<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 [ ]
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)
RIVIERA TOOL COMPANY
--------------------------------------------------------------------------------
(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)(1) 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:
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(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> 2
[RIVIERA TOOL CO. LOGO]
RIVIERA TOOL COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 20, 2000
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 20, 2000
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 two Directors to serve until the Annual Meeting of
Shareholders in 2003.
(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, 2001.
(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 20, 2000
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, 2000 accompanies this Notice.
By Order of the Board of Directors,
PETER C. CANEPA, Secretary
Grand Rapids, Michigan
November 20, 2000
<PAGE> 3
[RIVIERA TOOL CO. LOGO]
RIVIERA TOOL COMPANY
5460 Executive Parkway SE
Grand Rapids, Michigan 49512
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 20, 2000
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 20, 2000 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 20, 2000.
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 2000 Annual Report is enclosed.
STOCK OUTSTANDING, VOTING RIGHTS AND VOTES REQUIRED
Only Common Shareholders of record at the close of business on October 24,
2000 (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 3,379,609 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.
<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 20, 2000, 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)........................................ 769,216 22.8%
5460 Executive Parkway SE, Grand Rapids, MI 49512
Heartland Advisors, Inc..................................... 388,762 11.5%
790 N. Milwaukee Street, Milwaukee, WI 53202
Wellington Management Co. LLP............................... 317,711 9.4%
75 State Street, Boston, MA 02109
William Harris Investors, Inc............................... 183,905 5.4%
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 667,012 shares of the Common Stock of Riviera
Tool Company. Also includes 2,204 shares of common stock owned by Mr. Rieth
as custodian for his minor children and 100,000 shares, which Mr. Rieth has
the right to acquire through exercise of stock options granted under the
1998 Key Employee Stock Option Plan.
2
<PAGE> 5
I. ELECTION OF DIRECTORS
The Board of Directors proposed that Messrs. John C. Kennedy and Thomas H.
Highley be elected as Directors of the Company to hold office until the Annual
Meeting of Shareholders in 2003 or until their successor are elected. 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. The two nominees receiving the greatest
number of votes cast at the Meeting or its adjournment shall be elected. In case
any 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 each 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 20, 2000 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 2000 2000 EXPIRE
------------------- --- -------------------------- ------------ ------------- ------
<S> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS FOR A THREE-YEAR TERM
John C. Kennedy (1988)............... 42 Principal owner, Director, 11,186(3) 0.3% 2003
Chairman and President,
Autocam Corporation
Thomas H. Highley (1997)............. 58 President and Chief Executive 2,000(3) * 2003
Officer, The Empire Company,
Inc.
DIRECTORS CONTINUING IN OFFICE BEYOND THE ANNUAL MEETING
Leonard H. Wood (1988)............... 58 Vice President and General 30,551(2) 0.9% 2001
Manager of the Company
Daniel W. Terpsma (1998)............. 46 Executive Vice President, Old 2,000(3) * 2001
Kent Bank
Kenneth K. Rieth (1980).............. 41 President and Chief Executive 769,216(1) 22.8% 2002
Officer of the Company
OTHER EXECUTIVE OFFICERS, WHO ARE NOT DIRECTORS
Peter C. Canepa...................... 42 Chief Financial Officer, 35,512(2) 1.0% --
Treasurer and Secretary of the
Company
------- ----
All Directors and Executive Officers as a group (6 persons)................ 850,465 25.2%
======= ====
</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 100,000 shares, which Mr.
Rieth has the right to acquire through exercise, of a stock options granted
under the 1998 Key Employee Stock Option Plan.
(2) Amount includes 30,000 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 2,000 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 0.1% of the class.
3
<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, 2000, the Board of Directors held
three meetings. No director attended less than 33% 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, Thomas H. Highley and Daniel W.
Terpsma (elected to the Audit Committee on October 19, 2000). During fiscal year
ended August 31, 2000, 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 one meeting during fiscal year
ended August 31, 2000.
The Company has no nominating committee the functions of which are
performed by the Board of Directors.
4
<PAGE> 7
LEGAL PROCEEDINGS
The Company is a plaintiff in Kent County Circuit Case Number 94-2809-CZ
together with two individuals asking for recovery of damages, based on fraud,
resulting from an investment in and winding up of activities of Leap
Technologies, Inc. Durametallic Corporation, one of the defendants, has settled
the litigation on July 14, 1999 paying $400,000 with a mutual release. One
defendant has filed bankruptcy without answering the Company's Compliant. A
judgement of $2,800,000 plus interest and costs has been entered against the
final defendant. No allocation of the award among plaintiffs was specified. The
judgement has been appealed and waits Court of Appeals action. No claims against
the Company are surviving in this action. All such claims have been dismissed
without obligations of the Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
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 November 24, 2000 under a three-year employment agreement
which expires on August 31, 2002. This base compensation consists of a regular
payroll payment of $165,000 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 $140,000 and $150,000, respectively for fiscal
2000.
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 2000 for
Mr. Rieth was amended to provide for no bonus to Mr. Rieth. In determining 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.
