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                                                                    EXHIBIT 10.1

                        NORTH POINTE HOLDINGS CORPORATION
                              EQUITY INCENTIVE PLAN

SECTION 1. PURPOSE

            The purpose of this North Pointe Holdings Corporation Equity
Incentive Plan ("Plan") is to promote the best interests of North Pointe
Holdings Corporation ( "Company") and its shareholders by providing key
employees of the Company and its Affiliates (as defined below) and members of
the Company's Board of Directors who are not employees of the Company or its
Affiliates with an opportunity to acquire a proprietary interest in the Company.
It is intended that the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company by those key
employees who are primarily responsible for shaping and carrying out the
long-range plans of the Company and securing its continued growth and financial
success, all of which benefits the shareholders. In addition, by encouraging
stock ownership by directors who are not employees of the Company or its
Affiliates, the Company seeks to attract and retain on its Board of Directors
persons of exceptional competence and to provide a further incentive to serve as
a director of the Company.

SECTION 2. DEFINITIONS

            As used in the Plan, the following terms shall have the respective
meanings set forth below:

            (a)   "Affiliate" shall mean any entity that, directly or through
one or more intermediaries, is Controlled by, Controls, or is under common
Control with, the Company.

            (b)   "Available Shares" shall mean that number of Shares with
respect to which Awards may be granted under the Plan.

            (c)   "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock or Performance Share granted under the Plan.

            (d)   "Award Agreement" shall mean any written agreement, contract,
or other instrument or document evidencing any Award granted under the Plan.

            (e)   "Board" shall mean the board of directors of the Company.

            (f)   "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

            (g)   "Committee" shall mean a committee of the Board that the Board
designates to administer the Plan and composed of not less than two directors,
each of whom is a "non-employee director for purposes of Section 16" within the
meaning of Rule 16b-3 and each of whom is an "outside director" within the
meaning of Code Section 162(m)(4)(C).

            (h)   "Control" shall mean: (A) for a corporation, ownership of more
than 50% of the combined voting power of all classes of stock entitled to vote;
and (B) for a partnership or

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limited liability company, ownership of more than 50% of the profits or capital
interest of such a business entity.

            (i)   "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.

            (j)   "Excluded Items" shall mean any items that the Committee
determines shall be excluded in fixing Performance Goals, such as any gains or
losses from discontinued operations, any extraordinary gains or losses and the
effects of accounting changes.

            (k)   "Fair Market Value" shall mean, per Share on a particular
date: (i) if the Shares are listed for trading on the New York Stock Exchange,
the last reported sales price on the date in question as reported in The Wall
Street Journal, or if no sales of Shares occur on the date in question, on the
last preceding date on which there was a sale on that exchange; (ii) if the
Shares are not listed or admitted to trading on the New York Stock Exchange, the
last reported sales price on the date in question on the principal national
securities exchange on which the Shares are listed or admitted to trading, or if
no sales of Shares occur on the date in question, on the last preceding date on
which there was a sale on that exchange; (iii) if the Shares are not listed or
admitted to trading on any national securities exchange, the last reported sales
price on the date in question in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or if no sales of Shares occur on
the date in question, on the last preceding date on which there was a sale; (iv)
if on any such date the Shares are not quoted by any such organization, the last
sales price on the date in question as furnished by a professional market maker
making a market in the Shares selected by the Board for the date in question, or
if no sales of Shares occur on the date in question, on the last preceding date
on which there was a sale; or (v) if on any such date no market maker is making
a market in the Shares, the price as determined in good faith by the Committee.

            (l)   "Incentive Stock Option" shall mean an option granted under
Section 6(a) that is intended to meet the requirements of Code Section 422.

            (m)   "Key Employee" shall mean any officer or other key employee of
the Company or of any Affiliate who is responsible for or contributes to the
management, growth or profitability of the business of the Company or any
Affiliate as determined by the Committee, except that only Key Employees of the
Company or a subsidiary within the meaning of Code Section 424(f) may be granted
Incentive Stock Options.

            (n)   "Non-Employee Director" shall mean any member of the Company's
Board who is not an employee of the Company or of any Affiliate.

            (o)   "Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) that is not intended to be an Incentive Stock Option.

            (p)   "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.

            (q)   "Participating Key Employee" shall mean a Key Employee to whom
an Award is granted under the Plan.

