Document:

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                                                                   Exhibit 10(j)

August 9, 2000

Mr. James Connor
Newcor, Inc.
43252 Woodward, Suite 240
Bloomfield Hills, MI  48302

                                            Re: Change in Control

Dear Jim:

Newcor, Inc. (the "Company") recognizes that the possibility of a change in
control of the Company may create uncertainty for the Company's management and
other key employees and lead to the departure or distraction of such employees.
Consequently, the Board of Directors of the Company has authorized it to provide
to you (the "Employee") the benefits set forth in this letter as an inducement
to you to remain with the Company in such circumstances.

Our agreement is as follows:

1.   If, at any time within eighteen (18) months after a change in control (as
     defined below), the Company terminates Employee's employment for any reason
     other than cause (as defined below) or Employee terminates such employment
     for good reason (as defined below), the Company shall:

     (a)       Pay the Employee's base salary and other benefits of employment
               through the effective date of termination on regularly scheduled
               payroll dates,

     (b)       Pay in a lump sum in cash within fifteen (15) days after the
               effective date of termination an amount equal to the product of
               (i) 2.0 multiplied by (ii) the sum of (1) the Employee's annual
               base salary on the effective date of termination (or, if higher,
               the annual base salary in effect immediately prior to the change
               in control) plus (2) the average annual bonus of the Employee for
               the three (3) full fiscal years of the Company immediately
               preceding the effective date of termination (or, if higher, such
               average bonus for the three (3) full fiscal years immediately
               preceding the change in control),

     (c)       Continue for eighteen (18) months, but not after Employee and
               Employee's family shall be effectively provided with
               substantially equivalent such benefits under a non-contributory
               plan by another employer, all health, hospitalization, surgical,
               major medical and dental benefits to which Employee and
               Employee's family were entitled on the effective date of
               termination (or, if more favorable in the aggregate to the
               Employee and Employee's family, to which they were entitled
               immediately preceding the change in control), and

     (d)       Continue for eighteen (18) months, but not after Employee and
               Employee's family shall be effectively provided with
               substantially equivalent such benefits under a non-contributory
               plan by another employer, all life insurance and accidental death
               and disability benefits to which Employee and Employee's family
               were entitled on the effective date of termination (or, if more
               favorable in the aggregate to Employee and Employee's family, to
               which they were entitled immediately preceding the change in
               control).

Upon the expiration of the period of coverage set forth in clause (c) above, the
Company shall cause to be provided to Employee health benefits with such
coverages, for such period, and at costs to Employee not in excess of,
coverages, periods and costs which the Company would have been obligated to
provide to Employee under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") if Employee had been terminated on the date of such expiration.

2.   If, at any time within eighteen (18) months after a change in control,
     Employee terminates Employee's employment by the Company other than for
     good reason, the Company shall provide the payments and benefits described
     in paragraph 1 above, except that:
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     a)  The lump sum payable under clause (b) of paragraph 1 shall equal
         one-half the amount otherwise calculated thereunder,

     b)  The period of time for which the Company shall provide the benefits
         described in clause (c) and clause (d) of paragraph 1 shall be
         on-half the time otherwise provided thereunder.

3.   Upon the occurrence of a change in control all options to acquire
     securities of the Company held by Employee shall be immediately exercisable
     in full including all unmatured installments there of if any and, in
     addition, such options shall be exercisable for six (6) months following
     any termination of Employee's employment within a period of eighteen (18)
     months after a change in control or such lesser period as the option would
     have exercisable if Employee's employment had not been terminated.

4.   Nothing in this Agreement is intended to, or shall be construed as
     constituting a contract or other arrangement between the Employee and the
     Company providing for Employee's employment for any specific period of
     time. Further, nothing in this Agreement is intended to prevent or limit
     Employee's continuing or future participation in any benefit, bonus,
     incentive or other plan or program provided by the Company or any affiliate
     or subsidiary of the Company and for which Employee may otherwise qualify.

