Company.

     2.2 The entitlement of a Plan  participant or beneficiary to benefits under
the Plan will be  determined  by  Company  and any claim  for  benefits  will be
considered and reviewed under the procedures set out in the Plan.

     2.3 Company may make payment of benefits  directly to Plan  participants or
beneficiaries  as they  become  due under the  terms of the Plan.  Company  will
notify Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to participants or their beneficiaries. In addition, if
the assets of the Trust are not sufficient to make payments of benefits, Trustee
will notify Company and Company will make the balance of each such payment as it
falls due.  The Trustee  will  promptly  reimburse  the Company for any benefits
under the Plan paid by the Company directly to participants and beneficiaries.


                                   ARTICLE III
                        TRUSTEE RESPONSIBILITY REGARDING
                          PAYMENTS TO TRUST BENEFICIARY
                            WHEN COMPANY IS INSOLVENT

     3.1 Trustee will cease payment of benefits to Plan  participants  and their
beneficiaries   if  the  Company  is  Insolvent.   Company  will  be  considered
"Insolvent" for purposes of this Trust Agreement if Company is unable to pay its
debts as they  become due,  or Company is subject to a pending  proceeding  as a
debtor under the United States Bankruptcy Code.

     3.2 The assets of the Trust will be subject to claims of general  creditors
of Company under federal and state law as set forth below.

          (a) The Chief  Executive  Officer of Company  will  inform  Trustee in
     writing of Company's  Insolvency.  If a person claiming to be a creditor of
     Company  alleges in writing to Trustee that  Company has become  Insolvent,
     Trustee will determine whether Company is Insolvent and discontinue payment
     of benefits to Plan participants or their beneficiaries.
<PAGE>
          (b) Unless Trustee has actual  knowledge of Company's  Insolvency,  or
     has  received  notice  from  Company or a person  claiming to be a creditor
     alleging  that Company is  Insolvent,  Trustee will have no duty to inquire
     whether  Company  is  Insolvent.  Trustee  may in all  events  rely on such
     evidence  concerning  Company's solvency as may be furnished to Trustee and
     that provides  Trustee with a reasonable  basis for making a  determination
     concerning Company's solvency.

          (c) If at any time Trustee has  determined  that Company is Insolvent,
     Trustee  will   discontinue   payments  to  Plan   participants   or  their
     beneficiaries  and will hold the  assets of the  Trust for the  benefit  of
     Company's general creditors.

          (d) Trustee  will resume the payment of benefits to Plan  participants
     or  their  beneficiaries  in  accordance  with  Article  II of  this  Trust
     Agreement  only after Trustee has  determined  that Company is not or is no
     longer Insolvent.

     3.3 If the Trustee  discontinues  the payment of benefits and  subsequently
resumes  payments,  the next payment will include the amount of all payments due
to Plan  participants  and  beneficiaries  for the period of  discontinuance  of
payments   minus  the  payments  made  by  the  Company  during  the  period  of
discontinuance of payments from the Trust.


                                   ARTICLE IV
                               PAYMENTS TO COMPANY

     Except as provided in Article  III  hereof,  Company  will have no right or
power to direct  Trustee  to return to Company or to divert to others any of the
Trust assets until all payment of benefits  have been made to Plan  participants
and their beneficiaries pursuant to the term of the Plan.

                                    ARTICLE V
                          POWERS AND DUTIES OF TRUSTEE

     5.1  General  Powers.  The  Trustee  will  have  exclusive   authority  and
discretion to manage and control the assets of the Trust except that:

          (a) it will  disburse  benefit  payments in  accordance  with  written
     directions from the Company; and

          (b) the Company  may direct,  by written  notice to the  Trustee,  the
     segregation of any portion of the Trust into a separate  investment account
     or accounts, and appoint an investment manager to direct the investment and
     reinvestment of any such investment  account.  Any such investment  manager
     will either be:

               (1)  registered  as an investment  adviser  under the  Investment
          Advisers Act of 1940;
<PAGE>
               (2) a bank, as defined in that Act; or

               (3)  an  insurance  company   qualified  to  perform   investment
          management services under the laws of more than one state.

