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<SEC-DOCUMENT>0000950137-08-003952.txt : 20080320
<SEC-HEADER>0000950137-08-003952.hdr.sgml : 20080320
<ACCEPTANCE-DATETIME>20080320093736
ACCESSION NUMBER:		0000950137-08-003952
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20071231
FILED AS OF DATE:		20080320
DATE AS OF CHANGE:		20080320

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHICAGO RIVET & MACHINE CO
		CENTRAL INDEX KEY:			0000019871
		STANDARD INDUSTRIAL CLASSIFICATION:	METALWORKING MACHINERY & EQUIPMENT [3540]
		IRS NUMBER:				360904920
		STATE OF INCORPORATION:			IL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-01227
		FILM NUMBER:		08700902

	BUSINESS ADDRESS:	
		STREET 1:		901 FRONTENAC RD
		STREET 2:		P O BOX 3061
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60566
		BUSINESS PHONE:		6303578500

	MAIL ADDRESS:	
		STREET 1:		901 FRONTENAC RD
		STREET 2:		P O BOX 3061
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60566
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c24737e10vk.txt
<DESCRIPTION>ANNUAL REPORT
<TEXT>
<PAGE>

================================================================================

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

                                    FORM 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
      ACT OF 1934

For the fiscal year ended December 31, 2007

OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                          Commission file number 0-1227

                           CHICAGO RIVET & MACHINE CO.
             (Exact name of registrant as specified in its charter)

            ILLINOIS                                     36-0904920
    (State of incorporation)             (I.R.S. Employer Identification Number)

901 FRONTENAC ROAD, NAPERVILLE, ILLINOIS                   60563
(Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (630) 357-8500

Securities registered pursuant to Section 12(b) of the Act:

       Title of Each Class            Name of Each Exchange on Which Registered
  ------------------------------      -----------------------------------------
  Common Stock - $1.00 Par Value               American Stock Exchange
(including Preferred Stock Purchase   (Trading privileges only, not registered)
            Rights)

        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer","accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

          Large accelerated filer [ ]          Accelerated Filer [ ]

            Non-accelerated filer [ ]          Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [ ] No [X]

The aggregate market value of common stock held by non-affiliates of the Company
as of June 30, 2007 was $19,978,273.

As of March 18, 2008 966,132 shares of the Company's common stock were
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of the Company's Annual Report to Shareholders for the year ended
December 31, 2007 (the "2007 Report") are incorporated by reference in Parts I
and II of this report.

(2) Portions of the Company's definitive Proxy Statement which is to be filed
with the Securities and Exchange Commission in connection with the Company's
2008 Annual Meeting of Shareholders are incorporated by reference in Part III of
this report.

================================================================================
<PAGE>

                           CHICAGO RIVET & MACHINE CO.
                         PERIOD ENDING DECEMBER 31, 2007

<TABLE>
<CAPTION>
Item                                                                        Page
 No.                                                                         No.
- ----                                                                        ----
<S>    <C>                                                                  <C>
                                     Part I

1.     Business                                                               3
1A.    Risk Factors                                                           4
1B.    Unresolved Staff Comments                                              6
2.     Properties                                                             6
3.     Legal Proceedings                                                      6
4.     Submission of Matters to a Vote of Security Holders                    7

                                     Part II

5.     Market for Registrant's Common Equity, Related Stockholder
          Matters and Issuer Purchases of Equity Securities                   9
6.     Selected Financial Data                                                9
7.     Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                               9
7A.    Quantitative and Qualitative Disclosures About Market Risk            12
8.     Financial Statements and Supplementary Data                           13
9.     Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure                                               13
9A.    Controls and Procedures                                               13

                                    Part III

10.    Directors, Executive Officers and Corporate Governance                14
11.    Executive Compensation                                                14
12.    Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters                                    14
13.    Certain Relationships and Related Transactions, and Director
          Independence                                                       14
14.    Principal Accountant Fees and Services                                14

                                     Part IV

15.    Exhibits and Financial Statement Schedules                            15
</TABLE>


                                       2

<PAGE>

                                     PART I

ITEM 1 - BUSINESS

     Chicago Rivet & Machine Co. (the "Company") was incorporated under the laws
of the State of Illinois in December 1927, as successor to the business of
Chicago Rivet & Specialty Co. The Company operates in two segments of the
fastener industry: fasteners and assembly equipment. The fastener segment
consists of the manufacture and sale of rivets, cold-formed fasteners and parts
and screw machine products. The assembly equipment segment consists primarily of
the manufacture of automatic rivet setting machines, automatic assembly
equipment, parts and tools for such machines, and the leasing of automatic rivet
setting machines. For further discussion regarding the Company's operations and
segments, see Note 8 of the financial statements which appears on page 9 of the
Company's 2007 Annual Report to Shareholders. The 2007 Annual Report is filed as
an exhibit to this report.

     The principal market for the Company's products is the North American
automotive industry. Sales are solicited by employees and by independent sales
representatives.

     The segments in which the Company operates are characterized by active and
substantial competition. No single company dominates the industry. The Company's
competitors include both larger and smaller manufacturers, and segments or
divisions of large, diversified companies with substantial financial resources.
Principal competitive factors in the market for the Company's products are
price, quality and service.

     The Company serves a variety of customers. Revenues are primarily derived
from sales to customers involved, directly or indirectly, in the manufacture of
automobiles and automotive components. Information concerning backlog of orders
is not considered material to the understanding of the Company's business due to
relatively short production cycles. The level of business activity for the
Company is closely related to the overall level of industrial activity in the
United States. During 2007, sales to two customers exceeded 10% of the Company's
consolidated revenues. Sales to Fisher & Company accounted for approximately 29%
and 28% of the Company's consolidated revenues in 2007 and 2006, respectively.
Sales to TI Group Automotive Systems Corporation accounted for approximately 14%
and 13% of the Company's consolidated revenues in 2007 and 2006.

     The Company's business has historically been stronger during the first half
of the year.

     The Company purchases raw material from a number of sources, primarily
within the United States. There are numerous sources of raw material, and the
Company does not have to rely on a single source for any of its requirements.
Beginning early in 2004, the cost of raw materials used in the manufacture of
fasteners escalated sharply due to increased global demand, primarily in Asia.
While prices for ferrous materials have been relatively stable during the last
two years, the price of non-ferrous materials continued to increase
significantly during the same period.

     Patents, trademarks, licenses, franchises and concessions are not of
significant importance to the business of the Company.

     The Company does not engage in significant research activities, but rather
in ongoing product improvement and development. The amounts spent on product
development activities in the last two years were not material.

     At December 31, 2007, the Company employed 252 people.


                                       3

<PAGE>

     The Company has no foreign operations, and sales to foreign customers
represent only a minor portion of the Company's total sales.

ITEM 1A - RISK FACTORS

     Our business is subject to a number of risks and uncertainties. If any of
the events contemplated by the following risks actually occur, then our
business, financial condition or results of operations could be materially
adversely affected. Additional risks and uncertainties not currently known to us
or that we currently deem to be immaterial may also materially and adversely
affect our business, financial condition and results of operations.

WE ARE DEPENDENT ON THE DOMESTIC AUTOMOTIVE INDUSTRY.

     Demand for our products is directly related to conditions in the domestic
automotive industry, which is highly cyclical and is affected by a variety of
factors, including regulatory requirements, international trade policies, and
consumer spending and preferences. The domestic automotive industry is
characterized by significant overcapacity, fierce competition and significant
pension and health care liabilities, and automotive production in the United
States has declined between 1999 and 2007. Certain domestic automakers and
component suppliers, including several of our customers, are financially
distressed or may become financially distressed. In recent years, our gross
margins have been negatively impacted in part due to the declines in domestic
automotive production, and we have experienced increased accounts receivable
write-offs as a result of bankruptcy filings by some of our customers. Any
further decline in the domestic automotive industry could have a material
adverse effect on our business, results of operations and financial condition.

WE FACE INTENSE COMPETITION.

     We compete with a number of other manufacturers and distributors that
produce and sell products similar to ours. Price, quality, and service are the
primary elements of competition. Our competitors include a large number of
independent domestic and international suppliers. We are not as large as a
number of these companies and do not have as many financial or other resources.
The competitive environment has also changed dramatically over the past several
years as our customers, faced with intense international competition and
pressure to reduce costs, have expanded their worldwide sourcing of components.
As a result, we have experienced competition from suppliers in other parts of
the world that enjoy economic advantages, such as lower labor costs and lower
health care costs. There can be no assurance that we will be able to compete
successfully with existing or new competitors. Increased competition could have
a material adverse effect on our business, results of operations and financial
condition.

WE RELY ON SALES TO TWO MAJOR CUSTOMERS.

     Our sales in 2007 to two customers constituted approximately 43% of our
consolidated revenues. Sales to Fisher & Company accounted for approximately 29%
and 28% of the Company's consolidated revenues in 2007 and 2006, respectively.
Sales to TI Group Automotive Systems Corporation accounted for approximately 14%
and 13% of the Company's consolidated revenues in 2007 and 2006. The loss of any
significant portion of our sales to these customers could have a material
adverse effect on our business, results of operations and financial condition.


                                       4

<PAGE>

INCREASES IN OUR RAW MATERIAL COSTS OR DIFFICULTIES WITH OUR SUPPLIERS COULD
NEGATIVELY AFFECT US.

     While we currently maintain alternative sources for raw materials, our
business is subject to the risk of price fluctuations and periodic delays in the
delivery of certain raw materials. In recent years, we have been adversely
impacted by increased costs for steel, our principal raw material, which we have
been unable to wholly mitigate, as well as increases in other materials prices.
Any continued fluctuation in the price or availability of our raw materials
could have a material adverse impact on our business, results of operations and
financial condition.

WE MAY BE ADVERSELY AFFECTED BY LABOR RELATIONS ISSUES.

     Although none of our employees are unionized, the domestic automakers and
many of their suppliers, including many of our customers, have unionized work
forces. Work stoppages or slow-downs experienced by automakers or their
suppliers could result in slow-downs or closures of assembly plants where our
products are included in assembled components. In the event that one or more of
our customers or their customers experiences a material labor relations issue,
our business, results of operations and financial condition could be materially
adversely affected.

WE MAY INCUR LOSSES AS A RESULT OF PRODUCTS LIABILITY, WARRANTY OR OTHER CLAIMS
THAT MAY BE BROUGHT AGAINST US.

     We face risk of exposure to warranty and product liability claims in the
event that our products fail to perform as expected or result, or are alleged to
have resulted, in bodily injury, property damage or other losses. In addition,
if any of our products are or are alleged to be defective, then we may be
required to participate in a product recall. We may also be involved from time
to time in legal proceedings and commercial or contractual disputes. Any losses
or other liabilities related to these exposures could have a material adverse
effect on our business, results of operations and financial condition.

WE COULD BE ADVERSELY IMPACTED BY ENVIRONMENTAL LAWS AND REGULATIONS.

     Our operations are subject to environmental laws and regulations.
Currently, environmental costs and liabilities with respect to our operations
are not material, but there can be no assurance that we will not be adversely
impacted by these costs and liabilities in the future either under present laws
and regulations or those that may be adopted or imposed in the future.

WE COULD BE ADVERSELY IMPACTED BY THE LOSS OF THE SERVICES OF KEY EMPLOYEES.

     Successful operations depend, in part, upon the efforts of executive
officers and other key employees. Our future success will depend, in part, upon
our ability to attract and retain qualified personnel. Loss of the services of
any of our key employees, or the inability to attract or retain employees could
have a material adverse affect upon our business, financial condition and
results of operations.

WE COULD BE ADVERSELY IMPACTED BY OUR FAILURE TO COMPLY WITH SECTION 404 OF THE
SARBANES-OXLEY ACT

     As a public company we are required to comply with the reporting
obligations of the Exchange Act and will be required to comply with Section 404
of the Sarbanes-Oxley Act of 2002. If we fail to comply with the reporting
obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act, or if
we fail to achieve and maintain adequate internal controls over financial
reporting, our business, results of operations and financial condition, and
investors' confidence in us, could be materially adversely affected.


                                       5

<PAGE>

THE PRICE OF OUR COMMON STOCK IS SUBJECT TO VOLATILITY, AND OUR STOCK IS THINLY
TRADED.

     Various factors, such as general economic changes in the financial markets,
announcements or significant developments with respect to the automotive
industry, actual or anticipated variations in our or our competitors' quarterly
or annual financial results, the introduction of new products or technologies by
us or our competitors, changes in other conditions or trends in our industry or
in the markets of any of our significant customers, changes in governmental
regulation, or changes in securities analysts' estimates of our competitors or
our industry, could cause the market price of our common stock to fluctuate
substantially.

     Our common stock is traded on the American Stock Exchange (not registered,
trading privileges only). The average daily trading volume for our common stock
on the American Stock Exchange is currently less than 2,000 shares per day, and
on some days we have zero volume. As a result, you may have difficulty selling
shares of our common stock, and the price of our common stock may vary
significantly based on trading volume.

ITEM 1B - UNRESOLVED STAFF COMMENTS

     Not applicable.

ITEM 2 - PROPERTIES

     The Company's headquarters is located in Naperville, Illinois. It conducts
its manufacturing and warehousing operations at three additional facilities. All
of these facilities are described below. Each facility is owned by the Company
and considered suitable and adequate for its present use. The Company currently
maintains a small sales and engineering office in Norwell, Massachusetts in a
leased facility. The Company also owns a facility in Jefferson, Iowa, that was
formerly used in the fastener segment.

     Of the properties described below, the Madison Heights, Michigan facility
is used entirely in the fastener segment. The Albia, Iowa facility is used
exclusively in the assembly equipment segment. The Tyrone, Pennsylvania and the
Naperville, Illinois facilites are utilized in both operating segments.

                        Plant Locations and Descriptions

<TABLE>
<S>                         <C>
Naperville, Illinois        Brick, concrete block and partial metal construction
                            with metal roof.

Tyrone, Pennsylvania        Concrete block with small tapered beam type
                            warehouse.

Albia, Iowa                 Concrete block with prestressed concrete roof
                            construction.

Madison Heights, Michigan   Concrete, brick and partial metal construction with
                            metal roof.
</TABLE>

ITEM 3 - LEGAL PROCEEDINGS

     The Company is, from time to time involved in litigation, including
environmental claims, in the normal course of business. While it is not possible
at this time to establish the ultimate amount of liability with respect to
contingent


                                       6

<PAGE>

liabilities, including those related to legal proceedings, management is of the
opinion that the aggregate amount of any such liabilities, for which provision
has not been made, will not have a material adverse effect on the Company's
financial position.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matter was submitted to a vote of the Company's shareholders during the
fourth quarter of 2007.


                                       7

<PAGE>

                      Executive Officers of the Registrant

     The names, ages and positions of all executive officers of the Company, as
of March 14, 2008, are listed below. Officers are elected annually by the Board
of Directors at the meeting of the directors immediately following the Annual
Meeting of Shareholders. There are no family relationships among these officers,
nor any arrangement or understanding between any officer and any other person
pursuant to which the officer was selected.

<TABLE>
<CAPTION>
Name and Age of Officer        Position                                           Years an Officer
- -----------------------        --------                                           ----------------
<S>                       <C>  <C>                                                <C>
John A. Morrissey         72   Chairman, Chief Executive Officer                         27

Michael J. Bourg          45   President, Chief Operating Officer and Treasurer           9

Kimberly A. Kirhofer      49   Secretary                                                 17

Nirendu Dhar              66   General Manager, H & L Tool Company, Inc.                  7
</TABLE>

- -    Mr. Morrissey has been Chairman of the Board of Directors of the Company
     since November 1979, and Chief Executive Officer since August 1981. He has
     been a director of the Company since 1968.

- -    Mr. Bourg has been President, Chief Operating Officer and Treasurer of the
     Company since May 2006. He was Corporate Controller from December 1998 to
     November 2005. He became Vice President - Finance in November 2005 and was
     named Executive Vice President in February 2006. He has been a director of
     the Company since May 2006.

- -    Mrs. Kirhofer has been Secretary of the Company since August 1991, and was
     Assistant Secretary of the Company from February 1991 through August 1991.
     Prior to that, she held various administrative positions with the Company
     since May 1983.

