<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
RIVIERA TOOL COMPANY
- -------------------------------------------------------------------------------
(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.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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<PAGE> 2
[RIVIERA TOOL COMPANY LOGO]
RIVIERA TOOL COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 15, 1999
To the Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Riviera Tool Company (the "Company") to be held on Wednesday, December 15, 1999
at 4:00 p.m., Eastern Standard Time at Rembrandt's at Bridgewater, 333 Bridge
Street, N.W., Grand Rapids, Michigan 49504, for the following purposes:
(1) To elect one Director to serve until the Annual Meeting of
Shareholders in 2002.
(2) To consider and act upon the ratification of the selection of
Deloitte & Touche LLP as independent auditors for the fiscal year ended
August 31, 2000.
(3) To consider such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record on the close of business on October 19, 1999
will be entitled to vote at the meeting or any adjournments thereof.
YOUR ATTENTION IS CALLED TO THE ATTACHED PROXY STATEMENT AND ACCOMPANYING
PROXY. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE ANNUAL
MEETING, REGARDLESS OF WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON. YOU ARE
THEREFORE URGED TO SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD PROMPTLY IN
THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE
YOUR OWN SHARES.
A copy of the Annual Report of the Company for the fiscal year ended August
31, 1999 accompanies this Notice.
By Order of the Board of Directors,
PETER C. CANEPA, Secretary
Grand Rapids, Michigan
November 18, 1999
<PAGE> 3
[RIVIERA TOOL COMPANY LOGO]
RIVIERA TOOL COMPANY
5460 Executive Parkway SE
Grand Rapids, Michigan 49512
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 15, 1999
GENERAL INFORMATION
This proxy statement and proxy are being furnished to you by the Board of
Directors of Riviera Tool Company, a Michigan corporation (the "Company"), of
5460 Executive Parkway SE, Grand Rapids, Michigan 49512 (telephone number
616-698-2100) in connection with the Annual Meeting of Shareholders on
Wednesday, December 15, 1999 at 4:00 p.m., Eastern Standard Time, and any
adjournments thereof, to be held at Rembrandt's at Bridgewater, 333 Bridge
Street, N.W., Grand Rapids, Michigan 49504. These proxy materials are first
being mailed to shareholders on or about November 23, 1999.
A Shareholder giving the enclosed proxy (or his authorized representative)
may revoke it any time before it is exercised by executing a subsequent proxy,
by written notice to the Company received before the proxy is exercised or by
voting in person at the meeting, otherwise the proxy will be voted as indicated
by the signed proxy.
The Company will bear the cost of soliciting proxies, including charges and
expenses of brokerage firms and others for forwarding solicitation material to
beneficial owners of stock. In addition to mailings, proxies may be solicited by
personal interview, telephone or telegraph by certain of the Company's employees
without compensation. The Company may reimburse brokers, dealers, banks, voting
trustees or other record holders for postage and other reasonable expenses of
forwarding proxy materials to their principals who beneficially own shares of
the Company's stock.
A copy of the Company's 1999 Annual Report is enclosed.
STOCK OUTSTANDING, VOTING RIGHTS AND VOTES REQUIRED
Only Common Shareholders of record at the close of business on October 19,
1999 (the "record date") are entitled to notice of, and to vote at, the meeting
or at adjournment or adjournments thereof, each share having one vote and there
are no cumulative voting rights for the election of directors and ratification
of independent auditors.
The Company had 3,218,744 shares of Common Stock, no Par Value (Common
Shares), outstanding on the record date. A majority of the Common Shares
entitled to vote constitutes a quorum.
The votes required for approval of each matter to be submitted at the
meeting for shareholder vote are described in the applicable sections of this
Proxy Statement.