If  investment  of the  Trust  is to be  directed  in  whole  or in  part  by an
investment  manager,  the  Company  will  deliver  to the  Trustee a copy of the
instruments  appointing  the  investment  manager and  evidencing the investment
manager's  acceptance of such  appointment,  an acknowledgment by the investment
manager  that it is a fiduciary  of the Plan,  and  evidence  of the  investment
manager's  current  registration  under the 1940 Act.  The Trustee will be fully
protected in relying upon such instruments  until otherwise  notified in writing
by the Company.

     5.2  Relationship  with  Investment  Manager.  If an investment  manager is
appointed in accordance with the provisions of Section 5.1:

          (a) The Trustee will follow the directions of the  investment  manager
     regarding the investment and  reinvestment of the investment  account.  The
     Trustee will be under no duty or obligation to review any  investment to be
     acquired, held, or disposed of pursuant to such directions, nor to make any
     recommendations  with respect to the disposition or continued  retention of
     any such investment.  The Trustee will have no liability or  responsibility
     for acting or not acting pursuant to the direction of, or failing to act in
     the absence  of, any  direction  from the  investment  manager,  unless the
     Trustee knows that by such action or omission it would be itself committing
     or participating in a breach of fiduciary duty by the investment manager.

          (b) The  investment  manager may issue orders for the purchase or sale
     of  securities   directly  to  a  broker.   In  order  to  facilitate  such
     transactions,   the  Trustee,   upon  request,  will  execute  and  deliver
     appropriate trading authorizations. Written notification of the issuance of
     each such order will be given  promptly  to the  Trustee by the  investment
     manager;  the  execution  of each such order will be  confirmed  by written
     advice to the Trustee by the broker.  Such  notification  will be authority
     for the Trustee to pay for securi  ties  purchased  against  receipt and to
     deliver securities sold against payment.

          (c) If an investment manager resigns or is removed by the Company, the
     Trustee,  upon  receiving  written  notice from the  Company  that it is to
     resume the responsibility of management,  will manage the investment of the
     investment  account unless and until it will be notified in accordance with
     the  provisions  of Section 5.1 of the  appointment  of another  investment
     manager.

          (d) The accounts,  books,  and records of the Trustee will reflect the
     segregation  of  any  portion  or  portions  of  the  Trust  in a  separate
     investment account or accounts.

     5.3 Payments by Trustee. The Trustee will pay benefits from the Trust to or
for the account of participants or beneficiaries  in the amount and manner,  and
at such time and addresses, as directed in
<PAGE>
writing by the Company. The Trustee will make such other payments as directed in
writing by the Company.

     5.4  Accounts  and  Records.  The Trustee  will keep  accurate and detailed
records of the Trust on a cash  basis.  The fiscal year of the Trust will be the
year adopted by the Company for federal income tax purposes  unless another year
is agreed upon between the Company and the Trustee.  Each year, the Trustee will
furnish the Company with an annual report showing all receipts and disbursements
and other  transactions,  together  with a list of the assets held at the end of
such year showing the costs and the fair market value of each item.  The Company
may approve such  accounting  by written  notice  delivered to the Trustee or by
failure to object to such accounting in writing  delivered to the Trustee within
180 days.  The  Company  will have the right to examine the books and records of
the  Trust at any time.  The  Trustee  will have the right to have its  accounts
settled by judicial proceeding if it so elects.

     5.5  Valuation of Assets.  The Trustee will not amortize  premiums paid for
bonds or other  obligations  purchased  at a price  above  their  par  value nor
accumulate  discounts  by reason of the  purchase of such  securities  at prices
below their par value.  The Trustee may, in determining  the market value of the
Trust, use any recognized  method  reasonably  calculated to reflect the current
value of the Trust assets.

