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                              DONNELLY CORPORATION
                              AMENDED AND RESTATED
                     NONEMPLOYEE DIRECTOR STOCK OPTION PLAN


1.   NAME AND PURPOSE.

     This plan shall be called the Nonemployee Director Stock Option Plan (the
     "Plan"). The Plan is intended to encourage stock ownership by nonemployee
     directors of Donnelly Corporation (the "Company"), to provide them with an
     additional incentive to manage the Company effectively and to contribute to
     its success, and to provide a form of compensation that will attract and
     retain highly qualified individuals to serve as members of the Board of
     Directors of the Company.


2.   EFFECTIVE DATE AND TERM OF THE PLAN.

     The Plan shall become effective October 29, 1993, subject to its approval
     by the shareholders of the Company. No options shall be granted prior to
     approval of the Plan by the shareholders of the Company. Options may not be
     granted under the Plan after October 29, 2003; provided, however, that all
     options outstanding as of that date shall remain or become exercisable
     pursuant to their respective terms and the terms of the Plan.


3.   ADMINISTRATION.

     The Board of Directors of the Company shall be responsible for the
     implementation of the Plan, including the delegation of the administration
     of the Plan to management of the Company. The Board of Directors shall at
     no time exercise any discretion with respect to the administration of the
     Plan.


4.   PARTICIPATION.

     Subject to the limitations set forth in this Section 4, each director of
     the Company, who is neither a contractual nor common law employee of the
     Company or any of its subsidiaries, shall, as of the dates set forth in
     Subsection 6(b), be granted options to purchase shares of the Company's
     Class A Common Stock in accordance with the terms and conditions of the
     Plan. An optionee may hold more than one option, but only on the terms and
     subject to the restrictions hereafter set forth.



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5.   STOCK AVAILABLE FOR OPTIONS.

     Subject to adjustments as provided in Subsection 6(i), the aggregate number
     of shares reserved for issuance under the terms of the Plan shall be
     125,000 shares of the Company's Class A Common Stock, par value $.10 per
     share, either authorized but unissued shares or shares repurchased by the
     Company (the "Shares"). If any outstanding option under the Plan expires or
     is terminated for any reason before October 29, 2003, the Shares allocable
     to the unexercised portion of such option may again be subject to options
     under the Plan; provided that Shares tendered to the Company under
     Subsection 6(e) or Section 10, as payment for Shares or withholding taxes,
     shall not be subject to subsequent option grants under the Plan.


6.   TERMS AND CONDITIONS OF OPTIONS.

     Options granted under this Plan shall be evidenced by agreements in such
     form as the Company shall from time to time approve, which agreements shall
     comply with and be subject to the following conditions:

          (a)  OPTIONEE'S AGREEMENT. Each optionee shall agree to continue to
               serve as a director of the Company if nominated and elected to
               serve as a director by the Company's shareholders. Such agreement
               shall not impose upon the Company, its Board of Directors, or its
               shareholders any obligation to retain the optionee as a director
               for any period.

          (b)  DATE OF OPTIONS. The options shall be granted at the same time
               that options are granted to other employees of the company. These
               options shall be granted to each person entitled to participate
               in the Plan under Section 4.

          (c)  NUMBER OF SHARES AND TERM OF OPTIONS. Subject to adjustments as
               provided in Subsection 6(i), each option (except for the option
               granted in February 2000) shall be for two thousand (2,000)
               shares of the Class A Common Stock of the Company. The option to
               be granted in February 2000, which relates to the six (6) month
               period ended December 31, 1999, shall be for one thousand (1,000)
               shares of the Class A Common Stock of the Company. The term of
               each option shall be for a period of ten (10) years from the date
               of grant of the option.

          (d)  OPTION PRICE. Each option shall state the per share purchase
               price at which a share may be purchased, which shall be one
               hundred percent (100%) of the fair market value of a share of
               Class A Common Stock on the date of the grant of the option. If
               the Shares are listed upon an established stock exchange or
               exchanges, fair market value shall be deemed to be the closing
               price of the shares on such exchange or exchanges on the day the
               option is granted or if no sale of the shares shall have been
               made on any stock exchange on that day, on the next preceding day
               on which there was a sale of the shares. If the Shares are not
               listed upon an established stock


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               exchange but are traded in the over-the-counter market, the fair
               market value per share shall be the closing sale price on the
               national market list as quoted in the National Association of
               Securities Dealers Automated Quotation System ("NASDAQ") on the
               day the option is granted or if no sale of shares is reflected in
               NASDAQ on that day, on the next preceding day on which there was
               a sale of shares reflected in NASDAQ.

