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                                                                   EXHIBIT 10.38


                            MCCLAIN INDUSTRIES, INC.

                            1999 INCENTIVE STOCK PLAN


                                   ARTICLE I.
                        PURPOSE AND ADOPTION OF THE PLAN

         1.01   PURPOSE. The purpose of the McClain Industries, Inc. 1999
Incentive Stock Plan (the "Plan") is to provide certain employees, directors,
consultants and advisors of McClain Industries, Inc. (the "Company") with an
additional incentive to promote the Company's financial success and to provide
an incentive which the Company may use to induce able persons to enter into or
remain in service of the Company or a Subsidiary.

         1.02   ADOPTION AND TERM. The Plan was approved by the Board on, and is
effective as of, February 8, 1999, subject to approval of the Company's
stockholders on or before February 7, 2000, and will remain in effect until all
shares authorized under the terms of the Plan have been issued, unless earlier
terminated or abandoned by action of the Board; provided, however, that no
Incentive Stock Option may be granted after February 7, 2009. Awards may be
granted under the Plan before it is approved by the Company's stockholders but
no award granted under the Plan may be exercised unless and until the Plan is
approved by the Company's stockholders.

                                   ARTICLE II.
                                   DEFINITIONS

         2.01   ADMINISTRATOR means the group of persons having authority to
administer the Plan pursuant to Section 3.01.

         2.02   AWARD means any one or combination of Non-Qualified Stock
Options, Performance Based Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Share Rights or any other award made under the terms of the
Plan.

         2.03   AWARD AGREEMENT means a written agreement between the Company
and Participant or a written acknowledgment from the Company specifically
setting forth the terms and conditions of an Award granted under the Plan.

         2.04   AWARD PERIOD means, with respect to an Award, the period of time
set forth in the Award Agreement during which specified conditions set forth in
the Award Agreement must be satisfied.

         2.05   BENEFICIARY means (a) an individual, trust or estate who or
which, by will or by operation of the laws of descent and distribution, succeeds
to the rights and obligations of the Participant under the Plan and Award
Agreement upon the Participant's death; or (b) an individual, who by designation
of the Participant, succeeds to the rights and obligations of the Participant
under the Plan and Award Agreement upon the Participant's death.

         2.06   BOARD means the Board of Directors of the Company.

         2.07   CHANGE OF CONTROL EVENT means (a) an event or series of events
by which any Person or other entity or group (as such term is used in Section
13(d) and 14(d) of the Exchange Act) of Persons or other entities acting in
concert as a partnership or other group (a "Group of Persons") (other than
Persons who are, or Groups of Persons entirely made up of, (i) management
personnel of the Company or (ii) any affiliates of any such management
personnel)

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shall, as a result of a tender or exchange offer or offers, an open market
purchase or purchases, a privately negotiated purchase or purchases or
otherwise, become the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of 50% or more of the combined voting power of the then
outstanding voting stock of the Company; (b) the Company consolidates with, or
merges with or into, another Person (other than a Subsidiary in a transaction
which is not otherwise a Change of Control Event), or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with, or merges with or into
the Company, in any such event pursuant to a transaction in which the
outstanding voting stock of the Company is converted into or exchanged for cash,
securities or other property; (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board (together
with any new directors whose election by such Board or whose nomination for
election by the stockholders of the Company, was approved by a vote of 66-2/3%
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board then in
office; or (d) any liquidation or dissolution of the Company (other than a
liquidation into a Subsidiary that is not otherwise a Change of Control Event).

         2.08   CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes that section.

         2.09   COMMON STOCK means the Common Stock of the Company, no par
value.

         2.10   COMPANY means McClain Industries, Inc., a Michigan corporation.

         2.11   DATE OF GRANT means the date designated by the Administrator as
the date as of which it grants an Award, which shall not be earlier than the
date on which the Administrator approves the granting of such Award.

         2.12   DIRECTOR means a member of the Board of Directors of the
Company.

         2.13   EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.

         2.14   EXERCISE PRICE means, with respect to a Stock Appreciation
Right, the amount established by the Administrator, in accordance with Section
7.03 hereunder, and set forth in the Award Agreement, which is to be subtracted
from the Fair Market Value on the date of exercise in order to determine the
amount of the Incremental Value to be paid to the Participant.

         2.15   EXPIRATION DATE means the date specified in an Award Agreement
as the expiration date of such Award.

         2.16   FAIR MARKET VALUE means, the last reported sale price per share
of Common Stock on such date or, in case no such sale takes place on such date,
the average of the closing bid and asked prices on such date, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on a national securities exchange or
included for quotation on the Nasdaq National Market, or if the Common Stock is
not so listed or admitted to trading or included for quotation, the average of
the highest bid and lowest asked prices for the Common Stock on such date as
reported on the NASDAQ OTC Bulletin Board Service or by the National Quotation
Bureau, Incorporated or any comparable service, or, if the Common Stock is not
quoted by any such organization, the fair market value of a share of Common
Stock as determined in good faith by the Administrator. If,


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as the case may be, the relevant date is not a Trading Day, the determination
shall be made as of the next preceding Trading Day.