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            (r)   "Performance Goals" shall mean one or any combination of the
following (in all cases after excluding the impact of applicable Excluded
Items):

                  (i)   Return on equity for the Performance Period for the
      Company on a consolidated basis.

                  (ii)  Return on investment for the Performance Period (aa) for
      the Company on a consolidated basis, (bb) for any one or more Affiliates
      or divisions of the Company and/or (cc) for any other business unit or
      units of the Company as defined by the Committee at the time of selection.

                  (iii) Return on net assets for the Performance Period (aa) for
      the Company on a consolidated basis, (bb) for any one or more Affiliates
      or divisions of the Company and/or (cc) for any other business unit or
      units of the Company as defined by the Committee at the time of selection.

                  (iv)  Economic value added (as defined by the Committee at the
      time of selection) for the Performance Period (aa) for the Company on a
      consolidated basis, (bb) for any one or more Affiliates or divisions of
      the Company and/or (cc) for any other business unit or units of the
      Company as defined by the Committee at the time of selection.

                  (v)   Earnings from operations for the Performance Period (aa)
      for the Company on a consolidated basis, (bb) for any one or more
      Affiliates or divisions of the Company and/or (cc) for any other business
      unit or units of the Company as defined by the Committee at the time of
      selection.

                  (vi)  Pre-tax profits for the Performance Period (aa) for the
      Company on a consolidated basis, (bb) for any one or more Affiliates or
      divisions of the Company and/or (cc) for any other business unit or units
      of the Company as defined by the Committee at the time of selection.

                  (vii) Net earnings for the Performance Period (aa) for the
      Company on a consolidated basis, (bb) for any one or more Affiliates or
      divisions of the Company and/or (cc) for any other business unit or units
      of the Company as defined by the Committee at the time of selection.

                  (viii) Net earnings per Share for the Performance Period for
      the Company on a consolidated basis.

                  (ix)  Working capital as a percent of net sales for the
      Performance Period (aa) for the Company on a consolidated basis, (bb) for
      any one or more Affiliates or divisions of the Company and/or (cc) for any
      other business unit or units of the Company as defined by the Committee at
      the time of selection.

                  (x)   Net cash provided by operating activities for the
      Performance Period (aa) for the Company on a consolidated basis, (bb) for
      any one or more Affiliates or divisions of the Company and/or (cc) for any
      other business unit or units of the Company as defined by the Committee at
      the time of selection.

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                  (xi)  Market price per Share for the Performance Period.

                  (xii) Total shareholder return for the Performance Period for
      the Company on a consolidated basis.

            (s)   "Performance Period" shall mean any period for which a
Performance Goal or Goals have been established.

            (t)   "Performance Share" shall mean any right granted under Section
6(e) that will be paid out as a Share (which, in specified circumstances, may be
a Share of Restricted Stock).

            (u)   "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or related political subdivision.

            (v)   "Released Securities" shall mean Shares of Restricted Stock
with respect to which all applicable restrictions have expired, lapsed, or been
waived.

            (w)   "Restricted Securities" shall mean Awards of Restricted Stock
or other Awards under which issued and outstanding Shares are held subject to
certain restrictions.

            (x)   "Restricted Stock" shall mean any Share granted under Section
6(c) or 6(d) or, in specified circumstances, a Share paid in connection with a
Performance Share under Section 6(e).

            (y)   "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the SEC
under the Exchange Act.

            (z)   "SEC" shall mean the United States Securities and Exchange
Commission or any successor agency.

            (aa)  "Shares" shall mean shares of common stock of the Company and
such other securities or property as may become subject to Awards pursuant to an
adjustment made under Section 4(e).

            (bb)  "Stock Appreciation Right" shall mean any right granted under
Section 6(b).

SECTION 3. ADMINISTRATION

      (a)   ADMINISTRATION BY THE COMMITTEE. The Committee shall administer the
Plan. If at any time the Committee shall not be in existence, the Committee's
functions as specified in the Plan shall be exercised by a committee consisting
of those members of the Board of Directors of the Company who qualify as
"non-employee directors for purposes of Section 16" under Rule 16b-3 and as
"outside directors" under Code Section 162(m)(4)(C).

      (b)   DELEGATION OF AUTHORITY. To the extent permitted by applicable law,
the Committee may delegate to one or more of the Company's executive officers
any of its authority

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and responsibility with respect to the Plan, other than with respect to Persons
who are subject to Section 16 of the Exchange Act. To the extent that the
Committee has done so, all references to the Committee in this Plan shall
include this officer(s).

