MICHIGAN RIVET CORP, DEF 14A, 1999-03-19

MICHIGAN RIVET CORP
DEF 14A, 1999-03-19
BOLTS, NUTS, SCREWS, RIVETS & WASHERS

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<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

Michigan Rivet Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

Michigan Rivet Corporation
- --------------------------------------------------------------------------------
(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

MICHIGAN RIVET CORPORATION

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

APRIL 30, 1999

The Annual Meeting of Shareholders of Michigan Rivet Corporation, a
Michigan corporation, will be held at the offices of Michigan Rivet Corporation,
13201 Stephens Road, Warren, Michigan 48089, on Friday, April 30, 1999 at 11:00
a.m., Detroit time, for the following purposes:

(a) To elect nine directors to hold office until the next Annual
Meeting of Shareholders or until their successors are elected and
qualified; and

(b) To transact such other business as may properly come before the
meeting or any adjournment thereof.

You are invited to attend the meeting. However, if you do not expect to
attend in person, you are urged to execute and return immediately the enclosed
proxy which is solicited by the Board of Directors of the Company. The proxy is
revocable and will not affect your right to vote in person if you attend the
meeting.

By Order of the Board of Directors

CLARK V. STEVENS, Secretary

Warren, Michigan
March 19, 1999

<PAGE> 3

MICHIGAN RIVET CORPORATION

PROXY STATEMENT
ANNUAL MEETING TO BE HELD APRIL 30, 1999

This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Michigan Rivet Corporation (the "Company") of
proxies to be used at the Annual Meeting of Shareholders to be held on April 30,
1999 at the executive offices of the Company. The mailing address of the
principal executive offices of the Company is 13201 Stephens Road, Warren,
Michigan 48089. This Proxy Statement and the enclosed proxy were first sent or
given to the shareholders on or about March 19, 1999.

The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, the Company will reimburse brokerage houses
and other nominees for their expenses incurred in sending proxies and proxy
material to the beneficial owners of shares held by them. A proxy may be revoked
by the person executing it at any time before it is exercised. A proxy may be
revoked by filing with the Secretary of the Company a written revocation; by
giving another proxy bearing a later date than the proxy being revoked; or by
attending and voting at the Annual Meeting in person.

Only shareholders of record at the close of business on February 19,
1999 will be entitled to vote at the meeting. On that date 638,525 shares of
Common Stock were issued and outstanding. Each shareholder is entitled to one
vote for each share of Common Stock held by the shareholder. Shares cannot be
voted at the meeting unless the holder is present in person or represented by
proxy. A majority of the outstanding shares of the Company, represented in
person or by proxy, shall constitute a quorum at the meeting.

PRINCIPAL SHAREHOLDERS

The following persons beneficially owned shares of the Common Stock of
the Company in the amounts and percentages shown as of December 31, 1998, and
are the only persons known to the Company to own beneficially more than 5% of
the Common Stock. The determination of beneficial ownership was made in
accordance with Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, which specifies that a
beneficial owner includes "any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or shares:
(1) Voting power which includes the power to vote, or direct the voting of, his
or her shares, and/or (2) Investment power which includes the power to dispose,
or to direct the disposition of" his or her shares. The nature of beneficial
ownership is sole voting and investment power except as otherwise indicated in
the footnotes to the table.

<PAGE> 4

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

<S> <C> <C>
Dorothy E. Knuppenburg (1) 145,339 22.8%
8961 W. 32 Mile Road, Romeo, Michigan 48065

Comerica Bank f/k/a 145,339 22.8%
Manufacturers National Bank of Detroit (1)
P.O. Box 33060, Detroit, Michigan 48232

Dottice Stade (2) 139,792 21.9%
13201 Stephens Road, Warren, Michigan 48089

Kermit L. Knuppenburg (3) 82,121 12.9%
13201 Stephens Road, Warren, Michigan 48089

Frank C. Bellisario (4) 40,389 6.3%
38014 Rockhill, Clinton Township, Michigan 48036

Ronald M. Bellisario (5) 39,699 6.2%
4964 Deer Creek Circle N., Washington, MI 48094

Doreen E. Paulson (6) 35,679 5.6%
47952 Liberty Drive, Shelby Twp., Michigan 48315

</TABLE>

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

(1) Dorothy E. Knuppenburg and Comerica Bank f/k/a Manufacturers National
Bank of Detroit are co-trustees of the K.M. Knuppenburg Residuary Trust
which owns 145,339 shares of Common Stock, 22.8% of the total
outstanding. The voting and investment power of the shares owned by the
Trust is exercisable by the concurrent vote of the two trustees.