         2.17   INCENTIVE STOCK OPTION means a stock option described in Section
422 of the Code.

         2.18   INCREMENTAL VALUE has the meaning given such term in Section
7.01 of the Plan.

         2.19   NON-EMPLOYEE DIRECTOR PARTICIPANT means a Participant that is a
"non-employee director" of the Company within the meaning of Rule 16b-3.

         2.20   NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.

         2.21   OFFICER means a president, vice president, treasurer, secretary,
controller, and any other person who performs functions corresponding to the
foregoing officers for the Company, any member of the Board or any person
performing similar functions with respect to the Company, and any other
participant who is deemed to be an officer or director of the Company for
purposes of Section 16 of the Exchange Act and the rules thereunder, as
currently in effect or as amended from time to time.

         2.22   OPTIONS means all Non-Qualified Stock Options, Incentive Stock
Options and Performance Based Options granted at any time under the Plan.

         2.23   PARTICIPANT shall have the meaning set forth in Article V.

         2.24   PERFORMANCE BASED OPTION means a stock option which, upon
exercise or at any other time, would not result in or give rise to "applicable
employee remuneration" within the meaning of Section 162(m) of the Code.

         2.25   PLAN means the McClain Industries, Inc. 1999 Incentive Stock
Plan, as described herein and as it may be amended from time to time.

         2.26   PURCHASE PRICE, with respect to options,  shall have the meaning
set forth in Section 6.02.

         2.27   RESTRICTED SHARE RIGHT means a right to receive Common Stock
subject to restrictions imposed under the terms of an Award granted pursuant to
Article IX.

         2.28   RULE 16B-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as currently in effect
and as it may be amended from time to time, and any successor rule.

         2.29   STOCK APPRECIATION RIGHT means an Award granted in accordance
with Article VII.

         2.30   SUBSIDIARY shall mean any corporation or other entity in which
the Company has a direct or indirect ownership interest of 50% or more of the
total combined voting power of all classes of outstanding voting equity
interests.

         2.31   TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company for any reason,
including death, disability, retirement or as the result of the divestiture of
the Participant's employer or any other similar



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transaction in which the Participant's employer ceases to be the Company or a
Subsidiary of the Company. Whether an authorized leave of absence or absence on
military or government service, absence due to disability, or absence for any
other reason shall constitute Termination of Employment shall be determined in
each case by the Administrator in its sole discretion.

         2.32   TRADING DAY means a day on which public trading of securities
occurs and is reported in the principal consolidated reporting system referred
to in Section 2.16 above, or if the Common Stock is not listed or admitted to
trading on a national securities exchange or included for quotation on the
Nasdaq National Market, any business day.

                                  ARTICLE III.
                                 ADMINISTRATION

         3.01   ADMINISTRATION. The Plan shall be administered by the Board or,
to the extent determined by the Board, a committee (the "Compensation
Committee") consisting of not less than two non-employee directors of the
Company (within the meaning of Rule 16b-3) to be appointed by, and to serve at
the pleasure of, the Board (in either case, the "Administrator"). It is the
intention of the Company that, with respect to Awards designated as Performance
Based Options, each of the members of the Compensation Committee shall also be
"outside directors" within the meaning of Section 162(m) of the Code. The
Administrator shall administer the Plan in accordance with this provision and
shall have the sole discretionary authority to interpret the Plan, to establish
and modify administrative rules for the Plan, to impose such conditions and
restrictions on Awards as it determines appropriate, to cancel Awards (including
those made pursuant to other plans of the Company) and to substitute new options
(including options granted under other plans of the Company) with the consent of
the recipient, and to take such steps in connection with the Plan and Awards
granted thereunder as it may deem necessary or advisable. The Administrator may,
with respect to Participants who are not Officers or Directors, delegate such of
its powers and authority under the Plan as it deems appropriate to designated
officers or employees of the Company.

         3.02   INDEMNIFICATION. Members of the Administrator shall be entitled
to indemnification and reimbursement from the Company for any action or any
failure to act in connection with service as Administrator to the full extent
provided for or permitted by the Company's articles of incorporation or bylaws
or by any insurance policy or other agreement intended for the benefit of the
Company's officers, directors or employees or by any applicable law.

                                   ARTICLE IV.
                   COMMON STOCK ISSUABLE PURSUANT TO THE PLAN

         4.01   SHARES ISSUABLE. Shares to be issued under the Plan may be
authorized and unissued shares or issued shares which have been reacquired by
the Company. Except as provided in Section 4.03, the Awards granted to any
Participant and to all Participants in the aggregate under the Plan shall be
limited so that the sum of the following shall never exceed one million
(1,000,000) shares of Common Stock: (i) all shares which shall be issued upon
the exercise of outstanding Options or other Awards granted under the Plan, (ii)
all shares for which payment of Incremental Value shall be made by reason of the
exercise of Stock Appreciation Rights at any time granted under the Plan, and
(iii) the number of shares otherwise issuable under an Award which are applied
by the Company to payment of the withholding or tax liability discussed in
Section 11.04.