5
<PAGE> 8
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
and profitability. In fiscal 2000, stock options were granted under such plan to
Messrs. Wood and Canepa for 20,000 shares each, exercisable at $3.75 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 2000, stock options were
granted under such plan to Mr. Rieth for 50,000 shares and 1,000 shares each for
Messrs. Kennedy, Highley and Terpsma, all exercisable at $3.75 per share.
Stock options are 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, 2000, 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, 1998,
1999, and 2000 for services rendered to the Company in all capacities during
such years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
----------------------- LONG-TERM
COMPENSATION ALL OTHER
FISCAL AWARDS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK OPTIONS (3)(4)
--------------------------- ------ ------ ----- ------------- ------------
<S> <C> <C> <C> <C> <C>
Kenneth K. Rieth.................. 2000 $160,630(3) $ --(3) 50,000(5) $1,500
President, CEO and Director 1999 150,800(3) 132,000(3) 50,000(6) 1,334
1998 150,800(3) 100,000(3) -- 1,500
Leonard H. Wood................... 2000 $150,000 $ -- 20,000(5) $8,791
Vice President, General 1999 150,000 50,000 10,000(6) 8,625
Manager and Director 1998 150,000 25,000 -- 8,791
Peter C. Canepa................... 2000 $133,365 $ -- 20,000(5) $1,000
Secretary, Treasurer and CFO 1999 $125,000 35,000 10,000(6) 938
1998 125,000 25,000 -- 757
</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.
6
<PAGE> 9
(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.
(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 and renewed on September 1, 1999,
for an additional three years. Pursuant to the agreement with Mr. Rieth, the
Company will pay Mr. Rieth a base salary of $165,000.
(4) Required matching contribution by the Company to the 401(k) plan, which is
maintained by the Company for its employees generally.
(5) Options were granted on November 20, 1999, exercisable on November 20, 2000
and expire on November 20, 2009.
(6) Options were granted on November 2, 1998, exercisable on November 2, 1999
and expire on November 20, 2008.
Option Grants in the Last Fiscal Year
The following table provides information on options granted to each of the
executive officers of the Company during the fiscal year ended August 31, 2000
pursuant to the 1996 Incentive Stock Option Plan, as amended or the 1998 Key
Employee Stock Option Plan:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER PERCENT OF ANNUAL RATE OF STOCK
OF TOTAL OPTIONS EXERCISE PRICE APPRECIATION FOR
SECURITIES TO EMPLOYEES OF BASE OPTION TERM
UNDERLYING IN FISCAL PRICE EXERCISE EXPIRATION -----------------------
NAME OPTION YEAR ($/SH) DATE DATE 5% 10%
---- ---------- ------------- -------- -------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth K. Rieth..... 50,000 39.1% $3.75 11/24/2000 11/24/2009 $117,918 $298,827
Leonard H. Wood...... 20,000 15.6% $3.75 11/24/2000 11/24/2009 $ 23,584 $ 59,765
Peter C. Canepa...... 20,000 15.6% $3.75 11/24/2000 11/24/2009 $ 23,584 $ 59,765
------ ---- -------- --------
Total................ 90,000 70.3% $165,086 $418,357
====== ==== ======== ========
</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, 2000 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, 2000 AT AUGUST 31, 2000
---------------------------- ----------------------------
NAME AND PRINCIPAL POSITION EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Kenneth K. Rieth -- President,
C.E.O. & Chairman............................ 50,000(1) 50,000(1) -- $--
Leonard H. Wood -- Vice President,
General Manager and Director................. 10,000(2) 20,000(2) -- $--
Peter C. Canepa -- Secretary,
Treasurer and CFO............................ 10,000(2) 20,000(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, expiring November 2, 2008. On November 24,
7
<PAGE> 10
2000, Mr. Rieth was granted a stock option for 50,000 shares, exercisable at
$3.75 per share after November 24, 2000 and expires November 2, 2009.
(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, expiring November 2, 2008. On
November 24, 2000, Messrs. Wood and Canepa were granted a stock options for
20,000 shares each, exercisable at $3.75 per share after November 24, 2000
and expires November 2, 2009.
The Company's Board of Directors has given Mr. Rieth the authority to set
the compensation for senior management.
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 2000, the principal balance of the financing
facilities was $12,287,161, of which $5,080,019 was outstanding on the revolving
line of credit, $1,191,667, was outstanding on the equipment term note payable
(payable in monthly installments of $54,167), $2,944,436 was outstanding on a
term note (payable in monthly installments of $55,566), $2,254,373 was
outstanding on the $3,271,000 1999 equipment line of credit (payable in monthly
installments of $38,941) and $816,666 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 either the bank's prime rate less
.25% or at London Interbank Offered Rate ("LIBOR") plus 2.25%, except two of the
term notes, which are payable at a fixed rate (7.26% on the $2,944,436 note
payable and 8.04% on the $816,666 equipment term note). Total interest paid on
all these facilities to Old Kent Bank during the year ended August 31, 2000 was
$921,452.