          (e)  MEDIUM OF PAYMENT. The aggregate option price shall be payable to
               the Company either: (i) in United States dollars in cash or by
               check, bank draft, or money order payable to the order of the
               Company; (ii) through the delivery of unencumbered shares of
               Class A Common Stock with a fair market value on the date of the
               exercise equal to the aggregate option price provided such shares
               are utilized as payment to acquire at least 100 Shares; or (iii)
               by a combination of (i) and (ii) above. Fair market value will be
               determined in the manner specified in Subsection 6(d) except as
               to the date of determination.

          (f)  EXERCISE OF OPTIONS. No option shall be exercisable, either in
               whole or in part, prior to the first anniversary of the date of
               grant of the option, except that options under this Plan shall
               become immediately exercisable upon a "Change in Control" as
               defined in Subsection 6(i) of the Plan. Thereafter, an option
               shall be exercisable at any time or from time to time during the
               term of the option, upon written notice to the Company, as to any
               or all Shares covered by the option, until its termination or
               expiration in accordance with its terms. Notwithstanding the
               foregoing, an option shall not at any time be exercisable with
               respect to less than 100 shares unless the remaining shares
               covered by an option are less than 100 shares. The purchase price
               of the Shares purchased pursuant to an option shall be paid in
               full upon delivery to the optionee of certificates for such
               shares. Except as provided in Subsection 6(h), an option may be
               exercised by an optionee only while the optionee is a nonemployee
               director of the Company.

          (g)  OPTIONS NOT TRANSFERABLE. Options may not be sold, pledged,
               assigned, or transferred in any manner otherwise than by will or
               the laws of descent or distribution to the extent provided in
               Subsection 6(h). During the lifetime of an optionee, the options
               shall be exercisable only by the optionee. Following the death of
               an optionee, the options shall be exercisable only to the extent
               provided in Subsection 6(h).

          (h)  TERMINATION OF SERVICE AS A DIRECTOR.

               (i)  TERMINATION OF SERVICE FOR REASONS OTHER THAN DISABILITY,
                    DEATH OR REMOVAL. If an optionee ceases to serve the Company
                    as a nonemployee director for any reason other than those
                    set forth in Subsection 6(h)(ii)(iii) or (iv) (relating to
                    disability, death and removal from office as described more
                    fully in such subsections), each option held by the optionee
                    shall, subject to prior expiration according to its terms
                    and other limitations imposed by the Plan, terminate as
                    follows:


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                    (1)  If the non-employee director ceased to serve as a
                         non-employee director because of such director's
                         retirement from the Board, then all options held by
                         such optionee shall remain exercisable for the
                         respective terms of such options. If the optionee dies
                         after retirement from the Board, the optionee's options
                         shall be exercisable in accordance with Subsection
                         6(h)(ii) below. Whether or not a director has retired
                         from the Board shall be determined by the board at the
                         time of the optionee's cessation of service as a
                         director.

                    (2)  If the non-employee director ceased to serve as a
                         non-employee director prior to such director's
                         retirement from the Board, then all options held by
                         such optionee shall terminate two (2) years following
                         the date of the optionee's cessation of service. If the
                         optionee dies during such two (2) year period following
                         the date of the optionee's cessation of service, the
                         optionee's options shall be exercisable, during such
                         two year period, in accordance with Subsection
                         6(h)(iii) below.

               (ii) TERMINATION OF SERVICE FOR DISABILITY. If any optionee
                    ceases to be a nonemployee director on account of physical
                    disability, each option held by such optionee shall remain
                    exercisable during the term of such option. If the optionee
                    dies after such disability, the optionee's options shall be
                    exercisable in accordance with Subsection 6(h)(iii) below.

              (iii) TERMINATION OF SERVICE FOR DEATH. If an optionee ceases to
                    be a nonemployee director by reason of death, each option
                    held by such optionee shall, to the extent rights to
                    purchase shares under the option have been accrued at the
                    time of death and shall not have been fully exercised, be
                    exercisable, in whole or in part, during the term of such
                    option, by the personal representative of the optionee's
                    estate or by any person or persons who have acquired the
                    option directly from the optionee by bequest or inheritance.

               (iv) TERMINATION OF SERVICE FOR REMOVAL. If, at any time, an
                    optionee ceases to serve the Company as a nonemployee
                    director during his or her elected term (except for reasons
                    of disability) because he or she has either been removed
                    from the Board or has been asked to resign from the Board,
                    all exercisable options held by such optionee shall
                    terminate as of the 90th day following the date of such
                    cessation of service. Options which are not exercisable as
                    of the date the optionee's cessation of service shall
                    terminate 90 days after the date they become exercisable.