(2) Dottice Stade is Mrs. Knuppenburg's daughter, the sister of Kermit L.
Knuppenburg and wife of William B. Stade, President, Chairman of the
Board and a director of the Company. The shares shown as beneficially
owned by Mrs. Stade include 2,266 shares owned by Mr. Stade.

(3) Includes 11,960 shares held jointly with Mr. Knuppenburg's spouse.

(4) Does not include 2,200 shares owned by Mr. Bellisario's wife.

(5) Does not include 2,200 shares owned by Mr. Bellisario's wife.

(6) Does not include 4,200 shares owned by Mrs. Paulson's husband.

-2-
<PAGE> 5

ELECTION OF DIRECTORS

Nine directors will be elected at the meeting, each to hold office
until the next Annual Meeting of Shareholders or until his or her successor is
elected and has qualified. The following table sets forth information regarding
the nine nominees for election to the Board of Directors. All of the nominees,
except Howard W. Burdett and Earl T. O'Loughlin, are currently directors of the
Company elected at the 1998 Annual Shareholder's Meeting and have served as
directors since first elected as such.

At a meeting of the Board of Directors held February 17, 1999, the
Board approved a resolution to expand the size of the Board from seven to nine
directors, effective at the time of the Annual Meeting. The Board has nominated
Messrs. Burdett and O'Loughlin to stand for election to the newly created Board
seats.

Directors shall be elected by a plurality of the votes cast at the
Annual Meeting. Shares represented by proxies in the accompanying form received
by the Board of Directors will be voted at the Annual Meeting (or any
adjournment thereof) as directed in the proxies. Unless a shareholder directs
otherwise, signed proxies (including signed proxies which fail to direct how
they are to be voted) will be voted for the election of the nine nominees named
below and an equal number of votes will be cast for each nominee. If, as a
result of circumstances not known or foreseen, any of such nominees shall be
unavailable to serve as a director, such proxies will be voted for the election
of such person or persons as the Board of Directors may select. In no event will
the proxies be voted for more than nine nominees.

<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- ------------ -------------------- -----

<S> <C> <C>
William B. Stade, 61 President of the Company 1971
and Chairman of the Board

Clark V. Stevens, 65 Attorney at Law, Clark V. Stevens, P.C., 1974
St. Clair Shores, Michigan

Charles E. Blank, 61 President, Air-Way Manufacturing, 1977
Olivet, Michigan, manufacturer of
steel fittings for hydraulic systems

Kermit L. Knuppenburg, 57 Vice President, Select Sales, Inc., 1994
Mt. Clemens, Michigan, a
manufacturer's representative

</TABLE>

-3-

<PAGE> 6

<TABLE>

<S> <C> <C>
William P. Lianos, 62 Executive Vice President, Treasurer 1993
and Chief Operating Officer of the
Company

Anthony W. Livorine, 71 Retired Vice President of Sales, 1993
Textron, Townsend Division

Anthony J. Caputo, 55 President, Caputo Brosnan, P.C. 1994
Warren, Michigan, attorneys

Howard W. Burdett, 59 Principal, Northwoods Financial Center *
Oscoda, Michigan

Gen. Earl T. O'Loughlin, 68 General (Retired), *
United States Air Force
</TABLE>

- --------------------------
* Not currently a director.

All of the nominees have been engaged in the principal occupation
listed above for at least the last five years except as follows:

William B. Stade became Chairman of the Board effective August 1996 and
President of the Company effective April 1992. Prior thereto, he had
been Executive Vice President of the Company for more than the past
five years.

William P. Lianos became Executive Vice President and Chief Operating
Officer of the Company effective February 22, 1994. Prior thereto, he
had been Vice President and Treasurer of the Company for more than the
past five years.