     5.6 Reporting.  The Trustee will,  within the time  prescribed by law, file
with the Internal Revenue Service and with other appropriate regulatory agencies
any  reports  or  statements  which by law are  required  to be filed by it. The
Trustee  will  have no  responsibility  for the  preparation  or  filing  of any
reports,  returns, or documents required by law to be filed by the Company other
than those explicitly agreed upon in writing by the Trustee and the Company.

     5.7  Miscellaneous.  The  Trustee  will not be  responsible  for  enforcing
payment  of or  collecting  any  contribution  to be made by the  Company or any
participants,  or  enforcing  payment  of or  collecting  any funds  held by the
Company on behalf of participants for the purpose of making  contribution to the
Plan.


                                   ARTICLE VI
                             INVESTMENT OF THE TRUST

     6.1 General  Investment  Powers.  The Trustee  will invest and reinvest the
principal and income of the Trust,  without  distinction  between  principal and
income, in the interest-bearing  deposits of the Trustee, real estate, interests
in real estate,  leaseholds,  insurance and annuity  contracts,  common  stocks,
bonds, notes, mortgages, contracts,  debentures, mutual funds, tangible personal
property,  leases, and such other personal or real property as the Trustee deems
advisable  and believes  would be purchased by persons of prudence,  discretion,
and  intelligence  in such matters who are seeking  preservation  of capital and
reasonable  income,  whether  or  not  such  investment  or  reinvestment  would
otherwise be permissible  for the investment of trust funds under any present or
future  laws;  provided,  however,  that in the event an  investment  manager is
appointed,  the Trustee will invest and reinvest the  segregated  portion of the
Trust  that is in a separate  investment  account or  accounts  pursuant  to the
written directions of the
<PAGE>
investment manager.

     6.2 Specific  Investment Powers. The Trustee is authorized and empowered as
follows:

          (a) to sell, exchange,  convey, assign, transfer, or otherwise dispose
     of, and also to grant options with respect to, any  property,  whether real
     or personal,  at any time held by the Trustee,  in such manner and for such
     consideration  and upon such terms and  conditions  as the Trustee may deem
     advisable;

          (b) to retain, manage,  operate,  repair, and improve, and to mortgage
     or lease for any period, any real estate or tangible personal property held
     by the Trustee;

          (c) to compromise,  compound, arbitrate, or settle any claim, debt, or
     obligation  due to it or from  it as  Trustee  and to  reduce  the  rate of
     interest on, extend or otherwise  modify,  or foreclose upon,  default,  or
     otherwise enforce any such obligation;

          (d) to  vote in  person  or by  proxy  any  stocks,  bonds,  or  other
     securities  held by it; to exercise  any options  available  to any stocks,
     bonds,  or other  securities;  to  exercise  any  rights to  subscribe  for
     additional  stocks,  bonds,  or  other  securities,  and to make  necessary
     payments  for such  rights;  and to join in or oppose  any  reorganization,
     recapitalization, consolidation, sale, or merger;

          (e)  to  make,  execute,   acknowledge,  and  deliver  deeds,  leases,
     assignments,  documents  of  transfer,  and other  instruments  that may be
     necessary to carry out the powers granted by this Agreement;

          (f) to  enforce  any  right,  obligation,  or  claim  in its  absolute
     discretion  and,  in  general,  to protect in any way the  interest  of the
     Trust,  either before or after default,  and in its absolute  discretion to
     abstain  from the  enforcement  of any right,  obligation,  or claim and to
     abandon any  property,  whether real or personal,  which at any time may be
     held by it;

          (g) to cause  any  investments  in the  Trust to be  registered  in or
     transferred  into its name or the name of its  nominee  or  nominees  or to
     retain them  unregistered or in form permitting  transfer by delivery,  but
     the books and records of the  Trustee  will at all times show that all such
     investments are part of the Trust;

