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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement.
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2)).
[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Section 240.14A-11(c) or Section 240.14a-12

PERCEPTRON, INC.Perceptron, Inc.
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(Name of Registrant as Specified In Its Charter)

DAVID W. GEISS, ESQ.

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

- --------------------------------------------------------------------------------

4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------

5) Total fee paid:

- --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

- --------------------------------------------------------------------------------

2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

- --------------------------------------------------------------------------------

4) Date Filed:

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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.

SEC 1913 (11-01)(02-02)

[PERCEPTRON LOGO]

47827 Halyard Drive
Plymouth, Michigan 48170-2461
(734) 414-6100 Facsimile: (734) 414-4700

October 24, 200223, 2003

Dear Perceptron Shareholder:

You are cordially invited to attend the 2003 Annual Meeting of Shareholders
of Perceptron, Inc. (the "Company") to be held on Monday, December 9, 2002,8, 2003, at
9:00 a.m., local time, at 47827 Halyard Drive, Plymouth, Michigan 48170.

The attached notice of the meeting and Proxy Statement describe the items
of business to be transacted: (a) the election of seveneight directors, (b) the
approval of an amendment to the Company's 1992 Stock Option Plan to increase the
shares of Common Stock available for grant under such plan by 400,000 shares
(the "1992 Plan Amendment"), and (c)(b) such
other business as may properly come before the meeting or any adjournment
thereof.

The enclosed Proxy Statement offers a more complete description of the 1992
Plan Amendment. The Board of Directors encourages you to read the Proxy
Statement carefully.

THE BOARD OF DIRECTORS BELIEVES IT IS IMPORTANT THAT THE 1992 PLAN
AMENDMENT BE ADOPTED, AND WE NEED YOUR VOTE.

After the formal business session, there will be a report to the
shareholders on the progress of the Company along with a discussion period. I
look forward to seeing you at the Annual Meeting and hope you will make plans to
attend. Whether or not you plan to attend the meeting, I urge you to sign, date
and return your proxy in the addressed envelope enclosed for your convenience so
that as many shares as possible may be represented at the meeting. No postage is
required if the envelope is mailed in the United States. Returning theYou may revoke your
proxy will not affect your right to attendand, if you are a shareholder of record, vote in person at the meeting or your right to vote in
person.if
you so desire.

Sincerely,

/s/ Alfred A. Pease
-------------------------------------
Alfred A. Pease
Chairman of the Board of Directors,
President and Chief Executive Officer

[PERCEPTRON LOGO]

--------------------------------------------

PERCEPTRON, INC.
NOTICE OF THE 2003 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 9, 20028, 2003

--------------------------------------------

The Annual Meeting of Shareholders of Perceptron, Inc., a Michigan
corporation, will be held on Monday, December 9, 2002,8, 2003, at 9:00 a.m., local time,
at 47827 Halyard Drive, Plymouth, Michigan 48170 for the following purposes:

1. To elect seveneight directors to serve until the 20032004 Annual Meeting of
Shareholders.Shareholders and until their successors are elected and qualified.

2. To approve and adopt an amendment to the Company's 1992 Stock
Option Plan which would increase by 400,000 shares the total
number of shares of the Company's Common Stock available for grant
under such plan.

3. To transact such other business as may properly come before the
meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on October 18, 2002,17, 2003,
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting. A certified list of shareholders entitled to vote at
the meeting will be available for examination by any shareholder during the
meeting at the corporate offices at 47827 Halyard Drive, Plymouth, Michigan
48170.

A copy of the 2003 Annual Report for the fiscal year ended June 30, 2003
and Proxy Statement accompanies this notice.

By the Order of the Board of Directors

/s/ Thomas S. Vaughn
-------------------------------------------------------
Thomas S. Vaughn, Secretary

47827 Halyard Drive
Plymouth, Michigan 48170
October 24, 200223, 2003

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THE VOTE OF EVERY SHAREHOLDER IS IMPORTANT, AND YOUR COOPERATION IN
PROMPTLY RETURNING YOUR MARKED, DATED AND SIGNED PROXY WILL BE APPRECIATED. THE
PROXY IS REVOCABLE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING. YOUR PROXY WILL, HOWEVER, HELP TO ASSURE A QUORUM AND TO
AVOID ADDED PROXY SOLICITATION COSTS.

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PROXY STATEMENT

-----------------------

PERCEPTRON, INC.
2003 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT 9:00 A.M. ON DECEMBER 9, 20028, 2003

-----------------------

INTRODUCTION

This Proxy Statement and the accompanying formNotice of the 2003 Annual Meeting
of Shareholders, 2003 Annual Report and proxy which were first
mailed to shareholders on approximately October 28, 2002,card are furnished in connection
with the solicitation of proxies on behalf ofby the Board of Directors (the "Board") of
Perceptron, Inc. (the "Company"). The proxies are being solicited for use at the
2003 Annual Meeting of Shareholders of the Company (the "Annual Meeting") to be
held at the corporate offices of the Company on Monday, December 9, 2002,8, 2003, at
9:00 a.m., local time, and at any adjournments thereof, for the purposes set forth in the
accompanying Noticeadjournment of Annual Meeting of Shareholders and in this Proxy
Statement.that meeting. The corporate
offices of the Company are located at 47827 Halyard Drive, Plymouth, Michigan
48170, and the Company's telephone number is (734) 414-6100. The Company expects
that this Proxy Statement and the accompanying materials will be first sent or
given to shareholders on or about October 27, 2003.

Only holders of record of the Company's Common Stock, $0.01 par value (the
"Common Stock") at the close of business on October 18, 200217, 2003 (the "Record Date")
will be entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. Shareholders of record on the Record Date are entitled to
one vote per share on any matter that may properly come before the Annual
Meeting. As of the Record Date, there were 8,244,4538,577,219 shares of Common Stock
outstanding and entitled to vote. The Company has no other class of stock
outstanding. The presence, either in person or by properly executed proxy, of
the holders of a majority of the outstanding shares of Common Stock is necessary
to constitute a quorum at the Annual Meeting. See "Further Information -- Share
Ownership of Management and Certain Shareholders" for a description of the
beneficial ownership of the Common Stock.

Directors, officers and other employees of the Company may solicit, without
additional compensation, proxies by any appropriate means, including personal
interview, mail, telephone, courier service and facsimile transmissions.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries which are record holders of the Company's Common Stock
to forward proxy soliciting material to the beneficial owners of such shares and
the Company will reimburse such record holders for their reasonable expenses
incurred in connection therewith. The cost of soliciting proxies, including the
preparation, assembling and mailing of the Notice of the 2003 Annual Meeting of
Shareholders, the Proxy Statement, form ofthe 2003 Annual Report and the accompanying
proxy and any other soliciting material,card, as well as the cost of forwarding such material to the beneficial
owners of Common Stock, will be borne by the Company. Only one Proxy Statement
will be delivered to multiple shareholders sharing an address unless the Company
has received contrary instructions from one or more of the shareholders. Upon
written or oral request from a shareholder who shares an address with another
shareholder, the Company shall deliver a separate copy of the Proxy Statement.
In the future, shareholders can call or write the Company for a separate annual
report or proxy statement at (734) 414-6100 or 47827 Halyard Drive, Plymouth,
Michigan 48170-2461. Similarly, those shareholders who share an address and wish
to receive only one copy of the annual report or proxy statement when they are
receiving multiple copies can also call or write the Company at the number and
address given above.

Shares represented by a duly executed proxy, unless previously revoked,
will be voted at the Annual Meeting in accordance with the instructions of the
shareholder thereon if the proxy is received by the Company before the close of
business on December 6, 2002.5, 2003. Shares represented by a proxy received after
December 6, 20025, 2003 will be voted if the proxy is received by the Company in
sufficient time to permit the necessary examination and tabulation of the proxy
before the vote of shareholders is taken. A proxy also gives Messrs. Pease,
Garber and Vaughn discretionary authority, to the extent permitted by law, to
vote all shares of Common Stock represented by the proxy on any other matter
that is properly presented for action at the meeting; however, the Board of
Directors does not intend to present any other matters at the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by

the person giving it at any time before it is voted. Proxies may be revoked by
(i) filing with the Secretary of the Company, at or before the Annual Meeting, a
written notice of revocation bearing a later date than the proxy, (ii) duly
executing a subsequent proxy relating to the same shares and delivering it to
the Secretary of the Company at the Company's corporate offices at or before the
Annual Meeting, or (iii) attending the Annual Meeting and voting in person, if
you are a shareholder of record (although attendance at the Annual Meeting will
not in and of itself constitute a revocation of a proxy).

Abstentions, and withheld votes with respect to the election of directors,
are counted only for purposes of determining whether a quorum is present at the
20022003 Annual Meeting. Broker non-votes are not counted for any purpose. Directors
are elected by a plurality of the votes cast, so that only votes cast "for"
directors are counted in determining which directors are elected.

Approval of
the proposal to amend the 1992 Stock Option Plan requires a majority of the
votes cast on the matter. For purposes of determining the number of votes cast
with respect to the proposal to amend the 1992 Stock Option Plan, only those
cast "for" or "against" are included, and abstentions and broker non-votes are
not counted for this purpose.

MATTERS TO COME BEFORE THE MEETING

PROPOSAL 1 -- ELECTION OF DIRECTORS

At the Annual Meeting, Shareholders will be asked to elect a board of seveneight
directors to hold office, in accordance with the Bylaws of the Company, until
the 20032004 annual meeting and until the election and qualification of their
successors, or until their resignation or removal. The following table sets
forth information regarding the nominees for election to the Company's Board of
Directors. The shares represented by properly executed proxies will be voted in
accordance with the specifications made therein. PROXIES WILL BE VOTED "FOR" THE
ELECTION OF SUCH NOMINEES UNLESS THE SPECIFICATION IS MARKED ON THE PROXY
INDICATING THAT AUTHORITY TO DO SO IS WITHHELD. If a nominee is unable to serve
or, for good cause, will not serve, the proxy confers discretionary authority to
vote with respect to the election of any person to the Board. The nominees
receiving a plurality of votes cast at the Annual Meeting will be elected to the
Board of Directors. Shares may not be voted cumulatively for the election of
directors.

The nominees named below have been selected by the Board of Directors of
the Company. The following information with regard to business experience has
been furnished by the respective nominees for director.

POSITION, PRINCIPAL OCCUPATIONS
NAME AND AGE AND OTHER DIRECTORSHIPS
------------ -----------------------

David J. Beattie, 60.........Director61.........Director of the Company since 1997. Mr. Beattie has
been President of McNaughton --- McKay Electric
Company ("MME") since February 2001, and prior to
that time, from September 2000 to February 2001,
was Chief Operating Officer of MME. From February
1997 to September 2000, he was Senior Vice
President, Sales and Marketing of MME, where he was
responsible for all sales and marketing
activities, strategic planning, engineering and
related services. MME is a distributor of
industrial automation products and services.

Kenneth R. Dabrowski, 59.....Director60.....Director of the Company since 1999. Mr. Dabrowski
has been President of the Durant Group, L.L.C., a
management consulting firm, since December 2000,
and has been a member of the faculty at
Massachusetts Institute of Technology since June
1999. Mr. Dabrowski was Vice President, Quality and
Process Leadership, Ford Automotive Operations of
Ford Motor Company from September 1996 to January
1999 where he had global responsibility for
Information Technology, Process Reengineering,
corporate and supplier quality and customer
satisfaction.

Philip J. DeCocco, 64........Director65........Director of the Company since 1996. Mr. DeCocco has
been President of Sturges House, Inc., a company
founded by Mr. DeCocco, since 1983. Sturges House,
Inc. offers executive recruiting and management
consulting services in human resources, strategic
planning, executive development and organization
design and development to various companies.

W. Richard Marz, 59..........Director60..........Director of the Company since 2000. Mr. Marz has
been Executive Vice President, Communications and
ASIC Technology, LSI Logic Corporation ("LSI"),
since February 2002, and prior to that time, from
July 2001 to February 2002, he was Executive Vice
President, ASIC Technology of LSI. From May 1996 to
July 2001, he was Executive Vice President,
Geographic Markets, of LSI. LSI is a semiconductor
manufacturer.

Robert S. Oswald, 61.........Director62.........Director of the Company since 1996. Mr. Oswald has
been Chairman and Chief Executive Officer, Bendix
Commercial Vehicle Systems, LLC, a manufacturer of
air brakes and other safety systems, since March
2002. Mr. Oswald was Chairman, President and Chief
Executive Officer of Robert Bosch Corporation, a
manufacturer of automotive components and systems,
and a member of the Board of Management of Robert
Bosch, GmbH from July 1996 to December 2000.

Alfred A. Pease, 56..........Director57..........Director of the Company since 1996 and Chairman of
the Board since July 1996. Since February 1996, Mr.
Pease has been President and Chief Executive
Officer of the Company.

James A. Ratigan, 55........ Director of the Company since 2003. Mr. Ratigan has
been a consultant to Orapharma, Inc., a specialty
pharmaceutical company that was acquired by Johnson
and Johnson, Inc., since August 2003. From June
1997 to August 2003, Mr. Ratigan was Executive Vice
President, Chief Financial Officer and Secretary of
Orapharma, Inc. Mr. Ratigan was a director of the
Company from 1989 to 1996 and served as the
Company's Chief Operating Officer from May 1994 to
April 1996 and Chief Financial Officer from
December 1993 to June 1996.

Terryll R. Smith, 52.........Director53.........Director of the Company since 1996. Mr. Smith has
been President and Chief Executive Officer of
Novation Environmental Technologies Inc., a water
purification company, since January 2000. From
December 1998 to August 1999, Mr. Smith was
President and Chief Executive Officer of
picoNetworks, an integrated circuits and software
services company. From February 1996 to March 1998,
Mr. Smith was Group Vice President, Sales and
Marketing of Advanced Micro Devices, Inc., a
manufacturer of integrated circuits.

BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors is responsible for direction of the overall affairs
of the Company. Directors of the Company are elected to serve until their
successors are elected. The Board of Directors and each committee thereof meet
formally from time to time and also take action by consent resolutions. During
the fiscal year ended June 30, 2002,2003, the Board of Directors met a total of sixfive
times. All of the current directors who are standing for re-election except for
Mr. Beattie, attended at
least 75% of the total meetings of the Board of Directors, and of any committee
on which they served, held during the period in fiscal year 20022003 in which they
served as directors or members of any such committees.

The Board of Directors has delegated certain authority to an Audit
Committee, a Management Development, Compensation and Stock Option Committee and
a Nominating Committee to assist it in executing its duties. The composition and
principal functions of each Committee are as follows:

Audit Committee. The Audit Committee is currently comprised of three
outside members of the Board of Directors: Messrs. Dabrowski, Oswald and Smith.
The Board of Directors approved and adopted the Audit Committee's charter on May
5, 2000. The charter in its current form was last provided to shareholders as an
appendix to the Company's Proxy Statement dated October 29, 2001. The primary
responsibility of the Audit Committee is to oversee the Company's financial
reporting process on behalf of the Board of Directors and report the results of
its activities to the Board of Directors. The principal functions of the Audit
Committee are the following: (i) review and nominate the accounting firm to be
appointed as the Company's independent certified public accountants; (ii) review
the nature and extent of all services provided to the Company by such
accountants and evaluate their fees and the effects of such services upon their
independence; (iii) review the scope, purpose and procedures of the audit; (iv)
review the audited financial statements and the proposed footnotes to be
included in the Company's Annual Report on Form 10-K and report annually to the
Board of Directors whether the Audit Committee recommends to the Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for filing with the Securities and Exchange
Commission; (v) review with such accountants its experience, findings and
recommendations upon completion of the audit; (vi) review of the Company's
Quarterly Reports on Form 10-Q for filing with the Securities and Exchange
Commission; (vii) review the adequacy of the Company's internal accounting
procedures and controls; and (vii)(viii) review and reassess annually the adequacy of
the Audit Committee's charter. The Audit Committee held fivesix meetings in fiscal
year 2002.2003.

Management Development, Compensation and Stock Option Committee. The
Management Development, Compensation and Stock Option Committee ("Management
Development Committee") is currently comprised of three outside members of the
Board of Directors: Messrs. Beattie, DeCocco and Marz. The principal functions
of the Committee are to review the Company's compensation programs, to establish
the compensation programs for the Company's executive officers, to review and
approve annual bonuses to be paid to such executive officers and to administer
the Company's Stock Option Plans. The Management Development Committee met onceheld two
meetings in fiscal year 2002.2003.

Nominating Committee. The Nominating Committee is currently comprised of
three outside members of the Board of Directors: Messrs. Marz, DeCocco, Dabrowski and
Dabrowski.Marz. The Committee's duties include recommending to the Board of Directors the
nominees to stand for election as directors at each annual meeting of
shareholders and recommending to the Board of Directors the directors to serve
on the standing committees of the Board.

4
Recommendations by shareholders of possible director nominees may be addressed
to the Nominating Committee of the Board of Directors in care of the Secretary
of the Company and will be forwarded to the Committee for consideration. The
Nominating Committee did not meet in fiscal year 2002.2003.

AUDIT COMMITTEE REPORT

In accordance with its charter, the Audit Committee provides assistance to
the Board in fulfilling its responsibility to the shareholders, potential
shareholders and investment community relating to corporate accounting,
reporting practices of the Company and the quality and integrity of the
financial reports of the Company. In doing so, it is the responsibility of the
Audit Committee to maintain free and open communication between the Board, the
Company's independent auditors and the financial management of the Company. Each
Audit Committee member is "independent," as defined in Rule 4200(a)(14) of the
National Association of Securities Dealers Listing Standards.

4
Dealers' listing standards, as those
standards have been modified or supplemented. In addition, the Board of
Directors determined that all of the members of the Audit Committee are
financially literate as defined by the rules and regulations of the Securities
and Exchange Commission.

The Audit Committee received from the independent auditors and reviewed a
formal written statement describing all relationships between the auditors and
the Company that might bear on the auditors' independence consistent with
Independence Standards Board Standard No. 1 "Independence(Independence Discussions with Audit
Committees,"Committees), as may be modified or supplemented, discussed with the auditors any
relationships that may impact their objectivity and independence and satisfied
itself as to the auditors' independence.

The Audit Committee discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61 (Codification
of Statements on Auditing Standards, AU Section 380), as may be amended "Communication with Audit Committees,"or
supplemented, and, with and without management present, discussed and reviewed
the results of the independent auditors' examination of the financial
statements.

The Audit Committee reviewed and discussed with management and the
independent auditors the audited financial statements of the Company as of and
for the fiscal year ended June 30, 2002,2003, including the quality of accounting
principles and significant judgments affecting the financial statements.

The Audit Committee has satisfied its responsibilities under its charter
for the year ended June 30, 20022003 and, based on the above-mentioned reviews and
discussions with management and the independent auditors, recommended to the
Board of Directors that the Company's audited financial statements be included
in its Annual Report on Form 10-K for the year ended June 30, 20022003 for filing
with the Securities and Exchange Commission. Further, the Audit Committee
pursuant to authority delegated to it by the Board of Directors,
approved the engagement of Grant Thornton LLP as the Company's independent
auditors for the fiscal year ended June 30, 2003.2004.

AUDIT COMMITTEE:

ROBERT S. OSWALD, CHAIR
KENNETH R. DABROWSKI
TERRYLL R. SMITH

PROPOSAL 2 -- AMENDMENT TO THE 1992 STOCK OPTION PLAN

PROPOSED AMENDMENT TO THE 1992 PLAN

The Company proposes to amend the 1992 Stock Option Plan (the "1992 Plan")
to increase the total number of shares of Common Stock available for grant under
such plan by 400,000 shares, from 2,414,286 to 2,814,286 (the "1992 Plan
Amendment"). The Board of Directors believes that the 1992 Plan Amendment will
assist the Company in its efforts to attract and retain highly-qualified
executives and provide incentive to the Company's existing executive team.

The 1992 Amendment is necessitated by the fact that there are insufficient
shares of Common Stock currently available under the 1992 Plan for the Company
to continue to grant options to new and existing officers. The amendment, if
approved by the shareholders of the Company, will permit the continued use of
options to attract new executives and to retain and provide incentive to the
Company's existing executive team. The 1992 Plan has not been amended to add
additional shares to the Plan since April 14, 1999.

The Company's executive officer and management compensation program
reflects the Company's philosophy that executive compensation should be linked
to performance. As a result, the Company's Management Development Committee has
historically favored stock-based compensation incentives for the Company's
executives, such as stock options which permit the executives to buy a specified
number of shares of Common Stock at the fair market value on the date an option
is granted. Such stock options gain value only if the price of the Common Stock
increases above the exercise price.

Further, the Company has a continuing need to attract highly qualified
executive candidates to meet the Company's personnel requirements. The Company
utilizes stock options as part of a standard compensation package developed to
attract such candidates.

If the 1992 Plan is amended as proposed, the Company intends to continue to
use stock options as a key component of its executive compensation program as
described above.

If the 1992 Plan Amendment to the 1992 Plan is not adopted, the Company
believes that the number of available option shares would be inadequate to meet
the Company's needs and would significantly impede the Company's ability to
attract new executives and to retain existing key executive team members.

Of the 2,414,286 shares available under the 1992 Plan, as of October 18,
2002, 98,616 shares are available for future grants, 1,267,733 are reserved for
outstanding grants under the 1992 Plan and the remainder have been issued upon
exercise of stock options previously granted under the 1992 Plan.

REQUIRED VOTE

Approval of the proposed amendment to the 1992 Plan requires a majority of
the votes cast on the matter. PROXIES WILL BE VOTED "FOR" THE APPROVAL OF THE
AMENDMENT TO THE 1992 STOCK OPTION PLAN UNLESS OTHERWISE INDICATED ON THE PROXY.

THE 1992 STOCK OPTION PLAN

The 1992 Plan was adopted by the Board of Directors on April 21, 1992 and
approved by the shareholders on April 27, 1992 and has been amended on several
occasions thereafter. The 1992 Plan expires on April 20, 2012. Most recently the
Plan was amended on August 16, 2002 to increase the total number of shares of
Common Stock available for grant under such plan from 2,414,286 to 2,814,286.
Such amendment is being submitted to the shareholders for approval at the Annual
Meeting. A copy of the 1992 Plan along with the proposed amendment will be
furnished to any shareholder upon written request to the Secretary of the
Company at the executive offices of the Company in Plymouth, Michigan.

As of October 18, 2002, an aggregate of 1,267,733 shares of the Common
Stock are reserved for issuance upon the exercise of options granted under the
1992 Plan, and an additional 400,000 will be reserved upon approval of the
proposed amendment to the 1992 Plan. If, for any reason, an option lapses,
expires or terminates without having been exercised in full, the unpurchased
shares covered thereby are again available for grants of options under the 1992
Plan. In addition, if the option is exercised by delivery to the Company of
shares previously acquired pursuant to options granted under the 1992 Plan or
for options granted prior to January 1, 1998, by an optionee through the
retention by the Company of a portion of the option in payment of the exercise
price of such option, then shares of Common Stock underlying the retained option
and shares of Common Stock delivered in payment of the exercise price of an
option as described above will again be available for grants of options under
the 1992 Plan.

Pursuant to the 1992 Plan, employees of the Company (approximately 218
persons) may be granted incentive stock options ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
other persons (including employees) may be granted nonqualified options to
acquire Common Stock. The purpose of the 1992 Plan is to encourage employees of
the Company and certain other persons to acquire Common Stock. The Company
believes that stock option grants to employees help to provide an incentive for
their continued employment, and to attract and retain highly qualified employees
and otherwise more closely align the interests of the Company's employees with
those of the Company and its shareholders.

The 1992 Plan presently is administered by the Management Development
Committee. Subject to the express provisions of the 1992 Plan, the Management
Development Committee has authority, in its discretion, to determine which
employees and other persons receive options, the times when options will be
granted, the exercise price of each option, the period during which each option
may be exercised, the number of shares subject to each option and the terms of
the respective option agreements covering each option. At present, the
Management Development Committee is only granting options under the 1992 Plan to
the officers of the Company, although it may in the future grant options under
the 1992 Plan to other key team members or other persons. The Management
Development Committee may set aside a fixed number of shares of Common Stock out
of the shares available under the 1992 Plan for grants by the President to
employees of the Company who are not officers of the Company. Currently, the
President does not have authority to grant options under the 1992 Plan.

Stock options granted under the 1992 Plan are exercisable upon such terms
within the parameters of the 1992 Plan as the Management Development Committee,
in its discretion, may determine. No option granted under the 1992 Plan may be
exercisable more than ten years from the date upon which it was granted. In
addition, no option granted under the 1992 Plan may be exercisable within six
months from the date of grant by persons subject to Section 16 (b) of the
Securities Exchange Act of 1934, as amended. No ISO shall be exercisable by any
employee who has not been in the continuous employ of the Company for a period
of at least one year from the date of grant. Employees possessing more than ten
percent of the voting stock of the Company are eligible to receive ISOs;
provided, however, that the option price of ISOs granted to such employees shall
not be less than 110% of the fair market value of the shares covered by the ISOs
on the date of grant and such ISOs shall not be exercisable more than five years
after the date of grant. The exercise price of options granted under the 1992
Plan shall be no less than the fair market value of the Common Stock on the date
of grant. The last reported sale price of the Common Stock, as quoted on The
Nasdaq Stock Market's National Market (the "Nasdaq National Market"), on October
18, 2002 was $1.25 per share.

The exercise price is payable in full in cash at the time of exercise; or
in shares of Common Stock, (but generally, only if such shares have been owned
for at least six months); or, in the case of nonqualified stock options or in
the case of ISOs issued on or after May 21, 1993, the exercise price may be paid
by delivery to the Company of a properly executed exercise notice, acceptable to
the Company, together with irrevocable instructions to the participant's broker
to deliver to the Company sufficient cash to pay the exercise price and any
applicable income and employment withholding taxes, in accordance with a written
agreement between the Company and the brokerage firm ("cashless exercise"
procedure); or, in the case of nonqualified stock options or in the case of ISOs
issued on or after October 21, 1994, or before January 1, 1998, the option
exercise price may be paid through the retention by the Company of shares of
Common Stock which would otherwise be transferred to the optionee upon the
exercise of exercisable options, with such retained shares having a value equal
to the difference between the fair market value of the shares being retained
(determined as of the date of exercise of the options), less the exercise price
of such options (but generally, only if the optionee then owns, and has owned
for at least six months, at least an equal number of shares of Common Stock as
the option shares being retained) or, in the case of ISOs issued prior to
January 1, 1997, may be paid in three installments as hereinafter provided or, a
combination of the foregoing. In the event of payments in installments, 50% of
the purchase price will be paid on the date of exercise and on such date the
optionee will execute and deliver to the Company the optionee's promissory note
making the optionee personally liable to pay the balance of the purchase price
in two installments on the first and second anniversaries of the date of
exercise. The promissory note will bear interest at a rate determined by the
Management Development Committee and will be secured by a pledge of the Common
Stock being purchased.

Under Section 162(m) of the Code, the Company may deduct compensation paid
to the Company's chief executive officer and to each of its four highly
compensated executive officers only to the extent that it does not exceed
$1,000,000 during any fiscal year, unless the compensation constitutes
"performance-based" compensation. In general, compensation attributable to a
stock option or stock appreciation right is deemed to be based on performance if
(i) the grant is made by the corporation's compensation committee; (ii) the plan
under which the grant is made includes a limit on the number of shares with
respect to which options may be granted per employee during a specified period;
and (iii) the amount of compensation that an employee may receive under the
terms of the option is based solely on the increase in value of the stock after
the date of grant. The 1992 Plan provides that no employee shall be eligible to
receive aggregate option grants under the 1992 Plan in any one fiscal year to
purchase more than 200,000 shares of the Company's common stock. In addition, as
described above, grants under the 1992 Plan may only be made by the Management
Development Committee and the option price may not be less than fair market
value. Generally, stock options granted under the 1992 Plan constitute
"performance-based" compensation under Section 162(m) of the Code.

the option or one year after the date of termination of employment, but only to
the extent of the accrued right to purchase at the date of such termination. If
any optionee dies while employed by the Company and, if at the date of death,
the optionee is entitled to exercise an option, such option may be exercised by
any person who acquires the option by bequest or inheritance or by reason of the
death of the optionee, or by the executor or administrator of the estate of the
optionee, at any time before the earlier of the expiration date of the option or
one year after the date of death of the optionee, but only to the extent of the
accrued right to purchase at the date of death.