- -    Mr. Dhar has been employed as General Manager of the Company's subsidiary,
     H & L Tool Company, Inc., since 1996. Mr. Dhar was employed as Plant
     Manager and Chief Engineer of H & L Tool Company, Inc. prior to the
     Company's acquisition of H & L Tool Company, Inc. for more than five years.
     He has been a director of the Company since May 2001. In February 2008, Mr.
     Dhar notified the Company of his intention to retire from his position as
     General Manager of H & L Tool effective as of April 30, 2009. In connection
     with his decision to retire, Mr. Dhar resigned as a director of the Company
     effective as of the 2008 Annual Meeting of Shareholders of the Company.


                                        8

<PAGE>

                                     PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

     The Company's common stock is traded on the American Stock Exchange
(trading privileges only, not registered). As of February 15, 2008 there were
approximately 240 shareholders of record of such stock. The information on the
market price of, and dividends paid with respect to, the Company's common stock,
set forth in the section entitled "Information on Company's Common Stock" which
appears on page 12 of the 2007 Annual Report is incorporated herein by
reference. The 2007 Annual Report is filed as an exhibit to this report. See
Item 7 - "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Dividends," for additional information about the
Company's dividend policy.

     Under the terms of a stock repurchase authorization originally approved by
the Board of Directors of the Company in February of 1990, as amended, the
Company is authorized to repurchase up to an aggregate of 200,000 shares of its
common stock, in the open market or in private transactions, at prices deemed
reasonable by management. Cumulative purchases under the repurchase
authorization have amounted to 162,996 shares at an average price of $15.66 per
share. The Company has not purchased any shares of its common stock since 2002.

ITEM 6 - SELECTED FINANCIAL DATA

     As a Smaller Reporting Company as defined in Rule 12b-2 of the Exchange Act
and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure
reporting obligations with respect to this item and therefore are not required
to provide the information requested by this Item 6.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This discussion contains certain "forward-looking statements" which are
inherently subject to risks and uncertainties that may cause actual events to
differ materially from those discussed herein. Factors which may cause such
differences in events include those disclosed above under "Risk Factors" and
elsewhere in this Form 10-K. As stated elsewhere in this filing, such factors
include, among other things: conditions in the domestic automotive industry,
upon which we rely for sales revenue, the intense competition in our markets,
the concentration of our sales to two major customers, the price and
availability of raw materials, labor relations issues, losses related to product
liability, warranty and recall claims, costs relating to environmental laws and
regulations, and the loss of the services of our key employees. Many of these
factors are beyond our ability to control or predict. Readers are cautioned not
to place undue reliance on these forward-looking statements. We undertake no
obligation to publish revised forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

RESULTS OF OPERATIONS

     Net income in 2007 was $1.31 per share compared with $1.16 per share in
2006. Although net revenues declined 6.4 percent, from $40,369,977 in 2006 to
$37,776,264 in 2007, lower operating expenses and the absence of significant
plant closing expenses in 2007 helped achieve improved bottom line results.


                                       9

<PAGE>

2007 COMPARED TO 2006

     The decline in revenues in 2007 affected both the fastener and assembly
equipment segments. Fastener segment revenues amounted to $33,083,907 during the
year, compared to $34,421,398 in 2006. Throughout the year we experienced
reduced overall demand from our automotive customers as domestic automobile
manufacturers, who are the end users for a large portion of our automotive
customer base, reduced production in response to import brand market share gains
while also attempting to reduce their reliance on less profitable fleet sales.
Increases in sales to certain non-automotive customers during 2007 allowed us to
limit the net fastener segment sales decline to 3.9 percent. The impact of lower
net sales was offset by reductions in certain operating expenses. Tooling
expenses for the year were $163,000 lower than in 2006 due to higher than normal
tooling associated with new parts incurred in 2006. Due to a change in product
mix, as well as investments in equipment during the last year that have expanded
our capabilities, certain machining and parts sorting procedures that were
formerly outsourced are now being performed internally, contributing to a
$571,000 reduction in these outside production costs compared to last year. We
also benefited from the reduction in certain fixed overhead items as fastener
segment depreciation declined $510,323, due to certain equipment becoming fully
depreciated in 2006, and expediting and rejection expenses declined $55,000. The
most notable increase incurred during 2007 related to higher prices for
non-ferrous metals used in some of the parts we manufacture. The transfer of
production activities from Jefferson, Iowa to Tyrone, Pennsylvania that began in
the third quarter of 2006 resulted in expense reductions due to the elimination
of certain costs in the current year. The net decline in operating expenses
during 2007 effectively offset the revenue decline, resulting in an improvement
in the fastener segment gross margin to $5,788,153 compared with $5,583,254
reported in 2006.

     Assembly equipment segment revenues were $4,692,357 in 2007, a decline of
$1,256,222, or 21.1 percent, compared to the $5,948,579 recorded in 2006. Demand
for our products in this segment continues to be weak, and we have taken steps
to reduce and control expenses wherever possible, including reductions in both
staffing levels and work schedules. The cumulative effect of these actions did
not fully offset the effects of reduced volume and, as a result, the assembly
equipment segment gross margin declined to $1,572,312 from $2,257,258 last year.

     Selling and administrative expenses for 2007 were $5,816,802, a decline of
$216,897, or 3.6 percent, compared with 2006. Salaries and related benefits
account for approximately $94,000 of the net decline due to reduced headcount.
Legal fees declined $47,000, primarily due to services in 2006 related to the
Jefferson plant closing. Profit sharing expense declined $24,000 as a result of
lower profits in the current year, after taking the plant closing expenses into
consideration, and sales commissions declined $25,000 due to the lower sales
level in 2007. The balance of the net reduction is made up of a variety of
smaller expense items.

     In May of 2006, the closing of our Jefferson, Iowa fastener operation and
transfer of production activities to our facility in Tyrone, Pennsylvania, was
announced. The move was made to better utilize available manufacturing capacity.
During the fourth quarter of 2006, manufacturing activities in Jefferson
concluded. Total charges of $422,934 were recorded in 2006 related to the plant
closing. During 2007, additional charges of $20,337 were recorded.

DIVIDENDS

     In determining to pay dividends, the Board considers current profitability,
the outlook for longer-term profitability, known and potential cash requirements
and the overall financial condition of the Company. The Company paid four
regular quarterly dividends of $.18 per share during 2007, for a total dividend
distribution of $.72 per share for the year. On February 18, 2008, your Board of
Directors declared a regular quarterly dividend of $.18 per share, payable March
20, 2008 to shareholders


                                       10

<PAGE>

of record on March 5, 2008. This continues the uninterrupted record of
consecutive quarterly dividends paid by the Company to its shareholders that
extends over 74 years. At that same meeting, the Board also declared an extra
dividend of $.15 per share to be paid April 18, 2008 to shareholders of record
on April 4, 2008.

PROPERTY, PLANT AND EQUIPMENT

     Total capital expenditures in 2007 were $424,509. Of the total, $390,258
was invested in fastener segment additions, including $123,000 for cold-heading
equipment upgrades, $93,000 for secondary equipment, $61,000 for inspection and
other equipment, and $113,000 for certain buildings and grounds improvements.
Assembly equipment segment additions totaled $34,251, with approximately $25,000
expended for building heating units and the balance for a riveting machine used
for lease purposes.

     Capital expenditures during 2006 totaled $1,451,756, of which $1,374,009
was invested in equipment for our fastener operations. Approximately $680,000
was spent on cold-heading equipment to expand our capabilities to make larger
parts and approximately $233,000 was spent on equipment for performing secondary
operations, such as grinding and shaving of parts. Additionally, approximately
$346,000 was spent on inspection equipment. The remaining additions were for
computer hardware and other equipment not specifically assigned to a single
segment.

     Depreciation expense amounted to $1,136,806 in 2007 and $1,659,834 in 2006.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital increased approximately $1.2 million between
December 31, 2006 and December 31, 2007. The Company's holdings in cash, cash
equivalents and certificates of deposit amounted to approximately $7.5 million
at the end of 2007, an increase of $1.8 million compared with the prior
year-end. The increase was mainly due to a $900,000 reduction in capital outlays
during 2007 compared to 2006 and a $300,000 reduction in income tax payments.
Inventories were reduced by nearly $.5 million in 2007, as stock on hand was
adjusted due to reduced demand. Accounts receivable decreased $.6 million
compared with the prior year-end, primarily due to the lower level of sales
during the year. Accrued expenses declined $.2 million compared to the prior
year, primarily due to the payment of accrued plant closing expenses. The
Company's investing activities in 2007 primarily consisted of capital
expenditures of $.4 million and the net investment in certificates of deposit of
$1.5 million. The only financing activity during 2007 was the payment of $.7
million in dividends. The Company has a $1.0 million line of credit, which
expires May 31, 2008. This line of credit remains unused.

OFF-BALANCE SHEET ARRANGEMENTS

     The Company has not entered into, and has no current plans to enter into,
any off-balance sheet financing arrangements.

     Management believes that current cash, cash equivalents, operating cash
flow and available line of credit will be sufficient to provide adequate working
capital for the foreseeable future.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

     The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the amounts of revenue and expenses during the reporting period.
A summary of critical accounting policies can be found in Note 1 of the
financial statements.


                                       11

<PAGE>

NEW ACCOUNTING STANDARDS

     The Company's financial statements and financial condition were not, and
are not expected to be, materially impacted by new, or proposed, accounting
standards. A summary of new accounting pronouncements can be found in Note 1 of
the financial statements.

PERSONNEL

     On February 18, 2008, Nirendu Dhar, General Manager of H & L Tool Company,
Inc. and member of the Company's Board of Directors, notified the Company of his
intention to retire. Mr. Dhar's retirement from his position as General Manager
of H & L Tool will be effective April 30, 2009. In connection with his decision
to retire, Mr. Dhar also resigned from the Board effective as of the 2008 Annual
Meeting of Shareholders of the Company.

OUTLOOK FOR 2008

     We began 2007 on a cautious note as demand from our automotive customers
was expected to be restrained, due to production cuts that began in the second
half of 2006, and was not expected to rebound significantly. This caution was
well founded as 2007 saw further reductions in domestic automobile production.
As we begin 2008, end-users of our products are planning additional production
cuts for the first half of the year due to ongoing restructurings and the
general economic outlook which currently provides for little growth. While we
did achieve greater sales to customers in certain non-automotive markets, which
partially offset our automotive declines, our concentration in the automotive
market resulted in the net decline in fastener segment sales discussed above.

     The assembly equipment segment, which recorded a modest increase in sales
in 2006 on lower unit volume, recorded lower sales in 2007 on a further drop in
volume. The economic data currently available provides no reason to expect any
significant improvement in this segment in the near-term. We will continue to
concentrate on cost controls while pursuing profitable opportunities in this
segment.

     The outlook for 2008 is more challenging than a year ago. With the
possibility of a recession that would likely affect all the markets we serve, we
expect customers will continue to demand higher quality and lower prices as
their operations cope with a difficult economic environment. Our ability to
increase revenues while diversifying our customer base will be significant
factors determining our future success.

     Given the challenging circumstances we face, we will continue our efforts
to increase our sales revenues in all markets by emphasizing value over price
and will focus on more complex products for which our expertise, service and
unsurpassed quality are important factors in our customers' purchasing
decisions. At the same time, we will continue to pursue solutions that help
improve our operations at all levels.

     Our future success is dependent on many factors. We believe that the
valuable contributions of our employees and our sound financial condition will
help us face the challenges ahead in 2008. While many of our customers are
facing the same challenges, we would like to thank them for their loyalty, and
also thank our shareholders for their continued support.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     As a Smaller Reporting Company as defined in Rule 12b-2 of the Exchange Act
and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure
reporting obligations with respect to this item and therefore are not required
to provide the information requested by this Item 7A.


                                       12

<PAGE>

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See the sections entitled "Consolidated Financial Statements" and
"Financial Statement Schedule" which appear on pages 17 through 20 of this
report.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     Not applicable.

ITEM 9A - CONTROLS AND PROCEDURES

     (a) Disclosure Controls and Procedures. The Company's management, with the
participation of the Company's Chief Executive Officer and President, Chief
Operating Officer and Treasurer (the Company's principal financial officer), has
evaluated the effectiveness of the Company's disclosure controls and procedures
(as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this report. Based on such evaluation, the Company's Chief
Executive Officer and Chief Financial Officer have concluded that, as of the end
of such period, the Company's disclosure controls and procedures are effective
in recording, processing, summarizing and reporting, on a timely basis,
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act.

Management's Report On Internal Control Over Financial Reporting.

     The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting, as that term is defined in
Exchange Act Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The Company's
management, with the participation of the Company's Chief Executive Officer and
President, Chief Operating Officer and Treasurer (the Company's principal
financial officer), assessed the effectiveness of the Company's internal control
over financial reporting as of December 31, 2007, based on criteria established
in Internal Control--Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO"). Based on this assessment, the
Company's management has concluded that the Company's internal controls over
financial reporting is effective as of December 31, 2007.

     This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this annual report.

     (b) Internal Control Over Financial Reporting. There have not been any
changes in the Company's internal control over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
quarter ended December 31, 2007 that have materially affected, or are reasonably
likely to materially affect, the Company's internal control over financial
reporting.


                                       13

<PAGE>

                                    PART III

ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

     The information in the Company's 2008 Proxy Statement (i) with respect to
the Board of Directors' nominees for directors that is not related to security
ownership in "Security Ownership of Management" (ii) in the third paragraph in
"Additional Information Concerning the Board of Directors and Committees" and
(iii) in "Section 16(a) Beneficial Ownership Reporting Compliance" is
incorporated herein by reference. The 2008 Proxy Statement is to be filed with
the Securities and Exchange Commission in connection with the Company's 2008
Annual Meeting of Shareholders. The information called for with respect to
executive officers of the Company is included in Part I of this Report on Form
10-K under the caption "Executive Officers of the Registrant."

     The Company has adopted a code of ethics for its principal executive
officer, chief operating officer and senior financial officers. A copy of this
code of ethics was filed as Exhibit 14 to the Company's Annual Report on Form
10-K dated March 29, 2005.

ITEM 11 - EXECUTIVE COMPENSATION

     The information set forth in the Company's 2008 Proxy Statement in
"Compensation of Directors and Executive Officers" is incorporated herein by
reference.

     The Compensation Committee of the Board of Directors currently consists of
Directors Edward L. Chott, William T. Divane, Jr., George P. Lynch and John R.
Madden.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

     The information set forth in the Company's 2008 Proxy Statement in
"Principal Shareholders" and the information with respect to security ownership
of the Company's directors and officers set forth in "Security Ownership of
Management" is incorporated herein by reference.

     The Company does not have any equity compensation plans or arrangements.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

     The information set forth the Company's 2008 Proxy Statement in (i)
"Additional Information Concerning the Board of Directors and Committees -
Policy Regarding Related Person Transactions" and (ii) the first paragraph under
"Additional Information Concerning the Board of Directors and Committees" is
incorporated herein by reference.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information set forth in the Company's 2008 Proxy Statement in (i)
"Independent Registered Public Accounting Firm - Fee Table" and (ii) the last
paragraph under "Independent Registered Public Accounting Firm" is incorporated
herein by reference.


                                       14

<PAGE>

                                     PART IV

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (a)  The following documents are filed as a part of this report:

          1.   Financial Statements:

               See the section entitled "Consolidated Financial Statements"
               which appears on page 17 of this report.

          2.   Financial statement schedule and supplementary information
               required to be submitted:

               See the section entitled "Financial Statement Schedule" which
               appears on pages 18 through 20 of this report.

          3.   Exhibits:

               See the section entitled "Exhibits" which appears on page 21 of
               this report.


                                       15

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Chicago Rivet & Machine Co. has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                        Chicago Rivet & Machine Co.