      (c)   AUTHORITY. Subject to the Plan's terms, the Committee's authority
includes the following:

      (i)   designate Participating Key Employees;

      (ii)  determine the type(s) of Awards to be granted to each Participating
Key Employee;

      (iii) determine the number of Shares to be covered by (or with respect to
which payments, rights, or other matters are to be calculated in connection
with) Awards granted to Participating Key Employees;

      (iv)  determine the terms of any Award granted to a Participating Key
Employee;

      (v)   determine whether, to what extent, and under what circumstances
Awards granted to Participating Key Employees may be settled or exercised in
cash, Shares, other securities, other Awards, or other property, and the method
or methods by which Awards may be settled, exercised, cancelled, forfeited, or
suspended;

      (vi)  determine whether, to what extent, and under what circumstances
cash, Shares, other Awards, and other amounts payable with respect to an Award
granted to Participating Key Employees under the Plan shall be deferred either
automatically or at the election of the holder thereof or of the Committee;

      (vii) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan (including any Award Agreement);

      (viii) establish, amend, suspend, or waive rules and regulations and
appoint such agents as it shall deem appropriate for proper Plan administration;
and

      (ix)  make any other determination and take any other action that the
Committee deems necessary or desirable for Plan administration.

Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions made under or with respect
to the Plan or any Award shall be within the sole discretion of the Committee,
may be made at any time, and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participating Key Employee,
any Non-Employee Director, any holder or beneficiary of any Award, any
shareholder, and any employee of the Company or of any Affiliate.

Notwithstanding the foregoing, Awards to Non-Employee Directors under the Plan
shall be automatic. The amount and terms of such Awards shall be determined as
provided in Section 6(d).

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SECTION 4. AVAILABLE SHARES

      (a)   NUMBER OF SHARES AVAILABLE. The number of Shares with respect to
which Awards may be granted under the Plan shall be an amount equal to 12.5% of
the then-current Company shares issued and outstanding. Notwithstanding the
foregoing, the Company may grant Incentive Stock Options for no more than
___,000 [INSERT NUMBER EQUAL TO 12.5% OF SHARES] Shares. If, after the effective
date of the Plan, any Shares covered by an Award granted under the Plan, or to
which any Award relates, are forfeited or if an Award otherwise terminates,
expires or is cancelled prior to the delivery of all of the Shares or of other
consideration issuable or payable pursuant to such Award, then the number of
Shares counted against the number of Shares in question will once more be
available for granting of additional Awards.

      (b)   LIMITATIONS ON AWARDS TO INDIVIDUAL PARTICIPANTS. During any one
calendar year, no Participating Key Employee shall be granted Options for more
than ___,000 Shares, Stock Appreciation Rights with respect to more than __,000
Shares, more than __,000 Shares of Restricted Stock and/or an Award for more
than __,000 Performance Shares under the Plan. [IN EACH CASE, INSERT NUMBER
EQUAL TO 12.5% OF SHARES] The Committee may adjust these limitations as provided
below. In all cases, determinations under this Subsection shall be made in a
manner that is consistent with the exemption for performance-based compensation
provided by Code Section 162(m).

      (c)   ACCOUNTING FOR AWARDS. The number of Shares covered by an Award, or
to which such Award relates, shall be counted on the date of grant of such Award
against the number of Shares available for granting Awards.

      (d)   SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Shares delivered
pursuant to an Award shall consist of authorized and unissued Shares.

      (e)   ADJUSTMENTS. This Section's terms are subject to this Subsection's
terms as to adjustments. If the Committee determines that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event ("Adjustment Event") affects the Shares such that
the Committee determines that an adjustment in the Plan is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or any Award, then the Committee
may, in any manner it deems equitable, adjust any or all of:

      (i)   the number and type of Available Shares,

      (ii)  the Share limits specified in Sections 4(a), 4(b), 6(c), 6(d) and
6(e),

      (iii) the number and type of Shares subject to outstanding Awards, and

      (iv)  the grant, purchase, or exercise price with respect to any Award.