2
<PAGE> 4
To the Company's knowledge, based on the most recent information filed with
the Securities and Exchange Commission (the "SEC"), or otherwise provided to the
Company, as of October 19, 1999, the following person(s) beneficially owned more
than 5% of the Company's Common Stock:
5% OR MORE BENEFICIAL OWNERSHIP TABLE
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED
---------------------
NAME AND ADDRESS NUMBER PERCENT
---------------- ------ -------
<S> <C> <C>
Kenneth K. Rieth(1)......................................... 687,350 21.4%
5460 Executive Parkway SE, Grand Rapids, MI 49512
Heartland Advisors, Inc..................................... 366,350 11.4%
790 N. Milwaukee Street, Milwaukee, WI 53202
Wellington Management Co. LLP............................... 299,249 9.3%
75 State Street, Boston, MA 02109
Invista Capital Management.................................. 179,000 5.6%
1900 Hub Tower, 699 Walnut Street, Des Moines, IA 50309
William Harris Investors, Inc............................... 176,199 5.5%
2 North Lasalle Street, Chicago, IL 60602
</TABLE>
- -------------------------
(1) Riviera Holding Company, 100% owned by Kenneth K. Rieth, President and CEO
of Riviera Tool Company, owns 635,250 shares of the Common Stock of Riviera
Tool Company. Also includes 2,100 shares of common stock owned by Mr. Rieth
as custodian for his minor children and 50,000 shares, which Mr. Rieth has
the right to acquire through exercise, of a stock option granted under the
1998 Key Employee Stock Option Plan on December 16, 1998, exercisable after
November 2, 1999, at $6.625 per share.
3
<PAGE> 5
I. ELECTION OF DIRECTORS
The Board of Directors proposed that Mr. Kenneth K. Rieth be elected as a
Director of the Company to hold office until the Annual Meeting of Shareholders
in 2002 or until his successor is elected by a majority of the Company's
shareholders. The persons named in the accompanying proxy intend to vote all
valid proxies received by them for the election of the nominee named above,
unless such proxies are marked to the contrary. In case the nominee is unable or
declines to serve, which is not anticipated, it is intended that the proxies be
voted in accordance with the best judgment of the proxy holders.
The following information is furnished with respect to the nominee for
election as a Director, each person whose term of office as a Director will
continue after the meeting and each Executive Officer of the Company as of
November 18, 1999 named in the Summary Compensation Table of this proxy
statement.
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OF TOTAL COMMON
COMMON STOCK OF THE
STOCK COMPANY
BENEFICIALLY BENEFICIALLY
POSITIONS AND OFFICES OWNED AS OF OWNED AS OF TERM
NAME AND YEAR FIRST WITH THE COMPANY AND OTHER OCTOBER 31, OCTOBER 31, TO
BECAME A DIRECTOR AGE PRINCIPAL OCCUPATIONS 1999 1999 EXPIRE
------------------- --- -------------------------- ------------ ------------- ------
<S> <C> <C> <C> <C> <C>
NOMINEE FOR ELECTION AS DIRECTOR FOR A THREE-YEAR TERM
Kenneth K. Rieth (1980)........... 40 President and Chief Executive 687,350(1) 21.4% 2002
Officer of the Company
DIRECTORS CONTINUING IN OFFICE BEYOND THE ANNUAL MEETING
Leonard H. Wood (1988)............ 57 Vice President and General 10,525(2) * 2001
Manager of the Company
Daniel W. Terpsma (1998).......... 45 Executive Vice President, Old 1,000(3) * 2001
Kent Bank
John C. Kennedy (1988)............ 41 Principal owner, Director, 9,749(3) * 2000
Chairman and President, Autocam
Corporation
Thomas H. Highley (1997).......... 57 President and Chief Executive 1,000(3) * 2000
Officer, The Empire Company,
Inc.
OTHER EXECUTIVE OFFICERS, WHO ARE NOT DIRECTORS
Peter C. Canepa................... 41 Chief Financial Officer, 15,250(2) * --
Treasurer and Secretary of the
Company
------- ----
All Directors and Executive Officers as a group (6 persons).............. 724,874 22.5%
======= ====
</TABLE>
- -------------------------
(1) Riviera Holding Company, 100% owned by Kenneth K. Rieth, President and CEO
of Riviera Tool Company, owns 635,250 shares of the Common Stock of Riviera
Tool Company. Amount also includes 2,100 shares of common stock owned by Mr.
Rieth as custodian for his minor children and 50,000 shares, which Mr. Rieth
has the right to acquire through exercise, of a stock option granted under
the 1998 Key Employee Stock Option Plan on December 16, 1998, exercisable
after November 2, 1999, at $6.625 per share.
(2) Amount includes 10,000 shares of which Mr. Wood and Mr. Canepa each have the
right to acquire through exercise of a stock option grant under the 1996
Incentive Stock Option Plan.