                                        By /s/ Michael J. Bourg
                                           -------------------------------------
                                        Michael J. Bourg
                                        President and Chief Operating Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

<TABLE>
<S>                                     <C>


/s/ John A. Morrissey                   Chairman of the Board of Directors,
- -------------------------------------   Chief Executive Officer (Principal
John A. Morrissey                       Executive Officer) and Member of the
                                        Executive Committee
                                        March 20, 2008


/s/ Michael J. Bourg                    President, Chief Operating Officer,
- -------------------------------------   Treasurer (Principal Financial and
Michael J. Bourg                        Accounting Officer), Member of the
                                        Executive Committee and Director
                                        March 20, 2008


/s/ Edward L. Chott                     Director, Member of the Audit Committee
- -------------------------------------   March 20, 2008
Edward L. Chott


/s/ Kent H. Cooney                      Director, Member of the Audit Committee
- -------------------------------------   March 20, 2008
Kent H. Cooney


/s/ Nirendu Dhar                        Director
- -------------------------------------   March 20, 2008
Nirendu Dhar


/s/ William T. Divane, Jr.              Director, Member of the Audit Committee
- -------------------------------------   March 20, 2008
William T. Divane


/s/ George P. Lynch                     Director
- -------------------------------------   March 20, 2008
George P. Lynch


/s/ John R. Madden                      Director, Member of the Executive
- -------------------------------------   Committee and the Audit Committee
John R. Madden                          March 20, 2008


/s/ Walter W. Morrissey                 Director, Member of the Executive Committee
- -------------------------------------   March 20, 2008
Walter W. Morrissey
</TABLE>


                                       16

<PAGE>

                           CHICAGO RIVET & MACHINE CO.

                        CONSOLIDATED FINANCIAL STATEMENTS

     The consolidated financial statements, together with the notes thereto and
the report thereon of Grant Thornton LLP dated March 14, 2008, appearing on
pages 4 to 11 of the accompanying 2007 Annual Report, are incorporated herein by
reference. With the exception of the aforementioned information and the
information incorporated in Items 1, 5 and 8 herein, the 2007 Annual Report is
not to be deemed filed as part of this Form 10-K Annual Report.

Consolidated Financial Statements from 2007 Annual Report (Exhibit 13 hereto):

Consolidated Balance Sheets (page 4 of 2007 Annual Report)

Consolidated Statements of Income (page 5 of 2007 Annual Report)

Consolidated Statements of Retained Earnings (page 5 of 2007 Annual Report)

Consolidated Statements of Cash Flows (page 6 of 2007 Annual Report)

Notes to Consolidated Financial Statements (pages 7, 8, 9, and 10 of 2007 Annual
Report)

Report of Independent Registered Public Accounting Firm (page 11 of 2007 Annual
Report)


                                       17

<PAGE>

                          FINANCIAL STATEMENT SCHEDULE

                                  2007 AND 2006

     The following financial statement schedule should be read in conjunction
with the consolidated financial statements and the notes thereto in the 2007
Annual Report. Financial statement schedules not included herein have been
omitted because they are not applicable or the required information is shown in
the consolidated financial statements or notes thereto.

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Financial Statement Schedule:

Valuation and Qualifying Accounts (Schedule II)                              19

Report of Independent Registered Public Accounting Firm on Financial
   Statement Schedule                                                        20
</TABLE>


                                       18

<PAGE>

                           CHICAGO RIVET & MACHINE CO.
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                 FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

<TABLE>
<CAPTION>
                                   Balance at    Additions                   Balance at
                                    Beginning   Charged to                       End
Classification                       of Year     Expenses    Deductions(1)     of Year
- --------------                     ----------   ----------   -------------   ----------
<S>                                <C>          <C>          <C>             <C>
2007

Allowance for doubtful accounts,
   returns and allowances           $150,000     $ (7,242)      $ 47,758      $ 95,000
Reserve for inventory
   obsolescence                     $456,000     $334,246       $315,246      $475,000

2006

Allowance for doubtful accounts,
   returns and allowances           $210,000     $ (5,688)      $ 54,312      $150,000
Reserve for inventory
   obsolescence                     $510,000     $220,559       $274,559      $456,000
</TABLE>

(1)  Accounts receivable written off are net of recoveries.


                                       19

<PAGE>

           Report of Independent Registered Public Accounting Firm on
                          Financial Statement Schedule

To the Board of Directors
of Chicago Rivet & Machine Co.

      We have audited in accordance with the standards of the Public Company
Accounting Oversight Board (United States) the consolidated financial
statements of Chicago Rivet & Machine Co. and subsidiary referred to in our
report dated March 14, 2008, which is included in the 2007 Annual Report to
Shareholders. Our audits of the basic financial statements included the
financial statement schedule listed in the index appearing under Item 15(a)(2),
which is the responsibility of the Company's management. In our opinion, this
financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

Grant Thornton LLP
Chicago, Illinois
March 14, 2008


                                       20

<PAGE>

CHICAGO RIVET & MACHINE CO.

                                    EXHIBITS

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
 Number                                                                    Page
- -------                                                                  -------
<S>       <C>                                                            <C>
3.1       Articles of Incorporation, as last amended August 18, 1997.
          Incorporated by reference to the Company's report on Form
          10-K, dated March 27, 1998. File number 0000-01227

3.2       Amended and Restated By-Laws, as amended through
          December 28, 2007                                              22 - 46

4.1       Rights Agreement, dated November 22, 1999, between the
          Company and First Chicago Trust Company of New York as
          Rights Agent. Incorporated by reference to the Company's
          report on Form 10-K, dated March 29, 2000. File
          number 0000-01227

13*       Annual Report to Shareholders for the year ended
          December 31, 2007.                                             47 - 60

14        Code of Ethics for Principal Executive and Senior Financial
          Officers. Incorporated by reference to the Company's report
          on Form 10K, dated March 29, 2005. File number 0000-01227

21        Subsidiaries of the Registrant.                                     61

31.1      Certification of Principal Executive Officer Pursuant to
          Rule 13a-14(a) or 15d-14(a) as Adopted Pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.                              62

31.2      Certification of Principal Financial Officer Pursuant to
          Rule 13a-14(a) or 15d-14(a) as Adopted Pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.                              63

32.1      Certification of Principal Executive Officer Pursuant to
          18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.                                  64

32.2      Certification of Principal Financial Officer Pursuant to
          18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.                                  65
</TABLE>

*    Only the portions of this exhibit which are specifically incorporated
     herein by reference shall be deemed to be filed herewith.


                                       21

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>2
<FILENAME>c24737exv3w2.txt
<DESCRIPTION>AMENDED AND RESTATED BY-LAWS
<TEXT>
<PAGE>
                                                                     EXHIBIT 3.2


                          AMENDED AND RESTATED BY-LAWS

                     (AS AMENDED THROUGH DECEMBER 28, 2007)

                                       OF

                          CHICAGO RIVET & MACHINE CO.,
                             an Illinois corporation
                               (the "Corporation")


                                    ARTICLE I
                                     OFFICES

     The principal office of the Corporation shall be in the City of Naperville,
County of DuPage and State of Illinois. The Corporation may also have offices at
such other places, either within or without the State of Illinois, as the Board
of Directors may from time to time appoint or as the business may require.


                                   ARTICLE II
                             SHAREHOLDERS' MEETINGS

     SECTION 1. THE ANNUAL MEETING. The annual meeting of the shareholders shall
be held at the principal office of the Corporation at 10:00 o'clock A. M.
(Chicago time) on the second Tuesday in May of each year, or if such day be a
holiday, then upon the next succeeding secular day. A written or printed notice
stating the place, day and hour of the meeting shall be mailed by the Secretary
or an Assistant Secretary of the Corporation at least ten days before such
meeting to each shareholder to his, her or its last known post-office address,
as appears on the books of the Corporation. A majority of the capital stock
outstanding represented in person or by proxy shall constitute a quorum at all
shareholders' meetings.

                          SECTION 2. SPECIAL MEETINGS.

     (a) Special meetings of the shareholders may be called by (i) the President
or (ii) the Board of Directors and shall be called by the President or the Board
of Directors upon the demand, in accordance with this Section 2, of holders of
not less than one-fifth of all the outstanding shares of the Corporation
entitled to vote on the matter proposed to be considered at the special meeting,
for the purpose or purposes stated in the call of the meeting.

     (b) In order that the Corporation may determine the shareholders entitled
to demand a special meeting, the Board of

                                       1

<PAGE>





Directors may fix a record date to determine the shareholders entitled to make
such a demand (the "Demand Record Date"). The Demand Record Date shall not
precede the date upon which the resolution fixing the Demand Record Date is
adopted by the Board of Directors and shall not be more than 10 days after the
date upon which the resolution fixing the Demand Record Date is adopted by the
Board of Directors. Any shareholder of record seeking to have shareholders
demand a special meeting shall, by sending written notice to the Secretary of
the Corporation by hand or by certified or registered mail, return receipt
requested, request the Board of Directors to fix a Demand Record Date. The Board
of Directors shall promptly, but in all events within 10 days after the date on
which a valid request to fix a Demand Record Date is received, adopt a
resolution fixing the Demand Record Date and shall make a public announcement of
such Demand Record Date. If no Demand Record Date has been fixed by the Board of
Directors within 10 days after the date on which such request is received by the
Secretary, the Demand Record Date shall be the 10th day after the first date on
which a valid written request to set a Demand Record Date is received by the
Secretary. To be valid, such written request shall set forth the purpose or
purposes for which the special meeting is to be held, shall be signed by one or
more shareholders of record (or their duly authorized proxies or other
representatives), shall bear the date of signature of each such shareholder (or
proxy or other representative) and shall set forth all information about each
such shareholder and about the beneficial owner or owners, if any, on whose
behalf the request is made that would be required to be set forth in a
shareholder's notice described in paragraph (a) of Section 16 of Article II of
these by-laws.

     (c) In order for a shareholder or shareholders to demand a special meeting,
a written demand or demands for a special meeting by the holders of record as of
the Demand Record Date of not less than one-fifth of all the outstanding shares
of the Corporation entitled to vote on the matter proposed to be considered at
the special meeting must be delivered to the Corporation. To be valid, each
written demand by a shareholder for a special meeting shall set forth the
specific purpose or purposes for which the special meeting is to be held (which
purpose or purposes shall be limited to the purpose or purposes set forth in the
written request to set a Demand Record Date received by the Corporation pursuant
to paragraph (b) of this Section 2), shall be signed by one or more persons who
as of the Demand Record Date are shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of signature
of each such shareholder (or proxy or other representative), shall set forth the
name and address, as they appear in the Corporation's books, of each shareholder
signing such demand and the class and number of shares of the Corporation which
are owned of record and beneficially by each such shareholder, shall be sent to
the Secretary by hand or by certified or registered mail, return receipt
requested, and shall be received by the Secretary within 60 days after the
Demand Record Date.

                                       2

<PAGE>

     (d) The Corporation shall not be required to call a special meeting upon
shareholder demand unless, in addition to the documents required by paragraph
(c) of this Section 2, the Secretary receives a written agreement signed by each
Soliciting Shareholder (as defined below), pursuant to which each Soliciting
Shareholder, jointly and severally, agrees to pay the Corporation's costs of
holding the special meeting, including the costs of preparing and mailing proxy
materials for the Corporation's own solicitation, provided that if each of the
resolutions introduced by any Soliciting Shareholder at such meeting is adopted,
and each of the individuals nominated by or on behalf of any Soliciting
Shareholder for election as a director at such meeting is elected, then the
Soliciting Shareholders shall not be required to pay such costs. For purposes of
this paragraph (d), the following terms shall have the meanings set forth below:

          (i) "Affiliate" of any Person (as defined herein) shall mean any
     Person controlling, controlled by or under common control with such first
     Person.

          (ii) "Participant" shall have the meaning assigned to such term in
     Instruction 3 of Item 4 of Schedule 14A promulgated under the Securities
     Exchange Act of 1934, as amended (the "Exchange Act")

          (iii) "Person" shall mean any individual, firm, corporation,
     partnership, joint venture, association, trust, unincorporated organization
     or other entity.

          (iv) "Proxy" shall have the meaning assigned to such term in Rule
     14a-1 promulgated under the Exchange Act.

          (v) "Solicitation" shall have the meaning assigned to such term in
     Rule 14a-1 promulgated under the Exchange Act.

          (vi) "Soliciting Shareholder" shall mean, with respect to any special
     meeting demanded by a shareholder or shareholders, any of the following
     Persons: (A) if the number of shareholders signing the demand or demands of
     meeting delivered to the corporation pursuant to paragraph (c) of this
     Section 2 is 10 or fewer, each shareholder signing any such demand; (B) if
     the number of shareholders signing the demand or demands of meeting
     delivered to the corporation pursuant to paragraph (c) of this Section 2 is
     more than 10, each Person who either (x) was a Participant in any
     Solicitation of such demand or demands or (y) at the time of the delivery
     to the

                                       3

<PAGE>


     Corporation of the documents described in paragraph (c) of this Section 2
     had engaged or intended to engage in any Solicitation of Proxies for use at
     such Special Meeting (other than a Solicitation of Proxies on behalf of the
     Corporation); or (C) any Affiliate of a Soliciting Shareholder, if a
     majority of the Directors then in office determine, reasonably and in good
     faith, that such Affiliate should be required to sign the written notice
     described in paragraph (c) of this Section 2 and/or the written agreement
     described in this paragraph (d) in order to prevent the purposes of this
     Section 2 from being evaded.

     (e) Except as provided in the following sentence, any special meeting shall
be held at such hour and day as may be designated by whichever of the President
or the Board of Directors shall have called such meeting. In the case of any
special meeting called by the Board of Directors or the President upon the
demand of shareholders (a "Demand Special Meeting"), such meeting shall be held
at such hour and day as may be designated by the Board of Directors or the
President; provided, however, that the date of any Demand Special Meeting shall
be not more than 60 days after the Meeting Record Date (as defined in Section 6
of this Article II); and provided further that in the event that the Directors
then in office fail to designate an hour and date for a Demand Special Meeting
within 10 days after the date that valid written demands for such meeting by the
holders of record as of the Demand Record Date of shares representing not less
than one-fifth of all the outstanding shares of the Corporation entitled to vote
on the matter proposed to be considered at the special meeting are delivered to
the Corporation (the "Delivery Date"), then such meeting shall be held at 2:00
P.M. local time on the 90th day after the Delivery Date or, if such 90th day is
not a Business Day (as defined below), on the first preceding Business Day. In
fixing a meeting date for any special meeting, the President or the Board of
Directors may consider such factors as he or it deems relevant within the good
faith exercise of his or its business judgment, including, without limitation,
the nature of the action proposed to be taken, the facts and circumstances
surrounding any demand for such meeting, and any plan of the Board of Directors
to call an annual meeting or a special meeting for the conduct of related
business.

     (f) The Corporation may engage independent inspectors of elections to act
as an agent of the Corporation for the purpose of promptly performing a
ministerial review of the validity of any purported written demand or demands
for a special meeting received by the Secretary. For the purpose of permitting
the inspectors to perform such review, no purported demand shall be deemed to
have been delivered to the Corporation until the earlier of (i) 5 Business Days
following receipt by the Secretary of such purported demand and (ii) such date
as the independent inspectors

                                       4

<PAGE>

certify to the Corporation that the valid demands received by the Secretary
represent not less than one-fifth of all the outstanding shares of the
Corporation entitled to vote on the matter proposed to be considered at the
special meeting. Nothing contained in this paragraph (f) shall in any way be
construed to suggest or imply that the Board of Directors or any shareholder
shall not be entitled to contest the validity of any demand, whether during or
after such 5 Business Day period, or to take any other action (including,
without limitation, the commencement, prosecution or defense of any litigation
with respect thereto).

     (g) For purposes of these by-laws, "Business Day" shall mean any day other
than a Saturday, a Sunday or a day on which banking institutions in the State of
Illinois are authorized or obligated by law or executive order to close.

     SECTION 3. PLACE OF MEETING. The Board of Directors may designate any place
as the place of meeting for any annual meeting or for any special meeting called
by the Board of Directors. If no designation is made or if a special meeting be
otherwise called, the place of meeting shall be at the principal office of the
Company in Naperville, Illinois.

     SECTION 4. TIME OF ELECTING DIRECTORS. Directors shall be elected at the
regular annual meeting of the shareholders. If the election of directors is not
held on the day of the annual meeting, the directors shall cause the election to
be held as soon thereafter as conveniently may be. No failure to elect directors
or to hold the annual meeting at the designated time shall work any forfeiture
or dissolution of the Corporation.

     SECTION 5. NOTICE OF MEETINGS. Written notice stating the place, date, and
hour of the meeting, and in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
nor more than sixty days before the date of the meeting, or in the case of a
merger, consolidation, share exchange, dissolution or sale, lease or exchange of
assets, not less than twenty nor more than sixty days before the meeting, either
personally or by mail, by or at the direction of the President, or the
Secretary, or the officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such notices shall be deemed
to be delivered when deposited in the United States mail, addressed to the
shareholder at his address as it appears on the records of the Corporation, with
postage thereon prepaid. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and place thereof
are announced at the meeting at which the adjournment is taken. Any previously
scheduled meeting of shareholders may be postponed, and any special meeting of
the shareholders may be cancelled upon public notice given prior to the date
previously scheduled for such meeting of shareholders.

