MCLAREN AUTOMOTIVE GROUP INC, PRE 14A, 2000-03-06

MCLAREN AUTOMOTIVE GROUP INC
PRE 14A, 2000-03-06
MOTOR VEHICLE PARTS & ACCESSORIES

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SCHEDULE 14A INFORMATION

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:

X Preliminary Proxy Statement
- -----
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
- -----
Definitive Proxy Statement
- -----
Definitive Additional Materials
- -----
Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
- -----

MCLAREN AUTOMOTIVE GROUP, INC.
(Name of Registrant as Specified In Its Charter)

(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) and
0-11.

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

- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
(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:

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(4) Date filed:

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<PAGE>

MCLAREN AUTOMOTIVE GROUP, INC.
32233 WEST EIGHT MILE ROAD
LIVONIA, MICHIGAN 48152
(248) 477-6240

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 18, 2000

TO THE SHAREHOLDERS OF McLAREN AUTOMOTIVE GROUP, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
McLaren Automotive Group, Inc., a Delaware corporation, will be held at the Novi
Hilton, 21111 Haggerty Road, Novi, Michigan 48375-5305 on Tuesday, April 18,
2000, at 9:00 a.m., local time, for the purpose of considering and acting upon
the following matters:

1. The election of five (5) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors have been duly
elected and qualified;

2. Ratification of the selection of Ernst & Young LLP as the Company's
independent accountants for the fiscal year ending September 30, 2000;

3. The approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to "McLaren Performance
Technologies, Inc.";

4. Adoption of a new Stock Option Plan; and

5. The transaction of such other business as may properly come before
the meeting and any adjournments or postponements of the meeting.

The Board of Directors knows of no other business which will be
presented to the Shareholders at this annual meeting.

The Board of Directors has fixed March 13, 2000, as the record date for
the determination of the shareholders entitled to receive notice of and to vote
at the Annual Meeting of shareholders and any adjournments or postponements of
the annual meeting.

It is important that Proxies be returned promptly. Therefore,
shareholders who do not expect to attend the annual meeting in person are
requested to vote, sign, date and return the enclosed Proxy which is solicited
by the Board of Directors, in the enclosed prepaid envelope.

BY ORDER OF THE BOARD OF DIRECTORS

----------------------------------
Louis J. Infante, Secretary
Dated: March 17, 2000
<PAGE>

MCLAREN AUTOMOTIVE GROUP, INC.
32233 WEST EIGHT MILE ROAD
LIVONIA, MICHIGAN 48152
(248) 477-6240

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

The Board of Directors of McLAREN AUTOMOTIVE GROUP, INC. (the "Company"
or "McLaren") requests all shareholders who do not expect to be present at the
annual meeting to be held April 18, 2000 (the "Annual Meeting"), and who wish
their stock to be voted on the business to be transacted there, to vote, sign,
date and return the enclosed form of Proxy. It is anticipated that this Proxy
Statement and the accompanying Proxy will be mailed to the Company's
shareholders on or about March 17, 2000.

Any person signing and returning the enclosed Proxy may revoke it at
any time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Annual Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to shareholders, will be borne by the Company. It is anticipated that
solicitations of proxies for the Annual Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers and
employees to solicit proxies personally or by telephone, without additional
salary or compensation to them. Brokerage houses, custodians, nominees and
fiduciaries will be requested to forward the proxy soliciting materials to the
beneficial owners of the Company's shares held of record by such persons, and
the Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred by them in that connection. All shares represented by valid
proxies will be voted in accordance therewith at the Annual Meeting.

All voting rights are vested exclusively in the holders of the
Company's $.00001 par value Common Stock. Each share of Common Stock entitles
the holder to one (1) vote. Cumulative voting in the election of Directors is
not permitted. Only shareholders of record at the close of business on March 13,
2000, are entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. On March 13, 2000, the Company had 9,122,217 shares of its
$.00001 par value Common Stock outstanding.

A majority of the Company's outstanding Common Stock represented in
person or by proxy shall constitute a quorum at the Annual Meeting. Assuming a
quorum is present, Directors are elected by a plurality of all votes cast. In
accordance with applicable law, abstentions and broker non-votes will not have
the effect of votes in opposition to a Director nominee.

The Company's Annual Report is being simultaneously mailed to the
Company's shareholders, but does not constitute part of these proxy soliciting
materials.

1
<PAGE>

ELECTION OF DIRECTORS

The Board of Directors is currently set at five (5) members. The Board
of Directors recommends the election of the five (5) Director nominees listed
below, to hold office until the next Annual Meeting of Shareholders and until
their successors are elected and qualified. With the exception of Mr. Erick A.
Reickert, who has informed the Board of Directors that he no longer desires to
serve as a Director, each member of the current Board of Directors has been
nominated for reelection.

It is the intention of the persons named in the accompanying form of
Proxy to vote such Proxies for the nominees named below. The Board of Directors
has no reason to believe that any nominee will be unable to serve. In the event
that any nominee should not be available, the persons named in the Proxy will
vote for the election of such substitute nominee as may be selected by the Board
of Directors of the Company.

NOMINEES for Directors of the Company:

Nicholas P. Bartolini
Lawrence Cohen
David D. Jones
Wiley R. McCoy
Robert J. Sinclair

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
DIRECTOR NOMINEES LISTED ABOVE.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 13, 2000, the number and
percentage of Common Stock beneficially owned by each Director and Executive
Officer of the Company named in the Summary Compensation Table, all Directors
and Executive Officers of the Company as a group, and certain other beneficial
owners. Information as to beneficial ownership is based upon statements
furnished to the Company by such persons.

<TABLE>
<CAPTION>
Total Shares Percent
Name and Address of Beneficial Owner Beneficially Owned of Class
------------------------------------ ------------------ --------
<S> <C> <C>
Nicholas P. Bartolini 42,740(1) *
1926 Santa Barbara Street
Santa Barbara, CA 93101

Lawrence Cohen 714,906(2) 6.9%
3311 NE 26th Avenue
Lighthouse Point, FL 33064

Louis J. Infante 53,571(3) *
32233 West Eight Mile Road
Livonia, MI 48152

David D. Jones 25,000(4) *
100 Sea Horse Drive
Waukegan, IL 60085

Jacqueline K. Kurtz -0- 0.0%
32233 West Eight Mile Road
Livonia, MI 48152

John C. McCormack (5) 1,454,967(6) 13.9%
3360 Badger Rd.
Santa Ynez, CA 93460
</TABLE>

- --------------------------
/(1)/ Represents 5,240 shares held directly and 37,500 shares underlying
currently exercisable stock options held by Mr. Bartolini.
/(2)/ Represents 10,500 shares held directly and 475,000 shares underlying
currently exercisable stock options held by Mr. Cohen, and 229,406 shares held
directly by Mr. Cohen's wife.
/(3)/ Represents 28,571 shares held directly and 25,000 shares underlying
currently exercisable stock options held by Mr. Infante.
/(4)/ Represents shares underlying currently exercisable stock options.
/(5)/ Mr. McCormack resigned as President and Chief Executive Officer in April,
1999, and as a Director effective September 30, 1999.
/(6)/ Represents 237,854 shares underlying currently exercisable stock options
held by Mr. McCormack and 1,118,652 shares held by Brian Chang, for which Mr.
McCormack holds a revocable proxy.
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C>
Wiley R. McCoy 101,250(7) 1.0%
32233 West Eight Mile Road
Livonia, MI 48152

Erick A. Reickert 31,250(4) *
5128 Woodlands Drive
Bloomfield Hills, MI 48302

Steven E. Sanderson(8) 64,377 *
600 C Ward Drive
Santa Barbara, CA 93111

Robert J. Sinclair 114,000(9) 1.1%
1025 North Ontare Road
Santa Barbara, CA 93105

All Directors and Executive Officers as a Group
(10 persons) 2,602,061 24.9%

Brian Chang 1,217,113(10) 11.6%
1 Chatsworth Court
#24-21 Chatsworth Court
Singapore 249745

Greenmotors, L.L.C.(11) 1,118,652 10.7%
277 Park Avenue, 27th Floor
New York, NY 10172
</TABLE>
*Represents less than 1% of Class.