(3) Amount includes 1,000 shares of which each referenced director or officer
has the right to acquire through exercise of a stock option grant under the
1998 Key Employee Stock Option Plan.
* Beneficial ownership of less than 1% of the class.
4
<PAGE> 6
OTHER INFORMATION RELATING TO NOMINEES AND DIRECTORS
Set forth below is each Director's name and the year in which he first
became a Director, and a brief account of the business experience of each
nominee and Director during the past five years.
KENNETH K. RIETH 1980
Mr. Rieth has been a principal owner and President of Riviera Tool Company
since 1980. Mr. Rieth has served as a Director of Autocam Corporation, a
designer and manufacturer of close tolerance, specialty metal alloy components
for the automotive, medical, electronic and computer industries since 1991.
LEONARD H. WOOD 1988
Mr. Wood has been a Vice President of the Company since 1985. Prior to that
time, he was Project Manager with American Motors Corporation.
JOHN C. KENNEDY 1991
Mr. Kennedy has been a principal owner, Director, Chairman (appointed
September 30, 1998) and President of Autocam Corporation, a designer and
manufacturer of close tolerance, specialty metal alloy components for the
automotive, medical, electronic and computer industries since 1988.
DANIEL W. TERPSMA 1998
Mr. Terpsma has been Executive Vice President of Old Kent Bank since 1997.
Prior to that time, he was Senior Vice President of Old Kent Bank for more than
four years.
THOMAS H. HIGHLEY 1997
Mr. Highley has been President and CEO of the Empire Company, Inc., a
distributor of residential and commercial millwork products, since 1991.
During the fiscal year ended August 31, 1999, the Board of Directors held
four meetings. No director attended less than 75% of directors meetings,
including appropriate committee meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Audit Committee. The current members of the
Audit Committee are Messrs. John C. Kennedy and Thomas H. Highley. During fiscal
year ended August 31, 1999, the Audit Committee held three meetings. The duties
of the Audit Committee are briefly: recommending to the Board of Directors the
retention or discharge of the independent public accountants; reviewing the
arrangements and scope of the audit and non-audit engagements and the
compensation of the independent public accountants; reviewing with the
independent public accountants and the Company's financial officers the adequacy
of the Company's internal financial controls; and reviewing major changes in
accounting policies.
The Company has a standing Compensation Committee. The current members of
the Compensation Committee are Messrs. Thomas H. Highley and Daniel W. Terpsma.
The duty of the Committee is to recommend to the Board of Directors the
remuneration arrangements for Kenneth K. Rieth, President and Chief Executive
Officer of the Company and granting stock options under the Company's 1996
Incentive Stock Option Plan, as amended, and under the 1998 Key Employee Stock
Option Plan. The Compensation Committee held no meetings during fiscal year
ended August 31, 1999 and acted once by written consent resolution.
The Company has no nominating committee the functions of which are
performed by the Board of Directors.
5
<PAGE> 7
LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings as of the date of this
proxy.
COMPENSATION COMMITTEE REPORT
The duty of the Committee is to recommend to the Board of Directors the
remuneration arrangements for Kenneth K. Rieth, President and Chief Executive
Officer of the Company, grant stock options under the Company's 1996 Incentive
Stock Option Plan, as amended, and the 1998 Key Employee Stock Option Plan.
Overall Officer Compensation Policy
The Company's compensation policy for executive officers is designed to
support the overall objective of enhancing value for shareholders by attracting,
developing, rewarding, and retaining highly qualified and productive
individuals; relating compensation to both Company and individual performance;
and ensuring compensation levels that are externally competitive and internally
equitable.
The key elements of the Company's officer compensation consist of base
salary, a formula bonus for Mr. Rieth, the Company's chief executive officer, a
discretionary bonus for Mr. Canepa, the Company's Chief Financial Officer and
Mr. Wood, the Company's Vice President and General Manager, as well as stock
options for Messrs. Rieth, Canepa and Wood. The Compensation Committee's
policies with respect to each of these elements are discussed below. In
addition, while the elements of compensation described below are considered
separately, the Compensation Committee takes into account the full compensation
package afforded by the Company to the individual, including insurance and other
benefits.
Base Salary
The Committee reviews each officer's salary annually. In determining
appropriate salary levels, consideration is given to scope of responsibility,
experience, Company and individual performance as well as pay practices of other
companies relating to executives with similar responsibility.