                                       5
<PAGE>

     SECTION 6. FIXING OF RECORD DATE. The Board of Directors may fix in advance
a date not less than ten days and not more than sixty days, or in the case of a
merger, consolidation, share exchange, dissolution or sale, lease or exchange of
assets, not less than twenty and not more than sixty days, prior to the date of
any annual meeting or special meeting as the record date for the determination
of shareholders entitled to notice of, or to vote at, such meeting (the "Meeting
Record Date"). In the case of any Demand Special Meeting, (i) the Meeting Record
Date shall be not later than the 30th day after the Delivery Date and (ii) if
the Board of Directors fails to fix the Meeting Record Date within 30 days after
the Delivery Date, then the close of business on such 30th day shall be the
Meeting Record Date. The Board of Directors may also fix in advance a date as
the record date for the purpose of determining shareholders entitled to take any
other action or determining shareholders for any other purpose. Such record date
shall be not more than sixty days prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken. Except in
the case of a Demand Special Meeting, if no record date is fixed, the record
date for the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders shall be the date on which notice of the meeting is
mailed, and the record date for the determination of shareholders for any other
purpose shall be the date on which the Board of Directors adopts the resolution
relating thereto. A determination of shareholders of record entitled to notice
of or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting. Nothing in this Section 6 shall in any way be construed to change the
procedure for setting the record date and for determining the effectiveness of
shareholder action by written consent as set forth in Section 7 of this Article
II.

     SECTION 7. WRITTEN CONSENTS.

     (a) In order that the Corporation may determine the shareholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date (a "Consent Record Date"). The Consent Record
Date shall not precede the date upon which the resolution fixing the Consent
Record Date is adopted by the Board of Directors and shall not be more than 10
days after the date upon which the resolution fixing the Consent Record Date is
adopted by the Board of Directors. Any shareholder of record seeking to consent
to corporate action in writing without a meeting shall, by sending written
notice to the Secretary of the Corporation by hand or by certified or registered
mail, return receipt requested, request the Board of Directors to fix a Consent
Record Date. The Board of Directors shall promptly, but in all events within 10
days after the date on which a valid request to fix a Consent Record Date is
received, adopt a resolution fixing the Consent Record Date and shall make a
public announcement of such Consent Record Date. If no Consent Record Date has
been fixed by the Board of Directors within 10 days after the date on which such

                                       6
<PAGE>

request is received by the Secretary, the Consent Record Date shall be the 10th
day after the first date on which a valid written request to set a Consent
Record Date is received by the Secretary. To be valid, such written request
shall set forth the purpose or purposes for which the written consent is sought
to be used, shall be signed by one or more shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of signature
of each such shareholder (or proxy or other representative) and shall set forth
all information about each such shareholder and about the beneficial owner or
owners, if any, on whose behalf the request is made that would be required to be
set forth in a shareholder's notice described in paragraph (a) of Section 16 of
Article II of these by-laws.

     (b) Every written consent shall be signed by one or more persons who as of
the Consent Record Date are shareholders of record on the Consent Record Date
(or their duly authorized proxies or other representatives), shall bear the date
of signature of each such shareholder (or proxy or other representative), and
shall set forth the name and address, as they appear in the Corporation's books,
of each shareholder signing such consent and the class and number of shares of
the Corporation which are owned of record and beneficially by each such
shareholder and shall be sent to the Secretary by hand or by certified or
registered mail, return receipt requested. No written consent shall be effective
to take the corporate action referred to therein unless, within 60 days of the
date the earliest dated written consent was received in accordance with this
paragraph (b) of this Section 7, a written consent or consents signed by a
sufficient number of holders to take such action are delivered to the
Corporation.

     (c) In the event of the delivery, in the manner provided by paragraph (b)
of this Section 7, to the Corporation of the requisite written consent or
consents to take corporate action and/or any related revocation or revocations,
the Corporation shall engage independent inspectors of elections for the purpose
of promptly performing a ministerial review of the validity of the consents and
revocations. For the purpose of permitting the inspectors to perform such
review, no action by written consent without a meeting shall be effective until
such date as the independent inspectors certify to the Corporation that the
consents represent at least the minimum number of votes that would be necessary
to take the corporate action. Nothing contained in this paragraph (c) of Section
7 shall in any way be construed to suggest or imply that the Board of Directors
or any shareholder shall not be entitled to contest the validity of any consent
or revocation thereof, whether before or after certification by the independent
inspectors, or to take any other action (including, without limitation, the
commencement, prosecution or defense of any litigation with respect thereto, and
the seeking of injunctive relief in such litigation).

                                       7
<PAGE>

     SECTION 8. VOTING LISTS. The officer or agent having charge of the transfer
books for shares of the Corporation shall make, at least ten days before each
meeting of shareholders, a complete list of the shareholders entitled to vote at
such meeting, arranged in alphabetical order, showing the address of and the
number of shares registered in the name of the shareholder, which list, for a
period of ten days prior to such meeting, shall be kept on file at the
registered office of the Corporation and shall be open to inspection by any
shareholder for any purpose germane to the meeting, at any time during usual
business hours. Such list shall also be produced and kept open at the time and
place of the meeting and may be inspected by any shareholder during the whole
time of the meeting. The original share ledger or transfer book, or a duplicate
thereof kept in this State, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book or
to vote at any meeting of shareholders.

     SECTION 9. QUORUM. The holders of a majority of the outstanding shares of
the Corporation, present in person or represented by proxy, shall constitute a
quorum at any meeting of shareholders; provided that if less than a majority of
the outstanding shares are represented at said meeting, a majority of the shares
so represented may adjourn the meeting at any time without further notice. If a
quorum is present, the affirmative vote of the majority of the shares
represented at the meeting shall be the act of the shareholders, unless the vote
of a greater number or voting by classes is required by The Business Corporation
Act, the articles of incorporation or these by-laws. The Chairman of the meeting
or the holders of record of a majority of the shares represented at the meeting
shall have the power to adjourn the meeting from time to time, without notice
other than an announcement at the meeting. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the original meeting. Withdrawal of shareholders from any meeting
shall not cause failure of a duly constituted quorum at that meeting.

     SECTION 10. VOTING BY BALLOT. Voting on any question or in any election may
be by voice unless the presiding officer shall order or any shareholder shall
demand that voting be by ballot.

     SECTION 11. PROXIES. Each shareholder shall have one vote for each share of
stock having voting power and entitled to vote, registered in his name on the
books of the Corporation, and at all meetings of the shareholders, shareholders
may vote either in person or by proxy executed in writing by the shareholders,
or by a duly authorized attorney. No proxy shall be valid after eleven months
from the date of its execution, except where the stock is pledged as security
for a debt to the person holding the proxy.

                                       8

<PAGE>

     SECTION 12. VOTING OF SHARES. Each outstanding share, regardless of class,
shall be entitled to one vote upon each matter submitted to vote at a meeting of
shareholders.

     SECTION 13. VOTING OF SHARES BY CERTAIN HOLDERS. Shares outstanding in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the by-laws of such corporation may prescribe, or, in the
absence of such provision, as the Board of Directors of such corporation may
determine.

Shares outstanding in the name of a deceased person, a minor ward, or an
incompetent person, may be voted by his administrator, executor, court appointed
guardian, or conservator or custodian under a Gift to Minors Act, either in
person or by proxy without a transfer of such shares into the name of such
administrator, executor, court appointed guardian, or conservator. Shares
outstanding in the name of a trustee may be voted by him, either in person or by
proxy.

Shares outstanding in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name if authority so to do be contained in
an appropriate order of the court by which such receiver was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

Any number of shareholders may create a voting trust for the purpose of
conferring upon a trustee or trustees the right to vote or otherwise represent
their share, for a period not to exceed ten years, by entering into a written
voting trust agreement specifying the terms and conditions of the voting trust,
and by transferring their shares to such trustee or trustees for the purpose of
the agreement. Any such trust agreement shall not become effective until a
counterpart of the agreement is deposited with the Corporation at its registered
office. The counterpart of the voting trust agreement so deposited with the
Corporation shall be subject to the same right of examination by a shareholder
of the Corporation, in person or by agent or attorney, as are the books and
records of the Corporation, and shall be subject to examination by any holder of
a beneficial interest in the voting trust, either in person or by agent or
attorney, at any reasonable time for any proper purpose.

Shares of its own stock belonging to this Corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any given time, but shares of its own
stock held by it in a fiduciary

                                       9
<PAGE>

capacity may be voted and shall be counted in determining the total number of
outstanding shares at any given time.

     SECTION 14. CUMULATIVE VOTING. In all elections for directors, every
shareholder shall have the right to vote, in person or by proxy, the number of
shares owned by him, for as many persons as there are directors to be elected,
or to cumulate said shares, and give one candidate as many votes as the number
of directors multiplied by the number of his shares shall equal, or to
distribute them on the same principle among as many candidates as he shall see
fit.

     SECTION 15. INSPECTORS. At any meeting of shareholders, the presiding
officer may, or upon the request of any shareholder shall appoint one or more
persons as inspectors for such meeting.

Such inspectors shall ascertain and report the number of shares represented at
the meeting, based upon their determination of the validity and effect of
proxies; count all votes and report the results; and do such other acts as are
proper to conduct the election and voting with impartiality and fairness to all
the shareholders.

Each report of an inspector shall be in writing and signed by him or by a
majority of them if there be more than one inspector acting at such meeting. If
there is more than one inspector, the report of a majority shall be the report
of the inspectors. The report of the inspector or inspectors on the number of
shares represented at the meeting and the results of the voting shall be prima
facie evidence thereof.

     SECTION 16. NOTICE OF SHAREHOLDER NOMINATIONS AND BUSINESS PROPOSALS. (a)
Shareholder Nominations. Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors of the
Corporation, except as may be otherwise provided in the Articles of
Incorporation of the Corporation. Nominations of persons for election to the
Board of Directors may be made at any annual meeting of shareholders (i) by or
at the direction of the Board of Directors (or any duly authorized committee
thereof) or (ii) by any shareholder of the Corporation (A) who is a shareholder
of record on the date of the giving of the notice provided for in this Section
16(a) and on the record date for the determination of shareholders entitled to
vote at such annual meeting and (B) who complies with the notice procedures set
forth in this Section 16(a).

In addition to any other applicable requirements, for a nomination to be made by
a shareholder, such shareholder must have given timely notice thereof in proper
written form to the Secretary of the Corporation.

                                       10
<PAGE>

To be timely, a shareholder's notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than ninety (90) days nor more than one hundred twenty (120) days in
advance of the anniversary date of the mailing of the Corporation's proxy
statement in connection with the previous year's annual meeting; provided,
however, that in the event that the date of the applicable annual meeting has
been changed by more than 30 days from the date contemplated at the time of the
previous year's proxy statement, notice by the shareholder in order to be timely
must be so received not later than the close of business on the tenth (10th) day
following the day on which notice of the date of the annual meeting was mailed
or public announcement of the date of the annual meeting was made, whichever
first occurs. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a shareholder's
notice as described above.

To be in proper written form, a shareholder's notice to the Secretary must set
forth (i) as to each person whom the shareholder proposes to nominate for
election as a director (A) the name, age, business address and residence address
of the person, (B) the principal occupation or employment of the person, (C) the
class or series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by the person and (D) any other information
relating to the person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations
of proxies for election of directors pursuant to Section 14 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder; and (ii) as to the shareholder giving the
notice (A) the name and record address of such shareholder, (B) the class or
series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such shareholder, (C) a description of all
arrangements or understandings between such shareholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such shareholder, (D) a representation
that such shareholder intends to appear in person or by proxy at the meeting to
nominate the persons named in its notice and (E) any other information relating
to such shareholder that would be required to be disclosed in a proxy statement
or other filings required to be made in connection with solicitations of proxies
for election of directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder. Such notice must be accompanied by
a written consent of each proposed nominee to being named as a nominee and to
serve as a director if elected.

No person shall be eligible for election as a director of the Corporation unless
nominated in accordance with the procedures set forth in this Section 16(a). If
the Chairman of the meeting

                                       11
<PAGE>

determines that a nomination was not made in accordance with the foregoing
procedures, the Chairman shall declare to the meeting that the nomination was
defective and such defective nomination shall be disregarded.

Notwithstanding anything in the third paragraph of this Section 16(a) to the
contrary, in the event that the number of directors to be elected to the Board
of Directors of the Corporation is increased and there is no public announcement
by the Corporation naming all of the nominees for director or specifying the
size of the increased board of directors at least one hundred (100) days prior
to the first anniversary of the preceding year's annual meeting, a shareholder's
notice required by this Section 16(a) shall also be considered timely, but only
with respect to nominees for any new positions created by such increase, if it
shall be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the tenth (10th) day
following the day on which such public announcement is first made by the
Corporation.

     (b) Shareholder Business Proposals. No business may be transacted at an
annual meeting of shareholders, other than business that is either (i) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors (or any duly authorized committee thereof),
(ii) otherwise properly brought before the annual meeting by or at the direction
of the Board of Directors (or any duly authorized committee thereof) or (iii)
otherwise properly brought before the annual meeting by any shareholder of the
Corporation (A) who is a shareholder of record on the date of the giving of the
notice provided for in this Section 16(b) and on the record date for the
determination of shareholders entitled to vote at such annual meeting and (B)
who complies with the notice procedures set forth in this Section 16(b).

In addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a shareholder, such shareholder must have
given timely notice thereof in proper written form to the Secretary of the
Corporation.

To be timely, a shareholder's notice to the Secretary must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than ninety (90) days nor more than one hundred twenty (120) days in
advance of the anniversary date of the mailing of the Corporation's proxy
statement in connection with the previous year's annual meeting; provided,
however, that in the event that the date of the applicable annual meeting has
been changed by more than 30 days from the date contemplated at the time of the
previous year's proxy statement, notice by the shareholder in order to be timely
must be so received not later than the close of business on the tenth (10th) day
following the day on which notice of the date of the annual meeting was mailed
or public announcement of the date of the annual meeting

                                       12
<PAGE>

was made, whichever first occurs. In no event shall the public announcement of
an adjournment of an annual meeting commence a new time period for the giving of
a shareholder's notice as described above.

To be in proper written form, a shareholder's notice to the Secretary must set
forth as to each matter such shareholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of such shareholder, (iii) the class
or series and number of shares of capital stock of the Corporation which are
owned beneficially or of record by such shareholder, (iv) a description of all
arrangements or understandings between such shareholder and any other person or
persons (including their names) in connection with the proposal of such business
by such shareholder and any material interest of such shareholder in such
business and (v) a representation that such shareholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.

No business shall be conducted at the annual meeting of shareholders except
business brought before the annual meeting in accordance with the procedures set
forth in this Section 16(b); provided, however, that, once business has been
properly brought before the annual meeting in accordance with such procedures,
nothing in this Section 16(b) shall be deemed to preclude discussion by any
shareholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.

     (c) For purposes of this Section 16, "public announcement" shall mean an
announcement in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.


                                   ARTICLE III
                               BOARD OF DIRECTORS

     SECTION 1. GENERAL POWERS. The business of the Corporation shall be managed
by its Board of Directors.

     SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of
the Corporation shall be seven(7), provided however, that effective as of the
Company's 2004 Annual Meeting of Shareholders, the number of directors shall be
increased to nine (9). Each director shall hold office until the next annual
meeting

                                       13
<PAGE>

of shareholders or until his successor shall have been elected and qualified.
Directors need not be residents of Illinois or shareholders of the Corporation.
The number of directors may be increased or decreased from time to time by the
amendment of this section; but no decreases shall have the effect of shortening
the term of any incumbent director.

     SECTION 3. REGULAR MEETINGS. Immediately after the adjournment of the
annual meeting of the shareholders of the Corporation, the newly elected
directors shall meet for the purpose of organization, the election of officers
and the transaction of such other business as may properly come before the
meeting. Other regular meetings shall be held at such time as shall from time to
time be determined by the Board.

     SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
shall be held whenever called by the President or by a majority of the
directors.