         4.02   SHARES SUBJECT TO TERMINATED AWARDS. In the event that any Award
at any time granted under the Plan shall be surrendered to the Company, be
terminated or expire before it shall have been fully exercised, or an award of
Stock Appreciation Rights is exercised for cash,




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then all shares formerly subject to such Award as to which such Award shall not
have been exercised shall be available for any Award subsequently granted in
accordance with the Plan. Shares of Common Stock subject to Options, or portions
thereof, which have been surrendered in connection with the exercise of tandem
Stock Appreciation Rights shall not be available for subsequent Awards under the
Plan, and shares of Common Stock issued in payment of such Stock Appreciation
Rights shall be charged against the number of shares of Common Stock available
for the grant of Awards. Shares which are reacquired by the Company or shares
issuable subject to Restricted Share Rights which are forfeited pursuant to
forfeiture provisions in the Award Agreement shall be available for subsequently
granted Awards only if the forfeiting Participant received no benefits of
ownership (such as dividends actually paid to the Participant) other than voting
rights of the forfeited shares. Any shares of Common Stock issued by the Company
pursuant to its assumption or substitution of outstanding grants from acquired
companies shall not reduce the number of shares available for Awards under this
Plan unless issued under this Plan.

         4.03   ADJUSTMENTS TO REFLECT CAPITAL CHANGES.

                (a) RECAPITALIZATION. The number and kind of shares subject
         to outstanding Awards, the Purchase Price or Exercise Price for such
         shares, and the number and kind of shares available for Awards
         subsequently granted under the Plan shall be appropriately adjusted to
         reflect any stock dividend, stock split, combination or exchange of
         shares, merger, reorganization, consolidation, split-up, spin-off or
         other change in capitalization with a similar substantive effect upon
         the Plan or the Awards granted under the Plan. The Administrator shall
         have the power to determine the nature and amount of the adjustment to
         be made in each case.

                (b) SALE OR REORGANIZATION. After any reorganization,
         merger or consolidation in which the Company is a surviving
         corporation, each Participant shall, at no additional cost, be entitled
         upon exercise of an Award to receive (subject to any required action by
         stockholders), in lieu of the number of shares of Common Stock
         receivable or exercisable pursuant to such Award, a number and class of
         shares of stock or other securities to which such Participant would
         have been entitled pursuant to the terms of the reorganization, merger
         or consolidation if, at the time of such reorganization, merger or
         consolidation, such Participant had been the holder of record of a
         number of shares of Common Stock equal to the number of shares
         receivable or exercisable pursuant to such Award. Comparable rights
         shall accrue to each Participant in the event of successive
         reorganizations, mergers or consolidations of the character described
         above.

                (c) OPTIONS TO PURCHASE STOCK OF ACQUIRED COMPANIES. After
         any reorganization, merger or consolidation in which the Company or a
         Subsidiary of the Company shall be a surviving corporation, the
         Administrator may grant substituted Options under the provisions of the
         Plan, pursuant to Section 424 of the Code, replacing old options
         granted under a plan of another party to the reorganization, merger or
         consolidation, where such party's stock may no longer be issued
         following such merger or consolidation. The foregoing adjustments and
         manner of application of the foregoing provisions shall be determined
         by the Administrator in its sole discretion. Any adjustments may
         provide for the elimination of any fractional shares which might
         otherwise have become subject to any Awards.

                                   ARTICLE V.
                                  PARTICIPATION

         5.01   ELIGIBLE PARTICIPANTS. Participants in the Plan shall be the
employees, directors, consultants and advisors of the Company or any Subsidiary,
as determined and selected from



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time to time by the Administrator, in its sole and absolute discretion. The
Administrator's designation of a Participant in any year shall not require the
Administrator to designate such person to receive Awards in any other year. The
Administrator shall consider such factors as it deems pertinent in selecting
Participants and in determining the type and amount of their respective Awards.

                                   ARTICLE VI.
                                  OPTION AWARDS

         6.01   POWER TO GRANT OPTIONS. The Administrator may grant, to such
Participants as the Administrator may select, Options entitling the Participant
to purchase Common Stock from the Company at such price, in such quantity and on
such terms and subject to such conditions, not inconsistent with the terms of
this Plan, as may be established by the Administrator. The terms of any Option
granted under this Plan shall be set forth in an Award Agreement.

         6.02   PURCHASE PRICE OF OPTIONS. Notwithstanding anything to the
contrary in Section 6.01 above, the Purchase Price of each share of Common Stock
which may be purchased upon exercise of any Option granted under the Plan shall
not be less than fifty percent (50%) of the Fair Market Value on the Date of
Grant; provided, however, that the Purchase Price for shares of Common Stock
purchased pursuant to Stock Options designated by the Administrator as Incentive
Stock Options shall be equal to or greater than the Fair Market Value on the
Date of Grant as required under Section 422 of the Code and provided further
that the Purchase Price for shares of Common Stock purchased pursuant to Stock
Options designated by the Administrator as Performance Based Options shall be
equal to or greater than the Fair Market Value on the Date of Grant.

         6.03   DESIGNATION OF INCENTIVE STOCK OPTIONS. Except as otherwise
expressly provided in the Plan, the Administrator may designate, at the Date of
Grant of each Option to a Participant that is an employee of the Company or a
Subsidiary, that the Option is an Incentive Stock Option under Section 422 of
the Code.