Prior to January 1, 1995, Clark V. Stevens was President of Regan &
Stevens, P.C., Detroit, Michigan, attorneys. Regan & Stevens provided
legal services to the Company during the previous five fiscal years.
Clark V. Stevens, Professional Corporation, provided services to the
Company during the fiscal year ended October 31, 1998, and the Company
expects to retain such firm to perform legal services during the
current fiscal year.

Howard W. Burdett has been a principal of Northwoods Financial Center,
Oscoda, Michigan, since September, 1996. Northwoods Financial Center
provides investment advisory and investment management services. From
September, 1994 to August, 1996, Mr. Burdett was Vice President and
Treasurer of Aluminum Company of America. From July, 1993 to August,
1994, Mr. Burdett was President and Chief Executive Officer of Dorinco
Reinsurance Company.

-4-

<PAGE> 7

General Earl T. O'Loughlin, USAF, has been a director of Amcast
Industrial Corp., a New York Stock Exchange listed company, since
December, 1987. General O'Loughlin, retired, was the Commander of the
United States Air Force Logistics Command at Wright-Patterson AFB,
Ohio, from September, 1984 until August, 1987. General O'Loughlin is
also chairman of the Board of Directors of Huron Community Bank, East
Tawas, Michigan and a director of Straits Corp., Bay City, Michigan and
Aeronca Aerospace Corp., Middletown, Ohio.

Anthony J. Caputo serves on the Board and has been nominated at the
express request of Ronald M. Bellisario on behalf of the Bellisario family
shareholders.

William B. Stade and Kermit L. Knuppenburg are brothers-in-law. There
are no other family relationships between any of the directors or executive
officers of the Company.

The Board of Directors has established a Compensation Committee, which
is presently comprised of Messrs. Blank, Stevens, and Knuppenburg. The
Compensation Committee reviews and recommends to the Board the salaries of all
officers of the Company and remuneration of the directors.

The Board has also established an Executive Committee, composed of
Messrs. Stevens, Stade and Livorine, to oversee management of the Company. The
Company's executive officers report to this Committee. The Executive Committee
is expected to perform its duties for a temporary but indefinite period until
Company profitability improves.

The Board has also established a Search Committee, composed of Messrs.
Stevens, Knuppenburg and Lianos, to find a potential successor to the Chief
Executive Officer and Chief Operating Officer positions.

The Board has not established a nominating committee, nor has the Board
established an audit committee or similar committee. In these matters, the Board
of Directors acts as a committee of the whole.

During the fiscal year ended October 31, 1998, the Board met five
times, the Compensation Committee met two times, and the Search Committee met
one time. The Executive Committee met monthly during the year.

None of the directors or nominees for the Board serves as a director of
any company registered under, or which files reports pursuant to, the Securities
Exchange Act of 1934, other than General O'Loughlin with respect to Amcast
Industrial Corp.

-5-
<PAGE> 8

EXECUTIVE OFFICERS

The following table sets forth information concerning the persons who
served as executive officers of the Company during fiscal year ended October 31,
1998.

NAME AND AGE OFFICE AND LENGTH OF SERVICE
------------ ----------------------------

<S> <C>
William B. Stade, 61 Chairman of the Board since August 1996 and President
since April 1992. Prior thereto, Executive Vice
President since 1971.

Clark V. Stevens, 65 Secretary since 1977.

William P. Lianos, 62 Executive Vice President since 1994 and Treasurer since
1986. Prior thereto, Vice President since 1991.

</TABLE>

Each of the executive officers serves at the pleasure of the Board of
Directors. Background information regarding Messrs. Stade, Stevens and Lianos is
set forth under "Election of Directors."

-6-

<PAGE> 9

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information with respect to the
beneficial ownership of shares of the Company's Common Stock by all persons who
served as members of the Board of Directors during the fiscal year ended October
31, 1998, all nominees for the Board, the named executive officers and all
directors and officers of the Company as a group, calculated as of December 31,
1998. The nature of beneficial ownership is sole voting and investment power
except as otherwise indicated in the footnotes to the table.