In addition, with respect to the base salary of Mr. Rieth in 1999, the
Compensation Committee has acknowledged the longevity of Mr. Rieth's service to
the Company and its belief that Mr. Rieth is an excellent representative of the
Company within the industry. Mr. Rieth's base salary was established by the
Board of Directors in September 1996 under a three-year employment agreement
which expired on August 31, 1999. This base compensation consists of a regular
payroll payment of $150,800 per year plus an annual bonus equal to 3.5% of the
Company's income from operations before such bonus expense. Messrs. Canepa and
Wood received a base salary of $125,000 and $150,000, respectively for fiscal
1999.
Bonus Awards
The Company's officers may be considered for annual cash bonuses which are
awarded to recognize and reward corporate and individual performance based on
meeting specified goals and objectives. The plan in effect for fiscal 1999 for
Mr. Rieth provides for a bonus of $132,000 for fiscal year 1999 has been awarded
by the Board of Directors. In awarding a bonus to Mr. Rieth, the Committee
reviews compensation levels and financial results available to it for chief
executive officers for similarly sized companies as well as those located near
the Company's headquarters. Mr. Rieth recommends to the Committee Messrs.
Canepa's and Wood's bonus based on his review of corporate and Messrs. Canepa's
and Wood's individual performances as well as the performance bonus the
management team awards to employees of the Company other than Messrs. Canepa,
Wood and Rieth.
Stock Options
Under the Company's 1996 Incentive Stock Option Plan, as amended, stock
options may be granted to the Company's key employees including Messrs. Rieth,
Wood and Canepa. The number of options granted is determined by the subjective
evaluation of the person's ability to influence the Company's long-term growth
6
<PAGE> 8
and profitability. In fiscal 1999, stock options were granted under such plan to
Messrs. Wood and Canepa for 10,000 shares each, exercisable at $6.625 per share.
Under the Company's 1998 Key Employee Stock Option Plan, stock options may
be granted to the Company's key employees and directors including Messrs. Rieth,
Kennedy, Highley, Terpsma, Wood, and Canepa. The number of options granted is
determined by the subjective evaluation of the person's ability to influence the
Company's long-term growth and profitability. In fiscal 1999, stock options were
granted under such plan to Messrs. Rieth for 50,000 shares and 1,000 shares each
for Messrs. Kennedy, Highley and Terpsma, all exercisable at $6.625 per share.
Stock options will be granted with an exercise price equal to the market
price of the Common Stock on the date of grant. Since the value of an option
bears a direct relationship to the Company's stock price, it is an effective
incentive for employees to create value for shareholders. The Committee
therefore views stock options as an important component of its future
compensation policy.
Compensation Committee Members:
Daniel W. Terpsma
Thomas H. Highley
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Compensation of Directors
The Company pays each Director who is not a Company employee a fee of
$5,000 per year. During fiscal year ended August 31, 1999, the Company paid
$5,000 of Directors fees and granted stock options for 1,000 shares each under
the 1998 Key Employee Stock Option Plan to Messrs. Kennedy, Terpsma and Highley.
Summary Compensation Table
The following table sets forth the total compensation earned by each of the
Company's Executive Officers during the fiscal years ended August 31, 1997,
1998, and 1999 for services rendered to the Company in all capacities during
such years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
-----------------------------------------------------------------
LONG-TERM
COMPENSATION
NAME AND PRINCIPAL FISCAL OTHER ANNUAL ALL OTHER AWARDS
POSITION YEAR SALARY BONUS COMPENSATION(2) COMPENSATION(4) STOCK OPTIONS
------------------ ------ ------ ----- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth K. Rieth..... 1999 $150,800(3) $132,000(3) $ -0- $1,334 50,000
President, CEO 1998 150,800(3) 100,000(3) -0- 1,500 --
and Director 1997 150,800(3) 64,798(3) -0- 1,264 --
Leonard H. Wood...... 1999 $150,000 $ 50,000 $7,291 $1,334 10,000
Vice President,
General 1998 150,000 25,000 7,291 1,500 --
Manager and Director 1997 124,800 -0- 7,291 1,421 --
Peter C. Canepa...... 1999 $125,000 $ 35,000 $ -0- $ 938 10,000
Secretary, Treasurer 1998 125,000 25,000 -0- 757 --
and CFO 1997 112,500 69,789 -0- -0- --
</TABLE>
- -------------------------
(1) Does not include any value that might be attributable to job-related
personal benefits, the annual value of which has not exceeded the lesser of
10% of annual salary plus bonus or $50,000 for each executive officer.