5.   As used in this Agreement:

     (a) "Change in control" shall mean a change in control of the Company (or
         similar event) 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 as in effect on the date hereof (the
         "Exchange Act") or, if said Item 6(e) of the Exchange Act is no longer
         in effect, any regulations issued by the Securities and Exchange
         Commission pursuant to the Exchange Act or legislation enacted by
         Congress (together with regulations promulgated thereunder) which serve
         similar purposes. Without limitation of the foregoing, a change in
         control shall be deemed to have occurred if and when: (a) any "person"
         (as such term is used in Section 13(d) and 14(d) of the Exchange Act)
         is or becomes a beneficial owner, directly or indirectly, of securities
         of the company representing 30% or more of the combined voting power of
         the Company's then outstanding securities ordinarily having the right
         to vote for the election of directors of the Company, (b) the Company
         shall have merged or consolidated with another corporation and as a
         result of such merger or consolidation less than 70% of the outstanding
         securities ordinarily having the right to vote for the election of
         directors of the surviving or resulting corporation shall be owned in
         the aggregate by the shareholders of the Company immediately prior to
         such merger or consolidation, (c) the Company shall have sold or
         otherwise disposed of, or agreed to sell or otherwise dispose of, to a
         person (as hereinabove defined) in a single transaction or to more than
         one person in a series of related transactions assets of the Company
         constituting all or a major portion of the assets of a business segment
         of the Company or (d) individuals who are members of the Board of
         Directors of the Company immediately prior to a meeting of the
         shareholders of the Company involving a contest for the election of
         directors shall not constitute a majority of the Board of Directors
         following such meeting.

     (b) "Good reason" shall mean Employee's termination of Employee's
         employment due to the Employee's good faith determination (which
         determination shall be conclusive) that (i) there has occurred a
         significant change in the nature or scope of any of Employee's
         positions, status, office, support, authority, powers, functions,
         duties or responsibilities from that existing immediately prior to the
         change in control, (ii) there has occurred a reduction in any of
         Employee's compensation, benefits or perquisites of office from that
         existing immediately prior to the change in control (or, if more
         favorable to the Employee, those existing immediately prior to the
         effective date of termination), (iii) there has been imposed on the
         Employee a requirement that Employee perform Employee's duties on more
         than an occasional basis at locations other than those at which such
         duties were performed immediately prior to the change in control, (iv)
         the Company has breached this Agreement, or another agreement between
         Employee and the Company or any affiliate or subsidiary of the Company,
         and such breach has not been cured within ten (10) days of written
         notice of such breach from Employee to the Company or (v) the Company
         has failed to require a successor to all or substantially all of the
         business or assets of the Company (whether direct or indirect, or by
         purchase, merger, consolidation, acquisition of stock or otherwise)
         expressly to assume all of the terms and obligations of this Agreement
         by an agreement in writing in form and substance satisfactory to
         Employee.

     (c) "Cause" means gross misconduct or willful breach of any written
         contract of employment with the Company or a subsidiary of the Company.

6.   The Company's duties to make the payments and to perform the obligations
     described in this Agreement shall not be affected or reduced by any right
     of set-off, counterclaim, recoupment, defense or other right which the
     Company may have against Employee or any other person. Employee shall not
     be obligated under any circumstances to seek other employment by way of

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     mitigation of the amounts or benefits payable or providable to Employee
     under this Agreement. The Company agrees to pay within fifteen (15) days
     after invoice therefor all reasonable legal fees and expenses which
     employee may incur as a result of any contest (regardless of the outcome
     thereof) by the Company or any other person of the validity or
     enforceability of, or liability of the Company under, any provision of this
     Agreement. Any amounts owing by the Company under this Agreement and not
     paid or provided when due (or, if no due date shall be set forth herein, no
     paid or provided within five (5) days after written demand therefor) shall
     bear interest, compounded quarterly, from such due date to the date when
     paid at the rate of 2% plus the rate from time to time announced by
     Citibank NA of New York, New York (or any successor institution) as its
     "prime" or "base" rate.