          (h)  to  employ  accountants,   auditors,  actuaries,  and  attorneys,
     including accountants,  auditors,  actuaries, and attorneys of the Company,
     as  well as  other  advisors  and  agents,  and to  delegate  to them  such
     ministerial  and limited  discretionary  duties as it sees fit,  and to pay
     their reasonable expenses and compensation from the Trust;

          (i) to employ agents and investment advisors which may be subsidiaries
     or affiliates of the Trustee, to employ legal counsel whenever necessary to
     protect the interest
<PAGE>
     of the  trust  or the  participants,  and to pay the  reasonable  fees  and
     expenses of the agents activities, actuaries, plan administrators, advisors
     and  counsel.  The agents or counsel may be counsel for the Company as well
     as the Trustee;

          (j) to apply for,  purchase,  hold, or transfer,  in  accordance  with
     written  instructions  from the  Company,  annuity  contracts  by which the
     Company may choose to provide benefits; and

          (k) to do all other acts and to exercise any other powers which it may
     deem  necessary  and proper to carry out its  duties as Trustee  under this
     Trust Agreement.

                                   ARTICLE VII
                            RESPONSIBILITY OF TRUSTEE

     7.1 Trustee will act with the care, skill, prudence and diligence under the
circumstances  then prevailing that a prudent person acting in like capacity and
familiar  with such matters  would use in the conduct of an enterprise of a like
character  and with like aims,  provided,  however,  that  Trustee will incur no
liability to any person for any action taken pursuant to a direction, request or
approval given by Company which is contemplated by, and in conformity, the terms
of the Plans or this Trust and is given in writing by Company. In the event of a
dispute between  Company and a party,  Trustee may apply to a court of competent
jurisdiction to resolve the dispute.

     7.2 If Trustee  undertakes or defends any litigation  arising in connection
with this Trust,  Company agrees to indemnity  Trustee against  Trustee's costs,
expenses and  liabilities  (including  without  limitation,  attorneys' fees and
expenses)  relating  thereto and to be primarily  liable for such  payments.  If
Company does not pay such costs, expenses and liabilities in a reasonably timely
manner, Trustee may obtain payment from the Trust.

     7.3  Trustee may consult  with legal  counsel  (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.

     7.4 Trustee may hire agents, accountants,  actuaries,  investment advisors,
financial  consultants or other  professionals to assist it in performing any of
its duties or obligations hereunder.

     7.5 Trustee will have all powers  conferred on Trustees by applicable  law,
unless  expressly  provided  otherwise  herein,  provided,  however,  that if an
insurance policy is held as an asset of the Trust, Trustee will have no power to
name a beneficiary of the policy other than the Trust,  to assign the policy (as
distinct  from  conversion  of the policy to a  different  form) other than to a
successor  Trustee,  or to loan to any  person  the  proceeds  of any  borrowing
against such policy.
<PAGE>
                                  ARTICLE VIII
                      COMPENSATION AND EXPENSES OF TRUSTEE

     Company will pay all administrative and Trustee's fees and expenses. If not
so paid, the fees and expenses will be paid from the Trust.


                                   ARTICLE IX
                       RESIGNATION AND REMOVAL OF TRUSTEE

     9.1 Trustee may resign at any time by written notice to Company, which will
be effective  60 days after  receipt of such notice  unless  Company and Trustee
agree otherwise.

     9.2 Trustee may be removed  from  Company on 60 days notice or upon shorter
notice accepted by Trustee

     9.3 Upon  resignation or removal of Trustee and  appointment of a successor
Trustee,  all assets will subsequently be transferred to the successor  Trustee.
The  transfer  will be  completed  within  60 days  after  receipt  of notice of
resignation, removal or transfer, unless Company extends the time limit.