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If the Committee deems it appropriate, it may make provision for a cash payment
to the holder of an outstanding Award in lieu of any such adjustment. With
respect to Awards of Incentive Stock Options no such adjustment is authorized to
the extent that that authority would cause the Plan to violate Code Section
422(b). The number of Shares subject to any Award payable or denominated in
Shares shall always be a whole number. Notwithstanding the foregoing, Restricted
Stock subject to grant or previously granted but not yet vested to Non-Employee
Directors under Section 6(d) at the time of any Adjustment Event shall be
subject to only those adjustments necessary to maintain the relative
proportionate interest represented thereby immediately prior to the Adjustment
Event and to preserve, without exceeding, the value of the Restricted Stock.

SECTION 5. ELIGIBILITY

            Any Key Employee, including any executive officer or
employee-director of the Company or of any Affiliate, shall be eligible to be
designated a Participating Key Employee. All Non-Employee Directors shall
receive Awards of Restricted Stock as provided in Section 6(d).

SECTION 6. AWARDS

            (a)   OPTION AWARDS TO KEY EMPLOYEES. The Committee is authorized to
grant Options to Key Employees with the terms set forth below and with any
additional terms not inconsistent with this Plan's provisions as the Committee
shall determine. Non-Employee Directors are not eligible to be granted Options
pursuant to this Section 6(a).

                  (i)   EXERCISE PRICE. The exercise price per Share of an
      Option shall be determined by the Committee; provided, however, that (A)
      the exercise price shall not be less than 100% of the Fair Market Value of
      a Share on the date of grant of the Option and (B) the exercise price may
      vary during the term of the Option if the Committee determines that there
      should be adjustments to the exercise price relating to achievement of
      Performance Goals and/or to changes in an index or indices that the
      Committee determines is appropriate (but in no event may the exercise
      price per Share be less than the Fair Market Value of a Share as
      determined on the date of grant).

                  (ii)  OPTION TERM. The Committee will fix the term of each
      Option. No Option term shall exceed a period of ten years from the date of
      its grant.

                  (iii) EXERCISABILITY AND METHOD OF EXERCISE. The Committee
      will determine each Option's manner and time of exercise. The Committee
      also shall determine the method(s) by which, and the form(s) in which,
      payment of the exercise price with respect to any Option may be made or
      deemed to have been made, including cash, Shares, other securities, other
      Awards, or other property, or any combination, having a Fair Market Value
      on the exercise date equal to the relevant exercise price.

                  (iv)  INCENTIVE STOCK OPTIONS. The terms of any Incentive
      Stock Option granted under the Plan shall comply in all respects with the
      provisions of Code Section 422.

            (b)   STOCK APPRECIATION RIGHTS. The Committee is authorized to
grant Stock Appreciation Rights to Key Employees. Non-Employee Directors are not
eligible to be granted

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Stock Appreciation Rights under the Plan. Subject to the Plan's terms and any
applicable Award Agreement, a Stock Appreciation Right granted under the Plan
shall confer on its holder a right to receive upon its exercise the excess of
(i) the Fair Market Value of one Share on the date of exercise over (ii) the
grant price of the Stock Appreciation Right as specified by the Committee, which
shall not be less than 100% of the Fair Market Value of one Share on the date of
grant of the Stock Appreciation Right. Subject to the Plan's terms the grant
price, term, methods of exercise, methods of settlement (including whether the
Participating Key Employee will be paid in cash, Shares, other securities, other
Awards, or other property, or any combination), and any other terms of any Stock
Appreciation Right shall be as determined by the Committee. In no event shall
the term of any Stock Appreciation Right exceed ten (10) years from the date of
grant. The Committee may impose those conditions or restrictions on the exercise
of any Stock Appreciation Right as it may deem appropriate.

            (c)   RESTRICTED STOCK AWARDS.

                  (i)   ISSUANCE. The Committee is authorized to grant Awards of
      Restricted Stock to Key Employees. The aggregate number of Shares of
      Restricted Stock granted under the Plan to all Participating Key Employees
      as a group shall not exceed ___,000 [INSERT NUMBER EQUAL TO 5% OF SHARES].
      Non-Employee Directors are not eligible to be granted Restricted Stock
      under this Section.

                  (ii)  RESTRICTIONS. Shares of Restricted Stock granted to
      Participating Key Employees shall be subject to those restrictions as the
      Committee may impose (including any limitation on the right to vote a
      Share of Restricted Stock or the right to receive any dividend or other
      right or property), which restrictions may lapse separately or in
      combination at such time(s) (including upon the achievement of Performance
      Goals), in such installments or otherwise, as the Committee may deem
      appropriate. In addition, the Committee shall determine whether dividends
      paid with respect to an Award of Restricted Stock will be immediately paid
      or held in escrow or otherwise deferred and whether those dividends shall
      be subject to the same terms as the Award to which they relate.