7.   The Company may withhold from any amounts payable under this Agreement
     federal, state or local taxes or other amounts required to be withheld
     pursuant to any applicable law or regulation.

8.   This Agreement (a) shall inure to the benefit of and be binding upon the
     Company and its successors and assigns and shall inure to the benefit of
     Employee and Employer's legal representatives, (b) shall be governed by the
     internal laws of the State of Michigan, without reference to principles of
     conflicts of law and (c) may be amended only by an agreement in writing
     executed by the Company and Employee or their respective successors and
     legal representatives. The invalidity or unenforceability of any provision
     of this Agreement shall not affect the validity or enforceability of any
     other provision of this Agreement. Any notices required or which may be
     given under this Agreement shall be in writing and shall be effective when
     delivered or three days after mailing by registered or certified mail,
     return receipt requested, postage prepaid, addressed:

                  If to the Company:

                  Newcor, Inc.
                  43252 Woodward, Suite 240
                  Bloomfield Hills, MI  48302

                  If to the Employee:

                  James J. Connor
                  43252 Woodward, Suite 240
                  Bloomfield Hills, MI  48302

     or to such other address as either party shall have furnished by notice to
     the other.

9.   This Agreement contains the entire understanding of the Company and
     Employee regarding the subject matter of this Agreement.

The foregoing shall become a binding agreement upon your execution and delivery
to the Company of a copy of this letter.

Sincerely,

Newcor, Inc.                                 ACCEPTED:

/s/ William A. Lawson                        /s/ James J. Connor
  William A. Lawson                            James J. Connor<PAGE>   1
                                                                   EXHIBIT 10.11
                          DURA AUTOMOTIVE SYSTEMS, INC.

                            1998 STOCK INCENTIVE PLAN
                          (As amended on May 25, 2000)

         1.       Purposes of the Plan. The purposes of this Stock Incentive
Plan are:

                  -   to attract and retain the best available personnel for
                      positions of substantial responsibility,

                  -   to provide additional incentive to Employees, Directors
                      and Consultants, and

                  -   to promote the success of the Company's business.

         Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

         2.       Definitions. As used herein, the following definitions shall
apply:

                  (1)      "Administrator" means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4 of
the Plan.

                  (2)      "Applicable Laws" means the requirements relating to
the administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

                  (3)      "Board" means the Board of Directors of the Company.

                  (4)      "Change in Control" means the occurrence of any of
the following:

                           (1)  When any "person" as defined in Section 3(a)(9)
of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) of the Exchange Act but excluding the
Company and any Subsidiary and any employee benefit plan sponsored or maintained
by the Company or any Subsidiary (including any trustee of such plan acting as
trustee), directly or indirectly, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, as amended from time to time), after the
effective date of the Plan, of securities of the Company representing 20 percent
or more of the combined voting power of the Company's then outstanding
securities;

                           (2)  When, during any period of 24 consecutive months
during the existence of the Plan, the individuals who, at the beginning of such
period, constitute the Board (the "Incumbent Directors") cease for any reason
other than death to constitute at least a majority thereof,

<PAGE>   2

provided, however, that a director who was not a director at the beginning of
such 24-month period shall be deemed to have satisfied such 24-month requirement
(and be an Incumbent Director) if such director was elected by, or on the
recommendation of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors either actually (because they were
directors at the beginning of such 24-month period) or by prior operation of
this provision; or

                           (3)  The approval by the stockholders of the Company
of a transaction involving the acquisition of the Company by an entity other
than the Company or a Subsidiary through purchase of assets, by merger, or
otherwise.

                  (5)      "Class B Common" means the Class B Common Stock, par
value $0.01 per share of the Company.

                  (6)      "Code" means the Internal Revenue Code of 1986, as
amended.

                  (7)      "Committee" means a committee of Directors appointed
by the Board in accordance with Section 4 of the Plan.