     9.4 If Trustee resigns or is removed,  the Company will appoint a successor
trustee  by the  effective  date  of the  resignation  or  removal.  If no  such
appointment  has  been  made,   Trustee  may  apply  to  a  court  of  competent
jurisdiction for appointment of a successor or for instructions. All expenses of
Trustee in  connection  with the  proceeding  will be allowed as  administrative
expenses of the Trust.


                                  . ARTICLE X
                            AMENDMENT OR TERMINATION

     10.1 This Trust Agreement may be amended by a written  instrument  executed
by Trustee and Company.  Notwithstanding  the foregoing,  no such amendment will
conflict with the terms of the Plan or make the Trust revocable.

     10.2 The Trust will not terminate until the date on which Plan participants
and their beneficiaries are no longer entitled to benefits pursuant to the terms
of the Plan.


                                   ARTICLE XI
                                  MISCELLANEOUS

     11.1  Any  provision  of this  Trust  Agreement  prohibited  by law will be
ineffective  to the extent of any such  prohibition,  without  invalidating  the
remaining provisions.

     11.2 Benefits payable to Plan  participants and their  beneficiaries  under
this Trust Agreement
<PAGE>
may not be anticipated, assigned, alienated, pledged, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or equitable process.

     11.3 This Trust  Agreement  will be governed by and construed in accordance
with the laws of Michigan  except to the extent that state laws are preempted by
the federal  statute  known as the Employee  Retirement  Income  Security Act of
1974.


     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
this 23rd day of November, 1999.


X-RITE CORPORATION                          MACATAWA BANK


By  /s/ Ted Thompson                        By ________________________________
        Its Chairman                                  Its Trust Officer
<PAGE>
                           AMENDED AND RESTATED BYLAWS
                                       of
                              X-RITE, INCORPORATED
                             A Michigan Corporation
                    As Amended and Restated November 18, 1999

                               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
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,  Vice
Chairman of the Board of Directors,  President or a Vice  President,  and by the
Treasurer,   Assistant  Treasurer,  Secretary  or  Assistant  Secretary  of  the
Corporation,  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 if the certificate is countersigned by a transfer agent or registered
by a registrar other than the Corporation itself, or its employees. 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.  Any new certificate  issued in place of any such
lost or destroyed certificate shall be plainly marked "duplicate" upon its face.

     Section 3. Transfer of Shares.  Shares of stock of the Corporation shall be
transferrable 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
<PAGE>
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 direct payment of dividends or other distributions upon
its outstanding  shares out of funds legally available for such purposes,  which
dividends  may be paid in cash,  the  Corporation's  bonds or the  Corporation's
property,  including the shares or bonds of other  corporations.  In the event a
dividend is paid or any other distribution made, in any part, from sources other
than earned  surplus,  payment or  distribution  thereof shall be accompanied by
written  notice to the  shareholders  (a)  disclosing  the  amounts by which the
dividend or  distribution  affects stated  capital,  capital  surplus and earned
surplus,  or (b) if such amounts are not determinable at the time of the notice,
disclosing the approximate  effect of the dividend or  distribution  upon stated
capital,  capital surplus and earned  surplus,  and stating that the amounts are
not yet determinable.

     In  addition  to the  declaration  of  dividends  and  other  distributions
provided in the  preceding  paragraph of this Section 6 of Article II, the Board
of Directors,  in its  discretion,  from time to time may declare and direct the
payment  of a  dividend  in shares  of this  Corporation,  upon its  outstanding
shares,  in  accordance  with and  subject  to the  provisions  of the  Michigan
Business  Corporation  Act. A share dividend or other  distribution of shares of
the  Corporation  shall be accompanied by a written notice to  shareholders  (a)
disclosing  the  amounts  by which the  distributions  affects  stated  capital,
capital surplus and earned surplus,  or (b) if such amounts are not determinable
at the time of the notice, disclosing the approximate effect of the distribution
upon stated capital,  capital  surplus and earned surplus,  and stating that the
amounts are not yet determinable.
<PAGE>
     Section 7. Treasury Shares.  Treasury shares held by the Corporation  shall
be subject to the disposal of the Board of Directors, but shall neither vote nor
participate in dividends or other distributions.