(2) Represents the dollar value of the premiums paid by the Company for life
insurance policy maintained in respect an Executive Deferred Compensation
Plan agreement with Mr. Wood. This Agreement provides that upon death,
disability or retirement from service after reaching age 65, the employee or
his heirs and assigns will receive $50,000 per year for five consecutive
years.
7
<PAGE> 9
(3) The Company has an Employment Agreement with Kenneth K. Rieth pursuant to
which Mr. Rieth will continue to serve as the Chief Executive Officer and
President of the Company. The term of the agreement was for a period of
three years beginning September 1, 1996. Pursuant to the agreement with Mr.
Rieth, the Company will pay Mr. Rieth a base salary of $150,800 and a
formula bonus calculated at $132,000 for fiscal 1999.
(4) Required matching contribution by the Company to the 401(k) plan, which is
maintained by the Company for its employees generally.
Option Grants in the Last Fiscal Year
The following table provides information on options granted to each of the
executive officers of the Company during the fiscal year ended August 31, 1999
pursuant to the 1996 Incentive Stock Option Plan, as amended or the 1998 Key
Employee Stock Option Plan:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATE OF STOCK
NUMBER OF TOTAL OPTIONS EXERCISE PRICE APPRECIATION FOR
SECURITIES TO EMPLOYEES OF BASE OPTION TERM
UNDERLYING IN FISCAL PRICE EXPIRATION ----------------------
NAME OPTION YEAR ($/SH) DATE 5% 10%
---- ---------- ------------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Kenneth K. Rieth............ 50,000 50.5% $6.625 Nov. 2, 2008 $208,321 $527,927
Leonard H. Wood............. 10,000 10.1% $6.625 Nov. 2, 2008 $ 41,664 $105,585
Peter C. Canepa............. 10,000 10.1% $6.625 Nov. 2, 2008 $ 41,664 $105,585
------ ---- -------- --------
Total....................... 70,000 70.7% $291,649 $739,097
====== ==== ======== ========
</TABLE>
Option Values at Fiscal Year End
The following table provides information on the value of options held by
each of the executive officers of the Company at August 31, 1999 measured in
terms of the closing price of the Company's common stock on that day. There were
no options exercised by any officer during the year.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED OPTIONS
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT AUGUST 31, 1999 AT AUGUST 31, 1999
---------------------------- ----------------------------
NAME AND PRINCIPAL POSITION EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Kenneth K. Rieth -- President, C.E.O. &
Chairman....................................... -- 50,000(1) -- $--
Leonard H. Wood -- Vice President, General
Manager and Director......................... -- 10,000(2) -- $--
Peter C. Canepa -- Secretary, Treasurer and
CFO.......................................... -- 10,000(2) -- $--
</TABLE>
- -------------------------
(1) On November 2, 1998, Mr. Rieth was granted a stock option for 50,000 shares,
exercisable at $6.625 per share under the 1998 Key Employee Stock Option
Plan as approved by shareholders on December 16, 1998. Such grant is
exercisable after November 2, 1999 and expires November 2, 2008.
(2) On November 2, 1998, Messrs. Wood and Canepa were granted stock options for
10,000 shares each, exercisable at $6.625 per share under the 1996 Incentive
Employee Stock Option Plan, as amended. Such grant is exercisable after
November 2, 1999 and expires November 2, 2008.
The Company's Board of Directors has given Mr. Rieth the authority to set
the compensation for senior management.
8
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee of the Company are
Messrs. Highley and Terpsma. On June 12, 1997, the Company obtained its primary
financing facility from Old Kent Bank of which Mr. Terpsma is Executive Vice
President. At the end of fiscal 1999, the principal balance of the financing
facilities was $11,129,051, of which $2,032,494 was outstanding on the revolving
line of credit, $1,841,667, was outstanding on the equipment term note payable
(payable in monthly installments of $54,667), and $3,611,108 was outstanding on
a term note (payable in monthly installments of $55,566), $2,643,782 was
outstanding on the $3,271,000 1999 equipment line of credit (payable in monthly
installments of $38,941) and $1,000,000 was outstanding under the equipment term
note payable (payable in monthly installments of $16,667). The Company pays
interest monthly on all these facilities at the bank's prime rate less .25%
except two of the term notes, which are payable at a fixed rate (7.26% on the
$3,611,108 note payable and 8.04% on the $1,000,000 equipment term note). Total
interest paid on all these facilities to Old Kent Bank during the year ended
August 31, 1999 was $924,331.