     SECTION 5. NOTICE. Notice of any special meeting shall be given, at least
24 hours previous thereto to each director personally by telegraph, telephone,
facsimile transmission or by written notice duly served on each director, or
sent or mailed to each director at his business address. If notice of any
special meeting is to be given less than five days prior to such meeting, notice
shall be by means of telegraph, telephone, facsimile transmission or overnight
courier. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegram company. The attendance of a director at
any meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.

     SECTION 6. PLACE OF MEETINGS. Regular and Special Meetings of the Board of
Directors shall be held at the Registered Office of the Corporation, or any such
other place, either within or without the State of Illinois, as may from time to
time be determined by the Board of Directors.

     SECTION 7. QUORUM OF DIRECTORS - MANNER OF ACTING. A majority of the number
of directors fixed by the by-laws, or in the absence of a by-law fixing the
number of directors, then of the number stated in the articles of incorporation,
shall constitute a quorum for the transaction of business unless the greater
number is required by the articles of incorporation or the by-laws. The act of
the majority of the directors present at a meeting at which a quorum

                                       14
<PAGE>

is present shall be the act of the Board of Directors, unless the act of a
greater number is required by statute, these by-laws, or the articles or
incorporation.

     SECTION 8. VACANCIES. Any vacancy occurring in the Board of Directors and
any directorship to be filled by reason of an increase in the number of
directors, may be filled by election at an annual meeting or at a special
meeting of shareholders called for that purpose. A director elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office.

     SECTION 9. ACTION WITHOUT A MEETING. Unless specifically prohibited by the
articles of incorporation or by-laws, any action required to be taken at a
meeting of the Board of Directors, or any other action which may be taken at a
meeting of the Board of Directors, or of any committee thereof may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all the directors entitled to vote with respect to the
subject matter thereof, or by all the members of such committee, as the case may
be. Any such consent signed by all the directors or all the members of the
committee shall have the same effect as a unanimous vote, and may be stated as
such in any document filed with the Secretary of State or with anyone else.

     SECTION 10. PRESUMPTION OF ASSENT. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be conclusively presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the secretary of the Corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.

     SECTION 11. EXECUTIVE COMMITTEE. The Board of Directors, by resolution
adopted by a majority of the number of directors fixed by the by-laws or
otherwise, may appoint an executive committee, which committee, to the extent
provided in such resolution, shall have and exercise all of the authority of the
Board of Directors in the management of the Corporation, except as otherwise
required by law. Vacancies in the membership of the committee shall be filled by
the Board of Directors at a regular or special meeting of the Board of
Directors. The executive committee shall keep regular minutes of its proceedings
and report the same to the board when required.

     SECTION 12. COMMITTEES. The Board of Directors may from its membership
appoint other committees as it may from time to time by resolution determine and
fix the number of members thereof, and the board may delegate to such committees
such of the powers

                                       15
<PAGE>

vested in it as it may by the resolution of appointment determine. Such
committees so appointed shall observe such rules and regulations for their
conduct and keep such records as the board may from time to time by resolution
determine.

     SECTION 13. COMPENSATION. The Board of Directors, by the affirmative vote
of a majority of the acting and qualified directors, and notwithstanding any
personal interest of any director, shall have authority to establish reasonable
compensation of all directors for services to the Corporation as directors,
officers or otherwise. By resolution of the Board of Directors, the directors
may be paid their expenses of attending each meeting of the board.

     SECTION 14. INDEMNIFICATION. (a) Generally. Each person who was or is made
a party or is threatened to be made a party to or is involved in or called as a
witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and any appeal therefrom (hereinafter,
collectively a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is, was or had agreed to become a
director of the Corporation or is, was or had agreed to become an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, shall be indemnified and held harmless by the
Corporation to the fullest extent permitted under the Illinois Business
Corporation Act of 1983 (the "IBCA"), as the same now exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
the IBCA permitted the Corporation to provide prior to such amendment), against
all expenses, liabilities and losses (including attorneys' fees, judgments,
fines, excise taxes or penalties pursuant to the Employee Retirement Income
Security Act of 1974, as amended, and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith; provided
that, except as explicitly provided herein, prior to a Change in Control of the
Corporation, as defined herein, a person seeking indemnity in connection with a
proceeding (or part thereof) initiated by such person against the Corporation or
any director, officer, employee or agent of the Corporation shall not be
entitled thereto unless the Corporation has joined in or consented to such
proceeding (or part thereof). For purposes of this Section 14, a "Change in
Control of the Corporation" shall be deemed to have occurred if the conditions
set forth in any one of the following clauses shall have been satisfied: (i) any
"person" (as such term is used in Section 13(d) and 14(d) of the Exchange Act)
other than (A) the Corporation, (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(D) a corporation

                                       16
<PAGE>


owned, directly or indirectly, by the shareholders of the Corporation in
substantially the same proportions as their ownership of shares of the
Corporation (any such person is hereinafter referred to as a "Person"), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing more
than 50% of the combined voting power of the Corporation's then outstanding
securities (not including in the securities beneficially owned by such Person
any securities acquired directly from the Corporation); (ii) there is
consummated a merger or consolidation of the Corporation with or into any other
corporation, other than a merger or consolidation which would result in the
holders of the voting securities of the Corporation outstanding immediately
prior thereto holding securities which represent, in combination with the
ownership of any trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation, immediately after such merger or consolidation,
more than 70% of the combined voting power of the voting securities of either
the Corporation or the other entity which survives such merger or consolidation
or the parent of the entity which survives such merger or consolidation; (iii)
the shareholders of the Corporation approve any plan or proposal for the
liquidation or dissolution of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all the Corporation's
assets; or (iv) during any period of two consecutive years (not including any
period prior to January 1, 1997), individuals who at the beginning of such
period constitute the Board of Directors and any new director (other than a
director designated by a Person who has entered into an agreement with the
Corporation to effect a transaction described in clause (i), (ii) or (iii) of
this paragraph) whose election by the board or nomination for election by the
Corporation's shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof. For purposes of
this Section 14, where a Change in Control of the Corporation results from a
series of related transactions, the Change in Control of the Corporation shall
be deemed to have occurred on the date of the consummation of the first such
transaction. For purposes of clause (i) of this paragraph, the shareholders of
another corporation (other than this Corporation or a corporation described in
clause (i)(D) of this paragraph), in the aggregate, shall be deemed to
constitute a Person.

Prior to a Change in Control of the Corporation, any indemnification under this
Section 14(a) (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in the IBCA. Such
determination shall be made (i) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not

                                       17
<PAGE>

parties to such action, suit or proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel (who may be the regular counsel of the
Corporation) in a written opinion or (iii) by the shareholders.

Following a Change in Control of the Corporation, any indemnification under this
Section 14(a) (unless ordered by a court) shall be paid by the Corporation
unless within 60 days of such request for indemnification a determination is
made, in a written opinion, by special independent counsel selected by the
person requesting indemnification and approved by the Corporation (which
approval shall not be unreasonably withheld), which counsel has not otherwise
performed services (other than in connection with similar matters) within the
five years preceding its engagement to render such opinion for such person or
for the Corporation or any affiliates (as such term is defined in Rule 405 under
the Securities Act of 1933, as amended) of the Corporation (whether or not they
were affiliates when services were so performed) ("Independent Counsel"), that
indemnification of such person is not proper under the circumstances because
such person has not met the necessary standard of conduct under the IBCA. Unless
such person has theretofore selected Independent Counsel pursuant to this
Section 14(a) and such Independent Counsel has been approved by the Corporation,
legal counsel approved by a resolution or resolutions of the Board of Directors
prior to a Change in Control of the Corporation shall be deemed to have been
approved by the Corporation as required. Such Independent Counsel shall
determine as promptly as practicable whether and to what extent such person
would be permitted to be indemnified under applicable law and shall render its
written opinion to the Corporation and such person to such effect. The
Corporation agrees to pay the reasonable fees of the Independent Counsel
referred to above and to fully indemnify such Independent Counsel against any
and all expenses, claims, liabilities and damages arising out of or relating to
this Section 14 or its engagement pursuant hereto. In making a determination
under this Section 14(a), the Independent Counsel referred to above shall
determine that indemnification is permissible unless clearly precluded by this
Section 14 or the applicable provisions of the IBCA.

     (b) Payment of Expenses in Advance. Expenses, including attorneys' fees,
incurred by a person referred to in Subsection (a) of this Section 14 in
defending a proceeding shall be paid by the Corporation in advance of the final
disposition of such proceeding, including any appeal therefrom, upon receipt of
an undertaking (the "Undertaking") by or on behalf of such person to repay such
amount if it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation.

     (c) Right of Claimant to Bring Suit. If a claim under Subsection (a) of
this Section 14 is not paid in full by

                                       18
<PAGE>

the Corporation within 60 days after a written claim has been received by the
Corporation or if expenses pursuant to Subsection (b) of this Section 14 hereof
have not been advanced within 10 days after a written request for such
advancement, accompanied by the Undertaking, has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim or the advancement of
expenses. (If the claimant is successful, in whole or in part, in such suit or
any other suit to enforce a right for expenses or indemnification against the
Corporation or any other party under any other agreement, such claimant shall
also be entitled to be paid the reasonable expense of prosecuting such claim.)
It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required Undertaking has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the IBCA for the Corporation to indemnify the claimant for
the amount claimed. After a Change in Control of the Corporation, the burden of
proving such defense shall be on the Corporation, and any determination by the
Corporation (including its Board of Directors, independent legal counsel or its
shareholders) that the claimant had not met the applicable standard of conduct
required under the IBCA shall not be a defense to the action nor create a
presumption that claimant had not met such applicable standard of conduct.

     (d) Indemnity Not Exclusive. The indemnification and advancement of
expenses provided by, or granted pursuant to, the other Subsections of this
Section 14 shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
statute, by-law, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office. The Board of Directors shall have
the authority, by resolution, to provide for such other indemnification of
directors, officers, employees or agents as it shall deem appropriate.

     (e) Insurance. The Corporation shall have power to purchase and maintain
insurance to protect itself and any director, officer, employee or agent of this
Corporation or another Corporation, partnership, joint venture, trust or other
enterprise, against any expenses, liabilities or losses, whether or not the
Corporation would have the power to indemnify such person against such expenses,
liabilities or losses under the provisions of this Section 14 or the IBCA.

     (f) Continuation of Indemnification; Enforceability. The provisions of this
Section 14 shall be applicable to all proceedings commenced after its adoption,
whether such proceedings arise out of events, acts, omissions or circumstances
which occurred or existed prior or subsequent to such

                                       19
<PAGE>

adoption, and shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such person. This Section 14 shall be deemed to grant each person who, at any
time that this Section 14 is in effect, serves or agrees to serve in any
capacity which entitles him to indemnification hereunder rights against the
Corporation to enforce the provisions of this Section 14, and any repeal or
other modification of this Section 14 or any repeal or modification of the IBCA
or any other applicable law shall not limit any rights of indemnification then
existing or arising out of events, acts, omissions or circumstances occurring or
existing prior to such repeal or modification, including, without limitation,
the right to indemnification for proceedings commenced after such repeal or
modification to enforce this Section 14 with regard to acts, omissions, events
or circumstances occurring or existing prior to such repeal or modification.

     (g) Severability. If this Section 14 or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director and officer of the
Corporation as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any proceeding,
whether civil, criminal, administrative or investigative, including an action by
or in the right of the Corporation, to the full extent permitted by any
applicable portion of this Section 14 that shall not have been invalidated and
to the full extent permitted by applicable law.


                                   ARTICLE IV
                        OFFICERS AND DEFINITION OF DUTIES

     SECTION 1. OFFICERS - REMOVAL. The officers of this Corporation shall
consist of a Chairman of the Board, a President, one or more Vice-Presidents, a
Secretary and a Treasurer, and such other officers, including one or more
Assistant Secretaries and one or more Assistant Treasurers, as the Board of
Directors may from time to time determine. In addition, the Board of Directors
may from time to time elect a Vice Chairman and an Executive Vice President if
it so determines. Such officers, when elected, shall hold office for the period
of one year and thereafter until their respective successors shall have been
duly elected, and shall have qualified; provided, however, that all officers,
agents and employees of the Corporation shall be subject to removal at any time
by the affirmative vote by a majority of the Board. Any one person may hold two
offices at the same time, except that the same person shall not hold at the same
time the office of Chairman of the Board and Secretary, President and Vice
President, President and Secretary, Treasurer and Assistant Treasurer, or
Secretary and Assistant Secretary.

                                       20
<PAGE>

     SECTION 2. VACANCIES. If any vacancy shall occur among the officers of the
Corporation, by resignation or otherwise, such vacancy may be filled by the
Board of Directors.

     SECTION 3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall supervise
and control the officers, policies and programs of the Corporation. The Chairman
shall preside at all meetings of the Board of Directors and shareholders. The
Chairman shall initiate acquisition, merger and investment banking activities.
The Chairman, from time to time, may delegate powers and duties to the
Vice-Chairman, President and other officers. The Chairman shall possess the
power to sign all certificates, contracts and other instruments of the
Corporation as authorized by the Board of Directors. In the event of the
absence, inability to act or disability of the President, the Chairman shall
exercise all powers and discharge all duties of the President. The Chairman
shall possess such other duties and powers as may be prescribed from time to
time by the Board of Directors and the by-laws.

     SECTION 4. VICE-CHAIRMAN OF THE BOARD. The Vice Chairman of the Board, if
elected, and in the event of the absence, inability to act or disability of the
Chairman, shall carry out the responsibilities of the Chairman. The Vice-
Chairman when so acting shall exercise the powers and discharge the duties of
the Chairman, including presiding at meetings of shareholders and the Board of
Directors. The Vice-Chairman shall possess such other duties and powers as may
be prescribed from time to time by the Board of Directors, Chairman and by-laws.
In the event of the absence, inability to act or disability of the Chairman and
Vice-Chairman, the Board of Directors shall elect an acting Chairman.

     SECTION 5. PRESIDENT. The President shall be the chief operating officer of
the Corporation. The President shall conduct the daily business and affairs of
the Corporation as so authorized by the by-laws. The President may delegate
powers and duties to the Vice-Presidents or other officers. The President shall
have the power to sign all certificates, contracts, and other instruments of the
Corporation as authorized by the Board of Directors. The President shall perform
such other duties as may be prescribed from time to time by the Board of
Directors, Chairman and by-laws. In the event of the absence, inability to act
or disability of the Chairman, Vice-Chairman and acting Chairman, the President
shall preside at meetings of shareholders and the Board of Directors.

     SECTION 6. THE EXECUTIVE VICE PRESIDENT. In the absence of, or in the case
of the inability of the Chairman of the Board or the Vice Chairman (in the
absence of the Chairman), and the President to act, the Executive Vice
President, if one be elected by the Board, shall perform all duties and have the
powers of the President. The Executive Vice President shall, in addition,
perform

                                       21
<PAGE>

such other duties and have such other powers as the Board of Directors
may, from time to time, by resolution determine.

     SECTION 7. OTHER VICE PRESIDENTS. Other Vice Presidents, including one or
more Senior Vice Presidents, if such officers shall have been elected, shall
perform such duties and have such duties and powers as the Board of Directors
may from time to time by resolution determine, or, in the absence of such
determination, as the President, with the consent of the Chairman or Vice
Chairman, shall determine.

     SECTION 8. THE TREASURER. The Treasurer shall be the principal accounting
and financial officer of the Corporation. He shall: (a) have charge of and be
responsible for the maintenance of adequate books of account for the
Corporation; (b) have charge and custody of all funds and securities of the
Corporation; and be responsible therefor and for the receipt and disbursement
thereof; and (c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the President
or by the Board of Directors. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the Board of Directors may determine.

     SECTION 9. THE SECRETARY. The Secretary shall: (a) record the minutes of
the shareholders' and of the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law; (c) be custodian of
the corporate records and of the seal of the Corporation; (d) keep a register of
the post-office address of each shareholder which shall be furnished to the
secretary by such shareholder; (e) sign with the President, or a Vice President,
or any other officer thereunto authorized by the Board of Directors,
certificates for shares of the Corporation, the issue of which shall have been
authorized by the Board of Directors, and any contracts, deeds, mortgages,
bonds, or other instruments which the Board of Directors has authorized to be
executed, according to the requirement of the form of the instrument, except
when a different mode of execution is expressly prescribed by the Board of
Directors or these by-laws; (f) have general charge of the stock transfer books
of the Corporation and (g) perform all duties incident to the office of
secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.