                (a)   INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant
         may be granted Incentive Stock Options under the Plan (or any other
         plans of the Company) which would result in stock with an aggregate
         Fair Market Value (measured on the Date of Grant) of more than $100,000
         first becoming exercisable in any one calendar year, or which would
         entitle such Participant to purchase a number of shares greater than
         the maximum number permitted by Section 422 of the Code as in effect on
         the Date of Grant.

                (b)   OTHER INCENTIVE STOCK OPTION TERMS. Whenever possible,
         each provision in the Plan and in every Option granted under this Plan
         which is designated by the Administrator as an Incentive Stock Option
         shall be interpreted in such a manner as to entitle the Option to the
         tax treatment afforded by Section 422 of the Code. If any provision of
         this Plan or any Option designated by the Administrator as an Incentive
         Stock Option shall be held not to comply with requirements necessary to
         entitle such Option to such tax treatment, then (i) such provision
         shall be deemed to have contained from the outset such language as
         shall be necessary to entitle the Option to the tax treatment afforded
         under Section 422 of the Code, and (ii) all other provisions of this
         Plan and the Award Agreement shall remain in full force and effect. If
         any agreement covering an Option designated by the Administrator to be
         an Incentive Stock Option under this Plan shall not explicitly include
         any terms required to entitle such Incentive Stock Option to the tax
         treatment afforded by Section 422 of the Code, all such terms shall be
         deemed implicit in the designation of such Option and the Option shall
         be deemed to have been granted subject to all such terms.


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         6.04   DESIGNATION OF PERFORMANCE BASED OPTIONS. Except as otherwise
expressly provided in the Plan, the Administrator may designate, at the Date of
Grant of each Option to a Participant that is an employee of the Company or a
Subsidiary, that the Option is a Performance Based Option. A Performance Based
Option shall have a Purchase Price not less than the Fair Market Value on the
Date of Grant and shall contain such other terms and conditions as the
Administrator may deem necessary so that, upon exercise or at any other time,
the Performance Based Option does not result in or give rise to "applicable
employee remuneration" within the meaning of Section 162(m) of the Code.

         6.05   RIGHTS AS A STOCKHOLDER. The Participant or any transferee of an
Option pursuant to Section 8.02 or Section 11.05 shall have no rights as a
stockholder with respect to any shares of Common Stock covered by an Option
until the Participant or transferee shall have become the holder of record of
any such shares, and no adjustment shall be made for dividends and cash or other
property or distributions or other rights with respect to any such shares of
Common Stock for which the record date is prior to the date on which the
Participant or a transferee of the Option shall have become the holder of record
of any such shares covered by the Option.

                                  ARTICLE VII.
                            STOCK APPRECIATION RIGHTS

         7.01   POWER TO GRANT STOCK APPRECIATION RIGHTS. The Administrator is
authorized to grant to any Participant, on such terms established by the
Administrator on or prior to the Date of Grant and subject to and not
inconsistent with the provisions of this Plan, the right to receive the payment
from the Company, payable as provided in Section 7.04, of an amount equal to the
Incremental Value of the Stock Appreciation Rights, which shall be an amount
equal to the remainder derived from subtracting (i) the Exercise Price for the
right established in the Award Agreement from (ii) the Fair Market Value of a
share of Common Stock on the date of exercise. The terms of any Stock
Appreciation Right granted under the Plan shall be set forth in an Award
Agreement.

         7.02   TANDEM STOCK APPRECIATION RIGHTS. The Administrator may grant to
any Participant a Stock Appreciation Right consistent with the provisions of
this Plan covering any share of Common Stock which is, at the Date of Grant of
the Stock Appreciation Right, also covered by an Option granted to the same
Participant, either prior to or simultaneously with the grant to such
Participant of the Stock Appreciation Right, provided: (i) any Option covering
any share of Common Stock shall expire and not be exercisable upon the exercise
of any Stock Appreciation Right with respect to the same share; (ii) any Stock
Appreciation Right covering any share of Common Stock shall not be exercisable
upon the exercise of any related Option with respect to the same share; and
(iii) an Option and Stock Appreciation Right covering the same share of Common
Stock may not be exercised simultaneously.

         7.03   EXERCISE PRICE. The Exercise Price established under any Stock
Appreciation Right granted under this Plan shall be determined by the
Administrator and, in the case of a tandem Stock Appreciation Right, shall not
be less than the Purchase Price of the related Option. Upon exercise of the
Stock Appreciation Rights, the number of shares subject to exercise under a
related Option shall automatically be reduced by the number of shares of Common
Stock represented by the Option or portion thereof which is surrendered as a
result of the exercise of such Stock Appreciation Rights.

         7.04   PAYMENT OF INCREMENTAL VALUE. Any payment which may become due
from the Company by reason of Participant's exercise of a Stock Appreciation
Right may be paid to the Participant as determined by the Administrator (i) all
in cash, (ii) all in Common Stock, or



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(iii) in any combination of cash and Common Stock. In the event that all or a
portion of the payment is made in Common Stock, the number of shares of the
Common Stock delivered in satisfaction of such payment shall be determined by
dividing the amount of the payment by the Fair Market Value on the date of
exercise. The Administrator may determine whether payment upon exercise of a
Stock Appreciation Right will be made in cash or in stock, or a combination
thereof, upon or at any time prior to the exercise of such Stock Appreciation
Right. No fractional share of Common Stock shall be issued to make any payment;
if any fractional shares would be issuable, the mix of cash and Common Stock
payable to the Participant shall be adjusted as directed by the Administrator to
avoid the issuance of any fractional share.