The Company believes that the above transaction was at prices and terms
which were no less favorable to the Company than would have been in similar
transactions with unaffiliated third parties. The policy of the Company is that
proposed transactions with affiliates of the Company must have the prior
approval of a majority of the disinterested members of the Board of Directors
and be made on terms no less favorable to the Company than could be obtained
from unaffiliated parties.
9
<PAGE> 11
PERFORMANCE GRAPH
The following line graph compares the cumulative total shareholder return
for the Company's Common Stock with the cumulative total return of the Standards
& Poors 500 Composite Index and an index of peer companies selected by the
Company.
The comparison assumes $100 was invested on March 4, 1997 (the date of the
Company's initial public offering) in the Company's Common Stock , the S&P 500
Composite Index and the peer group. The companies in the peer group, all of
which are in the automotive industry, are as follows:
Arvin Industries
Autocam Corporation
Breed Technologies Inc.
Dana Corporation
Defiance Inc.
Excel Industries Inc.
Gentex Corporation
Hayes Lemmerz International Inc.
Magna International -CL A
Mascotech Inc.
Simpson Industries
Spartan Motors Inc.
Superior Industries International
Tower Automotive Inc.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Indexed Returns Years Ending
Base Period --------------------------------------------------------------
Company Name/Index March 4, 1997 August 31, 1997 August 31, 1998 August 31, 1999
<S> <C> <C> <C> <C>
Riviera Tool Co. $100 $ 76.79 $ 71.43 $ 67.86
S&P 500 Index $100 $114.58 $123.85 $173.18
Peer Group $100 $130.50 $110.27 $128.51
</TABLE>
SHAREHOLDER PROPOSALS
A shareholder proposal which is intended to be presented at the 2000 Annual
Meeting of Shareholders must be received by the Company at 5460 Executive
Parkway SE, Grand Rapids, Michigan 49512, no later than by August 1, 2000, in
order to be eligible for inclusion in the Proxy Statement and form of Proxy
relating to that meeting. A shareholder who desires to submit any such proposal
should refer to the applicable rules and regulations of the Securities and
Exchange Commission, Washington, D.C. 20549.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected the public accounting
firm of Deloitte & Touche LLP to report on the Company's financial statements
for fiscal 2000, and the shareholders are being asked to
10
<PAGE> 12
ratify this selection. Deloitte & Touche LLP has been the public accounting firm
retained by the Company since 1999. Deloitte & Touche LLP has indicated that a
representative of that firm will be present at the shareholder's meeting. Such
representative shall be given an opportunity to make a statement, if he or she
so desires, and it is expected that such representative will be available to
respond to appropriate questions presented at the meeting.
On April 28, 1999, the Company dismissed Plante & Moran LLP as its
independent accountant. The reports of Plante & Moran LLP on the financial
statements for the past two fiscal years (fiscal 1997 and 1998) contained no
adverse or disclaimer of opinion and were not qualified or modified as to
uncertainty, scope or accounting principles. The Company's Audit Committee
participated in and recommended the decision to change independent accountants.
In connection with its audits for the two most recent fiscal years (1997 and
1998) and through April 28, 1999, there have been no disagreements with Plante &
Moran LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope procedure or any reportable events.
During the two most recent fiscal years (1997 and 1998) and through April 28,
1999, there have been no reportable events (as defined in Regulation S-K Item
304(a)(1)(v). The Company had provided Plante & Moran LLP with a copy of the
Form 8-K and attached a letter from Plante & Moran LLP addressed to the SEC
stating that they agreed with the statement on such Form 8-K.