NUMBER PERCENT
OF SHARES OF CLASS
--------- --------

<S> <C> <C>
William B. Stade (1) 2,266 *
Clark V. Stevens (2) 14,220 2.2%
Charles E. Blank 973 *
William P. Lianos (3) 3,020 *
Anthony W. Livorine 1,400 *
Kermit L. Knuppenburg (4) 82,121 12.9%
Anthony J. Caputo 0 *
Howard W. Burdett 0 *
Gen. Earl T. O'Loughlin 0 *
------- -----
All directors, nominees and
executive officers as a group
(9 persons) 104,000 16.3%
======= =====
</TABLE>

- ----------------------
* Less than 1%

(1) See footnote 2 under "Principal Shareholders".

(2) Includes 3,120 shares held jointly with Mr. Stevens' spouse; and 11,100
shares held individually by Mr.Stevens.

(3) Shares are held jointly with Mr. Lianos' spouse.

(4) Includes 11,960 shares held jointly with Mr. Knuppenburg's spouse.

-7-

<PAGE> 10

EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

The following table sets forth the cash compensation paid by the
Company as well as other compensation paid or accrued during the Company's last
three fiscal years to (i) the Chief Executive Officer of the Company and (ii)
each of the executive officers of the Company whose annual compensation exceeded
$100,000.

SUMMARY COMPENSATION TABLE (1)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

NAME AND PRINCIPAL ANNUAL ALL OTHER
POSITION YEAR COMPENSATION COMPENSATION(2)
-------- ---- ------------ ---------------

<S> <C> <C> <C>
William B. Stade 1998 $150,500 $ 44,262
Chief Executive Officer 1997 150,500 29,885
1996 150,500 26,315

William P. Lianos 1998 169,750 126,094
Executive Vice President, 1997 154,167 82,236
Treasurer 1996 142,500 71,221
</TABLE>

(1) Cash compensation does not reflect Messrs. Stade's and Lianos' use of
Company automobiles, the individual amounts of which did not exceed 10%
of the compensation paid to either executive officer and the aggregate
amount of which did not exceed 10% of the total compensation paid to
all executive officers as a group.

(2) All other compensation includes contributions made by the Company on
behalf of the named executive officers under the Company's 401(k) plan
and bonuses paid under the Company's Incentive Compensation Plan.

-8-

<PAGE> 11

ANNUITY, PENSION OR RETIREMENT BENEFITS

ANNUAL BENEFIT EXAMPLES AT AGE 65 IN 1998
-----------------------------------------
BASED UPON YEARS OF SERVICE THROUGH DECEMBER 15, 1989

AVERAGE
EARNINGS 10 15 20 25 30
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 40,000 $ 3,200 $ 4,800 $ 6,400 $ 8,000 $ 9,600
105,000 8,400 12,600 16,800 21,000 25,200
170,000 13,600 20,400 27,200 34,000 40,800
235,000 18,800 28,200 37,600 47,000 56,400
300,000 24,000 36,000 48,000 60,000 72,000
</TABLE>

The Company's Salaried Employee Pension Plan is a qualified
non-contributory defined benefit pension plan which is intended to be qualified
under the Employee Retirement Income Security Act of 1974, as amended, and the
Internal Revenue Code of 1986, as amended (the "Plan"). In December 1988, the
Board of Directors approved the termination of the Plan and additional benefits
ceased accruing effective December 15, 1989 (the "Termination Date"). On June
29, 1990, the Company received approval from the Internal Revenue Service to
terminate the Plan and Plan assets were used to purchase annuities to cover the
accrued benefits of all Plan participants payable upon the employee's retirement
at age 65 or upon early retirement on or after age 55. The Plan provided
optional early retirement benefits, provided that the participant had attained
age 55 and completed at least ten years of service with the Company, although
after termination of the Plan, the participant no longer needs to complete ten
years of service with the Company to receive early retirement benefits. The Plan
covered all full-time employees (except certain employees whose employment is
governed by a collective bargaining agreement) who completed one year of service
(at least 1,000 hours) and attained the age of 21 years or completed three years
of employment. Generally, monthly payments based upon years of credited service
and the employee's yearly earnings are payable to or on behalf of each covered
employee upon such employee's retirement.