     SECTION 10. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The Assistant
Treasurers and Assistant Secretaries shall perform such duties as shall be
assigned to them by the Treasurer or the Secretary, respectively, or by the
President or the Board of Directors. The Assistant Secretaries may sign with the
President, or a Vice President, or any other officer thereunto authorized by the
Board of Directors, certificates for shares of the

                                       22
<PAGE>

Corporation, the issue of which shall have been authorized by the Board of
Directors, and any contracts, deeds, mortgages, bonds or other instruments which
the Board of Directors has authorized to be executed, according to the
requirements of the form of the instrument, except when a different mode of
execution is expressly prescribed by the Board of Directors or these by-laws.
The assistant treasurers shall respectively, if required by the Board of
Directors, give bonds for the faithful discharge of their duties in such sums
and with sureties as the Board of Directors shall determine.

     SECTION 11. SALARIES. The salaries of the officers shall be fixed from time
to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
Corporation.


                                    ARTICLE V
                   SHARES OF CAPITAL STOCK AND THEIR TRANSFER

     SECTION 1. STOCK ISSUE. Whenever stock, not previously reported to the
Secretary of State as issued, has been issued within the authorized limit fixed
by the statement of incorporation of a certificate of increase in capital stock,
a statement subscribed and sworn to by the President or any Vice President, and
attested by the Secretary or by an Assistant Secretary shall be filed in the
office of the Secretary of State within ninety days after the issuance of such
additional stock pursuant to authorization thereof by the Board of Directors in
the form prescribed by the General Corporation Act of the State of Illinois.
Promissory notes shall not be accepted for payment or part payment of stock
issued by this Corporation.

     SECTION 2. CERTIFICATES. Each shareholder shall be entitled to a
certificate of stock, executed by the President or Vice President and the
Secretary or Assistant Secretary, and under the corporate seal, certifying the
number of shares owned by him in such Corporation. When such certificate is
countersigned by a transfer agent other than the Corporation itself, or an
employee of the Corporation, or by a transfer clerk and registered by a
registrar, the signatures of the President or Vice President and the Secretary
or Assistant Secretary upon such certificates may be facsimiles, engraved or
printed.

     SECTION 3. TRANSFERS. Transfers of shares of capital stock shall be made
only upon the books of the Corporation by the holder in person or by power of
attorney, duly executed, and filed with the Secretary, and on surrender of any
certificate or certificates for such shares (or in the case of uncertificated
shares, upon submission of proper instructions for transfer and other required
documentation).

                                       23
<PAGE>

     SECTION 4. ADDRESSES. Every shareholder shall furnish the Secretary with
his address, at which notice of meetings and all other notices may be served
upon, or mailed to him. In default thereof, notices may be addressed to him at
the principal office of the Corporation.

     SECTION 5. LOST CERTIFICATES. The Chairman or President, as officers of the
Company, acting singly, may direct new certificates of stock to be issued in the
place of certificates theretofore issued, alleged to have been lost or
destroyed, and may, in their discretion, require the owner of such certificate
or certificates, or his legal representative, to give the Corporation a bond in
such sum as they may direct, as indemnity against any claim that may be made
against the Corporation. Said officers may issue instructions to the Transfer
Agents and Registrars of the capital stock of the Company, may enter into such
agreements and may sign such documents as may be necessary to effectuate the
issuance of said certificates. Said officers, however, may refuse to issue or
direct the issuance of any new certificates except upon institution of legal
proceedings as required by statute, in such case made and provided.


                                   ARTICLE VI
                                    DIVIDENDS

     SECTION 1. DECLARATION. Dividends may be declared by the Board of Directors
from time to time out of the surplus or net profits of the Corporation, and
shall be payable at such times as the Board of Directors may determine.

     SECTION 2. RESERVES. Before payment of any dividend or making any
distribution of profits, there may be set aside out of the surplus or net
profits of the Corporation such sum or sums as the Directors from time to time,
in their absolute discretion, think proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purposes as the Directors shall
think conducive to the interests of the Corporation.


                                   ARTICLE VII
                                      SEAL

The corporate seal is and until otherwise ordered by the Board of Directors,
shall be, an impression bearing the corporate name and the words "corporate
seal" and "Illinois."

                                       24

<PAGE>

                                  ARTICLE VIII
                                   FISCAL YEAR

The fiscal year of the Corporation shall begin on the first day of January and
end on the 31st day of December of each year.


                                   ARTICLE IX
                               INSPECTION OF BOOKS

The books kept for transferring stock and the names and addresses of the
shareholders, during the usual business hours shall be open to examination for
all proper purposes by every shareholder, at its principal office or place of
business in the State of Illinois. Each shareholder of the Corporation shall
have the right, at all reasonable times, by himself or by his attorney, to
examine the records and books of account.


                                    ARTICLE X
                                WAIVER OF NOTICE

Whenever any action is to be taken after notice either to the shareholders or
directors, or after the lapse of a prescribed period of time, such action may be
taken without notice and without the lapse of such prescribed period of time, if
such action be taken while all persons interested are present, and consenting
thereto or be authorized or approved or such requirement be waived in writing by
each person interested and entitled to notice, or by his attorney thereto
authorized.


                                   ARTICLE XI
                                   AMENDMENTS

These by-laws may be altered, amended or repealed by the affirmative vote of a
majority of the Board of Directors at any regular or special meeting of the
Board.

                                       25

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>3
<FILENAME>c24737exv13.txt
<DESCRIPTION>ANNUAL REPORT TO SHAREHOLDERS
<TEXT>
<PAGE>
                                                                               .
                                                                               .
                                                                               .

(CHICAGO RIVET LOGO)

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

HIGHLIGHTS




<TABLE>

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

                                                             2007          2006
- ----------------------------------------------------------------------------------
<S>                                                      <C>           <C>

NET SALES AND LEASE REVENUE............................  $37,776,264   $40,369,977

NET INCOME.............................................    1,267,072     1,120,627

NET INCOME PER SHARE...................................         1.31          1.16

DIVIDENDS PER SHARE....................................          .72           .72

NET CASH PROVIDED BY OPERATING ACTIVITIES..............    2,835,633     2,036,841

EXPENDITURES FOR PROPERTY, PLANT AND EQUIPMENT.........      424,509     1,451,756

WORKING CAPITAL........................................   16,452,963    15,242,183

TOTAL SHAREHOLDERS' EQUITY.............................   24,574,625    24,003,168

COMMON SHARES OUTSTANDING AT YEAR-END..................      966,132       966,132

SHAREHOLDERS' EQUITY PER COMMON SHARE..................        25.44         24.84

</TABLE>



ANNUAL MEETING
The annual meeting of shareholders
will be held on May 13, 2008 at 10:00 a.m. at
901 Frontenac Road
Naperville, Illinois


Chicago Rivet & Machine Co.  - 901 Frontenac Road  - P.O. Box 3061 - Naperville,
Illinois 60566                       -                      www.chicagorivet.com



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

<PAGE>

MANAGEMENT'S REPORT
ON FINANCIAL CONDITION AND RESULTS OF OPERATIONS              CHICAGO RIVET LOGO

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

TO OUR SHAREHOLDERS:

RESULTS OF OPERATIONS

     Net income in 2007 was $1.31 per share compared with $1.16 per share in
2006. Although net revenues declined 6.4 percent, from $40,369,977 in 2006 to
$37,776,264 in 2007, lower operating expenses and the absence of significant
plant closing expenses in 2007 helped achieve improved bottom line results.

2007 COMPARED TO 2006

     The decline in revenues in 2007 affected both the fastener and assembly
equipment segments. Fastener segment revenues amounted to $33,083,907 during the
year, compared to $34,421,398 in 2006. Throughout the year we experienced
reduced overall demand from our automotive customers as domestic automobile
manufacturers, who are the end users for a large portion of our automotive
customer base, reduced production in response to import brand market share gains
while also attempting to reduce their reliance on less profitable fleet sales.
Increases in sales to certain non-automotive customers during 2007 allowed us to
limit the net fastener segment sales decline to 3.9 percent. The impact of lower
net sales was offset by reductions in certain operating expenses. Tooling
expenses for the year were $163,000 lower than in 2006 due to higher than normal
tooling associated with new parts incurred in 2006. Due to a change in product
mix, as well as investments in equipment during the last year that have expanded
our capabilities, certain machining and parts sorting procedures that were
formerly outsourced are now being performed internally, contributing to a
$571,000 reduction in these outside production costs compared to last year. We
also benefited from the reduction in certain fixed overhead items as fastener
segment depreciation declined $510,323, due to certain equipment becoming fully
depreciated in 2006, and expediting and rejection expenses declined $55,000. The
most notable increase incurred during 2007 related to higher prices for non-
ferrous metals used in some of the parts we manufacture. The transfer of
production activities from Jefferson, Iowa to Tyrone, Pennsylvania that began in
the third quarter of 2006 resulted in expense reductions due to the elimination
of certain costs in the current year. The net decline in operating expenses
during 2007 effectively offset the revenue decline, resulting in an improvement
in the fastener segment gross margin to $5,788,153 compared with $5,583,254
reported in 2006.

     Assembly equipment segment revenues were $4,692,357 in 2007, a decline of
$1,256,222, or 21.1 percent, compared to the $5,948,579 recorded in 2006. Demand
for our products in this segment continues to be weak, and we have taken steps
to reduce and control expenses wherever possible, including reductions in both
staffing levels and work schedules. The cumulative effect of these actions did
not fully offset the effects of reduced volume and, as a result, the assembly
equipment gross margin declined to $1,572,312 from $2,257,258 last year.

     Selling and administrative expenses for 2007 were $5,816,802, a decline of
$216,897, or 3.6 percent, compared with 2006. Salaries and related benefits
account for approximately $94,000 of the net decline due to reduced headcount.
Legal fees declined $47,000, primarily due to services in 2006 related to the
Jefferson plant closing. Profit sharing expense declined $24,000 as a result of
lower profits in the current year, after taking the plant closing expenses into
consideration, and sales commissions declined $25,000 due to the lower sales
level in 2007. The balance of the net reduction is made up of a variety of
smaller expense items.

     In May of 2006, the closing of our Jefferson, Iowa fastener operation and
transfer of production activities to our facility in Tyrone, Pennsylvania, was
announced. The move was made to better utilize available manufacturing capacity.
During the fourth quarter of 2006, manufacturing activities in Jefferson
concluded. Total charges of $422,934 were recorded in 2006 related to the plant
closing. During 2007, additional charges of $20,337 were recorded.

DIVIDENDS

     In determining to pay dividends, the Board considers current profitability,
the outlook for longer-term profitability, known and potential cash requirements
and the overall financial condition of the Company. The Company paid four
regular quarterly dividends of $.18 per share during 2007, for a total dividend
distribution of $.72 per share for the year. On February 18, 2008, your Board of
Directors declared a regular quarterly dividend of $.18 per share, payable March
20, 2008 to shareholders of record on March 5, 2008. This continues the
uninterrupted record of consecutive quarterly dividends paid by the Company to
its shareholders that extends over 74 years. At that same meeting, the Board
also declared an extra dividend of $.15 per share to be paid April 18, 2008 to
shareholders of record on April 4, 2008.

PROPERTY, PLANT AND EQUIPMENT

     Total capital expenditures in 2007 were $424,509. Of the total, $390,258
was invested in fastener segment additions, including $123,000 for cold-heading
equipment upgrades, $93,000 for secondary equipment, $61,000 for inspection and
other equipment, and $113,000 for certain buildings and grounds improvements.
Assembly equipment segment additions totaled $34,251, with approximately $25,000
expended for building heating units and the balance for a riveting machine used
for lease purposes.



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

                                                                               1

<PAGE>

MANAGEMENT'S REPORT
(Continued)

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


     Capital expenditures during 2006 totaled $1,451,756, of which $1,374,009
was invested in equipment for our fastener operations. Approximately $680,000
was spent on cold-heading equipment to expand our capabilities to make larger
parts and approximately $233,000 was spent on equipment for performing secondary
operations, such as grinding and shaving of parts. Additionally, approximately
$346,000 was spent on inspection equipment. The remaining additions were for
computer hardware and other equipment not specifically assigned to a single
segment.

     Depreciation expense amounted to $1,136,806 in 2007 and $1,659,834 in 2006.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital increased approximately $1.2 million between
December 31, 2006 and December 31, 2007. The Company's holdings in cash, cash
equivalents and certificates of deposit amounted to approximately $7.5 million
at the end of 2007, an increase of $1.8 million compared with the prior year-
end. The increase was mainly due to a $900,000 reduction in capital outlays
during 2007 compared to 2006 and a $300,000 reduction in income tax payments.
Inventories were reduced by nearly $.5 million in 2007, as stock on hand was
adjusted due to reduced demand. Accounts receivable decreased $.6 million
compared with the prior year-end, primarily due to the lower level of sales
during the year. Accrued expenses declined $.2 million compared to the prior
year, primarily due to the payment of accrued plant closing expenses. The
Company's investing activities in 2007 primarily consisted of capital
expenditures of $.4 million and the net investment in certificates of deposit of
$1.5 million. The only financing activity during 2007 was the payment of $.7
million in dividends. The Company has a $1.0 million line of credit, which
expires May 31, 2008. This line of credit remains unused.

OFF-BALANCE SHEET ARRANGEMENTS

     The Company has not entered into, and has no current plans to enter into,
any off-balance sheet financing arrangements.

     Management believes that current cash, cash equivalents, operating cash
flow and available line of credit will be sufficient to provide adequate working
capital for the foreseeable future.


APPLICATION OF CRITICAL ACCOUNTING
POLICIES

     The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the amounts of revenue and expenses during the reporting period.
A summary of critical accounting policies can be found in Note 1 of the
financial statements.

NEW ACCOUNTING STANDARDS

     The Company's financial statements and financial condition were not, and
are not expected to be, materially impacted by new, or proposed, accounting
standards. A summary of new accounting pronouncements can be found in Note 1 of
the financial statements.

PERSONNEL

     On February 18, 2008, Nirendu Dhar, General Manager of H & L Tool Company,
Inc. and member of the Company's Board of Directors, notified the Company of his
intention to retire. Mr. Dhar's retirement from his position as General Manager
of H & L Tool will be effective April 30, 2009. In connection with his decision
to retire, Mr. Dhar also resigned from the Board effective as of the 2008 Annual
Meeting of Shareholders of the Company.

OUTLOOK FOR 2008

     We began 2007 on a cautious note as demand from our automotive customers
was expected to be restrained, due to production cuts that began in the second
half of 2006, and was not expected to rebound significantly. This caution was
well founded as 2007 saw further reductions in domestic automobile production.
As we begin 2008, end-users of our products are planning additional production
cuts for the first half of the year due to ongoing restructuring and the general
economic outlook which currently provides for little growth. While we did
achieve greater sales to customers in certain non-automotive markets, which
partially offset our automotive declines, our concentration in the automotive
market resulted in the net decline in fastener segment sales discussed above.



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

2

<PAGE>

MANAGEMENT'S REPORT
(Continued)                                                   CHICAGO RIVET LOGO

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


     The assembly equipment segment, which recorded a modest increase in sales
in 2006 on lower unit volume, recorded lower sales in 2007 on a further drop in
volume. The economic data currently available provides no reason to expect any
significant improvement in this segment in the near-term. We will continue to
concentrate on cost controls while pursuing profitable opportunities in this
segment.

     The outlook for 2008 is more challenging than a year ago. With the
possibility of a recession that would likely affect all the markets we serve, we
expect customers will continue to demand higher quality and lower prices as
their operations cope with a difficult economic environment. Our ability to
increase revenues while diversifying our customer base will be significant
factors determining our future success.

     Given the challenging circumstances we face, we will continue our efforts
to increase our sales revenues in all markets by emphasizing value over price
and will focus on more complex products for which our expertise, service and
unsurpassed quality are important factors in our customers' purchasing
decisions. At the same time, we will continue to pursue solutions that help
improve our operations at all levels.

     Our future success is dependent on many factors. We believe that the
valuable contributions of our employees and our sound financial condition will
help us face the challenges ahead in 2008. While many of our customers are
facing the same challenges, we would like to thank them for their loyalty, and
also thank our shareholders for their continued support.