                  (iii) REGISTRATION. Any Restricted Stock granted under the
      Plan to a Participating Key Employee may be evidenced in any manner that
      the Committee may deem appropriate, including book-entry registration or
      issuance of a stock certificate or certificates. The Restricted Stock may
      be held in escrow pending lapse of all restrictions. If any stock
      certificate is issued in respect of Shares of Restricted Stock granted
      under the Plan to a Participating Key Employee, the certificate shall be
      registered in the name of the Participating Key Employee and shall bear an
      appropriate legend (as determined by the Committee) referring to the
      terms, conditions, and restrictions applicable to such Restricted Stock.

                  (iv)  PAYMENT OF RESTRICTED STOCK. At the end of the
      applicable restriction period relating to Restricted Stock granted to a
      Participating Key Employee, one or more stock certificates for the
      appropriate number of Shares, free of restrictions imposed under the Plan,
      shall be delivered to the Participating Key Employee, or, if the
      Participating Key Employee received stock certificates representing the
      Restricted Stock at the time of grant, the legends placed on such
      certificates shall be removed.

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                  (v)   FORFEITURE. Except as otherwise determined by the
      Committee, upon termination of a Participating Key Employee's employment
      for any reason during the applicable restriction period, all Shares of
      Restricted Stock still subject to restriction shall be forfeited by the
      Participating Key Employee. The Committee may, when it finds that a waiver
      would be in the best interests of the Company, waive in whole or in part
      any or all remaining restrictions with respect to Shares of Restricted
      Stock held by a Participating Key Employee.

            (d)   RESTRICTED STOCK AWARDS TO NON-EMPLOYEE DIRECTORS.

                  (i)   ELIGIBILITY. Each Non-Employee Director shall
      automatically be granted Restricted Stock under the Plan in the manner set
      forth in this Section.

                  (ii)  ANNUAL RESTRICTED STOCK AWARDS TO NON-EMPLOYEE
      DIRECTORS. Each Non-Employee Director (if he or she continues to serve in
      such capacity) shall, on the day following the annual meeting of
      shareholders in [each year during the time the Plan] is in effect,
      automatically be granted a number of Shares of Restricted Stock equal to
      the lesser of (A) 1,000 Shares, or (B) the number of Shares determined by
      dividing $15,000 by the Fair Market Value of a Share on the date of grant
      (rounded to the nearest whole number). A Person who is first elected as a
      Non-Employee Director on the date of an annual meeting of shareholders
      shall not be eligible to begin to receive grants pursuant to this Section
      until the day following the next succeeding annual meeting of
      shareholders.

                  (iii) VESTING. The Shares of Restricted Stock granted under
      this Subsection shall vest _____.

                  (iv)  GRANT LIMITATION. Notwithstanding the provisions of this
      Section, Restricted Stock shall be automatically awarded to Non-Employee
      Directors under the Plan only for so long as the Plan remains in effect
      and there are a sufficient number of Available Shares for these awards.

            (e)   PERFORMANCE SHARES.

                  (i)   ISSUANCE. The Committee is authorized to grant Awards of
      Performance Shares to Participating Key Employees. The aggregate number of
      Performance Shares granted under the Plan to all Participating Key
      Employees as a group shall not exceed ___,000 [INSERT NUMBER EQUAL TO 5%
      OF SHARES]. Non-Employee Directors are not eligible to be granted
      Performance Shares under the Plan.

                  (ii)  PERFORMANCE GOALS AND OTHER TERMS. The Committee shall
      determine the Performance Period (which must be at least one year), the
      Performance Goal or Goals (and the related performance level(s)) to be
      achieved during any Performance Period, any proportion of payments to be
      made for performance between the minimum and full performance levels for
      any Performance Goal and, if applicable, the relative percentage weighting
      given to each of the selected Performance Goals, the restrictions
      applicable to Shares of Restricted Stock received upon payment of
      Performance Shares if Performance Shares are paid in such manner, and any
      other terms and rights relating to a grant of Performance Shares. The
      Committee shall have sole discretion to alter the

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      selected Performance Goals as that term is defined above, subject to
      shareholder approval, to the extent required to qualify the Award for the
      performance-based exemption provided by Code Section 162(m).
      Notwithstanding the foregoing, if the Committee determines it is advisable
      to grant Performance Shares which do not qualify for the performance-based
      exemption under Code Section 162(m), the Committee may make those grants
      without satisfying that section's requirements.