                  (8)      "Common Stock" means the Class A Common Stock, par
value $0.01 per share, of the Company.

                  (9)      "Company" means Dura Automotive Systems, Inc., a
Delaware corporation.

                  (10)     "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

                  (11)     "Director" means a member of the Board.

                  (12)     "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                  (13)     "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a Director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

                  (14)     "Exchange Act" means the Securities Exchange Act of
1934, as amended.

<PAGE>   3

                  (15)     "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:

                           (1)  If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                           (2)  If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

                           (3)  In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

                  (16)     "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

                  (17)     "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.

                  (18)     "Notice of Grant" means a written or electronic
notice evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.

                  (19)     "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

                  (20)     "Option" means a stock option granted pursuant to the
Plan.

                  (21)     "Option Agreement" means an agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

                  (22)     "Option Exchange Program" means a program whereby
outstanding Options are surrendered in exchange for Options with a lower
exercise price.

                  (23)     "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.

<PAGE>   4

                  (24)     "Optionee" means the holder of an outstanding Option
or Stock Purchase Right granted under the Plan.

                  (25)     "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (26)     "Plan" means this 1998 Stock Incentive Plan.

                  (27)     "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the
Plan.

                  (28)     "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

                  (29)     "Rule 16b-3" means Rule 16b-3 of the Exchange Act or
any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

                  (30)     "Section 16(b)" means Section 16(b) of the Exchange
Act.

                  (31)     "Service Provider" means an Employee, Director or
Consultant.

                  (32)     "Share" means a share of the Common Stock, as
adjusted in accordance with Section 13 of the Plan.

                  (33)     "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.

                  (34)     "Subsidiary" means a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 424(f) of the Code.

         3.       Shares Subject to the Plan. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is (a) 1,000,000 Shares, plus (b) any Shares
returned to the 1996 Key Employee Stock Option Plan (the "1996 Plan") as a
result of termination of options under the 1996 Plan, plus (c) an annual
increase to be added on the date of each annual meeting of the stockholders of
the Company, beginning with the 1999 annual meeting of the stockholders, equal
to the lesser of (i) 1,000,000 Shares, (ii) five percent (5%) of the outstanding
Shares on such date or (iii) a lesser amount determined by the Board. The Shares
may be authorized, but unissued, or reacquired Common Stock.

        If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Stock Purchase Right, shall not
be returned to the Plan and

<PAGE>   5

shall not become available for future distribution under the Plan, except that
if Shares of Restricted Stock are repurchased by the Company at their original
purchase price, such Shares shall become available for future grant under the
Plan.

         4.       Administration of the Plan.

                  (1)      Procedure.

                           (1)  Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.

                           (2)  Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                           (3)  Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

                           (4)  Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

                  (2)      Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:

                           (1)  to determine the Fair Market Value;

                           (2)  to select the Service Providers to whom Options
and Stock Purchase Rights may be granted hereunder;

                           (3)  to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;

                           (4)  to approve forms of agreement for use under the
Plan;

                           (5)  to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the shares of Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;

<PAGE>   6

                           (6)  to reduce the exercise price of any Option or
Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;

                           (7)  to institute an Option Exchange Program;

                           (8)  to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;

                           (9)  to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                           (10) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;

                           (11) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable;

                           (12) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

                           (13) to make all other determinations deemed
necessary or advisable for administering the Plan.

                  (3)      Effect of Administrator's Decision. The
Administrator's decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Stock Purchase
Rights.

         5.       Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.

         6.       Limitations.

                  (1)      Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year

<PAGE>   7

(under all plans of the Company and any Parent or Subsidiary) exceeds $100,000,
such Options shall be treated as Nonstatutory Stock Options. For purposes of
this Section 6(a), Incentive Stock Options shall be taken into account in the
order in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

                  (2)      Neither the Plan nor any Option or Stock Purchase
Right shall confer upon an Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.