- --------------------------------------------------------------------------------
/(7)/ Represents 76,250 shares held directly and 25,000 shares underlying
currently exercisable stock options held by Mr. McCoy.
/(8)/ Mr. Sanderson resigned as Chief Financial Officer effective September 30,
1999.
/(9)/ Represents 10,000 shares held directly, 4,000 shares held with his wife as
joint tenants, and 100,000 shares underlying currently exercisable stock options
held by Mr. Sinclair.
/(10)/ John C. McCormack, a former officer and former Director of the Company,
holds a revocable proxy to vote Mr. Chang's shares.
/(11)/ David D. Jones, a Director of the Company, is a member of Greenmotors,
L.L.C.

3
<PAGE>

INFORMATION CONCERNING DIRECTORS AND NOMINEES

The following information is furnished with respect to each Director
and each person nominated for election as a Director:

<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation During Last Five Years
---- --- ----- -------------------------------------------

<S> <C> <C> <C>
Nicholas P. Bartolini 63 1997 Principal, Bartolini Associates since 1995.

Lawrence Cohen 55 1995 Chairman of the Board of the Company since April, 1999;
Chairman of the Board and President of Bristol Retail
Solutions, Inc.; Chairman of the Board of Registry Magic,
Inc.

David D. Jones 56 1998 President, CEO and Director, Outboard Marine Company since
September, 1997; President, Mercury Marine Division of
Brunswick Company, 1990 to August, 1997; Director, National
Exchange Bank, Fond du Lac, Wisconsin.

Wiley R. McCoy 59 1999 President and COO of the Company since April, 1999;
President and COO of McLaren Engines, Inc. from December,
1993 to January, 1999.

Erick A. Reickert 64 1997 Retired; President and CEO of New Venture Gear, Inc. from
September, 1992 to January, 1996.

Robert J. Sinclair 67 1994 Retired.
</TABLE>

The Company may not have knowledge of all of the information provided
above regarding securities ownership, business interests and other events and
transactions of the Directors. To the extent that the Company does not have
actual knowledge of such information, such information has been furnished by
such persons.

MEETING AND COMMITTEES OF THE BOARD OF DIRECTORS

The standing committees of the Board of Directors are the Audit
Committee and the Compensation Committee.

The Audit Committee consists of David D. Jones and Nicholas P.
Bartolini, each of whom is an independent Director. The Audit Committee's
function is to review and report to the Board of Directors with respect to the
selection and the terms of engagement of the Company's independent certified
public accountants, and to maintain communications among the Board of Directors,
such independent certified public accountants, and the Company's internal
accounting staff with respect to accounting and audit procedures, the
implementation of recommendations by such independent certified public
accountants, the adequacy of the Company's internal controls, and related
matters. The Audit Committee also reviews certain related party transactions and
any potential conflict of interest situations involving officers, directors or
stockholders beneficially owning more than 10% of an equity security of the
Company.

The Compensation Committee consists of Robert J. Sinclair and Lawrence
Cohen. The Compensation Committee's function is to review and approve annual
salaries and bonuses for all executive officers and review, approve and
recommend to the Board of Directors the terms and conditions of all employee
benefit plans or changes thereto, including the granting of stock options
pursuant to the Company's 1994 Stock Option Plan.

During the fiscal year ended September 30, 1999, the Company's Board of
Directors held five (5) meetings, the Audit Committee held two (2) meetings, and
the Compensation Committee held one (1) meeting. With the exception of David D.
Jones, who was absent from three Board meetings and both Audit Committee
meetings, each Director attended at least 75% of the aggregate number of annual
meetings held by the Board of Directors and the Committees thereof during the
time each such Director was a member of the Board or any Committee thereof.
During the current fiscal year, the Board of Directors have held two (2)
meetings. Each Director has attended both meetings, with the exception of Erick
A. Reickert and David D. Jones, who have each attended one meeting. There have
been no meetings of the Audit Committee or Compensation during the current
fiscal year.

SECTION 16(A) BENEFICIAL REPORTING COMPLIANCE

Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year and certain

4
<PAGE>

written representations, no persons who were either a Director, Officer or
beneficial owner of more than 10% of the Company's Common Stock, failed to file
on a timely basis reports required by Section 16(a) of the Exchange Act during
the most recent fiscal year, except as follows:

Louis J. Infante filed Form 3 one month late and Form 5 reporting one
transaction ten days late; Erick A. Reickert filed Form 5 reporting one option
grant ten days late.

EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE

The following table sets forth information regarding the executive
compensation for the Company's Chief Executive Officer and each other Executive
Officer who received compensation in excess of $100,000 for the fiscal years
ended September 30, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS

Securities
Restricted Underlying
Name and Principal Other Annual Stock Options LTIP All Other
Position Year Salary Bonus Compensation Award(s) (Number) Payouts Compensation
- -------- ---- ------ ----- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wiley R. McCoy,(1) 1999 $121,389(2) -0- -0- -0- -0- -0- -0-
President and COO

Louis J. Infante, 1999 $ 52,500(3) -0- -0- 28,571 -0- -0- -0-
Executive VP and
COO, McLaren Traction

Kenneth R. Black, (4) 1999 $ 97,500 $1,950 -0- -0- 41,589 -0- $21,002(5)
VP of Sales and 1998 $119,167(6) -0- -0- -0- 17,374 -0- -0-
Marketing 1997 $ 90,000 -0- -0- -0- 104,257 -0- -0-

Steven E. Sanderson,(7) 1999 $119,453 $1,650 -0- -0- 37,096 -0- -0-
CFO 1998 $104,418(8) -0- -0- -0- 9,781 -0- -0-
1997 $ 51,468 -0- -0- -0- 10,000 -0- -0-

John C. McCormack,(9) 1999 $ 95,233 $2,100 -0- -0- 38,400 -0- $ 1,250(11)
President & Chief 1998 $123,603(10) -0- -0- -0- 49,414 -0- $ 1,250(11)
Executive Officer 1997 $ 90,000 -0- -0- -0- 106,386 -0- -0-

Alain J-M Clenet, Officer(12) 1998 $ 38,125 -0- -0- -0- 11,450 -0- $33,925(13)
1997 $152,500 -0- -0- -0- 8,278 -0- $ 5,953(14)
</TABLE>

- ----------------------------------------
/(1)/ Mr. McCoy was appointed President and COO of the Company on April 20,
1999.
/(2)/ Mr. McCoy received compensatoin of $25,784 from McLaren Engines between
October 1, 1998, and January 6, 1999, and compensation of $95,605 from the
Company between January 6, 1999, and September 30, 1999.
/(3)/ Mr. Infante was hired on May 1, 1999.
/(4)/ Mr. Black resigned as Vice President of Sales & Marketing effective June
18, 1999.
/(5)/ Represents accrued vacation paid to Mr. Black upon his resignation.
/(6)/ Effective January 1, 1998, Mr. Black's compensation was increased from
$90,000 to $130,000 per year.
/(7)/ Mr. Sanderson resigned as Chief Financial Officer effective September 30,
1999.
/(8)/ Mr. Sanderson was hired in January, 1997, as Controller and Chief
Financial Officer effective March, 1997. Effective January 1, 1998, his annual
salary increased from $85,000 to $110,000 per year.
/(9)/ Mr. McCormack resigned as President and Chief Executive Officer in April,
1999.
/(10)/ Effective January 1, 1998, Mr. McCormack's compensation was increased
from $90,000 to $140,000 per year.
/(11)/ Represents amounts paid by the Company as a matching payment to a 401(k)
plan contribution.
/(12)/ Mr. Clenet resigned as an Officer and Director of the Company on January
8, 1998.
/(13)/ Represents the cost of an automobile purchased for $28,000 for Mr. Clenet
as part of his termination agreement, legal expenses of $5,109 in connection
with termination, and $816 for additional medical expenses.
/(14)/ Represents estate and trust planning fees for Mr. Clenet and his family
of $2,600, premiums of $371 on a $5,000,000 umbrella liability insurance policy
and $2,982 for additional medical expenses paid on his behalf under his
employment agreement.