Benefits were calculated at 8/10 of 1% of annual earnings for each
credited year of service after the effective date of the Plan. Annual earnings
under the Plan were defined as gross earnings as reflected on an employee's Form
W-2. The maximum yearly pension benefit is the smallest of: (a) the benefits
credited to the employee under the benefit formula; or (b) 100% of the
employee's average yearly earnings (if over $10,000), in the three consecutive
years of highest earnings; or (c) the maximum yearly pension benefit under the
Plan ($98,064 as of the Termination Date). Benefits are fully vested after ten
years.

Mr. Stade has 17 credited years of service under the Plan and Mr.
Lianos has 7 years of credited service. The benefits payable under the Plan are
not subject to deduction for Social Security or other offset amounts. Estimated
annual benefits payable as a life annuity upon retirement at age 65 to persons
retiring in 1998 are shown in the table above according to "average earnings"
(calculated as provided in the Plan) and "years of service" (as defined in the
Plan).

-9-

<PAGE> 12

The Company makes a voluntary contribution to the Salaried Employees
401(k) Plan. The contribution in fiscal year 1998 amounted to $55,000,
distributed based upon employee base compensation.

COMPENSATION OF DIRECTORS

During the fiscal year ended October 31, 1998, directors (other than
those who are also officers or employees of the Company) were paid $750 for each
Board of Directors meeting attended. A $2,000 monthly fee is paid to the
Executive Committee members who are not employees of the Company. Members of the
Compensation Committee are paid $750 per meeting attended. Members of the
Executive Search Committee are paid $750 per meeting attended.

EMPLOYMENT AGREEMENT WITH EXECUTIVE VICE PRESIDENT

On September 2, 1994 the Company executed an employment agreement with
William P. Lianos, effective as of July 1, 1994. Pursuant to the terms of the
Employment Agreement, Mr. Lianos is to perform those duties and responsibilities
assigned by the Board of Directors, which are to be commensurate with his status
as Chief Operating Officer and Chief Financial Officer of the Company and its
subsidiary, The McLaughlin Company. The Employment Agreement provides for an
annual salary, payable in semi-monthly installments plus any increases in the
annual rate of compensation which the Board may determine from time to time. In
addition, the Board of Directors may, but is not required to, determine a bonus
to be paid to Mr. Lianos pursuant to the Agreement for any fiscal year ending
during the term of the Agreement.

Mr. Lianos is also entitled to sole use of an automobile purchased or
leased for him by the Company and to receive such fringe benefits, including
participation in the profit sharing plan, medical benefits, term life insurance
and the like, as he was receiving on the date of the Agreement so long as the
Company maintains such plans for its executives.

In the event of his disability, Mr. Lianos is entitled to receive his
full salary unless the Board determines that such disability shall prevent him
from rendering services necessary in the performance of his duties for a period
of six consecutive months. In that event the Board may terminate his employment,
upon ten days prior notice delivered after expiration of such six month period.
Upon such termination, or upon his death, during the term of the Agreement, Mr.
Lianos (or his estate) is entitled to receive his full salary through the last
day of the month in which such death or termination occurs plus 75% of the
salary called for under the Agreement during the remainder of the term of the
Agreement, reduced by any disability benefits received by him from insurance
carriers with respect to which insurance premiums were paid by the Company.

-10-

<PAGE> 13

Under its original term, the Agreement was to expire June 30, 1996. At
the meeting of the Board of Directors on December 20, 1995, the Compensation
Committee recommended and the Board of Directors approved an extension of the
Employment Agreement through October 31, 1998, and an increase in the annual
salary to $145,000, effective January 1, 1996. At the meeting of the Board of
Directors on December 18, 1996, the Compensation Committee recommended and the
Board of Directors approved an increase in the annual salary to $156,000,
effective January 1, 1997. At the meeting of the Board of Directors on December
17, 1997, the Compensation Committee recommended and the Board of Directors
approved an extension of the Employment Agreement through October 31, 2001, and
an increase in the annual salary to $172,500 effective January 1, 1998. At the
meeting of the Board of Directors on December 17, 1998, the Compensation
Committee recommended and the Board of Directors approved an increase in the
annual salary to $190,000 effective January 1, 1999. The Agreement may be
terminated, prior to the expiration of its term, by the Company for cause as
defined in the Agreement.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors for the fiscal
year ending October 31, 1998 consisted of Messrs. Blank, Stevens and
Knuppenburg. With respect to compensation awarded for that fiscal year, the
Committee makes the following report:

Mr. Stade's annual salary was increased to $165,000 effective January
1, 1999 by the Board of Directors at their meeting on December 17, 1998. The
Compensation Committee recommended this increase in light of the Company's
improved performance in recent years and the fact that Mr. Stade's base
compensation had not been increased since 1994.