     (i)  ADJUSTMENT IN SHARES COVERED BY OPTION. The number of Shares covered
          by each outstanding option, and the purchase price per Share thereof,
          and the number of Shares subject to each option to be granted pursuant
          to Subsection 6(c), shall be


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          proportionately adjusted for any increase or decrease in the number of
          issued and outstanding shares resulting from a split in or combination
          of Shares or the payment of a stock dividend on the Shares or any
          other increase or decrease in the number of such Shares effected
          without receipt of consideration by the Company.

          If the Company shall be the surviving corporation in any merger or
          consolidation or if the Company is merged into a wholly-owned
          subsidiary solely for purposes of changing the Company's state of
          incorporation, each outstanding option shall pertain to and apply to
          the securities to which a holder of the number of Shares subject to
          the option would have been entitled. Notwithstanding the remainder of
          this Section 6(i), upon the occurrence of a Change in Control, all
          options then outstanding under the Plan will be fully vested and
          exercisable and all restrictions will immediately cease, unless, in
          the case of a transaction described in clause (iii) or (iv) in the
          following definition of Change in Control, provisions are made in
          connection with such transaction for the continuance of the Plan and
          the assumption of or the substitution for such options with new
          options covering the stock of a successor corporation, or a parent or
          subsidiary thereof, with appropriate adjustments as to the number and
          kind of shares and prices. As used in this Plan, "Change in Control"
          shall mean a change in control of the Company of a nature that would
          be required to be reported in response to Item 6(e) of Schedule 14A of
          Regulation 14A promulgated under the Securities Exchange Act of 1934
          (the "Act"), provided that, for purposes of this Plan, a Change in
          Control shall be deemed to have occurred if: (i) any Person (other
          than the Company) is or becomes the "beneficial owner" (as defined in
          Rule 13d-3 under the Act), directly or indirectly, of securities of
          the Company which represent 20% or more of the combined voting power
          of the Company's then outstanding securities; (ii) during any period
          of two (2) consecutive years, individuals who at the beginning of such
          period constitute the Board of Directors of the Company (the "Board")
          cease for any reason to constitute at least a majority thereof, unless
          the election, or the nomination for election, by the Company's
          shareholders, of each new director is approved by a vote of at least
          two-thirds (2/3) of the directors then still in office who were
          directors at the beginning of the period but excluding any individual
          whose initial assumption of office occurs as a result of either an
          actual or threatened election contest (as such term is used in Rule
          14a-11 of Regulation 14A promulgated under the Act) or other actual or
          threatened solicitation of proxies or consents by or on behalf of a
          person other than the Board; (iii) there is consummated any
          consolidation or merger of the Company in which the Company is not the
          continuing or surviving corporation or pursuant to which shares of
          Class A Common Stock are converted into cash, securities or other
          property, other than a merger of the Company in which the holders of
          Class A Common Stock immediately prior to the merger have the same
          proportionate ownership of common stock of the surviving corporation
          immediately after the merger; (iv) there is consummated any
          consolidation or merger of the Company in which the Company is the
          continuing or surviving corporation in which the holders of Class A
          Common Stock immediately prior to the merger do not own at least fifty
          percent (50%), or such greater percentage as shall be set in any
          agreement with any optionee, or more of the stock of the surviving
          corporation


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          immediately after the merger; (v) there is consummated any sale,
          lease, exchange or other transfer (in one transaction or a series of
          related transactions) of all, or substantially, all, of the assets of
          the Company; or (vi) the shareholders of the Company approve any plan
          or proposal of the liquidation or dissolution of the Company.

          In the event of a change in the Shares as presently constituted, which
          is limited to a change of all of its authorized shares with par value
          into the same number of shares with a different par value or without
          par value, the shares resulting from any such change shall be deemed
          to be the Shares within the meaning of the Plan.

          Except as provided in this Subsection 6(i), an optionee shall have no
          rights by reason of: (i) any split or combination of shares of stock
          of any class; (ii) the payment of any stock dividend or any other
          increase or decrease in the number of shares of stock of any class; or
          (iii) by reason of any dissolution, liquidation, merger, or
          consolidation or spin-off of assets or stock of another corporation.
          Except as provided in Subsection 6(i), any issue by the Company of
          shares of stock of any class, or securities convertible into shares of
          stock of any class, shall not affect, and no adjustment by reason
          thereof shall be made with respect to, the number or price of Shares
          subject to an option. The grant of an option pursuant to the Plan
          shall not affect in any way the right or power of the Company to make
          adjustments, reclassifications, reorganizations, or changes of its
          capital or business structure, or to merge or to consolidate or to
          dissolve, liquidate or sell, or transfer all or any part of its
          business or assets.