                                  ARTICLE VIII.
                 TERMS OF OPTIONS AND STOCK APPRECIATION RIGHTS

         8.01   DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and
Stock Appreciation Rights shall terminate after the first to occur of the
following events:

                (a)   Expiration Date of the Award as provided in the Award
         Agreement; or

                (b)   Termination of the Award as provided in Section 8.02; or

                (c)   In the case of an Incentive  Stock Option,  ten years
         from the Date of Grant; or

                (d)   Solely in the case of tandem Stock Appreciation Rights,
         upon the Expiration Date of the related Option.

         8.02   EXERCISE ON DEATH, TERMINATION OF EMPLOYMENT OR REMOVAL OF
                DIRECTOR.

                (a)   Unless otherwise provided in the Award Agreement, in
         the event of the death of a Participant while an employee of the
         Company or a Subsidiary of the Company, the right to exercise all
         unexpired Awards shall be accelerated and shall accrue as of the date
         of death, and the Participant's Awards may be exercised by his
         Beneficiary at any time within one year after the date of the
         Participant's death. Unless otherwise provided in the Award Agreement,
         in the event of the death of a Participant while a director of the
         Company or a Subsidiary of the Company, the right to exercise all
         unexpired Awards shall be accelerated and shall accrue as of the date
         of death, and the Participant's Awards may be exercised by his
         Beneficiary at any time within one year after the date of the
         Participant's death.

                (b)   Unless otherwise provided in the Award Agreement, in
         the event of a Participant's Termination of Employment at any time for
         any reason (including disability or retirement) other than death or for
         "cause" (as defined in paragraph (d) below), an Award may be exercised,
         but only to the extent it was otherwise exercisable, on the date of
         Termination of Employment, within ninety days after the date of
         Termination of Employment. In the event of the death of the Participant
         within the ninety-day period following Termination of Employment, his
         Award may be exercised by his Beneficiary within the one year period
         provided in subparagraph (a) above. Unless otherwise provided in the
         Award Agreement, in the event that a Non-Employee Director Participant
         no longer serves on the Board for any reason, an Award may be
         exercised, but only to the extent it was otherwise exercisable, on the
         date that such Non-Employee Director Participant ceases to be a
         Director, within ninety days after the date such Non-Employee Director
         Participant ceases to be a director. In the event of the death of the
         Non-Employee Director Participant within the ninety-day period
         following the date he ceases



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         to be a Director, his Award may be exercised by his Beneficiary within
         the one year period provided in subparagraph (a) above.

                (c)   With respect to an Award which is intended to
         constitute an Incentive Stock Option, upon Termination of Employment,
         such Award shall be exercisable as provided in Section 422 of the Code.

                (d)   In the event that a Participant's Termination of
         Employment is for "cause", all Awards shall terminate immediately upon
         Termination of Employment. A Participant's employment shall be deemed
         to have been terminated for "cause" if such termination is determined,
         in the sole discretion of the Administrator, to have resulted from an
         act or omission by the Participant constituting active and deliberate
         dishonesty, as established by a final judgment or actual receipt of an
         improper benefit or profit in money, property or services, or from the
         Participant's continuous failure to perform his or her duties under any
         employment agreement in effect between the Participant and the Company
         in any material manner (or, in the absence of such an agreement, the
         consistent failure or refusal of the Participant to perform according
         to reasonable expectations and standards set by the Board and/or
         management consistent with Participant's title and position) after
         receipt of notice of such failure from the Company specifying how the
         Participant has so failed to perform.

         8.03   ACCELERATION OF EXERCISE TIME. The Administrator, in its sole
discretion, shall have the right (but shall not in any case be obligated) to
permit purchase of shares under any Award prior to the time such Award would
otherwise become exercisable under the terms of the Award Agreement.

         8.04   EXTENSION OF EXERCISE TIME. The Administrator, in its sole
discretion, shall have the right (but shall not in any case be obligated) to
permit any Award granted under this Plan to be exercised after its Expiration
Date or after the ninety day period following Termination of Employment or
service on the Board, subject, however, to the limitations described in Section
8.01 (c) and (d).

         8.05   CONDITIONS FOR EXERCISE. An Award Agreement may contain such
waiting periods, exercise dates and restrictions on exercise (including, but not
limited to, periodic installments which may be cumulative) as may be determined
by the Administrator at the Date of Grant. No Stock Appreciation Right may be
exercised prior to six months from the Date of Grant.

         8.06   CHANGE OF CONTROL EVENT. Unless otherwise provided in the Award
Agreement, and subject to such other terms and conditions as the Administrator
may establish in the Award Agreement, upon the occurrence of a Change of Control
Event, irrespective of whether or not an Award is then exercisable, the
Participant shall have the right to exercise in full any unexpired Award to the
extent not theretofore exercised or terminated; provided, however, that any
Stock Appreciation Right so exercised must have a Date of Grant at least six
months prior to the date of exercise.