                  (iii) RIGHTS AND BENEFITS DURING THE PERFORMANCE PERIOD. The
      Committee may provide that, during a Performance Period, a Participating
      Key Employee shall be paid cash, with respect to each Performance Share
      held by such Participating Key Employee, in the same manner, at the same
      time, and in the same amount paid, as a cash dividend on a Share.

                  (iv)  PAYMENT OF PERFORMANCE SHARES. As soon as is reasonably
      practicable following the end of the applicable Performance Period, and
      subject to the Committee certifying in writing as to the satisfaction of
      the requisite Performance Goal(s) if such a certification is required in
      order to qualify the Award for the performance-based exemption provided by
      Code Section 162(m), one or more certificates representing the number of
      Shares equal to the number of Performance Shares payable shall be
      registered in the name of and delivered to the Participating Key Employee.
      Any Shares of Restricted Stock that are payable in connection with
      Performance Shares shall, pending the expiration, lapse, or waiver of the
      applicable restrictions, be evidenced in the manner as set forth in the
      subsection discussing Restricted Stock.

            (f)   GENERAL.

                  (i)   NO CONSIDERATION FOR AWARDS. Awards shall be granted to
      Participating Key Employees for no cash consideration unless otherwise
      determined by the Committee. Awards of Restricted Stock granted to
      Non-Employee Directors under this Section shall be granted for no cash
      consideration unless otherwise required by law.

                  (ii)  AWARD AGREEMENTS. An Award Agreement in the form
      (consistent with the terms of the Plan) that the Committee approves shall
      evidence each Award.

                  (iii) AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER. Awards to
      Participating Key Employees under the Plan may be granted either alone or
      in addition to, in tandem with, or in substitution for any other Award or
      any award granted under any other plan of the Company or any Affiliate.
      Awards granted in addition to or in tandem with other Awards, or in
      addition to or in tandem with awards granted under any other plan of the
      Company or any Affiliate, may be granted either at the same time as or at
      a different time from the grant of such other Awards or awards.

                  (iv)  FORMS OF PAYMENT UNDER AWARDS. Subject to the terms of
      the Plan and of any applicable Award Agreement, payments or transfers to
      be made by the Company or an Affiliate upon the grant, exercise, or
      payment of an Award to a Participating Key Employee may be made in the
      form(s) that the Committee shall determine, and may be made in a single
      payment or transfer, in installments, or on a

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      deferred basis, in each case in accordance with rules and procedures
      established by the Committee. These rules and procedures may include
      provisions for the payment or crediting of interest on installment or
      deferred payments.

                  (v)   LIMITS ON TRANSFER OF AWARDS. No Award (other than
      Released Securities), and no right under any such Award, shall be
      assignable, alienable, saleable, or transferable by a Participating Key
      Employee or a Non-Employee Director otherwise than by will or by the laws
      of descent and distribution (or, in the case of an Award of Restricted
      Securities, to the Company). Subject to applicable law, a Participating
      Key Employee at the discretion of the Committee may, and a Non-Employee
      Director shall, be entitled, in the manner established by the Committee,
      to designate a beneficiary or beneficiaries to exercise his or her rights,
      and to receive any property distributable, with respect to any Award upon
      the death of the Participating Key Employee or the Non-Employee Director,
      as the case may be. Each Award, and each right under any Award, shall be
      exercisable, during the lifetime of the Participating Key Employee or the
      Non-Employee Director, only by the Award recipient or, if permissible
      under applicable law, by his or her guardian or legal representative. No
      Award (other than Released Securities), and no right under any such Award,
      may be pledged, alienated, attached, or otherwise encumbered, and any
      purported pledge, alienation, attachment, or encumbrance of an Award shall
      be void and unenforceable against the Company or any Affiliate.

                  (vi)  TERM OF AWARDS. Except as otherwise provided in the
      Plan, the term of each Award shall be for that period as may be determined
      by the Committee.