     (j)  RIGHTS OF A SHAREHOLDER. An optionee shall have no rights as a
          shareholder with respect to any Shares covered by his or her option
          until the date on which the optionee becomes the holder of record of
          such shares or is entitled to become the-holder of record. No
          adjustment shall be made for dividends, distributions, or other rights
          for which the record date is prior to the date on which he or she
          shall have become the holder of record (or become entitled to be the
          holder of record) thereof, except as provided in Subsection 6(i)
          above.

     (k)  POSTPONEMENT OF DELIVERY OF SHARES AND REPRESENTATIONS. The Company,
          in its discretion, may postpone the issuance and/or delivery of Shares
          upon any exercise of an option and until completion of such stock
          exchange listing, or registration, or other qualification of such
          Shares under any state and/or federal law, rule or regulation as the
          Company may consider appropriate, and may require any person
          exercising an option to make such representations, including a
          representation that it is the optionee's intention to acquire Shares
          for investment and not with a view to distribution thereof, and
          furnish such information as it may consider appropriate in connection
          with the issuance or delivery of the Shares in compliance with
          applicable laws, rules, and regulations. In such event no Shares shall
          be issued to such holder unless and until the Company is satisfied
          with the accuracy of any such representations.


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7.   ADJUSTMENTS IN SHARES AVAILABLE FOR OPTIONS.

     The adjustments in number and kind of Shares and the substitution of Shares
     affecting outstanding options in accordance with Subsection 6(i) hereof,
     shall also apply to the number and kind of Shares reserved for issuance
     pursuant to the Plan, but not yet covered by options.


8.   AMENDMENT OF THE PLAN.

     The Board of Directors, insofar as permitted by law, shall have the right
     from time to time, with respect to any Shares at the time not subject to
     options (but not with respect to Shares which are then subject to options),
     to suspend or discontinue the Plan or revise or amend it in any respect
     whatsoever, except that the provisions of the Plan set forth in Section 4
     and Subsections 6(b), (c), and (d) may not be amended more than once every
     six months (other than to comport with changes in the Internal Revenue Code
     or the rules and regulations promulgated thereunder), and except that,
     without approval of the shareholders of the Company, no such revision or
     amendment shall:

     (a)  increase the maximum number of Shares which may be subject to the Plan
          [except as contemplated in Subsection 6(i)],

     (b)  increase the maximum number of Shares which may be optioned to any one
          nonemployee director,

     (c)  materially increase the benefits accruing to option holders under the
          Plan,

     (d)  decrease the price at which options may be granted, or

     (e)  permit the granting of options under the Plan after October 29, 2003.


9.   RIGHT OF SHAREHOLDERS TO TERMINATE DIRECTOR'S SERVICE.

     Nothing in this Plan or in the grant of any option hereunder shall in any
     way limit or affect the right of the shareholders of the Company to remove
     any director or otherwise terminate his or her service as a director,
     pursuant to law, the Articles of Incorporation, or Bylaws of the Company.


10.  TAX WITHHOLDING.

     The exercise of any option under the Plan is subject to the satisfaction of
     withholding tax or other withholding liabilities, if any, under federal,
     state, and local laws in connection with


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     such exercise. The exercise of an option shall not be effective unless
     applicable withholding shall have been effected. Each optionee may satisfy
     any such withholding tax obligation by any of the following means or by a
     combination of such means:

     (a)  Tendering a cash payment;

     (b)  Authorizing the Company to withhold from the Shares otherwise issuable
          to the optionee as a result of the exercise of the stock option, a
          number of Shares having a fair market value (as determined under
          Subsection 6(d) of this Plan) as of the date that the amount of tax to
          be withheld is to be determined ("Tax Date"), which shall be the date
          of exercise of the option, less than or equal to the amount of the
          withholding obligation; or

     (c)  Delivering to the Company unencumbered shares owned by the optionee
          prior to the date of exercise, having a fair market value (as
          determined under Subsection 6(d) of the Plan) as of the Tax Date, less
          than or equal to the amount of the withholding tax obligation.

     An optionee's election to pay the withholding tax obligation by the latter
     means of payment must either: (i) be made at least six months prior to the
     Tax Date and must be irrevocable for a period at least six months prior to
     the Tax Date; or (ii) the exercise of the option must be effective during
     the period beginning on the third business day following the date of
     release of the Company's quarterly or annual summary statement of sales and
     earnings and ending on the twelfth business day following such date.


11.  APPLICATION OF FUNDS.

     The proceeds received by the Company from the sale of Shares pursuant to
     options will be used for general corporate purposes.


12.  NO OBLIGATION TO EXERCISE OPTION.

     The granting of an option shall impose no obligation upon the optionee to
     exercise such option.


13.  CONSTRUCTION.

     This Plan shall be construed under the laws of the State of Michigan.



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