         8.07   EXERCISE PROCEDURES. Each Option and Stock Appreciation Right
granted under the Plan shall be exercised by written notice to the Company which
must be received by the officer of the Company designated in the Award Agreement
on or before the Expiration Date of the Award. The Purchase Price of shares
purchased upon exercise of an Option granted under the Plan shall be paid in
full in cash by the Participant pursuant to the Award Agreement; provided,
however, that the Administrator may (but need not) permit payment to be made by
delivery to the Company of either (a) shares of Common Stock (including shares
issuable to the Participant pursuant to the exercise of the Option), or (b) any
combination of cash and shares of



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Common Stock, or (c) such other consideration as the Administrator deems
appropriate and in compliance with applicable law (including payment in
accordance with a cashless exercise program under which, if so instructed by the
Participant, shares of Common Stock may be issued directly to the Participant's
broker or dealer upon receipt of the Purchase Price in cash from the broker or
dealer.) In the event that any Common Stock shall be transferred to the Company
to satisfy all or any part of the Purchase Price, the part of the Purchase Price
deemed to have been satisfied by such transfer of Common Stock shall be equal to
the product derived by multiplying the Fair Market Value as of the date of
exercise times the number of shares transferred. The Participant may not
transfer to the Company in satisfaction of the Purchase Price (y) a number of
shares which when multiplied times the Fair Market Value as of the date of
exercise would result in a product greater than the Purchase Price or (z) any
fractional share of Common Stock. Any part of the Purchase Price paid in cash
upon the exercise of any Option shall be added to the general funds of the
Company and used for any proper corporate purpose.

                                   ARTICLE IX.
                             RESTRICTED STOCK AWARDS

         9.01   RESTRICTED SHARE AWARDS. The Administrator may grant to any
Participant an Award of Restricted Share Rights entitling such person to receive
shares of Common Stock in such quantity, and on such terms, conditions and
restrictions (whether based on performance standards, periods of service or
otherwise) as the Administrator shall determine on or prior to the Date of
Grant. The terms of any Award of Restricted Share Rights granted under the Plan
shall be set forth in an Award Agreement.

         9.02   DURATION OF RESTRICTED SHARE RIGHTS. In no event shall any
Restricted Share Rights granted entitle the holder to receive shares of Common
Stock free of all restrictions on transfer at any time prior to the expiration
of two years from the Date of Grant, and each Award Agreement shall provide that
the Participant shall remain employed by the Company or a Subsidiary for that
two year period (subject to the Company's or Subsidiary's right to terminate
such employment).

         9.03   FORFEITURE OF RESTRICTED SHARE RIGHTS. Subject to Section 9.05,
all Restricted Share Rights shall be forfeited and all Restricted Share Awards
shall terminate unless the Participant continues in the service of the Company
or a Subsidiary until the expiration of the forfeiture and satisfies any other
conditions set forth in the Award Agreement. If the Award Agreement shall so
provide, in the case of death, disability or retirement (as defined in the Award
Agreement) of the Participant, all of the shares covered by the Restricted Share
Rights shall immediately vest and any restrictions shall lapse as of the date of
such death, disability or retirement.

         9.04   DELIVERY OF SHARES UPON VESTING. Upon the lapse of the
restrictions established in the Award Agreement, the Participant shall be
entitled to receive, without payment of any cash or other consideration,
certificates for the number of shares covered by the Award.

         9.05   WAIVER OR MODIFICATION OF FORFEITURE PROVISIONS. The
Administrator has full power and authority to modify or waive any or all terms,
conditions or restrictions (other than the minimum restriction period set forth
in Section 9.02) applicable to any Restricted Share Rights granted to a
Participant under the Plan; provided that no modification shall, without consent
of the Participant, adversely affect the Participant's rights thereunder and no
modification shall reduce the employment requirement to less than three years,
except in the case of death, disability or retirement.




                                       10

<PAGE>   11

         9.06   RIGHTS AS A STOCKHOLDER. No person shall have any rights as a
stockholder with respect to any shares subject to Restricted Share Rights until
such time as the person shall have been issued a certificate for such shares.

                                   ARTICLE X.
                            OTHER STOCK BASED AWARDS

         10.01  GRANT OF OTHER AWARDS. Other Awards of Common Stock or other
securities of the Company and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, Common Stock ("Other Awards") may be
granted either alone or in addition to or in conjunction with Options or Stock
Appreciation Rights under the Plan. Subject to the provisions of the Plan, the
Administrator shall have the sole and complete authority to determine the
persons to whom and the time or times at which Other Awards shall be made, the
number of shares of Common Stock or other securities, if any, to be granted
pursuant to such Other Awards, and all other conditions of such Other Awards.
Any Other Award shall be confirmed by an Award Agreement executed by the
Administrator and the Participant, which agreement shall contain such provisions
as the Administrator determines to be necessary or appropriate to carry out the
intent of this Plan with respect to the Other Award.