     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  President  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
<PAGE>
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) days 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;  provided,  however,  that  attendance  of a person at a meeting of
shareholders,  in  person  or by  proxy,  constitutes  a waiver of notice of the
meeting, except when the shareholder attends the meeting for the express purpose
of  objecting,  at the  beginning  of the  meeting  to  the  transaction  of any
business, because the meeting is not lawfully called or convened.

     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.  Except as may  otherwise  be provided by law or in the
Articles of Incorporation for the Corporation, each shareholder entitled to vote
at a meeting of  shareholders  shall be  entitled  to one vote,  in person or by
proxy,  for each  share  of stock  entitled  to vote  held by such  shareholder;
provided,  however,  no proxy  shall be voted  after  three  years from its date
unless such proxy provides for a longer period.

     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  Chairman of the  Corporation  or his
designee  shall  call  meetings  of the  shareholders  to order and shall act as
chairman of such meetings unless otherwise determined by the affirmative vote of
a majority  of all the voting  shares of the  capital  stock of the  Corporation
issued and outstanding.  The Secretary of the Corporation shall act as secretary
of all  meetings of  shareholders,  but in the absence of the  Secretary  at any
meeting of shareholders, or his
<PAGE>
inability or refusal to act as secretary,  the presiding officer may appoint any
person to act as secretary of the meeting.

     Section 10. Inspector 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, and on request of a  shareholder
entitled to vote  shall,  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
<PAGE>
     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.  Except as may  otherwise  provided  in the
Articles or  Incorporation  or these  Bylaws,  the  business  and affairs of the
Corporation shall be managed by a Board of Directors. The size of the Board, the
classification  of the Board, the manner of filling  vacancies  occurring in the
Board,  nominations for directors, and removal of directors shall be as provided
for 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,  the  President  or the
Secretary,  and shall be called by one of them  upon the  written  request  of a
majority  of the  Directors.  Written  notice of the time and  place of  special
meetings of the Board shall be delivered  personally  or mailed to each director
at least  forty-eight  (48) hours prior  thereto.  Attendance of a Director at a
special  meeting  constitutes a waiver of notice of the meeting,  except where a
director  attends  the  meeting  for the  express  purpose of  objecting  to the
transaction  of any  business  because  the  meeting is not  lawfully  called or
convened.

     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. 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 7. 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.
<PAGE>
     Section 8.  Corporate  Seal.  The Board of Directors may provide a suitable
corporate seal, which seal shall be kept in the custody of the Secretary.

     Section  9.  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 10. Committees.  The Board of Directors may by resolution establish
committees,  including  an executive  committee,  composed of one or more of the
directors to perform such  functions  and exercise  such powers and authority of
the Board of  Directors  to the extent  provided by  resolution  of the Board of
Directors and not  prohibited by the Michigan  Business  Corporation  Act in the
management of the business and affairs of the  Corporation.  Each  committee and
each member  thereof shall serve at the pleasure of the Board of Directors and a
majority  of the  members of any  committee  shall  constitute  a quorum for the
transaction of business.

     Section 11. 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 Company.

                               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  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.
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     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. 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. In the
absence of the Chairman of the Board of Directors,  the President  shall perform
the duties of the Chairman.

     Section 7. 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 8. Treasurer. The Treasurer, or other officer performing the duties
of a Treasurer,  shall have custody of the corporate  funds and  securities  and
shall keep full and  accurate  account of receipts  and  disbursements  in books
belonging to the  Corporation.  The Treasurer  shall deposit all money and other
valuables in the name and to the credit of the Corporation in such  depositories
as may be designated by the Board of Directors. The Treasurer shall disburse the
funds of the  Corporation  as may be  ordered by the Board of  Directors  or the
President,  taking proper vouchers for such  disbursements.  The Treasurer shall
render to the President and Board of Directors,  or any member thereof,  at such
times as they may request within reason,  an account of all his  transactions as
Treasurer  and of the  financial  condition of the  Corporation.  In general the
Treasurer  shall perform all duties incident to the office of Treasurer and such
other duties as may be assigned by the Board of Directors.  The Treasurer may be
required to give bond for the faithful performance of his duties in such sum and
with such surety,  at the expense of the Corporation,  as the Board of Directors
may from time to time require.