All agreements issued to date under the 1992 Plan contain provisions
accelerating the exercisability of options granted under the 1992 Plan in the
event of certain mergers and sales of all or substantially all of the assets of
the Company.

See "Further Information - Compensation of Directors and Executive Officers
- - Termination of Employment and Change of Control Arrangements" for a
description of additional provisions applicable to the executive officers named
in the Summary Compensation Table.

AMENDMENT OR TERMINATION

The 1992 Plan may be suspended or terminated in its entirety at any time by
the Board of Directors. In addition, the Board of Directors may suspend,
terminate or amend the 1992 Plan at any time without the approval of
shareholders; provided, however, that the approval of shareholders is required
for any amendment which: (i) increases the total number of shares of stock which
may be issued and sold under the 1992 Plan; (ii) decreases the minimum option
price; (iii) alters the class of employees eligible for grants of options; (iv)
increases the maximum term of options granted under the 1992 Plan; (v) reduces
the period of time after the date of grant during which an employee must remain
in the employ of the Company in order to exercise an option; (vi) increases the
term of the 1992 Plan; (vii) withdraws the administration of the 1992 Plan from
a committee of the Board of Directors; or (viii) otherwise materially increases
the benefits accruing to participants under the 1992 Plan.

FEDERAL INCOME TAX CONSEQUENCES

Incentive Stock Options. Under the Code as now in effect, at the time an
ISO is granted or exercised, the optionee will not recognize income and the
Company will not be entitled to any deduction. However, the difference between
the exercise price and the fair market value of the purchased shares on the date
of exercise is a tax preference item which may be subject to the federal
alternative minimum tax in the year the ISO is exercised. The holder of an ISO
generally will be accorded long-term capital gain or loss treatment on the
disposition of Common Stock acquired by exercise of the option; provided that
the disposition (i) occurs more than two years from the date of grant, and (ii)
one year from the date of exercise. An optionee who disposes of shares acquired
upon exercise of an ISO prior to the expiration of the foregoing holding periods
recognizes ordinary income upon the disqualifying disposition equal to the
difference between the option price and the lesser of the fair market value of
the shares on the date of exercise or the date of disposition. Any appreciation
between the date of exercise and date of disposition is taxed as long or
short-term capital gain, depending upon the holding period of the shares.
Payment of the exercise price by surrendering shares of Common Stock generally
will not result in the recognition of a gain or loss on the shares surrendered.
If an ISO is tendered by the retention by the Company of shares of Common Stock
underlying the ISO, the optionee will recognize ordinary income in the year the
option is exercised equal to the difference between the fair market value on the
date of exercise of the Common Stock retained by the Company to satisfy the
option price and the exercise price of the ISO. The optionee's basis for the
newly acquired shares will be equal to the fair market value of the shares on
the exercise date, and the optionee's holding period will begin on the day after
the date of exercise. To the extent ordinary income is recognized by the
optionee, the Company may deduct a corresponding amount as compensation.

Nonqualified Stock Options. Upon the exercise of a nonqualified option, an
optionee will recognize ordinary income equal to the difference between the
option price and the fair market value of the Common Stock at the time of
exercise. When the optionee disposes of shares acquired by the exercise of an
option, the amount received in excess of the fair market value on the date of
exercise will be treated as long or short-term capital gain, depending on the
holding period of the shares. Payment of the option price for shares of Common
Stock by surrender of shares of Common Stock previously owned by the optionee
will not give rise to a recognized gain on the shares surrendered. If a
nonqualified option is exercised with payment by Common Stock, to the extent the
number of new

shares received upon the exercise of a nonqualified option exceeds the number of
shares surrendered upon the exercise of such option, the fair market value of
the additional shares on the date the option is exercised, reduced by the amount
of any cash paid by the optionee upon the exercise of the option, will be
taxable to the optionee as ordinary income in the year the option is exercised.
The optionee's basis and holding period for the number of newly-acquired shares
equal to the number of surrendered shares will carry over from the surrendered
shares on a share-for-share basis. The optionee's basis in the remaining shares
will equal the fair market value of the shares on the exercise date, and the
optionee's holding period will begin on the day after the date on which the
optionee's tax basis is determined. If the option price of a nonqualified option
is tendered through the retention by the Company of shares of Common Stock
underlying the nonqualified option, the optionee will recognize ordinary income
in the year the option is exercised equal to the difference between the fair
market value on the date of exercise of the Common Stock retained by the Company
to satisfy the option price and the exercise price of such options. The
optionee's basis for the newly acquired shares will be equal to the fair market
value of the shares on the exercise date, and the optionee's holding period will
begin on the day after the date of exercise. To the extent ordinary income is
recognized by the optionee, the Company may deduct a corresponding amount as
compensation.

STOCK OPTIONS GRANTED UNDER THE 1992 PLAN

The following table lists each person named in the Summary Compensation
Table under "Further Information - Executive Compensation - Summary Compensation
Table" below, all director nominees, all current executive officers as a group,
all current directors (other than executive officers) as a group, each associate
of the foregoing persons, each other person who received or is to receive at
least five percent of the options under the 1992 Plan, and all current team
members of the Company (other than executive officers) as a group, indicating
the number and weighted average exercise price of options granted under the 1992
Plan to each of the foregoing, as of October 18, 2002. The table does not
include options previously granted under the Company's 1998 Stock Option Plan or
Directors Stock Option Plan.

OPTION SHARES WEIGHTED
GRANTED UNDER AVERAGE
NAME AND PRINCIPAL POSITION 1992 PLAN (1) EXERCISE PRICE
--------------------------- --------------- --------------

Alfred A. Pease, President, Chief Executive Officer and Chairman of the
Board, Director and Director Nominee ......................................... 600,000(2) $10.36
John J. Garber, Vice President - Finance and Chief Financial Officer ........... 80,000(3) $3.26
Harry T. Rittenour, Senior Vice President - Product Production and Quality ..... 125,000(4) $8.43
Wilfred J. Corriveau, Senior Vice President - Global Automotive Business ....... 100,000(5) $2.28
All Current Executive Officers as a Group (4 Persons) .......................... 905,000 $8.57
All Current Directors (other than Executive Officers) as a Group (6 persons) ... 0 $0
David J. Beattie, Director and Director Nominee ................................ 0 $0
Kenneth R. Dabrowski, Director and Director Nominee ............................ 0 $0
Philip J. DeCocco, Director and Director Nominee ............................... 0 $0
W. Richard Marz, Director and Director Nominee ................................. 0 $0
Robert S. Oswald, Director and Director Nominee ................................ 0 $0
Terryll R. Smith, Director and Director Nominee ................................ 0 $0
All Current Team Members (other than Executive Officers) as a Group ............ 362,733 $11.93

- -------
(1) All options are ISOs, except that 321,608, 28,916 and 96,235 shares held by
Messrs. Pease, Rittenour, and certain other team members, respectively, are
non-qualified options. The exercise price of all options is equal to 100%
of the fair market value of the Common Stock on the date of grant.
(2) Options for 200,000, 30,000, 25,000, 25,000, 150,000, 120,000 and 50,000
shares held by Mr. Pease, become exercisable in cumulative annual
installments of 25% beginning February 14, 1997, November 1, 1998, January
1, 2000, September 3, 2000, January 1, 2002, January 2, 2003 and September
3, 2003, respectively, and expire on the earlier of February 13, 2006,
October 31, 2007, December 31, 2008, September 2, 2009, December 31, 2010,
January 1, 2012 and September 2, 2012, respectively, or, if earlier, one
year after Mr. Pease's death or permanent disability or three months after
Mr. Pease's termination of employment. As of October 18, 2002, Mr. Pease
held unexercised options for 600,000 shares of Common Stock under the 1992
Plan, of which 305,000 options are exercisable.
(3) Options for 35,000, 5,000, 10,000, 15,000 and 15,000 shares held by Mr.
Garber become exercisable in cumulative annual installments of 25%
beginning March 1, 2000, September 3, 2000, January 1, 2002, January 2,
2003 and September 3, 2003 respectively, and expire on the earlier of
February 28, 2009, September 2, 2009,

December 31, 2010, January 1, 2012 and September 2, 2012, respectively, or,
if earlier, one year after Mr. Garber's death or permanent disability or
three months after Mr. Garber's termination of employment. As of October
18, 2002, Mr. Garber held unexercised options for 80,000 shares of Common
Stock under the 1992 Plan, of which 32,500 are exercisable.
(4) Options for 25,000, 12,000, 10,000, 10,000, 25,000, 18,000 and 25,000
shares held by Mr. Rittenour become exercisable in cumulative annual
installments of 25% beginning January 1, 1998, September 1, 1999, September
3, 2000, June 1, 2001, January 1, 2002, January 2, 2003 and September 3,
2003 respectively, and expire on the earlier of December 31, 2006, August
31, 2008, September 2, 2009, May 31, 2010, December 31, 2010, January 1,
2012 and September 2, 2012, respectively, or, if earlier, one year after
Mr. Rittenour's death or permanent disability or three months after Mr.
Rittenour's termination of employment. As of October 18, 2002, Mr.
Rittenour held unexercised options for 125,000 shares of Common Stock under
the 1992 Plan, of which 55,750 are exercisable.
(5) Options for 50,000, 25,000 and 25,000 shares held by Mr. Corriveau become
exercisable in cumulative annual installments of 25% beginning October 2,
2001, January 2, 2003 and September 3, 2003, respectively, and expire on
the earlier of October 1, 2010, January 1, 2012 and September 2, 2012,
respectively, or, if earlier, one year after Mr. Corriveau's death or
permanent disability or three months after Mr. Corriveau's termination of
employment. As of October 18, 2002, Mr. Corriveau held unexercised options
for 100,000 shares of Common Stock under the 1992 Plan, of which 25,000 are
exercisable.

EQUITY COMPENSATION PLAN INFORMATION

The following table gives information about the Company's Common Stock that
may be issued upon the exercise of options, warrants and rights under all of the
Company's existing equity compensation plans as of June 30, 2002, including the
1992 Plan, the Directors Stock Option Plan, the 1998 Global Team Member Stock
Option Plan and the Employee Stock Purchase Plan (together, the "Option Plans"):

NUMBER OF SECURITIES
REMAINING AVAILABLE
WEIGHTED-AVERAGE FOR FUTURE ISSUANCE
NUMBER OF SECURITIES TO EXERCISE PRICE OF UNDER EQUITY
BE ISSUED UPON EXERCISE OUTSTANDING COMPENSATION PLANS
OF OUTSTANDING OPTIONS, OPTIONS, WARRANTS (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS AND RIGHTS REFLECTED IN COLUMN (A))
- ------------- ------------------- ---------- ------------------------
(A) (B) (C)

Equity compensation plans approved by shareholders:
1992 Plan 1,148,191(1) 10.75 218,158
Directors Stock Option Plan 173,500(2) 13.54 122,000
Employee Stock Purchase Plan 12,042(3) 1.28 130,185
------------ ------------ -------

Total of equity compensation plans
approved by shareholders 1,333,733(1)(2)(3) 11.03 470,343
------------ ------------ -------

Equity compensation plans not approved by
shareholders: 1998 Global Team Member
Stock Option Plan 691,016 2.79 263,984
------------ ------------ -------

Total: 2,024,749 8.22 734,327
============ ============ =======

- -------
(1) Does not include 400,000 shares which are the subject of the 1992 Plan
Amendment described above under Proposal 2.
(2) Does not include 22,803 shares purchased under the Directors Stock Purchase
Plan but not yet issued.
(3) Does not include an undeterminable number of shares subject to a payroll
deduction election under the Employee Stock Purchase Plan for the period
from July 1, 2002 until December 31, 2002 which will not be issued until
January 2003.

1998 GLOBAL TEAM MEMBER STOCK OPTION PLAN

On February 26, 1998, the Company's Board approved the 1998 Global Team
Member Stock Option Plan (the "1998 Plan"), pursuant to which non-qualified
stock options may be granted to employees who are not officers or directors or
subject to Section 16 of the Securities Exchange Act of 1934. The 1998 Plan has
been amended by the Board on several occasions thereafter.

The purpose of the 1998 Plan is to promote the Company's success by linking
the personal interests of non-executive employees to those of the Company's
shareholders and by providing participants with an incentive for outstanding
performance. The 1998 Plan authorizes the granting of non-qualified stock
options only. The President of the Company administers the 1998 Plan and has the
power to set the terms of any grants under the 1998 Plan. The exercise price of
an option may not be less than the fair market value of the underlying stock on
the date of grant and no option may have a term of more than ten years. All of
the options that are currently outstanding under the 1998 Plan become
exercisable ratably over a four-year period beginning at the grant date and
expire ten years from the date of grant. If, for any reason, an option lapses,
expires or terminates without having been exercised in full, the unpurchased
shares covered thereby are again available for grants of options under the 1998
Plan. In addition, if the option is exercised by delivery to the Company of
shares previously acquired pursuant to options granted under the 1998 Plan, then
shares of Common Stock delivered in payment of the exercise price of an option
will again be available for grants of options under the 1998 Plan.

The exercise price is payable in full in cash at the time of exercise; or
in shares of Common Stock, (but generally, only if such shares have been owned
for at least six months or, if they have not been owned by the optionee for at
least six months, the optionee then owns, and has owned for at least six months,
at least an equal number of shares of Common Stock as the option shares being
delivered); or the exercise price may be paid by delivery to the Company of a
properly executed exercise notice, together with irrevocable instructions to the
participant's broker to deliver to the Company sufficient cash to pay the
exercise price and any applicable income and employment withholding taxes, in
accordance with a written agreement between the Company and the brokerage firm
("cashless exercise" procedure).