5
<PAGE>

EMPLOYMENT AND OTHER AGREEMENTS

In January, 1999, McLaren Engines, Inc. entered into an employment
agreement with Wiley R. McCoy to employ Mr. McCoy in the position of President
and Chief Operating Officer of McLaren Engines, Inc. On April 20, 1999, this
agreement was terminated and Mr. McCoy entered into a new employment agreement
with the Company to serve as the Company's President and Chief Operating
Officer. Mr. McCoy's current employment agreement is for an initial term of two
years, but will be automatically extended an additional two year period unless
either party notifies the other of its intent to end the agreement at least 90
days prior to the end of the initial term. Mr. McCoy is to receive a base salary
of $140,000 plus annual cost of living adjustments. Mr. McCoy's agreement also
entitles him to participate in all fringe benefits available to other executive
officers and provides that he is to be granted options to purchase 25,000 to
30,000 shares of stock of the Company annually. The agreement may be terminated
by the Company with or without cause at any time. If the agreement is terminated
by the Company without cause, Mr. McCoy will continue to receive his salary and
benefits for up to 12 months.

In April, 1999, John C. McCormack resigned as President and Chief
Executive Officer of the Company. The Company entered into a Consulting
Agreement with Mr. McCormack on April 1, 1999, whereby he was retained as a
corporate consultant until April 24, 2000. The agreement calls for Mr. McCormack
to receive compensation of $147,000 during the term of the consulting agreement,
plus use of a vehicle and medical benefits.

On May 1, 1999, the Company entered into an employment agreement with
Louis J. Infante to employ Mr. Infante in the position of Executive Vice
President and Chief Operating Officer of the Company's McLaren Traction
Division. The agreement is for an initial term of two years, but will be
automatically extended for an additional two year period unless either party
notifies the other of its intent to end the agreement at least 90 days prior to
the end of the initial term. Mr. Infante is to receive a base salary of $130,000
plus annual cost of living adjustments. Mr. Infante's agreement also entitles
him to participate in all fringe benefits available to other executive officers
and provides that he is to be granted options to purchase 25,000 shares
annually. In addition, Mr. Infante received a one-time grant of shares with a
market value equal to $100,000 in July, 1999. The agreement may be terminated by
the Company with or without cause at any time. If the agreement is terminated by
the Company without cause, Mr. Infante will continue to receive his salary and
benefits for up to 12 months.

On May 1, 1999, the Company entered into an employment agreement with
Steven E. Sanderson, the Company's Chief Financial Officer. This agreement was
terminated on September 30, 1999. Under this agreement, Mr. Sanderson received a
base salary of $130,000 plus annual cost of living adjustments. The agreement
also entitled him to participate in all fringe benefits available to other
executive officers and provided that he was to be granted options to purchase
25,000 shares annually. On October 1, 1999, in consideration for the termination
of Mr. Sanderson's employment agreement, the Company agreed to enter into a
consulting agreement with Mr. Sanderson for a period of eight months, with
compensation of $5,950 per month.

On January 3, 2000, the Company entered into an employment agreement
with Jacqueline K. Kurtz to employ Ms. Kurtz in the position of Executive Vice
President Business Infrastructure/Chief Financial Officer. The agreement is for
an initial term of two years, but will be automatically extended an additional
two year period unless either party notifies the other of its intent to end the
agreement at least 90 days prior to the end of the initial term. Ms. Kurtz is to
receive a salary of $100,000. Ms. Kurtz' agreement also entitles her to
participate in all fringe benefits available to other executive officers, and
grants Ms. Kurtz the option to purchase 25,000 shares during each two-year
employment term. One-half of the options will vest on the last business day of
the first year of the agreement, with the second half vesting on the last
business day of the second year of the agreement. The price for the options is
the average of the closing price for the Company's stock for the five days
following the date of the agreement. The agreement may be terminated by the
Company for cause.

DIRECTORS' COMPENSATION

The Company's Directors receive fees of $1,250 per meeting for their
attendance at Board or committee meetings, and receive 12,500 options per year
under the Company's 1994 Stock Option Plan. Directors are also reimbursed for
their reasonable expenses in attending meetings of the Board of Directors and
any committees thereof. During the fiscal year ended September 30, 1999, the
Company's Directors received a total of 75,000 options under the Company's 1994
Stock Option Plan.

In October, 1998, stock options to purchase 12,500 shares each were
granted to Robert J. Sinclair, Lawrence Cohen, Nicholas P. Bartolini, Erick A.
Reickert and David D. Jones. These options are exercisable at any time during
the five year period following the date of grant at $3.25 per share.

In October, 1999, stock options to purchase 12,500 shares each were
granted to Robert J. Sinclair, Lawrence Cohen, Nicholas P. Bartolini, Erick A.
Reickert and David D. Jones. These options are exercisable at any time during
the five year period following the date of grant at $2.3125 per share.

6
<PAGE>

Certain of the Company's Directors receive fees for consulting services
to the Company in addition to the fees they receive as Directors. During the
fiscal year ended September 30, 1999, the Company paid Lawrence Cohen $42,174
for such consulting services.

OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS

The following table shows information about option grants in the last
fiscal year for each of the Executive Officers included in the Summary
Compensation Table. For the fiscal year ended September 30, 1999, no other
Executive Officer of the Company received stock options. The Company did not
grant any stock appreciation rights.

<TABLE>
<CAPTION>
Number of Securities
Underlying Options % of Total Options Granted to Exercise of Base
Name Granted (#) Employees in Fiscal Year Price ($/Sh) Expiration Date
---- -------------------- ----------------------------- ---------------- ---------------

Wiley R. McCoy 0 0.0% ------------ ------------
Louis J. Infante 0 0.0% ------------ ------------
Kenneth R. Black(1) 41,589 12.32% 3.25 9/18/99
John C. McCormack(2) 38,400 12.30% 3.25 10/28/01
Steven E. Sanderson(3) 37,096 11.88% 3.25 10/28/01
</TABLE>

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

The following table shows aggregate option exercises during the fiscal
year ended September 30, 1999, and the fiscal year-end option values for the
Executive Officers included in the Summary Compensation Table.

<TABLE>
<CAPTION>
Number of Securities
Underlying Value of
Unexercised Options Unexercised-in-the-Money
Shares Acquired at FY-End Options at FY-End
on Exercise Exercisable/ Exercisable/
Name (Number) Value Realized Unexercisable Unexercisable
---- ------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Wiley R. McCoy -- -- 0/0 $0/0
Louis J. Infante -- -- 0/0 $0/0
Kenneth R. Black(1) -- -- 0/0 $0/0
John C. McCormack(2) -- -- 244,240/0 $0/0
Steven E. Sanderson(3) -- -- 52,877/0 $0/0
</TABLE>

401(K) PLAN

Effective October 1, 1995, the Company implemented a 401(k) Plan
pursuant to which all eligible employees may contribute up to 15% of their
compensation. The Company matches contributions in the amount of 10% of all
elective deferrals, and, at the Company's option, may contribute annually up to
15% of the total compensation of all eligible employees. Executive Officers of
the Company are eligible to participate in this plan. During the fiscal year
ended September 30, 1998 and 1999, the Company made matching contributions of
$8,230 and $35,471, respectively, under this plan.

1994 STOCK OPTION PLAN

The 1994 Stock Option Plan, as amended (the "1994 Stock Option Plan"),
provides for the grant of options to purchase up to 2,000,000 shares of Common
Stock to employees, officers, directors and consultants of the Company. The
purpose of the 1994 Stock Option Plan is two-fold. First, the 1994 Stock Option
Plan furthers the interests of the Company and its shareholders by providing
incentives in the form of stock options to employees who contribute materially
to the success and profitability of the Company. Second, the 1994 Stock Option
Plan provides the Company flexibility and the means to reward directors and
consultants who render valuable contributions to the Company. The Board has the
power to determine at the time the option is granted whether the option will be
an incentive stock option (an option which qualifies under Section 422 of the
Internal Revenue Code of 1986) or an option which is not an incentive stock
option. However, incentive stock options will only be granted to persons who are
employees of the Company. Vesting provisions are determined by the Board at the
time options are granted. The

- ---------------------------------
/(1)/ Mr. Black resigned as Vice President of Sales and Marketing effective June
18, 1999.
/(2)/ Mr. McCormack resigned as President and Chief Executive Officer effective
April, 1999.
/(3)/ Mr. Sanderson resigned as Chief Financial Officer effective September 30,
1999.