         10.02  TERMS OF OTHER AWARDS. In addition to the terms and conditions
specified in the Award Agreement, Other Awards made pursuant to this Article X
shall be subject to the following:

                (a)   Any shares of Common Stock subject to such Other Awards
         may not be sold, assigned, transferred or otherwise encumbered prior to
         the date on which the shares are issued, or, if later, the date on
         which any applicable restriction, performance or deferral period
         lapses; and

                (b)   If specified by the Administrator and the Award
         Agreement, the recipient of an Other Award shall be entitled to
         receive, currently or on a deferred basis, interest or dividends or
         dividend equivalents with respect to the Common Stock or other
         securities covered by the Other Award; and

                (c)   The Award Agreement with respect to any Other Award
         shall contain provisions providing for the disposition of such Other
         Award in the event of Termination of Employment prior to the exercise,
         realization or payment of such Other Award, with such provisions to
         take account of the specific nature and purpose of the Other Award.

                                   ARTICLE XI.
                         TERMS APPLICABLE TO ALL AWARDS

         11.01  AWARD AGREEMENT. The grant and the terms and conditions of the
Award shall be set forth in an Award Agreement between the Company and the
Participant. No person shall have any rights under any Award granted under the
Plan unless and until the Administrator and the Participant to whom the Award is
granted shall have executed and delivered an Award Agreement expressly granting
the Award to such person and setting forth the terms of the Award.

         11.02  PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the
Administrator have the power to grant any Award under the Plan which is contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 4.03,
the terms of any



                                       11


<PAGE>   12

Award granted under the Plan may not be changed after the granting of such Award
without the express approval of the Participant.

         11.03  MODIFICATION OF AWARD AFTER GRANT. Each Award granted under the
Plan to a Participant other than an Officer may be modified after the date of
its grant by express written agreement between the Company and the Participant,
provided that such change (i) shall not be inconsistent with the terms of the
Plan and (ii) shall be approved by the Administrator.

         11.04  TAXES. The Company shall be entitled, if the Administrator deems
it necessary or desirable, to withhold (or secure payment from the Participant
in lieu of withholding) the amount of any withholding or other tax required by
law to be withheld or paid by the Company with respect to any amount payable
and/or shares issuable under such Participant's Award, or with respect to any
income recognized upon a disqualifying disposition of shares received pursuant
to the exercise of an Incentive Stock Option, and the Company may defer payment
or issuance of the cash or stock upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for such tax. The amount
of such withholding or tax payment shall be determined by the Administrator and,
unless otherwise provided by the Administrator, shall be payable by the
Participant at the time of issuance or payment in accordance with the following
rules:

                (a)   A Participant shall have the right to elect to meet his
         or her withholding requirement by: (1) having the Company withhold from
         such Award the appropriate number of shares of Common Stock, rounded
         out to the next whole number, the Fair Market Value of which is equal
         to such amount, or, in the case of the cash payment, the amount of
         cash, as is determined by the Company to be sufficient to satisfy
         applicable tax withholding requirements; or (2) direct payment to the
         Company in cash of the amount of any taxes required to be withheld with
         respect to such Award.

                (b)   In the event that an Award or property received upon
         exercise of an Award has already been transferred to the Participant on
         the date upon which withholding requirements apply, the Participant
         shall pay directly to the Company the cash amount determined by the
         Company to be sufficient to satisfy applicable federal, state or local
         withholding requirements. The Participant shall provide to the Company
         such information as the Company shall require to determine the amounts
         to be withheld and the time such withholding requirements become
         applicable.

                (c)   If permitted under applicable federal income tax laws,
         a Participant may elect to be taxed in the year in which an Award is
         exercised or received, even if it would not otherwise have become
         taxable to the Participant. If the Participant makes such an election,
         the Participant shall promptly notify the Company in writing and shall
         provide the Company with a copy of the executed election form as filed
         with the Internal Revenue Service no later than thirty days from the
         date of exercise or receipt. Promptly following such notification, the
         Participant shall pay directly to the Company the cash amount
         determined by the Company to be sufficient to satisfy applicable
         federal, state or local withholding tax requirements.

         11.05  LIMITATIONS ON TRANSFER. A Participant's rights and interest
under the Plan may not be assigned or transferred other than by will or the laws
of descent and distribution. Notwithstanding the foregoing, or any other
provision of this Plan, a Participant who holds Non-Qualified Stock Options may
transfer such Options to: (a) his or her spouse, children, grandchildren,
parents, brothers and/or sisters (collectively, "Immediate Family"), (b) a trust
or trusts for the exclusive benefit of such Participant's Immediate Family, (c)
a partnership or limited liability company in which such Participant's Immediate
Family are the only equity holders, or (d) such other persons or entities as
determined by the Administrator, in its sole and



                                       12


<PAGE>   13

absolute discretion. Options so transferred may thereafter be transferred only
to the Participant who originally received the Options or to an individual,
trust or entity to whom the Participant could have initially transferred the
Option pursuant to this Section 11.05. Options which are transferred pursuant to
this Section 11.05 shall be exercisable by the transferee according to the same
terms and conditions as applied to the Participant.