Generally, if the employment by the Company of any optionee who is an
employee terminates for any reason, other than by death or total and permanent
disability, any option which the optionee is entitled to exercise on the date of
employment termination may be exercised by the optionee at any time on or before
the earlier of the expiration date of the option or three months after the date
of employment termination, but only to the extent of the accrued right to
purchase at the date of such termination. In addition, the President of the
Company has the discretionary power to extend the date to exercise beyond three
months after the date of employment termination. If the employment of any
optionee who is an employee is terminated because of total and permanent
disability, the option may be exercised by the optionee at any time on or before
the earlier of the expiration date of the option or one year after the date of
termination of employment, but only to the extent of the accrued right to
purchase at the date of such termination. If any optionee dies while employed by
the Company and, if at the date of death, the optionee is entitled to exercise
an option, such option may be exercised by any person who acquires the option by
bequest or inheritance or by reason of the death of the optionee, or by the
executor or administrator of the estate of the optionee, at any time before the
earlier of the expiration date of the option or one year after the date of death
of the optionee, but only to the extent of the accrued right to purchase at the
date of death.

The 1998 Plan provides for acceleration of vesting of awards in the event
of a change of control of the Company. See "Further Information - Compensation
of Directors and Executive Officers - Termination of Employment and Change of
Control Arrangements" for a definition of change of control. The 1998 Plan will
terminate automatically on February 25, 2008. However, the Board may amend or
terminate the 1998 Plan at any time without shareholder approval, but no
amendment or termination of the 1998 Plan or any award agreement may adversely
affect any award previously granted under the 1998 Plan without the consent of
the participant.

FURTHER INFORMATION

EXECUTIVE OFFICERS

The officers listed below were appointed by the Board of Directors and
serve in the capacities indicated. Executive officers are normally appointed
annually by the Board of Directors and serve at the pleasure of the Board.

NAME AND AGE POSITION AND PRINCIPAL OCCUPATIONS
------------ ----------------------------------

Alfred A. Pease, 56........... President57..........President and Chief Executive Officer since
February 1996. Mr. Pease's business experience is
described under "Proposal 1--1 - Election of
Directors."

Wilfred J. Corriveau, 50.....Mr. Corriveau has been Senior Vice President -
Global Automotive Business of the Company since
September 2000. Prior to that, he was, from
February 1996 to September 2000, the Director of
the Global Automotive Business of Rockwell whose
principal business is the manufacture of automation
systems and services.

John J. Garber, 60............ Mr.61...........Mr. Garber has been Vice President - Finance and
Chief Financial Officer of the Company since
February 1999. Prior to that, he was, from
September 1991 to February 1999, the Chief
Financial Officer of Newcor, Inc., whose
principal business is the precision machining of
components for the automotive, medium and heavy
duty truck and agricultural industries.

Harry T. Rittenour, 56........ Mr.57.......Mr. Rittenour has been Senior Vice President -
Product Production and Quality since May 2001.
Prior to that, he was Senior Vice President -
Industrial Businesses Segment from May 2000 until
May 2001 and Vice President - Quality Assurance
from January 1997 until May 2000.
From 1993 to January 1997, Mr. Rittenour was
the Branch Director, Office of the Chief of
Naval Operations in Washington, D.C.

Wilfred J. Corriveau, 49 ..... Mr. Corriveau has been Senior Vice President -
Global Automotive Business of the Company
since September 2000. Prior to that, he was,
from February 1996 to September 2000, the
Director of the Global Automotive Business of
Rockwell whose principal business is the
manufacture of automation systems and
services.

SHARE OWNERSHIP OF MANAGEMENT AND CERTAIN SHAREHOLDERS

PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to beneficial
ownership of the Common Stock by each person known by management of the Company
to be the beneficial owner of more than five percent of its outstanding Common
Stock. The number of shares reported is as of the dates indicated in the
footnotes below. The percentage of class is based on 8,244,4538,577,219 shares of Common
Stock outstanding on October 18, 2002.17, 2003. The information as to each person has
been furnished by such person and, except as where otherwise indicated, each
person has sole voting power and sole investment power with respect to all
shares beneficially owned by such person.

NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------

Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401....................................... 637,900(1) 7.7490401......................................... 592,800(1) 6.91
FMR Corp., Fidelity Management & Research Company, Fidelity Low
Priced Stock Fund, Edward C. Johnson 3d and Abigail P. Johnson
82 Devonshire Street
Boston, Massachusetts 02109............................................ 502,499(2) 5.86
Royce & Associates, Inc.,
1414 Avenue of the Americas
New York, New York 10019............................................. 678,700(2) 8.23

T. Rowe Price Associates, Inc., T. Rowe Price Small-Cap Value Fund Inc
100 E. Pratt Street
Baltimore, Maryland 21202............................................ 427,400(3) 5.1810019............................................... 676,000(3) 7.88

- ------
(1) Based upon their statement on Schedule 13G dated January 30, 2002February 3, 2003 and
filed with the Securities and Exchange Commission on February 12, 2002,11, 2003,
Dimensional Fund Advisors Inc. has sole power to vote and dispose of
12

637,900592,800 shares of Common Stock. Further, based upon its statement on
Schedule 13G, the shares of Common Stock are beneficially owned by
investment companies, trusts and accounts which are advised by Dimensional

Fund Advisors Inc. and none of which own more than 5% of the shares of
Common Stock. Dimensional Fund Advisors Inc. disclaims beneficial
ownership of such shares of Common Stock.
(2) Based upon their statement on Schedule 13G dated and filed with the
Securities and Exchange Commission on February 8, 2002, Royce14, 2003, Fidelity
Management & Associates,
Inc.Research Company ("Royce"Fidelity"), a wholly-owned subsidiary of
FMR Corp. and an investment adviser, is the beneficial owner of 502,499
shares of Common Stock as a result of acting as an investment adviser to
various investment companies. Further, based upon their statement on
Schedule 13G, the shares of Common Stock are owned by one investment
company, Fidelity Low Priced Stock Fund. Edward C. Johnson 3d, FMR Corp.,
through its control of Fidelity, and the Fidelity Low Priced Stock Fund
each has sole power to vote and dispose of 678,700the 502,499 shares of Common Stock.
Neither FMR Corp. nor Edward C. Johnson 3d, Chairman of FMR Corp., has the
sole power to vote or direct the voting of the shares owned directly by
the Fidelity Low Priced Stock Fund, which power resides with the Fund's
Board of Trustees. Fidelity carries out the voting of the shares of Common
Stock under written guidelines established by the Fund's Board of
Trustees. Edward C. Johnson 3d and Abigail P. Johnson each own in excess
of 10% of the aggregate outstanding voting stock of FMR Corp.
(3) Based upon their statement on Schedule 13G dated and filed with the
Securities and Exchange Commission on February 14,4, 2003, 2002, T. Rowe PriceRoyce &
Associates, Inc. has sole power to dispose of 427,400 shares of Common
Stock, and T. Rowe Price Small-Cap Value Fund, Inc.("Royce") has sole power to vote 425,800and dispose of 676,000
shares of Common Stock.

BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information with respect to beneficial
ownership of the Common Stock by each of the directors and director nominees,
the persons named in the Summary Compensation Table and by all directors and
executive officers as a group as of October 18, 2002,17, 2003, unless otherwise
indicated. The information as to each person has been furnished by such person
and, except as where otherwise indicated, each person has sole voting power and
sole investment power with respect to all shares beneficially owned by such
person.

NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OWNER (1) OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------ ----------------------------------------------------- ----------------------- ----------------

David J. Beattie(2)(3)............................... 29,50020,600 *
Kenneth R. Dabrowski(2)(4)........................... 53,47861,282 *
Philip J. DeCocco(2)(5).............................. 50,06057,864 *
W. Richard Marz(2)(6)................................ 27,26936,714 *
Robert S. Oswald(2)(7)............................... 64,51672,320 *
Alfred A. Pease (2)(8)............................... 340,594 4.0441,532 4.95
James A. Ratigan (2)................................. 0 *
Terryll R. Smith (2)(9).............................. 31,00034,000 *
Wilfred J. Corriveau(10)............................. 78,164 *
John J. Garber(10)Garber(11)................................... 36,12963,964 *
Harry T. Rittenour(11)Rittenour(12)............................... 55,950 *
Wilfred J. Corriveau(12)............................. 43,99568,450 *
Directors and executive officers as a group
(10(11 persons)(13)................................ 732,491 8.3934,890 10.12

- ------
* Less than 1% of class
(1) To the best of the Company's knowledge, based on information reported by
such directors and officers or contained in the Company's shareholder
records. The address for Messrs. Beattie, Dabrowski, DeCocco, Marz, Oswald,
Pease, Ratigan, Smith, Corriveau, Garber, Rittenour, and CorriveauRittenour is 47827 Halyard
Drive, Plymouth, Michigan 48170.
(2) Serves as a member of the Board of Directors of the Company.
(3) RepresentsIncludes options to purchase 29,50019,500 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.17, 2003.
(4) Includes options to purchase 21,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
17, 2003.
(5) Includes options to purchase 34,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
17, 2003.
(6) Includes options to purchase 18,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.
(5)17, 2003.

(7) Includes options to purchase 31,00034,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.
(6)17, 2003.
(8) Includes options to purchase 16,000350,034 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October 18, 2002.
(7) Includes17
2003.
(9) Represents options to purchase 31,00034,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.
(8)17, 2003.
(10) Includes options to purchase 305,00037,500 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18
2002.
(9) Represents17, 2003.
(11) Includes options to purchase 31,00043,750 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.
(10)17, 2003.
(12) Includes options to purchase 32,50068,250 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.

(11) Represents17, 2003.
(13) Includes options to purchase 55,750660,034 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.
(12) Includes options to purchase 25,000 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.
(13) Includes options to purchase 543,750 shares of Common Stock, which are
presently exercisable or which are exercisable within 60 days of October
18, 2002.17, 2003.

SECTION 16(A)16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under the securities laws of the United States, the Company's directors,
its executive (and certain other) officers, and any persons holding more than
ten percent of the Common Stock are required to report their ownership of the
Common Stock and any changes in that ownership to the Securities and Exchange
Commission. Directors, officers and greater than ten percent shareholders are
required by the Securities and Exchange Commission andto furnish the National AssociationCompany with
copies of Securities Dealers, Inc.all Section 16(a) reports they file. Specific due dates for these
reports have been established and the Company is required to report in this
proxy statement any failure to file by these dates during the Company's last
fiscal year. AllTo the Company's knowledge, all of these filing requirements were
satisfied by the Company's officers, directors and ten percent shareholders,
except that Mr. MarzBeattie failed to file on a timely basis one report relating to
a single
transactiontwo transactions several years ago in Common Stock beneficially owned by him.him and
Mr. Ratigan failed due to an administrative oversight to disclose his initial
report of ownership of Common Stock on a Form 3 in a timely manner. In making
these statements, the Company has relied solely on the written representations
of its directors, officers and ten percent shareholders and copies of the
reports that have been filed with the Commission.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS

All of the members of the Board of Directors who are not employed by the
Company (the "Eligible Directors") will receive an annual retainer of $10,000,
paid quarterly in the amount of $2,500. All Eligible Directors who serve on more
than one committee of the Board of Directors shall receive $2,000 for each
committee in excess of one on which he serves. All Eligible Directors receive
$1,250 for each Board meeting attended. In addition, directors are reimbursed
for their out-of-pocket expenses incurred in attending Board and committee
meetings. Directors are also eligible to participate in the Company's 1992 Stock
Option Plan (the "1992 Plan").

All Eligible Directors participate in the Directors Stock Option Plan (the
"Directors Plan"). Any Eligible Director who is first elected or appointed after
February 9, 1995 will receive an Option to purchase 15,000 shares of Common
Stock on the date of his or her election or appointment ("Initial Option"). In
addition, each Eligible Director who has been a director for six months before
the date of each Annual Meeting of Shareholders held during the term of the
Directors Plan automatically will be granted, as of the date of such Annual
Meeting, an option to purchase an additional 3,000 shares of Common Stock (an
"Annual Option"). The Directors Plan expires on February 9, 2005. The exercise
price of options granted under the Directors Plan is the last reported sale
price per share of the Company's Common Stock as quoted on The Nasdaq Stock
Market Inc.'s National Market on the date of grant. Each option granted under
the Directors Plan as an Initial Option becomes exercisable in full on the first
anniversary of the date of grant. Options granted as Annual Options become
exercisable in three annual increments of 33 1/3% of the shares subject to the
option. The exercisability of such options is accelerated in the event of the
occurrence of certain changes in control of the Company. All options granted
under the Plan are exercisable for a

8
period of ten years from the date of grant, unless earlier terminated due to the
termination of the Eligible Director's service as a director of the Company.

The Directors Plan also permits Eligible Directors to purchase shares of
Common Stock through the Directors Plan in exchange for all or a portion of the
cash fees payable to them for serving as a director of the Company ("Directors
Stock Purchase Plan Option"). By December 31 of each year, a director must make
his or her election to purchase shares of Common Stock in exchange for all or a
portion of directors fees payable from December 1 of that year to December 1 of
the next year.

Directors fees are payable in cash on March 1, June 1, September 1 and
December 1 of each year. On each of these dates, the Company will determine the
number of shares of Common Stock each Director who has elected to participate in
the Directors Stock Purchase Plan Option has earned on that date. This
determination will be made by

14
dividing all director's fees payable on each of
those dates which the Director has elected to exchange for Common Stock, by the
fair market value of the Common Stock on that date. Any portion of the
director's fees payable on each of those dates which the Director has not
elected to receive in Common Stock will be paid to the Director in cash. The
fair market value of the Common Stock will be determined by using the average of
the closing sales price of the Common Stock on The Nasdaq Stock Market, Inc.'s
National Market for the five consecutive trading days on The Nasdaq's Stock
Market, Inc.'s National Market immediately preceding the date of determination.
The Company will issue share certificates for all shares of Common Stock
purchased in a calendar year by December 15th of such year unless a director
requests to receive his or her share certificate at any time during the year by
sending written notice to the Company.

EXECUTIVE OFFICERS

SUMMARY COMPENSATION TABLE

The following table sets forth certain information as to compensation paid
by the Company for services rendered in all capacities to the Company and its
subsidiaries during the fiscal years June 30, 2002,2003, June 30, 20012002 and June 30,
20002001 to (i) the Company's Chief Executive Officer and (ii) the Company's
executive officers at June 30, 20022003 (other than the Chief Executive Officer)
whose aggregate annual salary and bonus exceeded $100,000.

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------------------------------------------------------------------------- ------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1) OPTIONS (#) COMPENSATION ($)
------------------ ---- ---------- --------- ------------------- ----------------------- ----------------

Alfred A. Pease, President, 2003 277,500 178,463 0 50,000 13,142(2)
Chief Executive Officer and 2002 260,000 0 0 120,000 3,723(2)
Chief Executive Officer and3,723(3)
Chairman of the Board..... 2001 260,000 0 0 150,000 8,250(3)
Chairman of the Board ................ 2000 245,000 137,5528,250(4)

Wilfred J. Corriveau, 2003 195,750 133,255(5) 0 25,000 7,050(4)

John J. Garber, Vice 2002 166,000 0 0 15,000 2,193(2)
President Finance and Chief 2001 166,000 0 0 10,000 6,586(3)
Financial Officer .................... 2000 164,000 87,714 0 5,000 4,659(4)

Harry T. Rittenour, 2002 140,000 0 0 18,000 1,183(2)
Senior Vice President 2001 140,000 0 0 25,000 2,183(3)
Product Production and Quality (5) ... 2000 119,521 61,304 0 20,000 2,383(4)

Wilfred J. Corriveau,8,720(2)
Senior Vice President 2002 180,000 20,000(6)20,000(5) 0 25,000 2,718(3)
Global Automotive Business (6) ....... 2001 145,909 20,000(6)20,000(5) 0 50,000 1,036(4)
(5).......................

John J. Garber, Vice 2003 173,875 104,446 0 15,000 8,693(2)
President Finance and Chief 2002 166,000 0 0 15,000 2,193(3)
Financial Officer......... 2001 166,000 0 0 10,000 6,586(4)

Harry T. Rittenour, 2003 152,250 88,087 0 25,000 2,383(2)
Senior Vice President 2002 140,000 0 0 18,000 1,183(3)
Product Production and 2001 140,000 0 0 25,000 2,183(4)
Quality (6) ..............

- ------
(1) Perquisites and other personal benefits were provided to all of the
persons named in the Summary Compensation Table. Disclosure of such
amounts is not required because such amounts were less than 10% of the
total annual salary and bonuses reported for each of the respective
individuals for each period presented.
(2) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of the named executive officers under the
Company's 401(k) Plan with respect to the fiscal year ended June 30, 2003
as follows: Mr. Pease $7,500; Mr. Corriveau $6,002; Mr. Garber $6,500; and
Mr. Rittenour $1,200; and (ii) the

dollar value of any life insurance premiums paid by the Company in the
fiscal year ended June 30, 2003 with respect to term life insurance for
the benefit of the named executives as follows: Mr. Pease $5,642; Mr.
Corriveau $2,718; Mr. Garber $2,193; and Mr. Rittenour $1,183.
(3) "All Other Compensation" consists of the dollar value of any life
insurance premiums paid by the Company in the fiscal year ended June 30,
2002 with respect to term life insurance for the benefit of the named
executives. The Company made no contributions to the accounts of the named
executive officers under the Company's 401(k) Plan during the fiscal year
ended June 30, 2002.
(3)(4) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of the named executive officers under the
Company's 401(k) Plan with respect to the fiscal year ended June 30, 2001
as follows: Mr. Pease $5,250; Mr. Corriveau $583; Mr. Garber $4,375; and
Mr. Rittenour $1,000; and Mr.
Corriveau $583; and (ii) the dollar value of any life insurance
premiums paid by the Company in the fiscal year ended June 30, 2001 with
respect to term life insurance for the benefit of the named executives as
follows: Mr. Pease $3,000; Mr. Garber $2,193; Mr. Rittenour $1,183; and Mr. Corriveau $453.
(4) "All Other Compensation" is comprised of (i) contributions made by the
Company to the accounts of the named executive officers under the Company's
401(k) Plan with respect to the fiscal year ended June 30, 2000 as follows:
Mr. Pease $5,250;$453; Mr. Garber $2,625; and Mr. Rittenour $1,200; and (ii) the
dollar value of any life

insurance premiums paid by the Company in the fiscal year ended June 30,
2000 with respect to term life insurance for the benefit of the named
executives as follows: Mr. Pease $1,800; Mr. Garber $2,034;$2,193; and Mr.
Rittenour $1,183.
(5) Mr. Rittenour became Senior Vice President-- Product Production and Quality
in May 2001.
(6) Mr. Corriveau receivedCorriveau's bonus amount includes $20,000 that represents the last
installment on a $60,000 signing bonus of up to $60,000,that was payable $20,000 at hire
date and $20,000 at each of the next two employment anniversary dates when
he became Senior Vice President --- Global Automotive Business in August
2000.
(6) Mr. Rittenour became Senior Vice President - Product Production and
Quality in May 2001.

GRANTS OF OPTIONS

The following tables set forth certain information concerning
individual grants of stock options to each of the persons named in the Summary
Compensation Table made during the fiscal year ended June 30, 2002.2003. All grants
described in the following tables were made under the Company's 1992 Stock
Option Plan and contain the Option Acceleration Provision (as defined under
"Further Information -- Compensation of Directors and Officers -- Executive
Officers -- Termination of Employment and Change of Control Arrangements").

OPTION GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------------------------------ ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
NUMBER OF PERCENT OF TOTAL PRICE APPRECIATION FOROPTION TERM (3)
SECURITIES OPTIONS GRANTED TO EXERCISE OR OPTION TERM (3)----------------------
UNDERLYING OPTION EMPLOYEES IN BASE PRICE EXPIRATION -------------------------
NAME GRANTED (#) FISCAL YEAR (1) ($/SH) DATE (2) 5%($) 10%($)
---- ------------ ---------------------- ----------------- --------------- ---------- ---------- ------ -------- ----- -------------

Alfred A. Pease ......... 120,000(4) 52.63 1.24 1/1/Pease....... 50,000(4) 17.39 1.42 9/2/12 122,863 283,72344,652 113,156
Wilfred J. Corriveau.. 25,000(5) 8.69 1.42 9/2/12 22,326 56,578
John J. Garber .......... 15,000(5) 6.57 1.24 1/1/Garber........ 15,000(6) 5.22 1.42 9/2/12 15,357 35,46513,396 33,947
Harry T. Rittenour ...... 18,000(6) 7.89 1.24 1/1/Rittenour.... 25,000(7) 8.69 1.42 9/2/12 18,429 42,558
Wilfred J. Corriveau .... 25,000(7) 10.96 1.24 1/1/12 25,596 59,10922,326 56,578

- ----------
(1) Options to purchase a total of 228,000287,600 shares of Common Stock were granted
to team members in the fiscal year ended June 30, 2002.2003.
(2) Options expire on the date indicated, or, if earlier, one year after the
optionee's death or permanent disability or three months after the
optionee's termination of employment.
(3) Represents the value of such options at the end of its ten year term
(without discounting to present value) assuming the market prices of the
Common Stock appreciates from the grant date at an annually compounded rate
of 5% or 10%. These amounts represent rates of appreciation only. Actual
gains, if any, will be dependent on overall market conditions and on the
future performance of the Common Stock. There can be no assurance that the
amounts reflected in this table will be achieved.
(4) Consists of 30,00029,860 nonqualified options and 90,00020,140 incentive stock options.
Nonqualified options become exercisable in one installment of 30,00012,500 shares
of Common Stock on January 2, 2003.September 3, 2003 and two annual installments of 8,680
shares of Common Stock beginning on September 3, 2004. The Incentive Stock
Options become exercisable in threetwo annual installments of 30,0003,820 shares of
Common Stock beginning on January 2, 2004.September 3, 2004 and one installment of 12,500
shares of Common Stock on September 3, 2006.
(5) Consists of 25,000 incentive stock options. The Incentive Stock Options
become exercisable in four annual installments of 6,250 shares of Common
Stock beginning September 3, 2003.

(6) Consists of 15,000 incentive stock options. The Incentive Stock Options
become exercisable in four annual installments of 3,750 shares of Common
Stock beginning January 2, 2003.
(6) Consists of 18,000 incentive stock options. The Incentive Stock Options
become exercisable in four annual installments of 4,500 shares of Common
Stock beginning January 2,September 3, 2003.
(7) Consists of 25,000 incentive stock options. The Incentive Stock Options
become exercisable in four annual installments of 6,250 shares of Common
Stock beginning January 2,September 3, 2003.

EXERCISE AND VALUE OF OPTIONS

The following tables set forth certain information concerning exercises of
stock options during the fiscal year ended June 30, 20022003 by each of the persons
named in the Summary Compensation Table and the number of and the value of
unexercised stock options held by such persons as of June 30, 20022003 on an
aggregated basis.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)
ACQUIRED ON VALUE ------------------------------- ---------------------------------------------------------- ----------------------------
NAME EXERCISE (#) REALIZED ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ --------------- ----------- ------------- ----------- -------------

Alfred A. Pease .........Pease....... 0 0 298,750 251,250 750 39,450378,750 221,250 515,738 1,005,213
Wilfred J. Corriveau.. 6,250 15,875 25,000 68,750 71,000 274,750
John J. Garber ..........Garber........ 8,750 16,213 38,750 32,500 34,138 147,113
Harry T. Rittenour.... 0 0 31,250 33,750 50 4,800
Harry T. Rittenour ...... 0 0 50,250 49,750 125 5,955
Wilfred J. Corriveau .... 0 0 12,500 62,500 0 7,75069,000 56,000 107,820 244,810

- ----------
(1) Represents the total gain which would have been realized if all such
options had been exercised on June 30, 2002.2003.
(2) Represents the fair market value of the shares of Common Stock relating to
exercised options, as of the date of exercise, less the exercise price of
such options.

EMPLOYMENT AGREEMENTS

Mr. Pease serves in his present capacity pursuant to the terms of an
employment agreement. Mr. Pease's agreement provides for an annual base salary
of $200,000, subject to increase at the discretion of the Management Development
Committee, benefits comparable to the Company's other executive officers,
including life, disability and health insurance and the use of a Company leased
automobile and an annual performance bonus target level of 60% of his base
salary. Mr. Pease's base salary for fiscal year 2003 is $280,000 effective
August 16, 2002 and he will receive reimbursement of reasonable monthly club
dues. In the event Mr. Pease's employment is terminated without cause, his
salary and benefits will continue for twelve months and he will earn a pro rata
portion of any bonus that would have been earned in the year of the termination.

TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

Payments due to Mr. Pease upon termination of his employment with the
Company are described above under "Further Information -- Compensation of
Directors and Executive Officers -- Executive Officers -- Employment
Agreements."

Agreements relating to stock options granted under the 1992 Plan to each of
the executive officers named in the Summary Compensation Table, as well as
certain other officers of the Company, also provide that such options become
immediately exercisable in the event that the optionee's employment is
terminated without cause, or there is a diminishment of the optionee's
responsibilities, following a Change of Control of the Company or, if, in the
event of a Change of Control, such options are not assumed by the person
surviving the Change of Control or purchasing the assets in the Change of
Control. A "Change of Control" is generally defined as a merger of the Company
in which the Company is not the survivor, certain share exchange transactions,
the sale or transfer of all or substantially all of the assets of the Company,
or any person or group of persons (as defined by Section 13(d) the Securities
Exchange Act of 1934, as amended) acquires more than 50% of the Common Stock
("Option Acceleration Provision").

11
MANAGEMENT DEVELOPMENT, COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION

The Management Development, Compensation and Stock Option Committee of the
Board of Directors ("Management Development Committee") currently consists of
Messrs. DeCocco, Beattie and Marz. During fiscal year 2002,2003, no member of the
Management Development Committee served as an officer or employee of the Company
or any of its subsidiaries nor had any member of the Management Development
Committee formerly served as an officer of the Company or any of its
subsidiaries. During fiscal year 2002,2003, none of the executive officers of the
Company served on the board of directors or on the compensation committee of any
other entity, any of whose executive officers served either on the Board of
Directors or on the Management Development Committee of the Company.

REPORT OF THE MANAGEMENT DEVELOPMENT,
COMPENSATION AND STOCK OPTION COMMITTEE

The Management Development Committee is responsible for the planning,
review and administration of the Company's executive compensation program and
the Company's stock-based executive compensation programs, including the 1992
Stock Option Plan. During the fiscal year ended June 30, 20022003 all members of
this Committee were non-employee directors of the Company.

The Company's objective is to provide a superior return to its
shareholders. To support this objective, the Company believes it must attract,
retain and motivate top quality executive talent. The Company's executive
compensation program is a critical tool in this process.

The Company's executive compensation program has been designed to link
executive compensation to Company performance through at-risk compensation
opportunities, providing significant reward to executives who contribute to the
Company's success. The Company's executive compensation program consists of base
salary, annual cash profit sharing incentive opportunities and long-term
incentives represented by stock options.

The base salary, annual cash profit sharing incentive opportunity, stock
option and other compensation terms of new executive officers are established
based upon each executive's qualifications, position and level of responsibility
as compared with the Company's other executives.

BASE SALARY

The Management Development Committee recognizes the importance of a
competitive compensation structure in retaining and attracting valuable senior
executives. Executive salary levels are reviewed and established annually. The
salaries received by the Company's executives generally reflect their levels of
responsibility, the profitability of the Company and other factors, such as
assessments of individual performance.

Because of the Company's significantly improved financial performance in
fiscal year 2001 and
fiscal year 2002 prior tofollowing the Company's sale of its forest products business
unit and taking into consideration that Mr. Pease had not received an increase
in base salary in the prior two fiscal years, the Management Development
Committee did not increaseincreased the base salary of Alfred A. Pease, Chairman of the Board,
President and Chief Executive Officer of the Company, by $20,000 or any7.7% in
fiscal year 2003.

In fiscal year 2003, the Management Development Committee increased the
base salaries of the Company's other executive officerofficers by between 5.4% and 10%.
These increases were approved in recognition of the Company, forCompany's improved financial
performance during the last half of fiscal year 2002.2002, particularly in the
Company's automotive related operations for which these executives have primary
responsibility. In addition, these executives had not received increases in base
salary in the prior two fiscal years, except in connection with their
appointment to their then current executive positions. The size of the
percentage increases were determined based on the Committee's evaluation of the
contributions made by each of the executive officers to improving the Company's
operating performance.

ANNUAL PROFIT SHARING

The Company's executive officers are eligible for annual cash profit
sharing incentive opportunities. Generally, at the beginning of each year, the
Management Development Committee develops a profit sharing plan applicable to
all executives of the Company, including the Chief Executive Officer of the
Company.

The Fiscal Year 2003 Team Member 401(k) Plan/Restoration and Profit Sharing
Plan, which applied to all employees of the Company, determined notincluding Mr. Pease and the
other executive officers, provided that the Company would make matching
contributions to implement an annualthe Company's Employees' 401(k) Plan ("401(k) Plan") and a
profit sharing planpayout only if the Company achieved earnings per share ("EPS") in
excess of the Fiscal Year 2003 Profit Plan established by the Board. For
performance in excess of that level, a portion of each dollar of Company pre-tax
earnings above progressive earnings share targets would be added to the 401(k)
Plan match/profit sharing pool. One half of the pool was to be used to match any
401(k) Plan contributions made by team members, up to 50% of their
contributions, and the remainder to be used to fund the profit sharing pool.

The actual profit sharing pool earned was to be divided among employees in
relation to their profit sharing potential for the year. Each employee's profit
sharing potential for the year was stated as a percentage of their base salary.
In fiscal year 2003, that level was 60% for Mr. Pease and 55% for the other
executive officers.

During fiscal year 2003, the 401(k) Plan match/profit sharing pool earned
under the plan was 112% of the employees' aggregate potential payout, including
100% of their potential 401(k) Plan Matching Company contributions and 114% of
their aggregate profit sharing potential.

Mr. Pease received a profit sharing payment of 68.6% of his base salary
level as of June 30, 2002 and the other executive officers received profit
sharing payments of 62.9% of their base salary level as of June 30, 2002. This
decision was based primarily on the significant
uncertainties infirst profit sharing payout received by these executives since the
Company's operating performance for fiscal year 2002 as a
result of economic conditions which made it difficult to implement a plan with
meaningful targets and objectives. Further, the Company did not believe that the
level of Company profitability for fiscal year 2002 was likely to justify
bonuses for the executive officers of the Company. For this reason, noFiscal Year 2000 Profit Sharing Plan.

No discretionary bonuses were paid to Mr. Pease or the other executive
officers for
the year.in fiscal year 2003.

STOCK OPTIONS

Stock option grants have historically been utilized by the Company as part
of its compensation program for all levels of team members, including the
Company's executives. The Company's stock option program permits team members to
buy a specific number of shares of Common Stock in the future, at the fair
market value of such shares on the date the option is granted. Since stock
options gain value only if the price of the Common Stock increases above the
option exercise price, this use of stock option grants reflects the Company's
philosophy of linking compensation to performance. In addition, the Committee
believes that stock option grants to team members help to provide an incentive
for their continued employment and otherwise more closely align their interests
with those of 18
the Company and its shareholders. The Company also utilizes stock
options as part of its standard compensation package developed to attract highly
qualified candidates to the Company.

Mr. Pease was granted options under the 1992 Stock Option Plan to purchase
120,00050,000 shares of Common Stock in fiscal year 2002.2003. The grant reflected the
Management Development Committee's evaluation of Mr. Pease's performance in
fiscal year 2001 and2002, including the improvement in the Company's financial
performance during the year. In determining the size of the grant, the Committee
took into consideration that Mr. Pease had received a sizeable stock option
grant in the prior fiscal year, in part because of his performance in the first
six months of fiscal year 2002, particularlyand the successful disposition of the Company's
forest products business unit, and the Committee's
decision not to increase his base salary in fiscal year 2002. In addition, in
determining the number of option shares granted to Mr. Pease, the Committee took
into consideration that 230,000 of Mr. Pease's option shares, constituting
approximately 50% of Mr. Pease's stock options, had an exercise price in excess
of $20.00 per share.unit. The Committee was concerned that Mr. Pease's existing stock
options did not provide him with the appropriate level of long-term compensation
incentive. The Committee also believed that an additional option
grant at the 120,00050,000 share level was appropriate to more closely align the
interests of Mr. Pease with those of the Company and its shareholders.

In fiscal year 2002,2003, the Management Development Committee also granted
options to purchase shares of Common Stock under the 1992 Stock Option Plan to
the other executive officers of the Company. The Company's executive officers
each received grants of options to purchase between 10,00015,000 and 25,000 shares of
Common Stock. The grants reflected the significant improvements in part, the Committee's decision not to
increase the base salaries of the executive officers of the Company inCompany's
financial performance and operations during fiscal year 2002.2002, particularly its
automotive related operations. The size of the grants were made based on the

Committee's evaluation of the contributions made by each of the executive
officers to improving the CompanyCompany's operating performance.

Options granted to Mr. Pease and the other executive officers in fiscal
year 20022003 become exercisable in four equal annual installments, beginning one
year from their date of grant, at an exercise price equal to the fair market
value of the Common Stock on the date of the grant, which was $1.24.$1.42.

DEDUCTIBILITY OF EXECUTIVE COMPENSATION

The Board of Directors of the Company has reviewed the provisions of the
Internal Revenue Code and related regulations of the Internal Revenue Service
which restrict deductibility of executive compensation paid to any of the five
most highly compensated executive officers at the end of the fiscal year to the
extent such compensation exceeds $1,000,000 in any year.

The Board of Directors of the Company has established certain restrictions
on the granting of options under the Company's 1992 Stock Option Plan so that
compensation realized in connection with the exercise of options granted under
such plan would be exempt from the restrictions on deductibility described
above. The 1992 Stock Option Plan restricts to 200,000 the number of shares of
Common Stock that may be subject to options granted to any salaried employee in
any fiscal year. It is important to note that while this restriction allows the
Management Development Committee continuing discretion in establishing executive
officer compensation, it does limit such discretion by restricting the size of
option awards which the Management Development Committee may grant to any single
individual. The permitted size of the option award to a single individual was
established based on the Committee's determination of the maximum number of
option shares which would be required to be granted in any fiscal year to retain
or attract a chief executive officer of the Company.

The Board of Directors does not believe that other components of the
Company's compensation program are likely to result in payments to any executive
officer in any year which would be subject to the restriction on deductibility,
and therefore concluded that no further action with respect to qualifying such
compensation for deductibility was necessary at this time. The Board of
Directors will continue to evaluate the advisability of qualifying future
executive compensation programs for deductibility under the Internal Revenue
Code.

MANAGEMENT DEVELOPMENT, Philip J. DeCocco, Chairman
COMPENSATION AND STOCK OPTION David J. Beattie
COMMITTEE W. Richard Marz

1914

STOCK PRICE PERFORMANCE GRAPH

Set forth below is a graph comparing the cumulative total shareholder
return on the Common Stock from June 30, 1997,1998, through June 30, 20022003 with an
index consisting of returns from a peer group of companies, consisting of Cognex
Corp., Cyberoptics Corporation, Integral Vision, Inc. (formerly Medar, Inc.),
PPT Vision, Inc. (formerly Pattern Processing Technology) and Robotic Vision
Systems Inc. (the "Peer Group Index") and The Nasdaq Stock Market Composite
Index (the "Nasdaq Composite Index"). The returns of each company in the Peer
Group Index have been weighted according to their respective stock market
capitalization. The graph assumes that the value of the investment in the
Company's Common Stock, the Peer Group Index and the Nasdaq Composite Index was
$100 on June 30, 19971998 and that all dividends were reinvested.

COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
PERCEPTRON, INC., THE PEER GROUP AND THE NASDAQ COMPOSITE INDEX

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
ASSUMES INITIAL INVESTMENT OF $100
JUNE 2003

[LINE GRAPH]

CUMULATIVE TOTAL RETURN
-----------------------
6/30/97
6/30/98 6/30/99 6/30/00 6/30/01 6/30/02 6/30/03
-------- -------- ------- ------- ------- ------- ------- ---------------

Perceptron, Inc. 100 44 1738 28 11 13 5 650
Peer Group 100 66 99 196 98 59151 297 148 89 93
NASDAQ Composite 100 132 189 280 152 103144 213 115 78 80

The graph displayed above is presented in accordance with Securities and
Exchange Commissionapplicable legal
requirements. Shareholders are cautioned against drawing any conclusions from
the data contained therein,in the graph, as past results are not necessarily indicative
of future performance. The graph in no way reflects the Company's forecast of
future financial performance.

2015

INDEPENDENT ACCOUNTANTS

GENERAL

The accounting firm of Grant Thornton LLP ("Grant Thornton") has been
appointed by the Audit Committee, upon delegation of authority by the Board of
Directors, to audit the consolidated financial statements for the Company for
the fiscal year ended June 30, 2003.2004. Representatives of Grant Thornton are
expected to be at the Annual Meeting and to be available to respond to
appropriate questions. Such representatives will have the opportunity to make a
statement at such meeting if they desire to do so.

On March 8, 2002, after a competitive bid process, the Company, after
approval by the Audit Committee and the Board of Directors, dismissed
PricewaterhouseCoopers LLP ("PwC") as the Company's independent accountants. The
audit reports of PwC on the Company's consolidated financial statements for the
fiscal years ending June 30, 2001 and June 30, 2000 did not contain an adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principles.

During the fiscal years ended June 30, 2001 and 2000 and through March 8,
2002, there were no disagreements with PwC on any matter of accounting principle
or practice, financial statement disclosure or auditing scope or procedure,
which if not resolved to the satisfaction of PwC would have caused them to make
reference thereto in their report on the financial statements for such years.
Additionally, during the two most recent fiscal years ended June 30, 2001 and 2000 and through
March 8, 2002, there were no reportable events as defined in Item 304 (a)(1)(v)
of Regulation S-K.

PwC furnished the Company with a letter addressed to the Securities and
Exchange Commission stating that it agreed with the statements made in the two
preceding paragraphs by the Company. A copy of such letter, dated March 13,
2002, is filed as Exhibit 16 to the Company's Form 8-K filed on March 14, 2002
with the Securities and Exchange Commission.

After approval by the Board of Directors of the Company, the Company
engaged Grant Thornton as its new independent accountants as of March 8, 2002.

The Audit Committee has adopted a policy regarding audit and non-audit
services that may be provided by the Company's independent accountants. The
policy sets forth the procedures and conditions pursuant to which services
proposed to be performed by the independent accountants may be pre-approved. The
policy provides that the Audit Committee will consider whether services to be
performed by the independent accountant are consistent with the Securities and
Exchange Commission's rules on auditor independence. In particular, the policy
expressly names all services the independent accountant may not perform and
requires the Audit Committee to consider whether the independent auditor is the
best positioned to provide the most effective and efficient service.

The policy provides that the Audit Committee will review and pre-approve
annually, and periodically thereafter as required, the services proposed to be
provided by the independent accountant in the categories of audit services,
audit related services, tax services and all other services. In addition, the
Audit Committee is to determine the appropriate ratio of audit, audit related
and tax services to all other services. The Audit Committee has delegated to the
chairman of the Audit Committee and, if he or she is unavailable, another member
of the Audit Committee, authority to pre-approve audit and non-audit services
proposed to performed by the independent auditors not previously approved by the
Audit Committee. Under the policy, the Audit Committee is to be informed on a
timely basis of services actually rendered by the independent accountant,
including those pre-approved by a member of the Audit Committee. The chief
financial officer of the Company is to immediately report to the Chairman of the
Audit Committee any breach of the policy.

All of the services described below under audit fees, audit-related fees,
tax fees and all other fees arising on or after May 6, 2003 were approved by the
Audit Committee pursuant to its pre-approval policies and procedures prior to
the service being provided. None of the audit-related fees or tax fees described
below arising on or after May 6, 2003 were approved by the Audit Committee after
the initiation of such services pursuant to an exemption from the Securities and
Exchange Commission's requirements relating to approval of these types of
services by the Audit Committee prior to the provision of the service under
Section 2.01(c)(7)(i)(C) of Securities and Exchange Commission Regulation S-X.

16
FEES PAID TO INDEPENDENT AUDITORS

AUDIT FEES. The aggregate fees billed by Grant Thornton billed the Company a total of $37,870 for professional
services in connection withrendered for the reviewaudit of the Company's annual consolidated financial
statements and the reviews of the consolidated financial statements included in
the Company's FormForms 10-Q for the quarter ended March 31, 2002 and the
audit of theother regulatory filings were $89,673 during fiscal
year 2002 consolidated financial statements.ended June 30, 2003 and $40,120 during fiscal year ended June 30, 2002. In
addition, PwC which served as the Company's independent accountants until March
8, 2002 billed the Company a total of $12,995$8,400 during the fiscal year ended June
30, 2003 for audit fees related to the Company's 2002 Form 10-K and other
regulatory filings. In fiscal year ended June 30, 2002, PwC billed $45,595 for
professional services in connection with the review of the financial statements
included in the Company's Form 10-Q for the quarters ended September 30, 2001
and December 31, 2001. In addition,
subsequent to last year's proxy statement, PwC2001, audit of the Company's Form 10-K for the fiscal year
ended June 30, 2001 and other regulatory filings.

AUDIT RELATED FEES. The aggregate fees billed the Company $31,812by Grant Thornton for
professional services in connection withrendered for audit-related fees were $7,790 during fiscal
year 2003 and $4,588 during fiscal year 2002 related to the audit of the
Company's 401(k) Plan and the audit of a government contract, respectively.