7
<PAGE>

option price must be satisfied by the payment of cash or other means as approved
by the Board. Options may be granted by the Board with reload option provisions
on terms determined by the Board. A reload option provision provides that if the
grantee pays the exercise price of shares of stock to be purchased by the
exercise of either an incentive stock option or an option that is not an
incentive stock option by delivering to the Company shares of stock already
owned by the grantee or to be acquired on the exercise of the option, the
grantee shall receive a reload option which shall be a new option to purchase
shares of stock equal in number to the tendered shares. The Board of Directors
may amend the 1994 Stock Option Plan at any time; however, the Board may not
materially increase the number of shares available under the 1994 Stock Option
Plan, materially increase the benefits accruing to participants under the 1994
Stock Option Plan, or materially change the eligible class of employees without
shareholder approval.

As of January 15, 2000, there were 1,308,972 options outstanding under
the 1994 Stock Option Plan with exercise prices ranging from $6.28125 to
$2.3125.

THE 2000 STOCK OPTION PLAN

DESCRIPTION OF THE 2000 STOCK OPTION PLAN

The 2000 Stock Option Plan of the Company (the "2000 Stock Option
Plan") was adopted by the Board in the form attached as Exhibit "A" to this
Proxy Statement on March 16, 2000, subject to approval by the shareholders. The
2000 Stock Option Plan was adopted because almost all shares available for grant
under the 1994 Stock Option Plan have been granted, the 1994 Stock Option Plan
expires in 2004, and the 2000 Stock Option Plan, if approved by the
shareholders, will not expire until 2010.

The purpose of the 2000 Stock Option Plan is to advance the interests
of the Company and its shareholders by providing long-term incentives to certain
directors, officers, consultants and key employees of the Company by enabling
them to acquire a proprietary interest in the Company. The 2000 Stock Option
Plan provides for both the grant of Incentive Stock Options ("ISOs") pursuant to
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
options which do not qualify as ISOs ("NISOs" and, together with the ISOs, the
"Options").

The following summary of the 2000 Stock Option Plan does not purport to
be complete and is qualified in its entirety by reference to the complete text
of the 2000 Stock Option Plan.

ADMINISTRATION OF THE 2000 STOCK OPTION PLAN

The 2000 Stock Option Plan will be administered by a committee (the
"Committee") which is comprised of at least 2 or more "Non-Employee Directors"
(within the meaning of Rule 16b-3 of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act")) and "Outside Directors" (within the meaning of
Code Section 162). Under the 2000 Stock Option Plan, the Committee has the
authority to select the individuals to whom Options will be granted from among
the persons eligible for such grants, to determine the terms and conditions of
each award, to approve the form of each option agreement pursuant to which each
option will be granted (the "Option Agreement(s)"), to construe and interpret
the 2000 Stock Option Plan and all Option Agreements executed thereunder and to
make all other determinations necessary or advisable for administration of the
2000 Stock Option Plan.

SHARES SUBJECT TO THE 2000 STOCK OPTION PLAN

The total number of shares of common stock of the Company (the "Common
Stock") which may be issued under the 2000 Stock Option Plan may not exceed
2,000,000. If an Option is forfeited, terminated, canceled, or expires without
having been exercised, the shares of Common Stock subject to the Option will be
available for additional Option grants under the 2000 Stock Option Plan. On
March 3, 2000, the closing price per share of Common Stock on the Nasdaq
small-cap market was $3.00.

GRANTEES

Individuals who are selected for participation in the 2000 Stock Option
Plan are referred to in the 2000 Stock Option Plan as Grantees. In general, it
is anticipated that certain directors, officers, consultants and key employees
of the Company will be eligible to participate in the 2000 Stock Option Plan;
however, only key employees may receive ISOs.

TERMS OF OPTIONS

Options granted by the 2000 Stock Option Plan will be either ISOs or
NISOs. Each Option granted will be pre-approved by the Committee and evidenced
by an Option Agreement which will contain the terms and conditions of the
Option.

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The price, time, and manner of exercise of the Option shall be
determined by the Committee. Options may be fully vested when granted or may
vest in accordance with a vesting schedule set by the Committee in the Option
Agreement.

The Options will have per-share exercise prices at least equal to 100%
of the Fair Market Value (as defined in the 2000 Stock Option Plan) of the
Common Stock, unless the Grantee owns more than 10% of the voting power of the
Company, in which case the exercise price of an ISO must be at least 110% of the
Fair Market Value of the Common Stock on the Grant Date.

A Grantee will be able to exercise Options from time to time as
specified in the Grantee's individual Option Agreement. With regard to Options
granted to employees, Options generally must be exercised during their
employment with the Company and no Option may be exercised later than the tenth
anniversary from the Grant Date (as defined in the 2000 Stock Option Plan) (or
the fifth anniversary from the Grant Date if the Grantee owns more than 10% of
the voting stock of the Company) or as provided in the Option Agreement. If an
employee is granted Options and the employee's employment is terminated due to
retirement, the option exercise period may be extended until 3 months after
employment termination. If an employee is granted Options and the employee's
employment is terminated due to death or Disability (as defined in the 2000
Stock Option Plan), the option exercise period may be extended until 12 months
after employment termination. If an employee is granted Options and the
employee's employment is terminated for reasons other than retirement, death or
Disability, the Option exercise period may be extended beyond the employment
termination date, but not more than 3 months after the employment termination
date if the Option is an ISO.

Unless otherwise provided in the Option Agreement, Options will
terminate (and are not exercisable) if the Grantee is terminated for Cause (as
defined in the 2000 Stock Option Plan). Unless otherwise provided in the Option
Agreement, Options will become fully vested and exercisable upon the occurrence
of a Change in Control (as defined in the 2000 Stock Option Plan) prior to
death, Disability, retirement, or for an employee, prior to termination of
employment. Finally, Option Agreements for NISOs granted to members of the Board
may provide that the Options will expire coincident with or after a specified
number of days after such Board member ceases to be a member of the Board.

ISOs may only be exercised by the Grantee during the Grantee's lifetime
and are transferable only by will or the laws of descent and distribution. The
same rules apply for NISOs except that with prior Committee approval they may
also be transferred to certain immediate family members, to certain trusts and
partnerships and pursuant to qualified domestic relations orders, all in
accordance with the 2000 Stock Option Plan.

Unless otherwise provided by the Committee, shares of Common Stock
purchased pursuant to the exercise of an Option will be paid in full at the time
of exercise in cash or by the surrender of previously acquired shares of Common
Stock or any combination thereof. The Committee may also provide that the Option
may be exercised (i) through a "cashless exercise" procedure involving a broker
or dealer selected or approved by the Committee or (ii) through the tendering or
withholding of shares to pay the exercise price.

The Committee may provide in an Option Agreement that the Grantee will
automatically be granted a new Option in the event that the Grantee exercises a
prior Option by paying some or all of the exercise price of the Option with
shares of Common Stock.

In the event of any reorganization, merger, consolidation,
reclassification, recapitalization, combination or exchange of shares, stock
split, stock dividend, rights offering, or other event affecting shares of the
Company, the Committee may, in its discretion, adjust the number and class of
shares to which Options are authorized to be granted, the number and class of
shares then subject to Options previously granted, the price per share payable
upon exercise of each outstanding Option, and make any other equitable
adjustments.

AMENDMENT AND TERMINATION OF THE 2000 STOCK OPTION PLAN

The Board or Committee may at any time, and from time to time, amend,
alter or terminate the 2000 Stock Option Plan, except that certain types of
amendments must by approved by the shareholders. Examples of amendments which
require shareholder approval are amendments that materially increase the
benefits accruing to Grantees, those that increase the number of shares
available under the 2000 Stock Option Plan and those that materially modify the
eligibility requirements for participation in the 2000 Stock Option Plan. Unless
terminated earlier by the Board, the 2000 Stock Option Plan will terminate in
2010, and no Options may be granted after that date.

FEDERAL INCOME TAX CONSEQUENCES

Set forth below is a summary of the federal income tax consequences
associated with Options granted under the 2000 Stock Option Plan. The discussion
does not purport to be complete and does not cover, among other things, the
state and local tax consequences in connection with the grant and exercise of
Options. There are numerous special rules which are not discussed

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below but which should be considered by Grantees before exercising an Option or
selling stock acquired upon the exercise of an Option.