                                  Respectfully,


<Table>
<S>                       <C>
    /s/ J. A.               /s/ MICHAEL J.
     MORRISSEY                  BOURG

John A. Morrissey          Michael J. Bourg
     Chairman                 President
</Table>



March 20, 2008

FORWARD-LOOKING STATEMENTS

     This discussion contains certain "forward-looking statements" which are
inherently subject to risks and uncertainties that may cause actual events to
differ materially from those discussed herein. Factors which may cause such
differences in events include, those disclosed under "Risk Factors" in our
Annual Report on Form 10-K and in the other filings we make with the United
States Securities and Exchange Commission. These factors, include among other
things: conditions in the domestic automotive industry, upon which we rely for
sales revenue, the intense competition in our markets, the concentration of our
sales to two major customers, the price and availability of raw materials, labor
relations issues, losses related to product liability, warranty and recall
claims, costs relating to environmental laws and regulations, and the loss of
the services of our key employees. Many of these factors are beyond our ability
to control or predict. Readers are cautioned not to place undue reliance on
these forward-looking statements. We undertake no obligation to publish revised
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.



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

                                                                               3

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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


CONSOLIDATED BALANCE SHEETS


<Table>
<Caption>
- ---------------------------------------------------------------------------------
December 31                                               2007            2006
- ---------------------------------------------------------------------------------
<S>                                                   <C>             <C>
                       ASSETS
Current Assets
  Cash and Cash Equivalents.........................  $   665,072     $   367,581
  Certificates of Deposit...........................    6,880,000       5,405,000
  Accounts Receivable -- Less allowances of $95,000
     and $150,000, respectively.....................    5,329,413       5,902,628
  Inventories.......................................    4,975,833       5,481,309
  Deferred Income Taxes.............................      451,191         499,191
  Prepaid Income Taxes..............................      211,025         118,914
  Other Current Assets..............................      287,542         294,593
                                                      -----------     -----------
  Total Current Assets..............................   18,800,076      18,069,216
Property, Plant and Equipment, net..................    9,106,937       9,837,260
                                                      -----------     -----------
Total Assets........................................  $27,907,013     $27,906,476
                                                      ===========     ===========

        LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Accounts Payable..................................  $ 1,147,014     $ 1,431,468
  Accrued Wages and Salaries........................      679,233         693,442
  Accrued Profit Sharing Plan Contribution..........      201,000         225,000
  Accrued Plant Closing Expense.....................           --         217,443
  Other Accrued Expenses............................      319,866         259,680
                                                      -----------     -----------
  Total Current Liabilities.........................    2,347,113       2,827,033
Deferred Income Taxes...............................      985,275       1,076,275
                                                      -----------     -----------
  Total Liabilities.................................    3,332,388       3,903,308
                                                      -----------     -----------
Commitments and Contingencies (Note 10).............           --              --
Shareholders' Equity
  Preferred Stock, No Par Value, 500,000 Shares
     Authorized: None Outstanding...................           --              --
  Common Stock, $1.00 Par Value, 4,000,000 Shares
     Authorized: 1,138,096 Shares Issued............    1,138,096       1,138,096
  Additional Paid-in Capital........................      447,134         447,134
  Retained Earnings.................................   26,911,493      26,340,036
  Treasury Stock, 171,964 Shares at cost............   (3,922,098)     (3,922,098)
                                                      -----------     -----------
  Total Shareholders' Equity........................   24,574,625      24,003,168
                                                      -----------     -----------
Total Liabilities and Shareholders' Equity..........  $27,907,013     $27,906,476
                                                      ===========     ===========

</Table>



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
                                   STATEMENTS.





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

4

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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




CONSOLIDATED STATEMENTS OF INCOME


<Table>
<Caption>
- ---------------------------------------------------------------------------------
For The Years Ended December 31                              2007         2006
- ---------------------------------------------------------------------------------
<S>                                                      <C>          <C>
Net Sales and Lease Revenue............................  $37,776,264  $40,369,977
Cost of Goods Sold and Costs Related to Lease Revenue..   30,415,799   32,529,465
                                                         -----------  -----------
Gross Profit...........................................    7,360,465    7,840,512
Selling and Administrative Expenses....................    5,816,802    6,033,699
Plant Closing Expenses.................................       20,337      422,934
                                                         -----------  -----------
Operating Profit.......................................    1,523,326    1,383,879
Other Income, net......................................      323,746      264,748
                                                         -----------  -----------
Income Before Income Taxes.............................    1,847,072    1,648,627
Provision for Income Taxes.............................      580,000      528,000
                                                         -----------  -----------
Net Income.............................................  $ 1,267,072  $ 1,120,627
                                                         ===========  ===========
Net Income Per Share...................................  $      1.31  $      1.16
                                                         ===========  ===========

</Table>



CONSOLIDATED STATEMENTS OF RETAINED EARNINGS


<Table>
<Caption>
- ---------------------------------------------------------------------------------
For The Years Ended December 31                              2007         2006
- ---------------------------------------------------------------------------------
<S>                                                      <C>          <C>
Retained Earnings at Beginning of Year.................  $26,340,036  $25,915,024
Net Income.............................................    1,267,072    1,120,627
Cash Dividends Paid, $.72 Per Share in 2007 and 2006...     (695,615)    (695,615)
                                                         -----------  -----------
Retained Earnings at End of Year.......................  $26,911,493  $26,340,036
                                                         ===========  ===========

</Table>



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
                                   STATEMENTS.





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

                                                                               5

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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



CONSOLIDATED STATEMENTS OF CASH FLOWS


<Table>
<Caption>
- ----------------------------------------------------------------------------------
For The Years Ended December 31                             2007          2006
- ----------------------------------------------------------------------------------
<S>                                                     <C>           <C>
Cash Flows from Operating Activities:
Net Income............................................  $  1,267,072  $  1,120,627
Adjustments to Reconcile Net Income to Net Cash
  Provided by Operating Activities:
  Depreciation and Amortization.......................     1,136,806     1,659,834
  Net Gain on the Sale of Properties..................       (20,740)      (16,830)
  Deferred Income Taxes...............................       (43,000)     (176,000)
  Changes in Operating Assets and Liabilities:
     Accounts Receivable, net.........................       573,215      (532,017)
     Inventories......................................       505,476       490,386
     Other Current Assets.............................       (85,060)     (181,365)
     Accounts Payable.................................      (302,670)     (145,120)
     Accrued Wages and Salaries.......................       (14,209)       12,473
     Accrued Profit Sharing Plan Contribution.........       (24,000)      100,000
     Other Accrued Expenses...........................      (157,257)     (295,147)
                                                        ------------  ------------
          Net Cash Provided by Operating Activities...     2,835,633     2,036,841
                                                        ------------  ------------
Cash Flows from Investing Activities:
  Capital Expenditures................................      (406,293)   (1,327,482)
  Proceeds from the Sale of Properties................        38,766        23,000
  Proceeds from Certificates of Deposit...............    18,135,000    13,425,000
  Purchases of Certificates of Deposit................   (19,610,000)  (17,825,000)
                                                        ------------  ------------
       Net Cash Used in Investing Activities..........    (1,842,527)   (5,704,482)
                                                        ------------  ------------
Cash Flows from Financing Activities:
  Cash Dividends Paid.................................      (695,615)     (695,615)
                                                        ------------  ------------
       Net Cash Used in Financing Activities..........      (695,615)     (695,615)
                                                        ------------  ------------
Net Increase (Decrease) in Cash and Cash Equivalents..       297,491    (4,363,256)
Cash and Cash Equivalents:
  Beginning of Year...................................       367,581     4,730,837
                                                        ------------  ------------
  End of Year.........................................  $    665,072  $    367,581
                                                        ============  ============
Cash Paid During the Year for:
  Income Taxes........................................  $    715,111  $  1,015,091
Supplemental Schedule of Non-cash Investing
  Activities:
  Capital Expenditures in Accounts Payable............  $     18,216  $    124,274
</Table>



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
                                   STATEMENTS.





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

6

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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



1--NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS--The Company operates in the fastener industry and is in the
business of producing and selling rivets, cold-formed fasteners, screw machine
products, automatic rivet setting machines, parts and tools for such machines,
and the leasing of automatic rivet setting machines.

A SUMMARY OF THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES FOLLOWS:

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include the
accounts of Chicago Rivet & Machine Co. and its wholly-owned subsidiary, H & L
Tool Company, Inc. (H & L Tool). All significant intercompany accounts and
transactions have been eliminated.

REVENUE RECOGNITION--Revenues from product sales are recognized upon shipment
and an allowance is provided for estimated returns and discounts based on
experience in accordance with SEC Staff Accounting Bulletin No. 104. Cash
received by the Company prior to shipment is recorded as deferred revenue. The
Company experiences a certain degree of sales returns that varies over time. In
accordance with Statement of Financial Accounting Standards No. 48 ("FAS 48"),
"Revenue Recognition When Right of Return Exists," the Company is able to make a
reasonable estimation of expected sales returns based upon history and as
contemplated by the requirements of FAS 48. The Company records all shipping and
handling fees billed to customers as revenue, and related costs as cost of
sales, when incurred, in accordance with Emerging Issues Task Force "EITF"
Abstract 00-10, "Accounting for Shipping and Handling Fees and Costs."

LEASE INCOME--Automatic rivet setting machines are available to customers on
either a sale or lease basis. The leases are generally for a quarterly or one-
year term, are cancelable at the option of the Company or the customer and are
accounted for under the operating method, whereby the Company recognizes lease
revenue over the term of the lease. Rentals are billed in advance, and revenues
attributable to future periods are included in unearned revenue in the
consolidated balance sheets. Costs related to lease revenue, other than the cost
of the machines, are expensed as incurred.

CREDIT RISK--The Company extends credit on the basis of terms that are customary
within our markets to various companies doing business primarily in the
automotive industry. The Company has a concentration of credit risk primarily
within the automotive industry and in the Midwestern United States. The Company
has established an allowance for accounts that may become uncollectible in the
future. This estimated allowance is based primarily on management's evaluation
of the financial condition of the customer and historical experience. The
Company monitors its accounts receivable and charges to expense an amount equal
to its estimate of potential credit losses. The Company considers a number of
factors in determining its estimates, including the length of time its trade
accounts receivable are past due, the Company's previous loss history and the
customer's current ability to pay its obligation. Accounts receivable balances
are charged off against the allowance when it is determined that the receivable
will not be recovered.

CASH AND CASH EQUIVALENTS--The Company considers all highly liquid investments,
including certificates of deposit, with a maturity of three months or less when
purchased to be cash equivalents. The Company maintains cash on deposit in
several financial institutions. At times, the account balance may be in excess
of FDIC insured limits.

FAIR VALUE OF FINANCIAL INSTRUMENTS--The carrying amounts reported in the
consolidated balance sheets for cash and cash equivalents and certificates of
deposit approximate fair value.

INVENTORIES--Inventories are stated at the lower of cost or net realizable
value, cost being determined by the first-in, first-out method.

PROPERTY, PLANT AND EQUIPMENT--Properties are stated at cost and are depreciated
over their estimated useful lives using the straight-line method for financial
reporting purposes. Accelerated methods of depreciation are used for income tax
purposes. Direct costs related to developing or obtaining software for internal
use are capitalized as property and equipment. Capitalized software costs are
amortized over the software's useful life when the software is placed in
service. The estimated useful lives by asset category are:

<Table>
<Caption>
Asset category                    Estimated useful life
- -------------------------------------------------------
<S>                               <C>
Land improvements...............      15 to 25 years
Buildings and improvements......      10 to 35 years
Machinery and equipment.........       7 to 15 years
Automatic rivet setting machines
  on lease......................            10 years
Capitalized software costs......        3 to 5 years
Other equipment.................       3 to 15 years
</Table>


The Company reviews the carrying value of property, plant and equipment for
impairment whenever events and circumstances indicate that the carrying value of
an asset may not be recoverable from the estimated future cash flows expected to
result from its use and eventual disposition. In cases where undiscounted
expected future cash flows are less than the carrying value, an impairment loss
is recognized equal to an amount by which the carrying value exceeds the fair
value of assets.

When properties are retired or sold, the related cost and accumulated
depreciation are removed from the respective accounts, and any gain or loss on
disposition is recognized in current operations. Maintenance, repairs and minor
betterments that do not improve the related asset or extend its useful life are
charged to operations as incurred.

INCOME TAXES--Deferred income taxes are determined under the asset and liability
method in accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Deferred income taxes arise from temporary
differences between the income tax basis of assets and liabilities and their
reported amounts in the financial statements.

The Company adopted the provisions of Financial Accounting Standards Board
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"),
on January 1, 2007. There was no effect on retained earnings related to this
adoption. Consistent with FIN 48, the Company classifies interest and penalties
related to unrecognized tax benefits as a component of income tax expense.

The Company's federal income tax returns for the 2005 and 2006 tax years are
subject to examination by the Internal Revenue Service ("IRS"). While it may be
possible that a reduction could occur with respect to the Company's unrecognized
tax benefits as an outcome of an IRS examination, management does not anticipate
any adjustments that would result in a material change to the results of
operations or financial condition of the Company. The 2004 federal income


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

                                                                               7

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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




tax return was examined by the IRS and no adjustments were made as a result of
the examination.

No statutes have been extended on any of the Company's federal income tax
filings. The statute of limitations on the Company's 2005 and 2006 federal
income tax returns will expire on September 15, 2009 and 2010, respectively.

The Company's state income tax returns for the 2004 through 2006 tax years
remain subject to examination by various state authorities with the latest
closing period on October 31, 2010. The Company is currently not under
examination by any state authority for income tax purposes and no statutes for
state income tax filings have been extended.

SEGMENT INFORMATION--The Company reports segment information in accordance with
Statement of Financial Accounting Standards No. 131 ("FAS 131"), "Disclosures
about Segments of an Enterprise and Related Information." FAS 131 requires that
segments be based on the internal structure and reporting of the Company's
operations.

NET INCOME PER SHARE--Net income per share of common stock is based on the
weighted average number of shares outstanding of 966,132 in 2007 and 2006.

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and the accompanying notes. Significant items subject to estimates
and assumptions include deferred taxes and valuation allowances for accounts
receivable and inventory obsolescence. Actual results could differ from those
estimates.

RECENT ACCOUNTING PRONOUNCEMENTS--In September 2006, the FASB issued Statement
of Financial Accounting Standards No. 157 ("FAS 157"), "Fair Value
Measurements." FAS 157 defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles and expands disclosures
about fair value measurements. This statement applies under other accounting
pronouncements that require or permit fair value measurements and, accordingly,
FAS 157 does not require any new fair value measurements. The Company is
currently evaluating the impact this standard will have on its operating income
and statement of financial position. This statement is effective for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years. The Company will adopt FAS 157 as of January 1, 2008, as required.

In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159 ("FAS 159"), "The Fair Value Option for Financial Assets and Financial
Liabilities." FAS 159 permits a company to choose to measure many financial
instruments and certain other items at fair value. The Company is currently
evaluating the impact this standard will have on its operating income and
statement of financial position. This statement is effective for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The Company will adopt FAS 159 as of January 1, 2008, as required.

In May 2007, the FASB issued FASB Staff Position FIN 48-1 that amends FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FSP FIN
48-1"). FSP FIN 48-1 provides guidance on how an enterprise should determine
whether a tax position is effectively settled for the purpose of recognizing
previously unrecognized tax benefits. The Company has adopted FSP FIN 48-1 and
the provisions do not have a material impact on our consolidated financial
statements.