TAX FEES. The aggregate fees billed by Grant Thornton for preparation of
federal and state tax returns and miscellaneous tax-related services and advice
were $50,200 for fiscal year 2001
consolidated financial statements. In addition,2003 and $26,560 for fiscal year 2002. PwC also
billed the Company an
additional $16,144a total of $54,440 for professionalpreparation of federal and state tax
returns and miscellaneous tax-related services provided by PwC in connection with
the review of the financial statements included in the Company's Form 10-Q for
the quarters ended September 30, 2000, December 31, 2000 and March 31, 2001.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Neither Grant
Thornton nor PwC billed the Company for operating, designing or supervising the
Company's computer, financial or information systemsadvice rendered during fiscal
year 2002.

ALL OTHER FEES. Grant Thornton billed the Company a total of $33,398 for
otherand PwC did not render any such services rendered duringin
fiscal yearyears 2003 and 2002. These were primarily for tax
consultative services. PwC also billed the Company a total of $77,650 for other
services rendered during fiscal year 2002. These were primarily for tax
consultative services.

The Audit Committee of the Board of Directors does not consider the
provision of the services described above by Grant Thornton or PwC to be
incompatible with the maintenance of Grant Thornton's or PwC's independence.

21
PROPOSALS BY SHAREHOLDERS FOR 20032004 ANNUAL MEETING

Shareholder proposals intended to be presented at the 20032004 annual meeting
which are eligible for inclusion in the Company's proxy statement for that
meeting under Rule 14a-8 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), must be received by the Secretary of the
Company at 47827 Halyard Drive, Plymouth, Michigan 48170, no later than June 27,
200325,
2004 in order to be considered for inclusion in the Company's Proxy Statement
relating to that meeting. In order to curtail controversy as to the date on
which a proposal was received by the Company, it is suggested that proposals be
submitted by certified mail, return receipt requested.

Shareholder proposals intended to be presented at the 20032004 annual meeting
which are not eligible for inclusion in the Company's proxy statement for that
meeting under Rule 14a-8 are considered untimely under Rule 14a-5 promulgated
under the Exchange Act unless received by the Secretary of the Company at the
Company's offices no later than September 9, 200311, 2004 and the Company expects the
persons named as proxies for the 20032004 annual meeting to use their discretionary
voting authority, to the extent permitted by law, with respect to any proposal
considered untimely at the 20032004 annual meeting.

OTHER MATTERS

At the date of this Proxy Statement, the Board of Directors is not aware of
any matters to be presented for action at the Annual Meeting other than those
described above. However, if any other matters shouldrequiring a shareholder vote
properly come before the meeting, it is the intention of the persons named in
the accompanying proxy to vote such proxy in accordance with their best
judgment, to the extent permitted by law, on such matters.

Plymouth, Michigan
October 24, 2002

2223, 2003

PERCEPTRON, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PERCEPTRON, INC.

The undersigned shareholder hereby appoints ALFRED A. PEASE, JOHN J. GARBER and
THOMAS S. VAUGHN, or any one of them, the attorney and proxies of the
undersigned, with power of substitution, to vote all shares of common stock of
Perceptron, Inc. standing in the name of the undersigned at the close of
business on October 18, 200217, 2003 at the Annual Meeting of Shareholders of the
Company to be held on Monday, December 9, 20028, 2003 at 9:00 a.m., local time, and at
any and all adjournments thereof, with all the powers the undersigned would
possess if then and there present.

The shareholder instructs the proxies to vote as specified on this proxy on the
matters described in the Proxy Statement dated October 24, 2002.23, 2003. Proxies will be
voted as instructed.

IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
COMPANY'S NOMINEES AS DIRECTORS (INCLUDING THE ELECTION OF ANY PERSON FOR THE
BOARD OF DIRECTORS WHERE A NOMINEE NAMED IN THE PROXY STATEMENT IS UNABLE OR,
FOR GOOD CAUSE, WILL NOT SERVE), AND FOR THE AMENDMENT TO THE COMPANY'S 1992
STOCK OPTION PLAN..

DISCRETIONARY AUTHORITY IS HEREBY CONFERRED AS TO ANY OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF
THE 2003 ANNUAL REPORT, AND THE PROXY STATEMENT AND NOTICE OF SAID MEETING BOTH
DATED OCTOBER 24, 2002.

(TO23, 2003.

(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)

SEE REVERSE
SIDE

14475

[X]ANNUAL MEETING OF SHAREHOLDERS OF

PERCEPTRON, INC.

DECEMBER 8, 2003

Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.

\/ Please detach along perforated line and mail in the envelope provided.\/
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTESVOTE IN BLUE OR BLACK INK AS IN THIS EXAMPLESHOWN HERE [x]
- --------------------------------------------------------------------------------

FOR AGAINST ABSTAIN
2. APPROVAL OF AN AMENDMENT
WITHHELD TO THE 1992 STOCK OPTION [ ] [ ] [ ]
FOR from all PLAN
all nominees all nominees To approve an amendment to
1. ELECTION OF NOMINEES: the Perceptron, Inc. 1992
DIRECTORS [ ] [ ] David J. Beattie Stock Option Plan, as Election of Directors Kenneth R. Dabrowski described in the Notice ofdirectors to hold Officeoffice until Philip J. DeCocco Annual Meeting of Shareholders
the Annual Meeting of Shareholders in 2003. W. Richard Marz and Proxy Statement dated
Robert S. Oswald October 24, 2002.
For, except vote withheld from the Alfred A. Pease
following nominee(s): Terryll R. Smith

- --------------------------------------
(INSTRUCTION: To withhold authority to
vote for any Nominee, write that nominee's
name in the space provided.)2004. BROKERS EXECUTING PROXIES SHOULD INDICATE THE NUMBER
OF SHARES WITH RESPECT TO WHICH AUTHORITY IS
CONFERRED BY THIS PROXY IF LESS THAN ALL SHARES
HELD AS NOMINEES ARE TO BE VOTED.
[ ] FOR ALL NOMINEES NOMINEES:
O David J. Beattie PLEASE EXECUTE AND RETURN THIS PROXY IN THE ENCLOSED
O Kenneth R. Dabrowski ENVELOPE PROMPTLY.
Signature________________________________ Signature______________________________________ Dated:____________________________, 2002

NOTE:[ ] WITHHOLD AUTHORITY O Philip J. DeCocco
FOR ALL NOMINEES O W. Richard Marz
O Robert S. Oswald
[ ] FOR ALL EXCEPT O Alfred A. Pease
(See instructions O James A. Ratigan
below) O Terryll R. Smith

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: [X]

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please sign exactly as your name appears. If acting as attorney, executor, trustee or in other representative capacity, sign
name and title.note that [ ]
changes to the registered name(s) on the account may not be submitted via
this method.
- --------------------------------------------------------------------------------

------------------ --------------- ------------------ ---------------
Signature of Shareholder Date: Signature of Shareholder Date:
------------------ --------------- ------------------ ---------------

Appendix 1

PERCEPTRON, INC.

1992 STOCK OPTION PLAN
(Amended and Restated October 31, 1996)

SECTION 1. PURPOSE

The purpose of the Perceptron, Inc. 1992 Stock Option Plan (this
"Plan") is to encourage Employees (as defined in Section 7) of Perceptron, Inc.
(the "Company") to acquire Common Stock of the Company ("Stock") through
Incentive Stock Options (as hereinafter defined) and to permit the Company to
grant Non-qualified Options (as hereinafter defined) to key persons, including
Employees of the Company. It is believed thatNOTE: Please sign exactly as your name or names appear on this Plan will encourage Employees
to have a greater financial investment in the Company through ownership of its
Common Stock, will further stimulate their efforts on the Company's behalf, will
tend to maintain and strengthen their desire to remain with the Company, and
generally will be in the interest of the Company and its shareholders. Options
granted under this Plan may be of two types: (a) options designed to comply with
Section 422A of the Internal Revenue Code of 1986,Proxy. When
shares are held jointly, each holder should sign. When signing as
amended ("Incentive Stock
Options"); and (b) other options ("Non- qualified Options"). Except where
otherwise indicated, the provisions of this Plan shall apply to both Incentive
Stock Options and Non-qualified Options.

SECTION 2. ADMINISTRATION

2.1 ADMINISTRATION BY COMMITTEE. This Plan shall be administered by a
Committee of the Board of Directors (the "Committee"),executor, administrator, attorney, trustee or guardian, please give
full title as determined by
resolution of the Board of Directors. The Board of Directors of the Company
shall select the members of the Committee and may, from time to time, appoint
members of the Committee in substitution for or in addition to members
previously appointed. Vacancies on the Committee, however caused, shall be
filled

by appointment by the Board of Directors. Notwithstanding the foregoing and
Section 2.2 below, effective May 21, 1993, the President of the Company shall be
authorized to grant options under the terms of the Plan to key Employees, who
are not officers or directors of the Company for purposes of Section 16(b) of
the Securities Exchange Act of 1934, as amended. The Committee shall designate
the maximum number of shares of Stock available under the Plan which may be
subject to options granted by the President, which number may be revised from
time to time by the Committee.

2.2 POWERS. The Committee shall have full and final authority to
administer this Plan on behalf of the Company. Subject to the provisions of this
Plan, this authority includes but is not limited to the power to:

(a) determine the persons to whom options shall be granted;

(b) determine the number of shares to be covered by options
granted to each such person;

(d) prescribe the period within which options may be
exercised:

(e) grant options conditionally or unconditionally; and

(f) prescribe the form or forms of the Stock Option Agreements
evidencing the grant of options under this Plan.

2.3 ADDITIONAL POWERS. The Committee may establish, from time to time,
such regulations, provisions and procedures, within the terms of this Plan, as,
in the opinion of the Committee, may be advisable in the administration and
interpretation of this Plan. The Committee shall keep minutes of its meetings. A
majority of the Committee shall constitute a

quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, or the acts approved in writing by a majority of the
Committee, shall be the acts of the Committee.

SECTION 3. ELIGIBILITY

3.1 ELIGIBLE PERSONS. Only Employees shall be eligible to be granted
Incentive Stock Options under this Plan. Employees and other persons shall be
eligible to be granted Non-qualified Options under this Plan. No member of the
Committee may receive an option under this Plan.

3.2 RELEVANT FACTORS. The Committee shall grant options to those
persons who, in the opinion of the Committee, are capable of contributing to the
successful performance of the Company.

3.3 RESTRICTIONS. No Employee owning stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company,
determined on the date on which the option is granted, shall be eligible for the
grant of an Incentive Stock Option unless the exercise price for such option is
at least 110% of the fair market value on the date of grant of the shares
subject to the option, and the option is not exercisable more than five years
after the date of grant.

SECTION 4. GRANTING OF OPTIONS

4.1 SHARES AVAILABLE FOR OPTIONS. The Board of Directors shall reserve
for purposes of this Plan, out of the authorized but unissued Stock or out of
shares of Stock held in the Company's Treasury, or partly out of each, a total
of 1,814,286 shares of Stock, after taking into account the Company's reverse
stock split effected on May 5, 1992 and stock split effected November 30, 1995,
(or the number and kind of shares of Stock or other securities which, in

accordance with Section 8 of this Plan, shall be substituted for such shares or
to which such shares shall be adjusted).

4.2 EFFECT OF EXPIRATION, TERMINATION OR SURRENDER. In the event that
an option granted under the Plan expires or is terminated unexercised as to any
shares covered by such option, such shares shall thereafter be again available
for the granting of options under this Plan. In the event that an option granted
under the Plan is exercised on or after October 21, 1994 by the delivery of
shares of Common Stock previously acquired upon the exercise of Options issued
under the Plan or through the retention of options procedure as described in
Section 5.3 below, the shares of Common Stock so delivered to the Company and
underlying such retained options shall thereafter be again available for the
granting of options under this Plan.

4.3 TERM OF OPTIONS. Subject to the provisions of this Section 4.3, the
Committee shall have full discretion to determine the period during which an
option may be exercised. In no event shall any option granted under this Plan,
by its terms, (i) expire more than ten years from the date on which it was
granted, or (ii) be exercisable by any person subject to Section 16(b) of the
Securities Exchange Act of 1934 any sooner than six months after the date of
grant. No Incentive Stock Option shall be exercisable by any Employee who has
not been in the continuous employ of the Company for a period of one year from
the date of grant.

4.4 OPTION PRICE. The Committee shall, in its discretion, establish, at
the time at which any option is granted, the purchase price of each share of
stock covered by such option; provided, however, that the option price of an
option shall not be less than 100% of the fair market value of the shares
covered by the option on the date such option is granted. The option price will
be subject to adjustment in accordance with the provisions of Section 8 of this
Plan. For purposes of this Plan, the fair market value of each share shall be
deemed to be:

(a) the average of the closing sales prices of the Stock on
the principal securities exchange on which the Stock may at the time be listed
(or, if there have been no sales on such exchange on any day, the average of the
closing high bid and low asked prices on such exchange at the end of such day)
for the five (5) consecutive trading days on such exchange immediately preceding
the date of grant of the option; or

(b) if the Stock is not listed on a securities exchange, the
average of the closing sales prices of the Stock on The Nasdaq Stock Market (or,
if there have been no sales on The Nasdaq Stock Market on any such day, the
average of the closing high bid and low asked prices on The Nasdaq Stock Market
at the end of such day) for the five (5) consecutive trading days on The Nasdaq
Stock Market immediately preceding the date of grant of the option; or

(c) if the Stock is not listed on any domestic stock exchange
or The Nasdaq Stock Market, the average of the mean between the closing high bid
and low asked price as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") (or, if not so reported, by the
system then regarded as the most reliable source of such quotations) for the
five (5) consecutive trading days on NASDAQ or other such system immediately
preceding the date of grant of the option; or

(d) if none of the foregoing clauses apply, the fair value as
determined in good faith by the Committee.

4.5 NON-TRANSFERABILITY OF OPTIONS. Options granted under this Plan
shall not be transferable by the optionee otherwise than by will, or if the
optionee dies intestate, by the laws of the descent and distribution of the
jurisdiction of domicile of the optionee at the time of his or her death, and
such options shall be exercisable during his or her lifetime only by the
optionee.such. If the optionee is declared legally incompetent, the optionee's duly
appointed personal

representative may exercise any options which the optionee was eligible to
exercise at the time when the optionee was declared incompetent, to the extent
provided in Section 6 of this Plan.