         11.06  SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Administrator
and Participant approve, including, but not limited to, terms which provide that
upon such surrender the Company will pay to the Participant cash or Common
Stock, or a combination of cash and Common Stock.

         11.07  ADJUSTMENTS FOR POOLING-OF-INTERESTS ACCOUNTING. If the Company
enters into a transaction which is intended to be accounted for using the
pooling-of-interests method of accounting and it is determined by the Board that
any Award granted under the Plan could reasonably be expected to preclude such
accounting treatment, then the Board may modify (to the minimum extent required)
or revoke (if necessary) such Award(s) or any provision thereof to the extent
that the Board determines that such modification or revocation is necessary to
enable the transaction to qualify for pooling-of-interests accounting treatment.

                                  ARTICLE XII.
                               GENERAL PROVISIONS

         12.01  AMENDMENT AND TERMINATION OF PLAN.

                (a)   AMENDMENT. The Board shall have complete power and
         authority to amend the Plan at any time and to add any other stock
         based Award or other incentive compensation programs to the Plan as it
         deems necessary or appropriate and no approval by the stockholders of
         the Company or by any other person, committee or entity of any kind
         shall be required to make any amendment; provided, however, that the
         Board shall not, without the requisite affirmative approval of the
         stockholders of the Company, make any amendment (i) which requires
         stockholder approval under any applicable law, including Rule 16b-3 or
         the Code; or (ii) which, unless approved by the requisite affirmative
         approval of stockholders of the Company, would cause, result in or give
         rise to "applicable employee remuneration" within the meaning of
         Section 162(m) of the Code with respect to any Performance Based
         Option. No termination or amendment of the Plan may, without the
         consent of the Participant to whom any Award shall theretofore have
         been granted under the Plan, adversely affect the right of such
         individual under such Award. For the purposes of this section, an
         amendment to the Plan shall be deemed to have the affirmative approval
         of the stockholders of the Company if such amendment shall have been
         submitted for a vote by the stockholders at a duly called meeting of
         such stockholders at which a quorum was present and the majority of
         votes cast with respect to such amendment at such meeting shall have
         been cast in favor of such amendment, or if the holders of outstanding
         stock having not less than a majority of the outstanding shares consent
         to such amendment in writing in the manner provided under the Company's
         bylaws.

                (b)   TERMINATION. The Board shall have the right and the
         power to terminate the Plan at any time. If the Plan is not earlier
         terminated, the Plan shall terminate when all shares authorized under
         the Plan have been issued. No Award shall be granted under the Plan
         after the termination of the Plan, but the termination of the Plan
         shall not have any other effect and any Award outstanding at the time
         of the termination of the Plan may be exercised after termination of
         the Plan at any time prior to the expiration date of such Award to the
         same extent such award would have been exercisable if the Plan had not
         been terminated.



                                       13

<PAGE>   14

         12.02  NO RIGHT TO EMPLOYMENT OR TO CONTINUE AS DIRECTOR. No employee
or other person shall have any claim or right to be granted an Award under this
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the Company or a
Subsidiary of the Company. Neither the Plan nor any action taken hereunder shall
be construed as giving any Director any right to be retained as a Director, or
to limit in any way the right of the stockholders of the Company to remove such
person as a Director.

         12.03  COMPLIANCE WITH RULE 16B-3. It is intended that the Plan be
applied and administered in compliance with Rule 16b-3. If any provision of the
Plan would be in violation of Rule 16b-3 if applied as written, such provision
shall not have effect as written and shall be given effect so as to comply with
Rule 16b-3, as determined by the Administrator. The Board is authorized to amend
the Plan and to make any such modifications to Award Agreements to comply with
Rule 16b-3, as it may be amended from time to time, and to make any other such
amendments or modifications as it deems necessary or appropriate to better
accomplish the purposes of the Plan in light of any amendments made to Rule
16b-3.

         12.04  SECURITIES LAW RESTRICTIONS. The shares of Common Stock issuable
pursuant to the terms of any Awards granted under the Plan may not be issued by
the Company without registration or qualification of such shares under the
Securities Act of 1933, as amended, and under various state securities laws or
without an exemption from such registration requirements. Unless the shares to
be issued under the Plan have been registered and/or qualified as appropriate,
the Company shall be under no obligation to issue shares of Common Stock upon
exercise of an Award unless and until such time as there is an appropriate
exemption available from the registration or qualification requirements of
federal and state law as determined by the Administrator in its sole discretion.
The Administrator may require any person who is granted an award hereunder to
agree with the Company to represent and agree in writing that if such shares are
issuable under an exemption from registration requirements, the shares will be
"restricted" securities which may be resold only in compliance with applicable
securities laws, and that such person is acquiring the shares issued upon
exercise of the Award for investment, and not with the view toward distribution.

         12.05  NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock or stock options otherwise
than under the Plan.

         12.06  CAPTIONS. The captions (i.e., all section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions have
been used in the Plan.

         12.07  SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.

         12.08  NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Administrator, or any other person in the
interpretation of any of the terms of




                                       14
<PAGE>   15


the Plan, any Award granted under the Plan or any rule or procedure established
by the Administrator.

         12.09  CHOICE OF LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Michigan, without regard to its
conflict of law provisions.