                  (3)      The following limitations shall apply to grants of
Options:

                           (1)  No Service Provider shall be granted, in any
fiscal year of the Company, Options to purchase more than 500,000 Shares.

                           (2)  In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional 500,000
Shares which shall not count against the limit set forth in subsection (i)
above.

                           (3)  The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

                           (4)  If an Option is cancelled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 13), the canceled Option will be counted
against the limits set forth in subsections (i) and (ii) above. For this
purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.

                  7.       Term of Plan. Subject to Section 19 of the Plan, the
Plan shall become effective upon its adoption by the Board. It shall continue in
effect for a term of ten (10) years unless terminated earlier under Section 15
of the Plan.

                  8.       Term of Option. The term of each Option shall be
stated in the Option Agreement. In the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Option Agreement. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Option
Agreement.

                  9.       Option Exercise Price and Consideration.

                           (1)  Exercise Price. The per share exercise price for
the Shares to be issued pursuant to exercise of an Option shall be determined by
the Administrator, subject to the following:

<PAGE>   8

                  (1)      In the case of an Incentive Stock Option

                           (1)  granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

                           (2)  granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.

                  (2)      In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                  (3)      Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.

         (2)      Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

         (3)      Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                  (1)      cash;

                  (2)      check;

                  (3)      promissory note;

                  (4)      other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

                  (5)      consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;

<PAGE>   9

                  (6)      a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                  (7)      any combination of the foregoing methods of payment;
or
                  (8)      such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.

         10.      Exercise of Option.

                  (1)      Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.

                           An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.

                  Exercising an Option in any manner shall decrease the number
of Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

                  (2)      Termination of Relationship as a Service Provider. If
an Optionee ceases to be a Service Provider, other than upon the Optionee's
death or Disability, the Optionee may exercise his or her Option within such
period of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three (3) months following the Optionee's termination. If, on
the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

<PAGE>   10

                  (3)      Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

                  (4)       Death of Optionee. If an Optionee dies while a
Service Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

                  (5)      Retirement of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's voluntary retirement, the
Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent the Option is vested on the date
of retirement (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee's retirement. If, on the date of retirement, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after retirement,
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan. This Section 10(e) shall only apply to an Optionee who
voluntarily retires from the Company or a Subsidiary on or after the date on
which such Optionee has attained the age of 59 1/2. Notwithstanding anything in
this Section 10(e) or an Option Agreement to the contrary, if the Committee
determines in the good faith exercise of its judgment that any Optionee who has
retired engages in any conduct detrimental to the Company, upon such
determination by the Committee, such Option shall immediately and without
further action on the part of the Company, expire and become unexercisable. No
notice of such determination need to be given to any Optionee in such
circumstance.

                  (6)      Change in Control. In the event of a Change in
Control, only if provided in the Option Agreement, any Option awarded under this
Plan to the extent not previously exercisable shall immediately become fully
exercisable. The Administrator in its sole discretion may direct the

<PAGE>   11

Company to cash out all outstanding Options as of the date a Change in Control
occurs or such other date as the Administrator may determine prior to the Change
in Control.

                  (7)      Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares an Option previously granted
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

         11.      Stock Purchase Rights.

                  (1)      Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must accept such
offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

                  (2)      Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's service with the Company for any reason
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.

                  (3)      Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion.

                  (4)      Rights as a Stockholder. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

         12.      Non-Transferability of Options and Stock Purchase Rights.
Unless determined otherwise by the Administrator, an Option or Stock Purchase
Right may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option or Stock Purchase Right transferable, such
Option or Stock Purchase Right shall contain such additional terms and
conditions as the Administrator deems appropriate.

         13.      Adjustments Upon Changes in Capitalization, Dissolution,
Merger or Asset Sale.

<PAGE>   12

                  (1)      Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company (including shares of
Class B Common) shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.

                  (2)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten (10) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option or Stock Purchase
Right shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option or Stock Purchase Right
will terminate immediately prior to the consummation of such proposed action.