4.6 LIMITATIONS ON GRANTS OF INCENTIVE STOCK OPTIONS. The aggregate
fair market value of the underlying shares (determined as of the date of grant)
as to which Incentive Stock Options granted on or after February 23, 1993 under
the Plan (including a plan of a subsidiary) may first be exercised by an
optionee during any calendar year shall not exceed $100,000. To the extent that
an option intended to constitute an Incentive Stock Option shall violate the
foregoing $100,000 limitation, the portion of the option that exceeds the
$100,000 limitation shall be deemed to constitute a Non-qualified Stock Option.

4.7 WRITTEN CONFIRMATION OF GRANTS. Each option granted under this Plan
shall be confirmed by a Stock Option Agreement which shall be executed by the
Company and by the person to whom the option is granted. Each Stock Option
Agreement shall clearly state whether the option granted thereunder (or any
portion thereof) constitutes an Incentive Stock Option or a Non-qualified Stock
Option.

4.8 RESTRICTION ON GRANT. Effective on and after February 14, 1996, no
optionee whosigner is a salaried employee shall be eligible to receive aggregate
option grants under this Plan,corporation, please sign full
corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please sign in any fiscal year of the Company, to purchase
more than 200,000 shares of the Stock.

SECTION 5. EXERCISE OF OPTIONS

5.1 EXERCISE. Each option granted under this Plan shall be exercisable
on such date or dates and during such period and for such number of shares as
shall be provided in the Stock Option Agreement evidencing such option. In the
event of options exercisable in installments, the right to purchase shares shall
be cumulative so that when the right to purchase any shares has

accrued under any such option, such shares or any part thereof may be purchase
at any time thereafter until the expiration or termination of the option.

5.2 NOTICE OF EXERCISE. An optionee electing to exercise an option
granted under this Plan shall give written notice to the Company. Such notice
shall state the number of full shares (no fractional shares may be purchased) to
which the election applies.

5.3 PURCHASE OF SHARES. The option price of each share purchased
pursuant to the exercise of an option shall be paid in full in cash or in shares
of Common Stock at the time of purchase; or, in the case of non-qualified stock
options or in the case of Incentive Stock Options issued on or after May 21,
1993, the option exercise price may be paidpartnership name by
delivery to the Company of a
properly executed exercise notice, acceptable to the Company, together with
irrevocable instructions to the participant's broker to deliver to the Company
sufficient cash to pay the exercise price and any applicable income and
employment withholding taxes, in accordance with a written agreement between the
Company and the brokerage firm ("cashless exercise" procedure); or, in the case
of non-qualified stock options or in the case of Incentive Stock Options issued
on or after October 21, 1994, the option exercise price may be paid through the
retention by the Company of then exercisable options issued to the Optionee
under the Plan (the "retained options"), with the value of the retained options
equal to the difference between the fair market value of the shares underlying
the retained options (determined as of the date of exercise of the options), and
the exercise price of such options ("retention of options" procedure); or, in
the case of Incentive Stock Options, may be paid in three installments as
hereinafter provided; or, a combination of the foregoing. In the event of
payments in installments, 50% of the purchase price shall be paid on the date of
exercise and on such date the exercising Employee shall execute and deliver to
the Company such Employee's promissory

note making such Employee personally liable to pay the balance of the purchase
price in two installments on the first and second anniversaries of the date of
exercise. Such promissory note shall bear interest at a rate determined by the
Committee and shall be secured by a pledge of the Stock being purchased. Until
the optionee has been issued a certificate or certificates for the shares so
purchased, he or she shall possess no rights of a record holder with respect to
any such shares. In the event that an optionee exercises both an Incentive Stock
Option and a Non-qualified Stock Option, separate share certificates shall be
issued for shares acquired pursuant to the Incentive Stock Option and for shares
acquired pursuant to the Non-qualified Stock Option. Options retained by the
Company under the retention of options procedure shall expire and be of no
further force and effect as of the date retained.

5.4 PRIOR INCENTIVE STOCK OPTIONS. Each Incentive Stock Option granted
under this Plan, by its terms, shall not be exercisable while there is
outstanding any Incentive Stock Option previously granted to the same individual
by the Company. An Incentive Stock Option shall be treated as outstanding until
such option is exercised in full or expires solely by reason of lapse of time.
Notwithstanding the foregoing, no Incentive Stock Option granted on or after
February 23, 1993 shall be subject to the foregoing sequential exercise rule.

5.5 DELIVERY AND REGISTRATION OF STOCK. The Company shall not be
required to deliver any shares of Stock under this Plan prior to (i) the
admission of such shares to listing on any stock exchange on which such shares
may then be listed and (ii) the completion of such registration or other
qualification of such shares under any federal, state or local law, rule or
regulation as the Committee shall determine to be necessary or advisable.

SECTION 6. TERMINATION OF EMPLOYMENT

6.2 DISABILITY. If the employment of any optionee who is an Employee
shall be terminated because of total and permanent disability of such optionee,
the option shall be exercisable by the optionee at any time on or before the
earlier of the expiration date of the option or one year after the date of such
termination of employment, but only to the extent of the accrued right to
purchase at the date of such termination.

6.3 DEATH. If any optionee shall die while employed by the Company and,
if at the date of death, the optionee shall be entitled to exercise an option,
such option may be exercised by any person who acquires the option by bequest or
inheritance or by reason of the death of the optionee, or by the executor or
administrator of the estate of the optionee, at any time before the earlier of
the expiration date of the option or one year after the date of death of the
optionee, but only to the extent of the accrued right to purchase at the date of
death.

SECTION 7. EMPLOYMENT, RIGHTS, AS A SHAREHOLDER AND BENEFIT PLANS

Neither this Plan nor any action taken hereunder shall give any
Employee any right to be retained in the employ of the Company or any rights as
a shareholder of the Company prior to the issuance or transfer of shares of
Stock to his or her name. Awards under this Plan are discretionary and are not a
part of regular salary. Awards may not be used in determining the amount of
compensation for any purpose under the benefit plans of the Company. For
purposes of this Plan, "Employee" means full time or part time employees of the
Company and its

subsidiaries, who are executives, managerial or other salaried employees,
including officers, whether or not directors of the Company.

SECTION 8. CHANGES IN CAPITAL STRUCTURE

In the event of changes in the outstanding Stock by reason of Stock
dividends, Stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges or other relevant changes in the capital
structure of the Company, an appropriate adjustment shall be made by the
Committee in the number of shares and kind of stock for which options may be or
may have been granted under the Plan, to the end that the proportionate
interests shall be maintained as before the occurrence of such event.

SECTION 9. AMENDMENT, SUSPENSION OR TERMINATION

9.1 SUSPENSION OR TERMINATION. The Committee may suspend this Plan or
any part thereof at any time or may terminate the Plan in its entirety. Awards
shall not be granted after Plan termination. Options granted prior to the
suspension or termination of this Plan may not be cancelled solely because of
such suspension or termination, except with the consent of the optionee.

9.2 AMENDMENT. The Board of Directors shall have the right to suspend,
terminate or amend this Plan at any time, provided that the approval of the
shareholders shall be required for any amendment which:

(a) increases the total number of shares which may be issued
and sold pursuant to options granted under this Plan;

(b) decreases the minimum option price;

(d) increases the maximum term of options granted under this
Plan;

(e) reduces the period of time after the date of grant during
which an employee must remain in the employ of the Company in order to exercise
an option;

(f) increases the term of this Plan;

(g) withdraws the administration of this Plan from a Committee
of directors; or

(h) otherwise materially increases the benefits accruing to
participants under the Plan.

SECTION 10. EFFECTIVE DATE AND DURATION

This Plan shall become effective beginning April 21, 1992, subject to
the approval of the shareholders of the Company as required by Rule 16b-3 under
the Securities Exchange Act of 1934, as amended, and Section 422A of the Code.
No options may be granted under this Plan subsequent to April 20, 2002.

FIRST AMENDMENT TO THE
PERCEPTRON, INC. 1992 STOCK OPTION PLAN
(AMENDED AND RESTATED OCTOBER 31, 1996)

Pursuant to the Amendment provisions in Section 9.2 of the Perceptron,
Inc. 1992 Stock Option Plan ("Plan") and the approval of the Board of Directors
of Perceptron, Inc. ("Company"), the Plan is hereby amended as set forth below.

1. Subject to shareholder approval, Section 4.1 of the Plan (Shares
Available for Options) shall be amended and restated in its entirety to read as
follows:

4.1 SHARES AVAILABLE FOR OPTIONS. The Board of Directors
shall reserve for purposes of this Plan, out of the authorized but
unissued Stock or out of shares of Stock held in the Company's
Treasury, or partly out of each, a total of 2,114,286 shares of
Stock, after taking into account the Company's reverse stock split
effected on May 5, 1992 and stock split effected November 30,
1995, (or the number and kind of shares of Stock or other
securities which, in accordance with Section 8 of this Plan, shall
be substituted for such shares or to which such shares shall be
adjusted).

THIS FIRST AMENDMENT is hereby adopted as of May 13, 1997.

PERCEPTRON, INC.

By: /s/ ALFRED A. PEASE
---------------------------------------
Alfred A. Pease, Chairman, President
and Chief Executive Officer

SECOND AMENDMENT TO THE
PERCEPTRON, INC. 1992 STOCK OPTION PLAN
(AMENDED AND RESTATED OCTOBER 31, 1996)

Pursuant to the Amendment provisions in Section 9.2 of the Perceptron, Inc.
1992 Stock Option Plan ("Plan") and the approval of the Board of Directors of
Perceptron, Inc. ("Company"), the Plan is hereby amended as set forth below.

1. Subject to shareholder approval, Section 4.1 of the Plan (Shares
Available for Options) shall be amended and restated in its entirety to read as
follows:

4.1 SHARES AVAILABLE FOR OPTIONS. The Board of Directors shall reserve
for purposes of this Plan, out of the authorized but unissued Stock or out
of shares of Stock held in the Company's Treasury, or partly out of each, a
total of 2,414,286 shares of Stock, after taking into account the Company's
reverse stock split effected on May 5, 1992 and stock split effected
November 30, 1995, (or the number and kind of shares of Stock or other
securities which, in accordance with Section 8 of this Plan, shall be
substituted for such shares or to which such shares shall be adjusted).

2. Section 6.1 of the Plan (Termination of Employment - General) shall be
amended and restated in its entirety to read as follows:

6.1 GENERAL. If the employment by the Company of any optionee who is
an Employee shall terminate for any reason, other than by death or total
and permanent disability, any option which such optionee is entitled to
exercise on the date of such termination shall be exercisable by the
optionee at any time on or before the earlier of the expiration date of the
option or three months after the date of such termination, but only to the
extent of the accrued right to purchase at the date of such termination.
Notwithstanding the foregoing, the Committee, in its discretion, may extend
an exercise period, not to exceed the tenth anniversary of the date of the
grant, and may permit the option to continue to accrue rights to purchase
additional shares of Stock following any termination of employment of any
option; it being understood, that the extension of the exercise term or
accrual right as set forth above for an Incentive Stock Option may cause
such Option to lose its preferential tax treatment.

THIS SECOND AMENDMENT is hereby adopted as of April 14, 1999.

PERCEPTRON, INC.

By: /S/ Alfred A. Pease
------------------------------------------
Alfred A. Pease, Chairman, President
and Chief Executive Officer

THIRD AMENDMENT TO THE
PERCEPTRON, INC. 1992 STOCK OPTION PLAN
(AMENDED AND RESTATED OCTOBER 31, 1996)

1. Subject to shareholder approval, Section 10 of the Plan (Effective
Date and Duration) shall be amended and restated in its entirety to read as
follows:

SECTION 10 EFFECTIVE DATE AND DURATION. This Plan shall become
effective beginning April 21, 1992, subject to the approval of the
shareholders of the Company as required by Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, and Section 422A of the
Code. No options may be granted under this plan subsequent to April 20,
2012.

THIS THIRD AMENDMENT is hereby adopted as of August 10, 2001.

PERCEPTRON, INC.

By: /s/ Alfred A. Pease
---------------------------------
Alfred A. Pease, Chairman,
President and Chief Executive
Officer

FOURTH AMENDMENT TO THE
PERCEPTRON, INC. 1992 STOCK OPTION PLAN
(AMENDED AND RESTATED OCTOBER 31, 1996)

1. Subject to shareholder approval, Section 4.1 of the Plan (Shares
Available for Options) shall be amended and restated in its entirety to read as
follows:

4.1 SHARES AVAILABLE FOR OPTIONS. The Board of Directors shall
reserve for purposes of this Plan, out of the authorized but unissued
Stock or out of shares of Stock held in the Company's Treasury, or
partly out of each, a total of 2,814,286 shares of Stock, after taking
into account the Company's reverse stock split effected on May 5, 1992
and stock split effected November 30, 1995, (or the number and kind of
shares of Stock or other securities which, in accordance with Section 8
of this Plan, shall be substituted for such shares or to which such
shares shall be adjusted).

2. Section 6.1 of the Plan (Termination of Employment - General) shall
be amended and restated in its entirety to read as follows:

6.1 GENERAL. If the employment by the Company of any optionee
who is an Employee shall terminate for any reason, other than by death
or total and permanent disability, any option which such optionee is
entitled to exercise on the date of such termination shall be
exercisable by the optionee at any time on or before the earlier of the
expiration date of the option or three months after the date of such
termination, but only to the extent of the accrued right to purchase at
the date of such termination. Notwithstanding the foregoing, the
Committee, in its discretion, may extend an exercise period, not to
exceed the tenth anniversary of the date of the grant, and may permit
the option to continue to accrue rights to purchase additional shares
of Stock following any termination of employment of any option; it
being understood, that the extension of the exercise term or accrual
right as set forth above for an Incentive Stock Option may cause such
Option to lose its preferential tax treatment.

THIS FOURTH AMENDMENT is hereby adopted as of August 16, 2002.

PERCEPTRON, INC.

By: /s/ Alfred A. Pease
-----------------------------------------------
Alfred A. Pease, Chairman, President and Chief
Executive Officerperson.