A Grantee does not realize taxable income upon the grant of an Option.
In general, the holder of a NISO realizes ordinary income when the Option is
exercised equal to the excess of the value of the stock over the exercise price
(i.e., the option spread), and the Company receives a corresponding deduction.
Special rules may apply if the Grantee is subject to Section 16(b) of the
Exchange Act at the time of exercise. Upon a later sale of stock, the Grantee
realizes capital gain or loss equal to the difference between the selling price
and the fair market value of the stock at the time ordinary income was realized
with respect to the exercise of the Option.

The holder of an ISO does not realize taxable income upon exercise of
the Option provided that the holder satisfies all ISO requirements (although the
option spread is an item of tax preference income potentially subject to the
alternative minimum tax). If the stock acquired upon exercise of the ISO is sold
or otherwise disposed of within two years from the ISO grant date or within one
year from the exercise date, then, in general, gain realized on the sale is
treated as ordinary income to the extent of the Option spread at the exercise
date (or, if later, the date ordinary income would have been realized if the
Option had been a NISO), and the Company receives a corresponding deduction. Any
remaining gain is treated as capital gain. If the stock is held for at least two
years from the grant date and one year from the exercise date, then gain or loss
realized upon the sale will be capital gain or loss and the Company will not be
entitled to a deduction. A special basis adjustment applies to reduce the gain
for alternative minimum tax purposes.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 2000
STOCK OPTION PLAN.

APPOINTMENT OF INDEPENDENT ACCOUNTANTS

The independent accounting firm of Arthur Andersen LLP audited the
financial statements of the Company for the year ended September 30, 1999. It is
not expected that representatives of Arthur Andersen LLP will be present at the
annual meeting.

The independent accounting firm of Ernst & Young LLP has been selected
as the Company's independent account for the current fiscal year. This selection
was approved by the Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE SELECTION OF ERNST &
YOUNG LLP AS THE AUDITORS FOR THE COMPANY.

AMENDMENT TO ARTICLES OF INCORPORATION
CHANGING NAME OF CORPORATION

The Board of Directors has approved an amendment to the Articles of
Incorporation to change the name of the Company to "McLaren Performance
Technologies, Inc." This name change is being proposed in an effort to better
signify the ever-changing nature of the Company's current and planned lines of
business. It is also being proposed as part of an amicable resolution of an
issue relating to the separation of the identity of the Company from another
user of the name "McLaren."

An affirmative vote of a majority of the shares of Common Stock
outstanding will be required to approve the proposed amendment to the Company's
Articles of Incorporation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE
ARTICLES OF INCORPORATION CHANGING THE COMPANY'S NAME TO "MCLAREN PERFORMANCE
TECHNOLOGIES, INC."

ANNUAL REPORT

The Company's Annual Report for the year ending September 30, 1999,
accompanies this Proxy Statement. The Annual Report is not incorporated into
this Proxy Statement and is not to be considered part of the solicitation
material.

SOLICITATION OF PROXIES

The expenses in connection with the solicitation of the enclosed form
of proxy, including clerical work, printing and postage, will be borne by the
Company. In addition to the use of the mails, Directors, Officers, or employees
of the Company may make solicitations in person or by telephone without special
compensation. The Corporation has retained Corporate Investor Communications,
Inc. to assist in the solicitation of proxies at an estimated cost of $6,500
plus reimbursement of reasonable expenses. The Company will reimburse
custodians, nominees or other person for their out-of-pocket expenses in sending
proxy material to beneficial owners.

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PROPOSALS OF SHAREHOLDERS

Proposals of shareholders intended to be presented at the Company's
2001 Annual Meeting of Shareholders must be received by the Secretary, McLaren
Automotive Group, Inc., 32233 West Eight Mile Road, Livonia, Michigan 48152, no
later than November 16, 2000.

AS TO OTHER MATTERS WHICH MAY COME BEFORE THE MEETING

The Board of Directors does not intend to bring any other matters
before the meeting and has not been informed of such an intention by any other
person. However, if any other matters properly come before the meeting, it is
the intention of the persons named in the enclosed form of proxy to vote said
proxies in accordance with their judgment on such matters.

It is important that the proxies be returned promptly. Therefore,
shareholders are requested to execute and return the enclosed proxy to which no
postage need be affixed if mailed in the United States.

By Order of the Board of Directors

--------------------------------------
Louis J. Infante, Secretary
Dated: March 17, 2000

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EXHIBIT A

MCLAREN 2000 STOCK OPTION PLAN

WHEREAS, McLaren Automotive Group, Inc., a Delaware Corporation, (the
"Corporation") desires to adopt a new stock option plan to align the interests
of certain officers, key employees, directors and key consultants with
shareholders of the Corporation by rewarding long-term growth and profitability
of the Corporation.

NOW, THEREFORE, this McLaren 2000 Stock Option Plan is ratified as of
the 18th day of April, 2000, by the Corporation as follows:

1. DEFINITIONS. Except as otherwise expressly provided in this Plan, the
following capitalized terms shall have the respective meanings hereafter
ascribed to them:

(a) "Board" shall mean the Board of Directors of the Corporation.

(b) "Cause" shall mean, unless otherwise specifically defined in
the Option Agreement:

(i) With regard to an Employee, the failure of the Employee to
devote substantially all of his business time to the performance of his duties
to the Corporation (other than by reason of disability), or refusal or failure
to follow or carry out any reasonable direction of the Board of Directors, and
the continuance of such refusal or failure for a period of 10 days after notice
to such Employee;

(ii) The material breach by the Grantee of any material
agreement to which such Grantee and the Corporation are a party;

(iii) The commission of fraud, embezzlement, theft, dishonesty
or gross negligence by such Grantee with respect to the Corporation, his willful
or continuing violation of the published rules of the Corporation, or his
willful or continuing disregard for the safety or soundness of the Corporation;

(iv) The conviction of such Grantee of, or plea by such
Grantee of nolo contendere to, any felony or any other crime involving
dishonesty or moral turpitude; or

(v) Any other intentional action or intentional omission that
involves a material breach of fiduciary obligation on the part of such Grantee.

The Committee shall determine, in its sole discretion, whether
Cause exists.

(i) The Corporation is merged, consolidated or reorganized
into or with another corporation or other legal person, and as a result of such
merger, consolidation or reorganization, less than 50% of the combined voting
power of the then-outstanding voting stock of such corporation or person
immediately after such transaction is held in the aggregate by the Corporation
or by the holders of voting stock of the Corporation immediately prior to such
transaction;

(ii) The Corporation sells or otherwise transfers all or
substantially all of its assets to another corporation or other legal person,
and as a result of such sale or transfer less than 50% of the combined voting
power of the then-outstanding voting stock of such corporation or person
immediately after such sale or transfer is held in the aggregate by the
Corporation or by the holders of voting stock of the Corporation immediately
prior to such sale or transfer; or

(iii) The Corporation files a report or proxy statement with
the Securities and Exchange Commission pursuant to the Exchange Act disclosing
in response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Corporation will occur
in the future pursuant to a then-existing contract or transaction which when
consummated would be a Change in Control determined without regard to this
subsection (iii).

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Notwithstanding the foregoing provisions of Section 1(c)(iii), unless
otherwise determined in a specific case by a majority vote of the Board, a
Change in Control shall not be deemed to have occurred for purposes of Section
1(c)(iii) solely because the Corporation, a Subsidiary, or any
Corporation-sponsored employee stock ownership plan or any other employee
benefit plan of the Corporation either files or becomes obligated to file a
report or a proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) under the Exchange Act disclosing beneficial ownership by it of
shares of voting stock, whether in excess of 20% or otherwise, or because the
Corporation reports that a Change in Control of the Corporation has occurred or
will occur in the future by reason of such beneficial ownership.

(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.

(e) "Committee" shall mean the Committee which shall administer
this Plan as provided in Section 3 of this Plan.

(f) "Consultant" shall mean a person who provides services to the
Corporation as an independent contractor.

(g) "Corporation" shall mean McLaren Automotive Group, Inc.
and its successors and each and all of any present and future subsidiaries.