                  (vii) SHARE CERTIFICATES; REPRESENTATION. In addition to the
      restrictions imposed pursuant to Section 6(c), Section 6(d) and Section
      6(e), all certificates for Shares delivered under the Plan pursuant to any
      Award or its exercise shall be subject to those stop transfer orders and
      other restrictions as the Committee may deem advisable under the Plan or
      those rules, regulations, and other requirements of the SEC, any stock
      exchange or other market upon which the Shares are then listed or traded,
      and any applicable federal or state securities laws. The Committee may
      cause a legend or legends to be put on any such certificates to make
      appropriate reference to these restrictions. The Committee may require
      each Participating Key Employee, Non-Employee Director or other Person who
      acquires Shares under the Plan by means of an Award originally made to a
      Participating Key Employee or a Non-Employee Director to represent to the
      Company in writing that he or she is acquiring the Shares without a view
      to their distribution.

                  (viii) REPRICING PROHIBITED. Notwithstanding anything in this
      Plan to the contrary, and except for the adjustments provided in Section
      4, neither the Committee nor any other person may decrease the exercise
      price for any outstanding Option after the date of grant nor cancel or
      allow a Participating Key Employee to surrender an outstanding Option to
      the Company as consideration for the grant of a new Option with a lower
      exercise price or the grant of another type of Award the effect of which
      is to reduce the exercise price of any outstanding Option.

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<PAGE>

SECTION 7. AMENDMENT AND TERMINATION OF THE PLAN; CORRECTION OF DEFECTS AND
           OMISSIONS

            (a)   AMENDMENTS TO AND TERMINATION OF THE PLAN. The Board of
Directors of the Company may at any time amend, alter, suspend, discontinue, or
terminate the Plan. The provisions of Section 6 above concerning automatic
Awards to Non-Employee Directors shall not be amended more than once every six
months, other than to comport with changes in the Code and the Employee
Retirement Income Security Act of 1974, as amended. The shareholders must
approve any amendment of the Plan in order for it to be effective if: (i) the
amendment (A) increases the number of Shares with respect to which Awards may be
granted under the Plan (other than increases related to adjustments made as
provided in Section 4), (B) expands the class of persons eligible to participate
under the Plan, (C) otherwise increases in any material respect the benefits
payable under the Plan, or (D) changes the provisions prohibiting repricing in
Section 6; or (ii) if approval is otherwise required by: (A) the Code, (B) the
listing requirements of the Nasdaq Stock Market or any principal securities
exchange or market on which the Shares are then traded (in order to maintain the
listing of the Shares on that exchange), or (C) any other applicable law or
regulation. Termination of the Plan shall not affect the rights of Participating
Key Employees or Non-Employee Directors with respect to Awards previously
granted to them, and all unexpired Awards shall continue in force and effect
after termination of the Plan except as they may lapse or be terminated by their
own terms.

            (b)   CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in any Award or Award Agreement in the manner and to the extent it
shall deem desirable to carry the Plan into effect.

SECTION 8. GENERAL PROVISIONS

            (a)   NO RIGHTS TO AWARDS. No Key Employee, Participating Key
Employee or other Person (other than a Non-Employee Director to the extent
provided in Section 6 above ) shall have any claim to be granted any Award under
the Plan, and there is no obligation for uniformity of treatment of Key
Employees, Participating Key Employees, or holders or beneficiaries of Awards
under the Plan. The terms of Awards need not be the same with respect to each
Participating Key Employee.

            (b)   WITHHOLDING. No later than the date as of which an amount
first becomes includable in the gross income of a Participating Key Employee for
federal income tax purposes with respect to any Award under the Plan, the
Participating Key Employee shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to such
amount. Unless otherwise determined by the Committee, the minimum tax
withholding obligations arising with respect to Awards to Participating Key
Employees under the Plan may be settled with Shares (other than Restricted
Securities), including Shares that are part of, or are received upon exercise
of, the Award that gives rise to the withholding requirement. The obligations of
the Company under the Plan shall be conditional on such a payment or
arrangement, and the Company and any Affiliate, to the extent permitted by law,
shall have the right to deduct any such taxes from any payment otherwise due to
the Participating Key Employee. The

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<PAGE>

Committee may establish such procedures as it deems appropriate for the settling
of withholding obligations with Shares, including, without limitation, the
establishment of such procedures as may be necessary to satisfy the requirements
of Rule 16b-3.

            (c)   NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and these
arrangements may be either generally applicable or applicable only in specific
cases.