     Section 9. Secretary.  The Secretary shall give or cause to be given notice
or all meetings of shareholders  and Directors and all other notices required by
law or by these  Bylaws,  and in case of his absence or refusal or neglect to do
so, any such notice may be given by the shareholders  upon whose requisition the
meeting is called,  as provided in these Bylaws.  The Secretary shall record all
the proceedings of the meetings of the  shareholders and of the Directors in one
or more books provided for that purpose. The Secretary shall have custody of the
seal of the  Corporation,  if one be  provided,  and shall affix the same to all
instruments requiring it when authorized by the Directors or the President.
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The Secretary  shall have such authority and perform such other duties as may be
assigned by the Board of Directors.  All records in the possession or custody of
the  Secretary  shall  be open to  examination  by the  Chairman  of the  Board,
President,  and  Board of  Directors,  or any  member  thereof,  during  regular
business hours.

     Section 10. 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
President  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
President.

              ARTICLE VI. CONTRACTS, LOANS, CHECKS AND LEGAL ACTION

     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 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.

                           ARTICLE VII. MISCELLANEOUS

     Section 1. Fiscal Year.  The fiscal year of this  Corporation  shall end on
the 31st day of December of each year.

     Section 2.  Notices.  Whenever any notice is required to be given under the
provisions of any law, the Articles of Incorporation for this Corporation, or by
these Bylaws,  it shall not be construed or interpreted to mean personal notice,
unless  expressly  so stated,  and any notice so required  shall be deemed to be
sufficient if given in writing by mail, by depositing  the same in a Post Office
box, postage prepaid, addressed to the person entitled thereto at his last known
Post Office address, and such notice
<PAGE>
shall be deemed to have been given on the day of such mailing.  Shareholders not
entitled to vote shall not be entitled to receive notice of any meetings, except
as otherwise provided by law or these Bylaws.

     Section 3.  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 4. Voting of Securities.  Securities of another corporation foreign
or domestic, standing in the name of this Corporation which are entitled to vote
shall be voted, in person or by proxy,  by the President of this  Corporation or
by such  other  or  additional  persons  as may be  designated  by the  Board of
Directors.

                            ARTICLE VIII. AMENDMENTS

     Section  1.  Except  as  may  otherwise  be  provided  in the  Articles  of
Incorporation  or these  Bylaws,  these  Bylaws may be amended,  repealed or new
Bylaws  adopted either by a majority vote of the Board of Directors at a regular
or special  meeting of the Board, or by vote of the holders of a majority of the
outstanding voting stock of the Corporation at any annual or special meeting, if
notice of the proposed amendment,  repeal or adoption be contained in the notice
of such meeting.
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                                                                      Exhibit 21


                              X-RITE, INCORPORATED
                              LIST OF 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,  Inc., 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,
       Incorporated and X-Rite Holdings, Inc., 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,  Incorporated and X-Rite Holdings,  Inc., and being utilized as a
       sales office.

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

  10.  X-Rite  Mediterranee  SARL,  a French  Corporation,  is  wholly  owned by
       X-Rite,  Incorporated and X-Rite Holdings,  Inc., and being utilized as a
       sales and service office.
<PAGE>
                                                                      Exhibit 23



                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-K, into X-Rite,  Incorporated's previously filed
Registration Statement File Numbers 33-29288, 33-29290, 33-82258 and 33-82260.


                                           /s/ Arthur Andersen LLP


Grand Rapids, Michigan,
March 30, 2000.