On July 14, 1999, the Company engaged Deloitte & Touche LLP as its new
independent accountants. The Company's Audit Committee participated in and
recommended the decision to select Deloitte & Touche LLP as its' independent
accountants. In November 1998, the Company engaged Deloitte & Touche LLP to
assist the Audit Committee in its review of the Company's prior financial
statements. In conjunction with this engagement, Deloitte & Touche LLP provided
oral advice regarding matters relating to the Company's restated financial
statements. The Company has not consulted with Deloitte & Touche LLP on any
matter that was either the subject of a disagreement, as that term is defined in
Item 304(a)(1)(iv) of Regulation S-K, or a reportable event, as that term is
defined in Item 304(a)(1)(v) of Regulation S-K.
OTHER BUSINESS
Neither the Company nor the members of the Board of Directors intend to
bring before the Annual Meeting any matters other than those set forth in the
Notice of Annual Meeting, and they have no present knowledge that any other
matters will be presented for action at the Meeting by others. 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 in accordance with their
best judgment.
It is important that proxies be returned promptly to avoid unnecessary
expenses. Therefore, all Common Shareholders (even those planning to attend the
meeting) are urged, regardless of the number of shares of stock owned, to sign
date and return the enclosed proxy in the business-reply envelope, also
enclosed. Shareholders attending in person may withdraw their proxies and vote
in person.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain officers and persons who own ten percent (10%) or more of
the Company's common stock file with the SEC and the American Stock Exchange
initial reports of ownership and reports of changes in ownership of Company
Common Stock. These officers, directors and 10% shareholders are required by SEC
regulation to furnish the Company with copies of these reports. To the Company's
knowledge, based solely upon review of the copies of such reports furnished to
the Company and written representations that no other reports were required
during the fiscal year ended August 31, 1999, all Section 16(a) requirements
applicable to its officers, directors and 10% beneficial owners were complied
with.
VOTING OF PROXIES
Proxies which are signed and returned will be voted for the nominee named
above to serve until the Annual Meeting of Shareholders in 2001 unless authority
to vote upon the election of directors is withheld. Abstentions will be treated
as shares present for determining a quorum and all abstentions, withheld votes
and broker non-votes will not be deemed votes cast in determining the outcome of
any matter.
11
<PAGE> 13
AVAILABILITY OF S.E.C. FORM 10-K
A copy of the Company's 10-K Annual Report, filed with the Securities and
Exchange Commission, is available without charge to shareholders by written
request to:
Mr. Peter C. Canepa
Riviera Tool Company
5460 Executive Parkway SE
Grand Rapids, Michigan 49512
By order of the Board of Directors
/s/ Peter C. Canepa
--------------------------------------
PETER C. CANEPA, Secretary
12
<PAGE> 14
RIVIERA TOOL COMPANY
PROXY FOR ANNUAL MEETING DECEMBER 15, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Kenneth K. Rieth and Peter C.
Canepa and each or either of them, proxies with full power of substitution, to
vote all stock of Riviera Tool Company, a Michigan corporation, which the
undersigned is entitled to vote at the Annual Meeting of the Shareholders of the
Company to be held at Rembrandt's At Bridgewater, 333 Bridgewater Street, N.W.,
Grand Rapids, Michigan 49504, on Wednesday, December 15, 1999, at 4:00 p.m. and
at any adjournment.
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR the nominee listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) To vote for the nominee listed below
</TABLE>
Kenneth K. Rieth
- --------------------------------------------------------------------------------
2. RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS FOR THE
COMPANY FOR THE FISCAL YEAR ENDING AUGUST 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on reverse side.)
IF YOU SIGN AND RETURN THIS PROXY, THE SHARES REPRESENTED HEREON WILL BE VOTED
IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREON. IF NOT OTHERWISE SPECIFIED,
THE PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR AS NOMINATED AND
RATIFICATION OF THE AUDITORS. THE PROXIES WILL VOTE IN ACCORDANCE WITH THEIR
BEST JUDGEMENT ON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
The undersigned hereby acknowledge receipt of the Annual Report of the Company
for its fiscal year ended August 31, 1999, and Notice of Annual Meeting of
Shareholders and Proxy Statement dated November 18, 1999.
Dated: , 1999
------------------------------------
Signature
------------------------------------
Signature
Please sign exactly as your name
appears hereon. If stock is held
jointly, each holder should sign.
When signing as attorney, executor,
administrator, trustee, guardian,
corporate officer or in any other
capacity, please state title in
full.
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY