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.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Board of Directors adopted a written Audit Committee Charter on April
19, 2000, a copy of which is included as Appendix 1 to this Proxy Statement. All
members of the Audit Committee are independent as defined in Section 121(A) of
the American Stock Exchange's listing standards.
The Audit Committee has reviewed and discussed with the Company's
management and the Company's independent auditors the audited financial
statements of the Company contained in the Company's fiscal 2000 Annual Report.
Without limiting the foregoing, the Audit Committee has also discussed with the
Company's independent auditors the matters required to be discussed pursuant to
SAS 61 (Codification of Statements on Auditing Standards, AU ss. 380).
Based on the review and discussions described in the immediately preceding
paragraph, the Audit Committee recommended to the Board of Directors that the
audited financial statements included in the Company's fiscal 2000 Annual Report
be included in that report, which is incorporated by reference into the
Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000,
filed with the U.S. Securities and Exchange Commission.
Audit Committee Members:
John C. Kennedy
Thomas H. Highley
Daniel W. Terpsma
8
<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 -------------------------------------------------------------------
March 4, August 31, August 31, August 31, August 31,
Company Name/Index 1997 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C>
Riviera Tool Co. $100 $ 76.79 $ 71.43 $ 67.86 $ 43.76
S&P 500 Index $100 $114.58 $123.85 $173.18 $201.45
Peer Group $100 $130.50 $110.27 $128.51 $ 96.90
</TABLE>
SHAREHOLDER PROPOSALS
A shareholder proposal which is intended to be presented at the 2001 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, 2001, 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. Shareholder proposals submitted at
the meeting will be considered untimely and will not be considered if notice of
the proposal is not received no later than November 1, 2000.
9
<PAGE> 12
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 2001, and the shareholders are being asked to 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 opinion 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 fiscal years (1997 and 1998) and
through April 28, 1999, there were 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 fiscal
years (1997 and 1998) and through April 28, 1999, there were 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 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, 2000, all Section 16(a) requirements
applicable to its officers, directors and 10% beneficial owners were complied
with.
10
<PAGE> 13
VOTING OF PROXIES
Proxies which are signed and returned will be voted for the nominees 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.
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
11
<PAGE> 14
APPENDIX 1
RIVIERA TOOL COMPANY
AUDIT COMMITTEE CHARTER
APRIL 19, 2000
The Audit Committee ("Committee") is appointed by the Board of Directors to
assist the Board of Directors in overseeing and monitoring management's and the
independent auditor's participation in the financial reporting process.
The Audit Committee shall consist of at least three members. The members of
the Audit Committee shall meet the independence and experience requirements of
the National Association of Securities Dealers, Inc. The members of the Audit
Committee shall be appointed by the Board of Directors.
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit Committee may
request any officer or employee of the Company or the Company's outside counsel
or independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
The Audit Committee shall meet not less than three times per year and shall
make regular reports to the Board. The Chairman of the Committee may call
special meetings of the Committee as circumstances require. The Committee will
keep minutes of its meetings. The minutes will be circulated among the members
of the Committee and the Board of Directors.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and report to
the Board of Directors on such review.
2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles and
practices as well as the adequacy of internal controls that could significantly
affect the Company's financial statements.
3. Review analyses prepared by management and the independent auditor of
significant financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements.
4. Engage the independent auditor to review the Company's quarterly
financial statements prior to the filing of the Company's Quarterly Report on
Form 10-Q.
5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.
6. Review major changes to the Company's auditing and accounting principles
and practices as suggested by the independent auditor or management.
7. Recommend to the Board of Directors the appointment of the independent
auditor, which firm is ultimately accountable to the Audit Committee and the
Board of Directors.
8. Approve the compensation to be paid to the independent auditor.
9. Receive periodic reports from the independent auditor regarding the
auditor's independence in accordance with Independence Standards Board Standard
No. 1, discuss such reports with the auditor, and if so determined by the Audit
Committee, recommend that the Board of Directors take appropriate action to
insure the independence of the auditor.
10. Evaluate the performance of the independent auditor and, if so
determined by the Audit Committee, recommend that the Board of Directors replace
the independent auditor.
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<PAGE> 15
11. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.
12. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit.
13. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the auditor
and the Company's response to that letter.
14. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
15. Receive and take any necessary action with respect to any reports from
management or the independent auditor, concerning conformity by the Company or
its affiliates with applicable legal requirements.
16. Consider, in consultation with the independent auditor, the adequacy of
the Company's internal financial controls.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations and the Company's policies on
business ethics.
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<PAGE> 16
RIVIERA TOOL COMPANY
PROXY FOR ANNUAL MEETING DECEMBER 20, 2000
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 20, 2000, at 4:00 p.m. and
at any adjournment.
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) To vote for the nominees listed below
</TABLE>
John C. Kennedy Thomas H. Highley
--------------------------------------------------------------------------------
2. RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS FOR THE
COMPANY FOR THE FISCAL YEAR ENDING AUGUST 31, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 DIRECTORS 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, 2000, and Notice of Annual Meeting of
Shareholders and Proxy Statement dated November 20, 2000.
Dated: , 2000
------------------------------------
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