(h) "Disability" or "Disabled" shall mean an individual's total
and permanent disability as evidenced by the fact that he is unable to engage in
any gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months as
determined in the sole discretion of the Committee in its reasonable judgment.

(i) "Employee" shall mean an employee of the Corporation or any
subsidiary of the Corporation.

(j) "Exchange Act" shall mean the Securities and Exchange Act
of 1934, as amended, and its corresponding rules and regulations.

(k) "Fair Market Value" shall mean the following:

(i) During such time as the Shares are not traded on any
securities market, the Fair Market Value per Share shall be determined in good
faith by the Board.

(ii) During such time as the Shares are traded on a securities
market but not listed upon an established stock exchange, the Fair Market Value
per Share shall be the mean between dealer "bid" and "ask" prices in the
securities market in which it is traded on the Grant Date, as reported by the
National Association of Securities Dealers, Inc. If the Shares are listed on an
established stock exchange or exchanges, such Fair Market Value shall be deemed
to be the highest closing price on such stock exchange or exchanges on the Grant
Date, or if no sale of any Shares shall have been made on any stock exchange on
that day, on the next preceding day on which there was such a sale.

(l) "Grant Date" shall mean the date on which the Committee
approves the specific grant of stock options to a Grantee.

(m) "Grantee" shall mean the recipient of an Option Agreement
pursuant to the Plan.

(n) "Incentive Stock Option" shall mean an option to purchase a
number of Shares set forth in the Option Agreement which qualifies as such
pursuant to Section 422 of the Code.

(o) "Non-statutory Stock Option" shall mean an option to purchase
a number of Shares set forth in the Option Agreement which is not an Incentive
Stock Option.

(p) "Option Agreement" shall mean a separate written agreement in
a form approved by the Committee between the Corporation and a Grantee which,
together with the Plan, provides terms and provisions governing a grant of an
option to purchase Shares under the Plan.

(q) "Plan" shall mean this McLaren 2000 Stock Option Plan.

(r) "Reload Option" shall mean a Grantee's receipt of a new
option to purchase Shares equal in number to tendered Shares when the Grantee
pays the exercise price of an option by delivering to the Corporation Shares
already owned by the Grantee or to be acquired on the exercise of the option.

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(s) "Rule 16b-3" shall mean Rule 16b-3 of the Exchange Act, as
amended, and any corresponding rules and regulations.

(t) "Section 162(m) Relief" shall mean such exception as may be
available pursuant to Section 162(m) of the Code from the limitation on tax
deductibility provided for thereunder.

(u) "Shares" shall mean shares of common stock of McLaren
Automotive Group, Inc. or its successor.

(v) "Shareholders" shall mean the owners of record of Shares of
McLaren Automotive Group, Inc. or its successor.

(w) "Tandem Stock Option" shall mean any arrangement whereby two
options, an Incentive Stock Option and a Non-statutory Stock Option, are issued
and the exercise of one option affects the right to exercise the other.

2. PURPOSE. The purpose of this Plan is to align the interest of certain
officers, directors, key employees, and key consultants of the Corporation by
rewarding long-term growth and profitability of the Company, as well as to
attract and retain these individuals to provide them with additional incentives
to devote their best efforts to pursue and sustain the Corporation's financial
success through the achievement of corporate goals. This program is also
intended to provide the Corporation flexibility and the means to reward
individuals who render valuable contributions to the Corporation.

3. ADMINISTRATION.

(a) This Plan will be administered by the Committee. In addition to any
implied powers and duties that may be necessary to carry out the provisions of
the Plan, the Committee shall have all the powers vested in it by the terms of
the Plan, including exclusive authority to select the Grantees, to fix the
options and amounts of options to each Grantee (which types and amounts of
options need not be uniform), to determine the time when options will be granted
(to the extent Section 162(m) Relief is sought, taking into account the
provisions of Section 162(m) of the Code), to prescribe the form of the Option
Agreements, to make all other determinations necessary or advisable pursuant to
the Plan, to determine whether the performance of an individual warrants the
grant of an option pursuant to this Plan, and to determine the amount and
duration of any options. The Committee has full and exclusive power to construe
and interpret the Plan and the awards of options made pursuant to the Plan, to
prescribe, amend and rescind rules and regulations relating to this Plan, and to
take all actions necessary or advisable for the Plan's administration.

(b) The Committee shall have full power and authority to determine, and
shall clearly set forth in the Option Agreement, whether the option shall be an
Incentive Stock Option or a Non-statutory Stock Option.

(d) Any determinations made by the Committee will be final, conclusive
and binding on all persons, including any employee, beneficiary, legal
representative, and any other interested parties. A member of the Committee will
not be liable for performing any act or making any determination required by or
pursuant to the Plan if such act or determination is made in good faith. The
Committee may authorize any one or more of their members, or any officer of the
Corporation, to execute and deliver documents on behalf of the Committee.

(e) All members of the Committee shall be "Non-Employee Directors"
within the meaning of Rule 16b-3, and "Outside Directors" within the meaning of
Section 162(m) of the Code, except, with respect to Code Section 162(m), to the
extent not necessary for Code Section 162(m) Relief or Section 162(m) Relief is
not sought. The number of directors serving on the Committee at any given time
shall be no less than the number required by Rule 16b-3 and by Code Section
162(m) (except, with respect to Code Section 162(m), to the extent not necessary
for Section 162(m) Relief or Section 162(m) Relief is not sought).

4. GRANTEES.

(a) The Committee, in its sole discretion, may designate any employee,
officer, director or consultant as a Grantee pursuant to this Plan. However,
only key employees of the Corporation, as determined by the Committee, shall be
eligible to receive grants of Incentive Stock Options. The Committee's
designation of a person as a Grantee in any year does not require the Committee
to designate that person to receive an award pursuant to this Plan in any other
year or, if so designated, to receive the same award as any other Grantee in any
year.

(b) The Committee may consider such factors as it deems pertinent in
selecting Grantees and in determining the amount of their respective awards,
including, but not limited to:

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(i) The financial condition of the Corporation;

(ii) Expected profits for the current or future years;

(iii) The contributions of a prospective Grantee to the
profitability and success of the Corporation; and

(iv) The adequacy of the prospective Grantee's other
compensation.

(c) The Committee, in its discretion, may grant options to a Grantee
pursuant to this Plan, even though he has participated in another benefit plan
of the Corporation or other benefits, equity or otherwise, were previously
granted to him pursuant to this or another plan of the Corporation, whether or
not the previously granted benefits have been exercised, but the Grantee may
hold such options only on the terms and subject to the restrictions hereafter
set forth in this Plan and the corresponding Option Agreement.

5. AWARDS.

(a) Awards granted pursuant to this Plan, if any, will be granted in
options to acquire Shares as described herein. Notwithstanding anything to the
contrary herein, options may only be granted pursuant to this Plan if they are
pre-approved by the Committee and issued pursuant to an Option Agreement between
the Grantee and the Corporation.

(b) Each Option Agreement shall specify whether the pertinent option is
an Incentive Stock Option or a Non-statutory Stock Option. Each Option Agreement
shall also specify the number of Shares subject to the pertinent option.

(c) In granting an option under this Plan, the Committee may include a
Reload Option provision in the Option Agreement. The terms of any Reload Option
shall be determined by the Committee consistent with the provisions of this
Plan.

6. OPTION EXERCISE.

(a) Options granted pursuant to this Plan may only be exercised in
conjunction with the terms of the Plan and the corresponding Option Agreement
which shall specify a vesting schedule, if any, and the period (or periods)
during which the pertinent options may be exercised. The Grantee may exercise
the option subject to the terms and provisions of the Plan and the corresponding
Option Agreement.

(b) As soon as reasonably practicable after the exercise of an option,
the Corporation shall deliver to the Grantee certificates representing
authorized Shares.

(c) The cumulative total number of Shares which may be subject to
options issued and outstanding pursuant to this Plan is limited to 2,000,000
Shares. This amount automatically will be adjusted in accordance with Section 21
of this Plan. If an option expires, is canceled or is terminated, in whole or in
part, for any reason other than its exercise, the Committee may reallocate the
Shares subject to that option (or to the part thereof so terminated) to one or
more other options to be granted pursuant to this Plan.

(d) Any option granted pursuant to this Plan shall automatically expire
10 years after the Grant Date or at such earlier time as may be described in
this Plan or in the Option Agreement.