            (d)   RIGHTS AND STATUS OF RECIPIENTS OF AWARDS. The grant of an
Award shall not be construed as giving a Participating Key Employee the right to
be retained in the employ of the Company or any Affiliate. Further, the Company
or any Affiliate may at any time dismiss a Participating Key Employee from
employment, free from any liability, or any claim under the Plan, unless
otherwise expressly provided in an Award Agreement. The grant of an Award to a
Non-Employee Director pursuant to Section 6 shall confer no right on the
Non-Employee Director to continue as a director of the Company. Except for
rights accorded under the Plan and under any applicable Award Agreement,
Participating Key Employees and Non-Employee Directors shall have no rights as
holders of Shares as a result of the granting of Awards. Unless the Committee
determines otherwise, for purposes of the Plan and all Awards, the following
rules shall apply:

                  (i)   a Participating Key Employee who transfers employment
      between the Company and any Affiliate, or between Affiliates, will not be
      considered to have terminated employment;

                  (ii)  an individual who ceases to be a Non-Employee Director
      because he or she becomes an employee of the Company or an Affiliate shall
      not be considered to have ceased service as a director with respect to any
      Award until such individual's termination of employment with the Company
      or its Affiliates;

                  (iii) a Participating Key Employee who ceases to be employed
      by the Company or an Affiliate of the Company and immediately thereafter
      becomes a Non-Employee Director, a non-employee director of any Affiliate,
      or a consultant to the Company or any Affiliate shall not be considered to
      have terminated employment until the Participating Key Employee's service
      as a director of, or consultant to, the Company or its Affiliates has
      ceased; and

                  (iv)  a Participating Key Employee employed by an Affiliate of
      the Company will be considered to have terminated employment when the
      entity ceases to be an Affiliate of the Company.

            (e)   UNFUNDED STATUS OF THE PLAN. Unless otherwise determined by
the Committee, the Plan shall be unfunded and shall not create (or be construed
to create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Participating Key Employee,
any Non-Employee Director or other Person. To the extent any Person holds any
right by virtue of a grant under the Plan, that right (unless the Committee
otherwise determines) shall be no greater than the right of an unsecured general
creditor of the Company.

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<PAGE>

            (f)   GOVERNING LAW. Michigan law (without reference to conflict of
law principles) and applicable federal law govern this Plan. Any legal action or
proceeding relating in any way to this Plan shall be heard in the Oakland County
(Michigan) Circuit Court or the Federal District Court for the Eastern District
of Michigan sitting in Detroit, Michigan. Any such action may be heard only in a
"bench" trial, and any party to such an action waives its right to assert a jury
trial. Any legal action or proceeding relating in any way to this Plan must be
brought within 365 days after the day the complaining party first knew or should
have known of the events giving rise to the complaint.

            (g)   SEVERABILITY. If any provision of the Plan or any Award
Agreement or any Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction, or as to any Person or Award, or would
disqualify the Plan, any Award Agreement or any Award under any law deemed
applicable by the Committee, that provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the Committee's determination, materially altering the intent of the
Plan, any Award Agreement or the Award, the provision shall be stricken as to
the jurisdiction, Person, or Award in question, and the remainder of the Plan,
the Award Agreement and the Award shall remain fully effective.

            (h)   NO FRACTIONAL SHARES. No fractional Shares or other securities
shall be issued or delivered pursuant to the Plan, any Award Agreement or any
Award, and the Committee shall determine (except as otherwise provided in the
Plan) whether cash, other securities, or other property shall be paid or
transferred in lieu of any fractional Shares or other securities, or whether
such fractional Shares or other securities or any related rights shall be
canceled, terminated, or otherwise eliminated.

            (i)   HEADINGS. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. These headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any of its provisions.

SECTION 9. EFFECTIVE DATE OF THE PLAN

            The Plan shall be effective from and after the last to occur of the
following: (a) approval of the Plan by the Board; (b) approval of the Plan by a
vote of the Company's shareholders; and (c) the closing of the Company's initial
public offering of Shares registered with the SEC.

SECTION 10. INTERPRETATIONS

      All references in this Plan to a statute or regulation shall include any
then-current amendments of the statute or regulation, any successor statute or
regulation and, in the case of a statute, any rules and regulations promulgated
in connection with that statute. References to Sections mean sections in this
Plan.

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