2--BALANCE SHEET DETAILS

<Table>
<Caption>
                                  2007          2006
                              -----------   -----------
<S>                           <C>           <C>
Inventories:
  Raw materials.............  $ 1,275,595   $ 1,483,046
  Work in process...........    1,597,483     1,907,653
  Finished goods............    2,577,755     2,546,610
                              -----------   -----------
                                5,450,833     5,937,309
  Reserve for obsolescence..      475,000       456,000
                              -----------   -----------
                              $ 4,975,833   $ 5,481,309
                              ===========   ===========
Property, Plant and
  Equipment, net:
  Land and improvements.....  $ 1,029,035   $ 1,029,035
  Buildings and
     improvements...........    6,385,831     6,321,609
  Machinery and equipment,
     leased machines and
     other..................   28,124,007    29,411,746
                              -----------   -----------
                               35,538,873    36,762,390
  Accumulated depreciation..   26,431,936    26,925,130
                              -----------   -----------
                              $ 9,106,937   $ 9,837,260
                              ===========   ===========
Other Accrued Expenses:
  Property taxes............  $   113,261   $   116,250
  Unearned revenue and
     customer deposits......      134,403       104,676
  All other items...........       72,202        38,754
                              -----------   -----------
                              $   319,866   $   259,680
                              ===========   ===========

</Table>


3--LEASED MACHINES--Lease revenue amounted to $97,895 in 2007 and $100,948 in
2006. Future minimum rentals on leases beyond one year are not significant. The
cost and carrying value of leased automatic rivet setting machines at December
31 were:

<Table>
<Caption>
                                  2007          2006
                              -----------   ------------
<S>                           <C>           <C>
Cost........................  $   226,465   $    232,499
Accumulated depreciation....      213,221        221,356
                              -----------   ------------
Carrying value..............  $    13,244   $     11,143
                              ===========   ============

</Table>


4--INCOME TAXES--The provision for income tax expense consists of the following:

<Table>
<Caption>
                                  2007          2006
                              -----------   ------------
<S>                           <C>           <C>
Current:
  Federal...................  $   616,000   $    699,000
  State.....................        7,000          5,000
Deferred....................      (43,000)      (176,000)
                              -----------   ------------
                              $   580,000   $    528,000
                              ===========   ============

</Table>





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

8

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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



The deferred tax liabilities and assets consist of the following:

<Table>
<Caption>
                                  2007           2006
                              ------------   -----------
<S>                           <C>            <C>
Depreciation and
  amortization..............  $   (985,275)  $(1,076,275)
                              ------------   -----------
Inventory...................       268,415       292,133
Accrued vacation............       147,350       152,993
Allowance for doubtful
  accounts..................        32,675        51,960
Other, net..................         2,751         2,105
                              ------------   -----------
                                   451,191       499,191
                              ------------   -----------
                              $   (534,084)  $  (577,084)
                              ============   ===========

</Table>


The following is a reconciliation of the statutory federal income tax rate to
the actual effective tax rate:

<Table>
<Caption>
                               2007              2006
                         ---------------   ---------------
                          AMOUNT      %     Amount%
                         --------   ----   --------
<S>                      <C>        <C>    <C>        <C>
Expected tax at U.S.
  Statutory rate.......  $628,000   34.0   $560,000   34.0
Permanent differences..   (53,000)  (2.9)   (35,000)  (2.1)
State taxes, net of
  federal benefit......     5,000     .3      3,000     .1
                         --------   ----   --------   ----
Income tax expense.....  $580,000   31.4   $528,000   32.0
                         ========   ====   ========   ====

</Table>


5--NOTE PAYABLE--The Company has a $1 million line of credit, which expires May
31, 2008, and remained unused at December 31, 2007. The line is unsecured and
bears interest at a variable rate that is based upon, at the election of the
Company, Bank of America's prime rate less an applicable margin or the London
Inter-bank Offering Rate plus an applicable margin.

6--PROFIT SHARING PLAN--The Company has a noncontributory profit sharing plan
covering substantially all employees. Total expenses relating to the profit
sharing plan amounted to approximately $201,000 in 2007 and $225,000 in 2006.

7--OTHER INCOME, NET--consists of the following:

<Table>
<Caption>
                                  2007          2006
                              -----------   ------------
<S>                           <C>           <C>
Interest income.............  $   306,825   $    249,618
Other.......................       16,921         15,130
                              -----------   ------------
                              $   323,746   $    264,748
                              ===========   ============

</Table>


8--SEGMENT INFORMATION--The Company operates, primarily in the United States, in
two business segments as determined by its products. The fastener segment, which
comprises H & L Tool and the parent company's fastener operations, includes
rivets, cold-formed fasteners and screw machine products. The assembly equipment
segment includes automatic rivet setting machines, parts and tools for such
machines and the leasing of automatic rivet setting machines. Information by
segment is as follows:

<Table>
<Caption>
                                    ASSEMBLY
                       FASTENER     EQUIPMENT      OTHER      CONSOLIDATED
                     -----------   ----------   -----------   ------------
<S>                  <C>           <C>          <C>           <C>
YEAR ENDED DECEMBER 31, 2007:
Net sales and lease
  revenue..........  $33,083,907   $4,692,357   $        --    $37,776,264
Depreciation.......      957,661       85,136        94,009      1,136,806
Segment profit.....    2,774,062      906,774            --      3,680,836
Selling and
  administrative
  expenses.........                              (2,120,252)    (2,120,252)
Plant closing
  expenses.........      (20,337)          --            --        (20,337)
Interest income....                                 306,825        306,825
                                                               -----------
Income before
  income taxes.....                                              1,847,072
                                                               -----------
Capital
  expenditures.....      390,258           --        34,251        424,509
Segment assets:
  Accounts
     receivable....    4,878,675      450,738            --      5,329,413
  Inventory........    3,499,840    1,475,993            --      4,975,833
  Property, plant
     and
     equipment.....    7,132,439    1,126,300       848,198      9,106,937
  Other assets.....           --           --     8,494,830      8,494,830
                                                               -----------
                                                                27,907,013
                                                               -----------
Year Ended December 31, 2006:
Net sales and lease
  revenue..........  $34,421,398   $5,948,579   $        --    $40,369,977
Depreciation.......    1,467,984      101,210        90,640      1,659,834
Segment profit.....    2,454,068    1,493,852            --      3,947,920
Selling and
  administrative
  expenses.........                              (2,125,977)    (2,125,977)
Plant closing
  expenses.........     (422,934)          --            --       (422,934)
Interest income....                                 249,618        249,618
                                                               -----------
Income before
  income taxes.....                                              1,648,627
                                                               -----------
Capital
  expenditures.....    1,374,009           --        77,747      1,451,756
Segment assets:
  Accounts
     receivable....    5,363,451      539,177            --      5,902,628
  Inventory........    3,877,545    1,603,764            --      5,481,309
  Property, plant
     and
     equipment.....    7,712,639    1,182,414       942,207      9,837,260
  Other assets.....           --           --     6,685,279      6,685,279
                                                               -----------
                                                                27,906,476
                                                               -----------

</Table>


The Company does not allocate certain selling and administrative expenses for
internal reporting, thus, no allocation was made for these expenses for segment
disclosure purposes. Segment assets reported internally are limited to accounts
receivable, inventory and long-lived assets. Long-lived assets of one plant
location are allocated between the two segments based on estimated plant
utilization, as this plant serves both fastener and assembly equipment
activities. Other assets are not allocated to segments internally and to do so
would be impracticable. Sales to two customers in the fastener segment accounted
for 29 and 28 percent and 14 and 13 percent of consolidated revenues during 2007
and 2006, respectively. The accounts receivable balances for these customers
accounted for 30 and 37 percent of consolidated accounts receivable for the
larger customer and 18 and 13 percent for the other customer as of December 31,
2007 and 2006, respectively.



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

                                                                               9

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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



9--SHAREHOLDER RIGHTS AGREEMENT--On November 22, 1999, the Company adopted a
shareholder rights agreement and declared a dividend distribution of one right
for each outstanding share of Company common stock to shareholders of record at
the close of business on December 3, 1999. Each right entitles the holder, upon
occurrence of certain events, to buy one one-hundredth of a share of Series A
Junior Participating Preferred Stock at a price of $90, subject to adjustment.
The rights may only become exercisable under certain circumstances involving
acquisition of the Company's common stock, including the purchase of 10 percent
or more by any person or group. The rights will expire on December 2, 2009
unless they are extended, redeemed or exchanged.

10--COMMITMENTS AND CONTINGENCIES--The Company recorded rent expense aggregating
approximately $38,000 and $48,000 for 2007 and 2006, respectively. Total future
minimum rentals at December 31, 2007 are not significant.

The Company is, from time to time involved in litigation, including
environmental claims, in the normal course of business. While it is not possible
at this time to establish the ultimate amount of liability with respect to
contingent liabilities, including those related to legal proceedings, management
is of the opinion that the aggregate amount of any such liabilities, for which
provision has not been made, will not have a material adverse effect on the
Company's financial position.


11--PLANT CLOSING--The Company recorded various charges during 2006 and 2007
related to the closure of its Jefferson, Iowa facility. The facility had been
operating below capacity, and after the transfer of production activities to
Tyrone, Pennsylvania, operations ceased in December 2006. As a result of the
closure, the Company recorded plant closing expenses of $422,934 in the year
ended December 31, 2006, and $20,337 in the year ended December 31, 2007.

The following is a summary of liabilities recorded on the accompanying balance
sheet as accrued plant closing expenses at December 31, 2007 and 2006:

<Table>
<Caption>
                                          FACILITY
                             SEVERANCE     CLOSURE
                           AND BENEFITS     COSTS      TOTAL
                           ------------   --------   ---------
<S>                        <C>            <C>        <C>
Balance at January 1,
  2006...................    $      --    $     --   $      --
  Charge.................      347,929      75,005     422,934
  Payments...............     (170,855)    (34,636)   (205,491)
  Non-cash reduction.....           --          --          --
Balance at December 31,
  2006...................    $ 177,074    $ 40,369   $ 217,443
  Charge.................           --      21,157      21,157
  Payments...............     (176,254)    (61,526)   (237,780)
  Non-cash reduction.....         (820)         --        (820)
Balance at December 31,
  2007...................    $      --    $     --   $      --
</Table>


12--SUBSEQUENT EVENT--On February 18, 2008, the Board of Directors declared a
regular quarterly dividend of $.18 per share, payable March 20, 2008 to
shareholders of record on March 5, 2008 and an extra dividend of $.15 per share
to be paid April 18, 2008 to shareholders of record on April 4, 2008.



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

10

<PAGE>

                                                            (CHICAGO RIVET LOGO)

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




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Chicago Rivet & Machine Co.

     We have audited the accompanying consolidated balance sheets of Chicago
Rivet & Machine Co. (an Illinois corporation) and subsidiary (the "Company") as
of December 31, 2007 and 2006, and the related consolidated statements of
income, retained earnings and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Chicago
Rivet & Machine Co. and subsidiary as of December 31, 2007 and 2006, and the
results of the Company's operations and cash flows for the two years then ended
in conformity with accounting principles generally accepted in the United States
of America.

- -s- Grant Thornton LLP

Chicago, Illinois
March 14, 2008



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

                                                                              11

<PAGE>

(CHICAGO RIVET LOGO)

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



INFORMATION ON COMPANY'S COMMON STOCK

The Company's common stock is traded on the American Stock Exchange (trading
privileges only, not registered.) The ticker symbol is: CVR.

At December 31, 2007, there were approximately 240 shareholders of record.

The transfer agent and registrar for the Company's common stock is:

Computershare Trust Company, N.A.
P.O. Box 43078
Providence, Rhode Island 02940-3078

The following table shows the dividends declared and the quarterly high and low
prices of the common stock for the last two years.

<Table>
<Caption>
                                 Dividends
                                  Declared               Market Range
                                -----------   ---------------------------------
Quarter                         2007   2006         2007              2006
- -------                         ----   ----   ---------------   ---------------
<S>                             <C>    <C>    <C>      <C>      <C>      <C>
First.........................  $.18   $.18   $23.00   $21.25   $21.00   $17.50
Second........................   .18    .18   $25.38   $21.75   $24.25   $19.45
Third.........................   .18    .18   $25.50   $22.50   $24.89   $22.00
Fourth........................   .18    .18   $26.10   $19.40   $24.55   $20.29
</Table>



BOARD OF DIRECTORS

MICHAEL J. BOURG (e)
President of the Company


EDWARD L. CHOTT (a)(c)(n)
Chairman of the Board and
Chief Executive Officer of
The Broaster Co.
Beloit, Wisconsin


KENT H. COONEY (a)
Chief Financial Officer of
Heldon Bay Limited Partnership
Bigfork, Montana


NIRENDU DHAR
General Manager of
H & L Tool Company, Inc.


WILLIAM T. DIVANE, JR. (a)(c)(n)
Chairman of the Board and
Chief Executive Officer of
Divane Bros. Electric Co.
Franklin Park, Illinois




GEORGE P. LYNCH (c)
Attorney at Law
George Patrick Lynch, Ltd.
Lisle, Illinois


JOHN R. MADDEN (a)(c)(e)(n)
Chairman of the Board of
First National Bank
of La Grange
La Grange, Illinois


JOHN A. MORRISSEY (e)
Chairman of the Board
of the Company
President and Director of
Algonquin State Bank, N.A.
Algonquin, Illinois


WALTER W. MORRISSEY (e)
Attorney at Law
Morrissey & Robinson
Oakbrook Terrace, Illinois


(a) Member of Audit Committee
(c) Member of Compensation Committee
(e) Member of Executive Committee
(n) Member of Nominating Committee

CORPORATE OFFICERS


JOHN A. MORRISSEY
Chairman, Chief
Executive Officer


MICHAEL J. BOURG
President, Chief Operating
Officer and Treasurer


NIRENDU DHAR
General Manager of
H & L Tool Company, Inc.


KIMBERLY A. KIRHOFER
Secretary


CHICAGO RIVET & MACHINE CO.


ADMINISTRATIVE & SALES OFFICES
Naperville, Illinois
Norwell, Massachusetts


MANUFACTURING FACILITIES
Albia Division
Albia, Iowa


Tyrone Division
Tyrone, Pennsylvania


H & L Tool Company, Inc.
Madison Heights, Michigan


Chicago Rivet & Machine Co. -  901 Frontenac Road - P.O. Box 3061  - Naperville,
Illinois 60566                       -                      www.chicagorivet.com



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

12

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>4
<FILENAME>c24737exv21.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
<TEXT>
<PAGE>

                                   EXHIBIT 21

                           CHICAGO RIVET & MACHINE CO.

                         SUBSIDIARIES OF THE REGISTRANT

     The Company's only subsidiary is H & L Tool Company, Inc., which is
wholly-owned and is organized in the State of Illinois.


                                       61

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>c24737exv31w1.txt
<DESCRIPTION>SECTION 302 CERTIFICATION
<TEXT>
<PAGE>

EXHIBIT 31.1

     I, John A. Morrissey, certify that:

1.   I have reviewed this annual report on Form 10-K of Chicago Rivet & Machine
     Co.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the registrant and have:

     a)   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

     b)   Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.


Date: March 20, 2008                    /s/ John A. Morrissey
                                        ----------------------------------------
                                        John A. Morrissey
                                        Chief Executive Officer
                                        (Principal Executive Officer)


                                       62

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>c24737exv31w2.txt
<DESCRIPTION>SECTION 302 CERTIFICATION
<TEXT>
<PAGE>

EXHIBIT 31.2

     I, Michael J. Bourg, certify that:

1.   I have reviewed this annual report on Form 10-K of Chicago Rivet & Machine
     Co.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the registrant and have:

     a)   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

     b)   Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.


Date: March 20, 2008                    /s/ Michael J. Bourg
                                        ----------------------------------------
                                        Michael J. Bourg
                                        President, Chief Operating Officer and
                                        Treasurer (Principal Financial Officer)


                                       63

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>7
<FILENAME>c24737exv32w1.txt
<DESCRIPTION>SECTION 906 CERTIFICATION
<TEXT>
<PAGE>

                                  EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Chicago Rivet & Machine Co.
(the "Company") for the period ended December 31, 2007 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, John A.
Morrissey, as Chief Executive Officer of the Company, hereby certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.


/s/ John A. Morrissey
- -------------------------------------
Name: John A. Morrissey
Title: Chief Executive Officer
       (Principal Executive Officer)
Date: March 20, 2008


                                       64

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>8
<FILENAME>c24737exv32w2.txt
<DESCRIPTION>SECTION 906 CERTIFICATION
<TEXT>
<PAGE>

                                  EXHIBIT 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Chicago Rivet & Machine Co.
(the "Company") for the period ended December 31, 2007 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Michael
J. Bourg, as President, Chief Operating Officer and Treasurer of the Company,
hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my
knowledge:

     (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.


/s/ Michael J. Bourg
- -------------------------------------
Name: Michael J. Bourg
Title: President, Chief Operating
       Officer and Treasurer
       (Principal Financial Officer)
Date: March 20, 2008


                                       65
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