As mentioned above, the Board of Directors approved an additional
extension to the employment agreement with William P. Lianos and increased his
base salary, effective January 1, 1999, to $190,000. The Compensation Committee
recommended this extension and increase in recognition of the Company's improved
performance in the 1995, 1996, 1997 and 1998 fiscal years, Mr. Lianos'
performance of his responsibilities and duties, and the scope of duties assigned
to Mr. Lianos.

An Incentive Compensation Plan for all exempt salaried employees
including officers was in effect for the fiscal year ended October 31, 1998. The
Board of Directors approved a new Incentive Compensation Plan for the fiscal
year ending October 31, 1999. The new incentive plan provides for the creation
of an incentive bonus pool equal to 20% of the Company's consolidated pretax
profits in excess of $1,700,000. In calculating pretax profits, (1) bonuses paid
under the incentive plan or any other bonuses for the fiscal year will not be
included as expenses, and (2) gains from non-operational transactions (such as
equipment sales or receipt of life insurance proceeds, for example) will not be
included as profits. 40% of the bonus pool is reserved for payment to Mr. Lianos
and Mr. Stade, except that payments to Mr. Lianos may not exceed 60% of his base
salary and payments to

-11-

<PAGE> 14

Mr. Stade may not exceed 40% of his base salary. The remaining 60% of the bonus
pool is to be paid to the Company's General Operations Manager, other Corporate
Managers and other exempt salaried personnel as determined by the Company's
Chief Operating Officer (Mr. Lianos) based on his determination of the relative
contribution of such individuals to the pretax profits. The bonus paid to the
General Operations Manager, General Sales Manager, Chief Engineer and/or
Corporate Controller, may not exceed 50% of their respective base salaries,
while bonuses to other Corporate Managers and other exempt salaried personnel
may not exceed 25% and 15%, respectively, of their base salaries. The incentive
bonus plan is effective only for the fiscal year ending October 31, 1999.

It is the Compensation Committee's belief that the salaries for Mr.
Stade and Mr. Lianos are reasonable for persons performing the functions
performed by them for companies of the size and character of the Company. The
Committee took cognizance of the Company's continuing improved financial
performance in fiscal 1998 in establishing the compensation to be paid to the
officers; however, the Committee did not establish or use any specific
performance-based criteria, quantitative or qualitative, in determining the
compensation to be paid any officers.

Charles E. Blank
Clark V. Stevens
Kermit L. Knuppenburg

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

For its most recent fiscal year, the Company is not aware of the
failure of any director, officer or beneficial owner of more than 10% of the
Company's equity securities to file timely any report on Form 3, 4 or 5 required
under Section 16(a) of the Securities Exchange Act of 1934, except that Kermit
L. Knuppenburg did not timely file a report on Form 4 or Form 5 to report his
transfer of 200 shares of Common Stock which occurred in June, 1998.

-12-

<PAGE> 15

PERFORMANCE GRAPH

The SEC requires that the Company include in this Statement a
line-graph presentation comparing cumulative, five-year shareholder returns on
an indexed basis with the S&P 500 Stock Index and companies in the Company's
peer group. For peer group purposes, the Company has compared such shareholder
returns with Federal Screw Works.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

[GRAPH]

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CERTAIN BUSINESS RELATIONSHIPS

Clark V. Stevens, a director of the Company, is the President and owner
of Clark V. Stevens, Professional Corporation, a law firm which provided
services to the Company in the fiscal year ended October 31, 1998. In 1998,
Clark V. Stevens, Professional Corporation, was paid fees for services by the
Company in the amount of $13,920. The Company proposes to retain this firm
during the current fiscal year.