                  (3)      Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the

<PAGE>   13

merger or sale of assets by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

         14.      Date of Grant. The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.

         15.      Amendment and Termination of the Plan.

                  (1)      Amendment and Termination.  The Board may at any time
amend, alter, suspend or terminate the Plan.

                  (2)      Stockholder Approval. The Company shall obtain
stockholder approval of any Plan amendment to the extent necessary and desirable
to comply with Applicable Laws.

                  (3)      Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

         16.      Conditions Upon Issuance of Shares.

                  (1)      Legal Compliance. Shares shall not be issued pursuant
to the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with Applicable Laws and shall be further subject to the approval
of counsel for the Company with respect to such compliance.

                  (2)      Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

         17.      Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be

<PAGE>   14

necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

                  18.      Reservation of Shares. The Company, during the term
of this Plan, will at all times reserve and keep available such number of Shares
as shall be sufficient to satisfy the requirements of the Plan.

                  19.      Stockholder Approval. The Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months after the
date the Plan is adopted by the Board. Such stockholder approval shall be
obtained in the manner and to the degree required under Applicable Laws. The
Plan shall terminate in the event that it is not approved by the stockholders of
the Company within the time period set forth herein. In addition, all of the
Options and/or Stock Purchase Rights granted under this Plan prior to its
approval by the stockholders of the Company shall be granted subject to, and
conditioned upon, such approval and shall automatically terminate in the event
that the Plan has not been approved by the stockholders within the time period
set forth herein.

<PAGE>   15

                          DURA AUTOMOTIVE SYSTEMS, INC.
                            1998 STOCK INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

         Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

                          NOTICE OF STOCK OPTION GRANT

         You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:

                  Number of Options Granted:

                  Date of Grant:                  _____________

                  Vesting Commencement Date:      _____________

                  Exercise Price per Share:       _____________

                  Type of Option:                 ___  Incentive Stock Option

                                                  ___  Nonstatutory Stock Option

                  Term/Expiration Date:           _____________

                  Vesting Schedule:               _____________

         This Option may be exercised, in whole or in part, in accordance with
the following schedule:

                         [SUBJECT TO BOARD DISCRETION.]

         Termination Period:

         This Option may be exercised for 30 days after Optionee ceases to be a
Service Provider. Upon the death or Disability of the Optionee, this Option may
be exercised for 6 months after Optionee ceases to be a Service Provider. Upon
the voluntary retirement of the Optionee (provided that the Optionee at the time
of such retirement has obtained the age of 59 1/2), this Option may be exercised
for one year after the Optionee ceases to be a Service Provider. In no event
shall this Option be exercised later than the Term/Expiration Date as provided
above.

AGREEMENT

<PAGE>   16

         20.      Grant of Option. The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

                  If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an Incentive Stock Option
under Section 422 of the Code. However, if this Option is intended to be an
Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code
Section 422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

         21.      Exercise of Option.

                  (1)      Right to Exercise. This Option is exercisable during
its term in accordance with the Vesting Schedule set out in the Notice of Grant
and the applicable provisions of the Plan and this Option Agreement. This Option
shall immediately become fully exercisable upon a Change in Control (as defined
in the Plan).

                  (2)      Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
completed by the Optionee and delivered to the Chief Financial Officer of the
Company. The Exercise Notice shall be accompanied by payment of the aggregate
Exercise Price as to all Exercised Shares (as permitted by Section 3 hereof).
This Option shall be deemed to be exercised upon receipt by the Company of such
fully executed Exercise Notice accompanied by such aggregate Exercise Price.

                  No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with Applicable Laws. Assuming
such compliance, for income tax purposes the Exercised Shares shall be
considered transferred to the Optionee on the date the Option is exercised with
respect to such Exercised Shares.

         22.      Method of Payment. Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:

                  (1)      cash;

                  (2)      check; or

                  (3)      consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan.

<PAGE>   17

         23.      Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of the Plan and this Option Agreement shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.

         24.      Term of Option. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option Agreement.

         25.      Tax Consequences. Some of the federal tax consequences
relating to this Option, as of the date of this Option, are set forth below.
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

                  (1)      Exercising the Option.

                           (1) Nonstatutory Stock Option. The Optionee may incur
regular federal income tax liability upon exercise of a NSO. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price. If
the Optionee is an Employee or a former Employee, the Company will be required
to withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

                           (2) Incentive Stock Option. If this Option qualifies
as an ISO, the Optionee will have no regular federal income tax liability upon
its exercise, although the excess, if any, of the Fair Market Value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price
will be treated as an adjustment to alternative minimum taxable income for
federal tax purposes and may subject the Optionee to alternative minimum tax in
the year of exercise. In the event that the Optionee ceases to be an Employee
but remains a Service Provider, any Incentive Stock Option of the Optionee that
remains unexercised shall cease to qualify as an Incentive Stock Option and will
be treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.

                  (2)      Disposition of Shares.

                           (1) NSO. If the Optionee holds NSO Shares for
at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes.

                           (2) ISO. If the Optionee holds ISO Shares for at
least one year after exercise and two years after the grant date, any gain
realized on disposition of the Shares will be treated as long-term capital gain
for federal income tax purposes. If the Optionee disposes of ISO

<PAGE>   18

Shares within one year after exercise or two years after the grant date, any
gain realized on such disposition will be treated as compensation income
(taxable at ordinary income rates) to the extent of the excess, if any, of the
lesser of (A) the difference between the Fair Market Value of the Shares
acquired on the date of exercise and the aggregate Exercise Price, or (B) the
difference between the sale price of such Shares and the aggregate Exercise
Price. Any additional gain will be taxed as capital gain, short-term or
long-term depending on the period that the ISO Shares were held.

                  (3)      Notice of Disqualifying Disposition of ISO Shares. If
the Optionee sells or otherwise disposes of any of the Shares acquired pursuant
to an ISO on or before the later of (i) two years after the grant date, or (ii)
one year after the exercise date, the Optionee shall immediately notify the
Company in writing of such disposition. The Optionee agrees that he or she may
be subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

         26.      Entire Agreement; Governing Law. The Plan is incorporated
herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of Michigan.

         27.      NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

         By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

<PAGE>   19

OPTIONEE:

Signature: _______________________________

Print Name: ______________________________

Residence Address: _______________________

                   _______________________

DURA AUTOMOTIVE SYSTEMS, INC.

By: ______________________________________

Title:____________________________________

<PAGE>   20
                                    EXHIBIT A

                            1998 STOCK INCENTIVE PLAN

                                 EXERCISE NOTICE

Dura Automotive Systems, Inc.
2791 Research Drive
Rochester Hills, Michigan  48309

Attention: Chief Financial Officer

         28.      Exercise of Option. Effective as of today, ________________,
_____, the undersigned ("Purchaser") hereby elects to purchase ______________
shares (the "Shares") of the Common Stock of Dura Automotive Systems, Inc. (the
"Company") under and pursuant to the 1998 Stock Incentive Plan (the "Plan") and
the Stock Option Agreement dated _____________, _____ (the "Option Agreement").
The purchase price for the Shares shall be $_____________, as required by the
Option Agreement.

         29.      Delivery of Payment. Purchaser herewith delivers to the
Company the full purchase price for the Shares.

         30.      Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Plan and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.

         31.      Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 13 of the
Plan.

         32.      Tax Consultation. Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

         33.      Entire Agreement; Governing Law. The Plan and Option Agreement
are incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter

<PAGE>   21

hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
Michigan.

Submitted by:                             Accepted by:

PURCHASER:                                DURA AUTOMOTIVE SYSTEMS, INC.

                                          --------------------------------------
Signature                                 By

                                          --------------------------------------
Print Name                                Its

Address:                                  Address:

                                          2791 Research Drive
                                          Rochester Hills, Michigan 48309

Date Received

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