(e) Notwithstanding anything to the contrary herein, no Incentive Stock
Option granted to a Grantee who owns, as of the Grant Date, stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Corporation shall, in any event, be exercisable after the expiration of 5 years
from the Grant Date. For the purpose of determining under any provision of this
Plan whether a Grantee owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation, such Grantee shall be
considered as owning the stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors and
lineal descendants, and stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries.

(f) Subject to the provisions of this Plan, a Grantee cannot exercise
an Incentive Stock Option granted pursuant to this Plan unless, at the time of
exercise, he has been continuously employed by the Corporation since the date
the option was granted. The Committee may decide in each case to what extent
good faith leaves of absence for illness, temporary disability, government or
military service, or other reasons will be deemed to not cause an interruption
in continuous employment.

(g) Subject to the provisions of the Plan, a Grantee must exercise an
option within the time provided in the Option Agreement; provided, however, if a
Grantee is an Employee on the Grant Date and ceases to be an Employee as a
result of termination of employment, he may not exercise an option thereafter
unless the Committee, in its sole discretion, grants the

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Grantee an extension of time to exercise the option after cessation of
employment. The extension of time of exercise that may be granted by the
Committee pursuant to this subsection for an Incentive Stock Option shall not
exceed 3 months after the date on which the Grantee ceases to be an Employee and
in no case shall extend beyond the stated expiration date of the option. Such
options may be exercised only as to the number of shares for which they could
have been exercised at the time the Grantee's employment was terminated pursuant
to the Plan and applicable Option Agreement.

(h) If a Grantee is an Employee on the Grant Date and ceases to be an
Employee as a result of retirement, he may exercise the option within the time
provided in the Option Agreement; provided, however, he may only exercise an
option within 3 months after the date on which he ceases to be an Employee (but
no later than the stated expiration date of the option). An Employee shall be
regarded as retired if he terminates employment after his 65th birthday. Such
options may be exercised only as to the number of shares for which they could
have been exercised at the time the Grantee's employment was terminated as a
result of retirement pursuant to the Plan and applicable Option Agreement.

(i) If a Grantee is an Employee on the Grant Date and ceases to be an
Employee because of Disability or death, and if at the time of the Grantee's
Disability or death he was entitled to exercise an option pursuant to this Plan,
he may exercise the option within the time provided in the Option Agreement;
provided, however, the option may only be exercised by him, or by the Grantee in
the case of Disability or, in case of death, by his legal representative or by
the person who acquired the right to exercise the option pursuant to the Plan,
within 12 months after his death or termination of employment due to Disability
(but no later than the stated expiration date of the option). Such options may
be exercised only as to the number of Shares for which they could have been
exercised at the time the Grantee died or became Disabled pursuant to the Plan
and applicable Option Agreement.

(j) Notwithstanding any other provisions of the Plan, unless an Option
Agreement specifically provides to the contrary, if a Grantee is terminated as
an Employee, consultant or director by the Corporation for Cause, all rights to
any option granted under this Plan shall terminate, including but not limited to
the ability to exercise such options.

(k) With respect to Non-statutory Stock Options granted to Board
members, the Option Agreement may provide that such options will expire
coincident with or after a specified number of days after such Board member
ceases to be a member of the Board. In the absence of any such provision, the
option will expire on the stated expiration date of the option.

(l) Notwithstanding any other provisions of the Plan, unless an Option
Agreement specifically provides to the contrary, all options granted under this
Plan shall immediately become fully vested and exercisable as of the effective
date of a Change in Control prior to (i) a Grantee's death, disability,
retirement, or (ii) with regard to a Grantee who is an Employee, termination of
employment.

(m) Any option granted pursuant to the Plan will terminate, in whole or
in part, to the extent that, in accordance with the Plan or corresponding Option
Agreement, it no longer can be exercised.

7. OPTION EXERCISE PRICE.

(a) Each Option Agreement shall state the exercise price of the option,
which shall be not less than 100% of the Fair Market Value of the corresponding
Shares on the Grant Date or the par value thereof, whichever is greater.

(b) Notwithstanding any other provision of the Plan, in the case of a
grant of an Incentive Stock Option to a Grantee who, as of the Grant Date, owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Corporation or its Parent or Subsidiaries, the option price
shall not be less than 110% of the Fair Market Value of the corresponding Shares
on the Grant Date or the par value thereof, whichever is greater.

8. MAXIMUM INCENTIVE STOCK OPTION EXERCISE. The aggregate Fair Market
Value (determined as of the Grant Date) of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by a Grantee during
any calendar year (under all such plans of the Corporation and its parent or
subsidiary, if any) shall not exceed $100,000. For purposes of this Section 8,
the value of stock acquired through the exercise of Non-statutory Stock Options
shall not be included in the computation of the aggregate Fair Market Value.

9. METHOD OF EXERCISE.

(a) Each option granted pursuant to this Plan will be deemed to be
exercised when the holder of it indicates his decision to do so in writing
delivered to the Chief Financial Officer of the Corporation and concurrently
tenders to the Corporation full payment pursuant to Section 9(d) of this Plan
for the Shares to be purchased pursuant to the exercise of the option and
complies with such other reasonable requirements as the Committee establishes
pursuant to this Plan or the corresponding Option Agreement.

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(b) No person, personal representative, estate or other entity will
have the rights of a Shareholder with respect to Shares subject to an option
granted pursuant to this Plan until a certificate or certificates for the Shares
have been delivered to the person exercising the option.

(c) Any option granted pursuant to this Plan may be exercised as to any
lesser number of Shares than the full amount for which such option has been
granted. A partial exercise of an option will not affect the Grantee's rights to
exercise the option from time to time in accordance with this Plan as to the
remaining Shares subject to the option.

(d) Payment of the exercise price may be made in cash or certified
check or, to the extent expressly provided in the Option Agreement:

(i) By surrender of Shares having a Fair Market Value equal to the
exercise price of the option (and which have been paid for within the meaning of
Securities and Exchange Commission Rule 144 and, if such Shares were purchased
from the Corporation by use of a promissory note, such note has been fully paid
with respect to such shares, or were obtained by the holder of the option in the
open public market);

(ii) Provided that a public market for the Corporation's stock
exists, through a "same day sale" commitment from the holder of the option and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby the holder irrevocably elects to exercise the option
and to sell a portion of the Shares so purchased to pay for the exercise price
and whereby the NASD Dealer irrevocable commits upon receipt of such Shares to
forward the exercise price directly to the Corporation;

(iii) Provided that a public market for the Corporation's stock
exists, through a "margin" commitment from the holder of the option and an NASD
Dealer whereby the holder of the option irrevocably elects to exercise the
Option and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the exercise price directly to the Corporation;

(iv) By surrendering Shares for which the option is being exercised
having a Fair Market Value equal to the exercise price of the option; or

(v) By any combination of the foregoing.

10. WITHHOLDING. The Corporation, if necessary or desirable, may pay
or withhold the amount of any tax attributable to any amount payable or Shares
deliverable pursuant to this Plan and the Corporation may defer making payment
on delivery until it is indemnified to its satisfaction for that tax.

11. COMPLIANCE.

(a) Options are exercisable and Shares can be delivered pursuant to
this Plan, only in compliance with all applicable federal and state laws and
regulations, including, without limitation, state and federal securities laws,
and the rules of all stock exchanges on which the Shares are listed at the
applicable time. Any certificate issued pursuant to options granted pursuant to
this Plan shall bear such legends and statements as the Committee deems
advisable to assure compliance with federal and state laws and regulations. No
option may be exercised, and Shares may not be issued pursuant to this Plan,
until the Corporation has obtained the consent or approval of every regulatory
body, federal or state, having jurisdiction over such matters as the Board or
Committee deems advisable.

(b) In the event that the Corporation deems it necessary or desirable
to file a registration statement with the Securities and Exchange Commission or
any state Securities Commission, no option granted pursuant to the Plan may be
exercised, and Shares may not be issued, until the Corporation has obtained the
consent or approval of such Commission.

(c) In the case of the exercise of an option by a person or estate
acquiring by bequest or inheritance the right to exercise such option, the
Committee may require reasonable evidence as to the ownership of the option and
may require such consents and releases of taxing authorities as the Committee
deems advisable.

(d) It is the intention that the Plan at all times fully satisfy the
provisions and conditions of Rule 16b-3 applicable to a plan of this type.

12. ASSIGNABILITY. Except for Incentive Stock Options which shall not be
transferable other than by will or the laws of descent and distribution, a
Non-statutory Stock Option may be transferred either directly or by operation of
law or otherwise, only to the extent such transfer is exempt under Rule 16b-3,
only with the prior written consent of the Committee, and only to the extent
allowable under applicable securities laws and registration requirements and
only as follows:

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<PAGE>

(a) To immediate family members of the Grantee;

(b) To a trust established for the benefit of the Grantee or his
immediate family members;

(d) Pursuant to a qualified domestic relations order.

13. RIGHTS. A participant's right, if any, to continue to serve the
Corporation as an officer, employee or otherwise, will not be affected by his
designation as a Grantee pursuant to this Plan, such designation will not in any
way restrict the right of the Corporation to terminate at any time the
employment or affiliation of any Grantee for cause or otherwise, and no employee
or other person shall have any claim or right to be granted an option or any
other award under the Plan.

14. AMENDMENT AND TERMINATION OF PLAN.

(a) Subject to the remainder of this Section 14, the Board or the
Committee may at any time terminate, modify or amend the Plan in such respects
as it shall deem advisable provided, that the Board or the Committee may not
make any amendment to the Plan that would, if such amendment were not approved
by the Shareholders:

(i) Cause the Plan to fail to comply with (A) Section 16 of
the Exchange Act (or Rule 16b-3), (B) any other requirement of applicable law or
regulation, or (C) the requirements for Section 162(m) Relief to the extent
Section 162(m) Relief is sought, unless and until the approval of the
shareholders is obtained;

(ii) Materially increase the benefits accruing to Grantees
pursuant to the Plan;

(iii) Increase the cumulative number of shares that may be
delivered upon the exercise of options granted pursuant to the Plan or the
aggregate Fair Market Value of options which a Grantee may exercise in any
calendar year;

(iv) Materially modify the eligibility requirements for
Grantees in the Plan; or

(v) Amend the requirements of subparagraphs (ii) - (iv) of
this Section 14.

(b) Any amendments, modifications or terminations of this Plan
shall be accomplished by a separate document(s) which will be incorporated by
reference into this document.

(c) Any amendment, whether with or without the approval of
Shareholders, that alters the terms or provisions of an option granted before
the amendment will be effective only with the consent of the Grantee to whom the
option was granted or the holder currently entitled to exercise it, except for
adjustments expressly authorized by this Plan.

15. EXPENSES OF PLAN. The expenses of the Plan will be borne by the
Corporation.

16. DURATION OF PLAN. Options may only be granted pursuant to this Plan
during the 10 years immediately following the earlier of the adoption of the
Plan or its approval by the Shareholders. Options granted during that 10-year
period will remain valid thereafter in accordance with their terms and the
provisions of this Plan.

17. OPTION AGREEMENTS. The Option Agreements authorized pursuant to the
Plan shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the option, as the Board shall deem advisable.
Any such Option Agreements, which are intended to grant Incentive Stock Options
shall, in conjunction with this Plan, contain such limitations and restrictions
upon the exercise of the option as shall be necessary in order that such option
will be an Incentive Stock Option as defined in Section 422 of the Code.

18. INDEMNIFICATION OF BOARD AND COMMITTEE. In addition to such other
rights of indemnification as they may have as directors, the members of the
Board and the members of the Committee shall be indemnified by the Corporation
against the reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act pursuant to
or in connection with the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such director is liable for negligence or misconduct in the
performance of his duties; provided, that within 60 days after the institution
of any such action, suit or proceeding, a director shall in writing offer the
Corporation the opportunity, at its own expense, to handle and defend the same.

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<PAGE>

19. APPLICATION OF FUNDS. The proceeds received by the Corporation from
the sale of stock pursuant to options granted pursuant to this Plan will be used
for general corporate purposes.

20. NO EXERCISE OBLIGATION. The granting of an option shall impose no
obligation upon the Grantee to exercise such option.

21. ADJUSTMENTS. If a reorganization, merger, consolidation,
reclassification, recapitalization, combination or exchange of shares, stock
split, stock dividend, rights offering, or other event affecting shares of the
Corporation occurs, then the number and class of shares to which options are
authorized to be granted pursuant to this Plan, the number and class of shares
then subject to options previously granted pursuant to this Plan, and the price
per share payable upon exercise of each option outstanding pursuant to this Plan
shall be equitably adjusted by the Board to reflect such changes.

22. NUMBER AND GENDER. Unless otherwise clearly indicated in this Plan,
words in the singular or plural shall include the plural and singular,
respectively, where they would so apply, and words in the masculine or neuter
gender shall include the feminine, masculine or neuter gender where applicable.

23. APPLICABLE LAW. The validity, interpretation and enforcement of
this Plan are governed in all respects by the laws of Delaware. Additionally,
this Plan, and any options or Shares acquired pursuant to this Plan or a
corresponding Option Agreement, shall be subject to and comply with Section 16
of the Exchange Act.

24. EFFECTIVE DATE. This Plan shall not take effect until adopted by the
Board and approved by the holders of a majority of the outstanding shares of the
capital stock of the Corporation, which approval must occur within the period
beginning 12 months before and ending 12 months after the Plan is adopted by the
Board.

25. HEADINGS. The section headings contained herein are inserted only as a
matter of convenience and for reference and in no way define, limit, enlarge or
describe the scope or intent of this Plan nor in any way shall they affect this
Plan or the construction of any provision thereof.

McLAREN AUTOMOTIVE GROUP, INC.

By:
--------------------------------

Its:
----------------------------

I hereby certify that the McLaren 2000 Stock Option Plan was approved
by the Board of Directors of McLaren Automotive Group, Inc. on the 16th day of
March, 2000.

By:
--------------------------------

Its:
----------------------------

I hereby certify that the McLaren 2000 Stock Option Plan was approved
by the Shareholders of McLaren Automotive Group, Inc. on the 18th day of
April, 2000.

By:
--------------------------------

Its:
----------------------------

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<PAGE>

P R O X Y

MCLAREN AUTOMOTIVE GROUP, INC.

SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Wiley R. McCoy with the power to
appoint his substitute, and hereby authorizes him to represent and to vote as
designated below, all the shares of common stock of McLaren Automotive Group,
Inc. held of record by the undersigned on March 13, 2000, at the Annual Meeting
of Shareholders to be held on April 18, 2000, or any adjournment thereof.

1. The election of five (5) Directors of the Company to serve until the
next Annual Meeting of Shareholders and until their successors have been duly
elected and qualified:

FOR all nominees listed below (except as marked to the
contrary).
---
WITHHOLD authority to vote for all the nominees listed below:
---
Nicholas P. Bartolini Wiley R. McCoy
Lawrence Cohen Robert J. Sinclair
David D. Jones

[INSTRUCTION: To withhold authority to vote for any individual nominee, cross
out that nominee's name above.]

2. The ratification of the appointment of Ernst & Young LLP as the
Company's independent accountants for the fiscal year ending September 30, 2000;

FOR AGAINST ABSTAIN
--- --- ---

3. The approval of an amendment to the Company's Articles of
Incorporation to change the name of the Company to "McLaren Performance
Technologies, Inc."

FOR AGAINST ABSTAIN
--- --- ---

4. The adoption of the 2000 Stock Option Plan.

FOR AGAINST ABSTAIN
--- --- ---

5. The transaction of such other business as may properly come before
the meeting and any adjournments or postponements of the meeting.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF McLAREN
AUTOMOTIVE GROUP, INC. PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED
PRE-ADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE
IN PERSON IF YOU ATTEND THE ANNUAL MEETING.

(To be signed on the other side)

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, 3 AND 4.

SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE ANNUAL MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.

<PAGE>

The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders, Proxy Statement and Annual Report.

Dated: , 2000
-------------- ------------------------------------------
Signature(s) of Shareholder(s)

------------------------------------------
Signature(s) of Shareholder(s)

Signature(s) should agree with the name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when signing.
Attorneys should submit powers of attorney.