Kermit L. Knuppenburg, a director of the Company, son of Dorothy E.
Knuppenburg and brother-in-law of William B. Stade, performs commissioned sales
representative services for the Company through Select Sales, Inc. Amounts paid
by the Company for these services for the fiscal year ended October 31, 1998
were approximately $303,574.

Comerica Bank, a co-trustee under the K.M. Knuppenburg Residuary Trust,
which holds approximately 22.8% of the outstanding Common Stock, is lender to
the Company pursuant to a $5,000,000 revolving line of credit. At January 31,
1999, $975,000 was outstanding under the line of credit.

-13-

<PAGE> 16

ACCOUNTANTS

Plante & Moran, independent public accountants, audited the financial
statements of the Company for the fiscal year ended October 31, 1998.
Representatives of Plante & Moran are expected to be present at the Annual
Meeting, will be afforded the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions by
shareholders.

The audit services provided by Plante & Moran relating to the fiscal
year ended October 31, 1998, were examination of the Company's financial
statements and pension plan, assistance and consultation in connection with
filing Form 10-K and other reports with the Securities and Exchange Commission,
and consultation in connection with various accounting matters.

OTHER MATTERS

At the date of this Proxy Statement, the Board of Directors is not
aware of any matters to be presented for action at the meeting other than those
described above. However, if any other matters should come before the meeting,
it is the intention of the persons named in the accompanying proxy to vote in
accordance with their judgment in such matters.

If any security holder of the Company wishes to present a proposal for
action at the annual meeting of the Company's shareholders to be held in April,
2000, such proposal shall be received at the Company's principal executive
offices not later than November 19, 1999.

A proposal to be presented at any meeting other than an annual meeting
of shareholders should be received a reasonable time before the solicitation is
made.

To avoid uncertainty as to the date on which a proposal was received by
the Board of Directors, it is suggested that proponents submit their proposals
by Certified Mail, Return Receipt Requested.

By Order of the Board of Directors

CLARK V. STEVENS, Secretary

Warren, Michigan
March 19, 1999
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MICHIGAN PROXY THIS PROXY IS SOLICITED ON
RIVET BEHALF OF THE BOARD OF DIRECTORS.
CORPORATION
13201 Stephens Road The undersigned hereby constitutes and appoints William B. Stade and William P.
Warren, Michigan 48089 Lianos and each of them, as Proxies, each with power to appoint his substitute,
and hereby authorizes them to represent and to vote as designated below, by
action of a majority present (or, if only one is present, then that one), all
the shares of common stock of Michigan Rivet Corporation held of record by the
undersigned on February 19, 1999 at the Annual Meeting of Shareholders to be
held at the offices of Michigan Rivet Corporation, 13201 Stephens Road,
Warren, Michigan, 48089, on Friday, April 30, 1999, at 11:00 a.m., Detroit
Time, or at any adjournment thereof.

1. ELECTION OF FOR all nominees listed below \ \ WITHHOLD AUTHORITY \ \
DIRECTORS (except as marked to the contrary below) to vote for all nominees listed below

(INSTRUCTION: To withhold authority to vote for any nominee, strike a line through the nominee's name in the list below.)

C. Stevens, W. Stade, C. Blank, W. Lianos, A. Livorine, K. Knuppenburg, A. Caputo, E. O'Loughlin and H. Burdett

2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

This proxy when properly executed will be voted in the manner directed hereby by the undersigned shareholder. If no
specification is made, this proxy will be voted for the election of the nominees named above and any substitute for
any of them.
(Continued, and to be signed, on the other side.)

Receipt is hereby acknowledged of the Notice of Annual Meeting of Shareholders and Proxy Statement,
each dated March 19, 1999 and the Annual Report of Michigan Rivet Corporation for the year ended October
31, 1998.

Dated:_____________________, 1999

______________________________________
Signature
______________________________________
Signature if held jointly

Please sign exactly as name appears hereon. If
the stock is registered in the names of two or
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY more persons, each should sign. Executors,
CARD PROMPTLY USING THE ENCLOSED ENVELOPE. administrators, trustees, guardians, attorneys
and corporate officers should add their titles.

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