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As filed with the Securities and Exchange Commission on November 25, 1997 - 
Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933


                              DONNELLY CORPORATION
             (Exact name of registrant as specified in its charter)

            Michigan                                    38-0493110
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

             414 East Fortieth Street, Holland, Michigan 49423-5368
               (Address of Principal Executive Offices) (Zip Code)

              Donnelly Corporation 1997 Employee Stock Option Plan
                            (Full Title of the Plan)

   William R. Jellison, 414 East Fortieth Street, Holland, Michigan 49423-5368
                     (Name and address of agent for service)



                          Copies of Communications to:
                             William J. Lawrence III
                    Varnum, Riddering, Schmidt & Howlett LLP
                      333 Bridge Street, N.W., P.O. Box 352
                        Grand Rapids, Michigan 49501-0352
                                 (616) 336-6000

<TABLE>
                         CALCULATION OF REGISTRATION FEE

                                                              Proposed              Proposed
           Title of                                            Maximum               Maximum
       Securities to be              Amount to be          Offering Price           Aggregate             Amount of
          Registered                  Registered            Per Share(2)         Offering Price       Registration Fee
    <S>                           <C>                         <C>                 <C>                    <C>
    Class A Common Stock
     ($.10 Par Value)             175,593 Shares(1)           $18.35              $3,222,132             $977.00
===============================  ===================== ====================== =====================  ===================
</TABLE>
(1)      Represents the number of shares of Common Stock authorized for issuance
         under the Donnelly  Corporation  1997  Employee  Stock Option Plan (the
         "Plan").  This Registration  Statement also covers such  indeterminable
         additional number of shares as may be issuable under the Plan by reason
         of adjustments in the number of shares covered  thereby as described in
         the Prospectus.
(2)      For the purpose of computing the registration fee only, the price shown
         is based  upon the price of $18.35 per share, the  average of the  high
         and low sales prices for the Common  Stock of  Donnelly  Corporation on
         the  New York Stock Exchange  on November 20, 1997, in  accordance with
         Rule 457(h).


Pursuant  to  Rule  416(a)  of the  General  Rules  and  Regulations  under  the
Securities Act of 1933, this Registration  Statement shall cover such additional
securities as may be offered or issued to prevent dilution  resulting from stock
splits, stock dividends or similar transactions.
<PAGE>
                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference

     The Company's  Annual Report on Form 10-K for the year ended June 28, 1997,
which has been filed by the Company with the Commission  (File No.  1-9716),  is
incorporated  herein  by  reference.  All  other  reports  filed by the  Company
pursuant to Section  13(a) or 15(d) of the  Securities  Exchange Act of 1934, as
amended  (the  "Exchange  Act") since the end of the fiscal year  covered by the
foregoing Annual Report on Form 10-K are incorporated  herein by reference.  All
other reports or documents filed by the Company  pursuant to the requirements of
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, subsequent to the date
of this  Registration  Statement and prior to the termination of the offering of
the securities  offered hereby shall be deemed to be  incorporated  by reference
herein  and to be a part  hereof  from the date of  filing  of such  reports  or
documents.  Any  statements  contained  in a  document  incorporated  herein  by
reference  shall be deemed to be modified  or  superseded  for  purposes of this
Prospectus  to  the  extent  that  a  statement   contained  herein  or  in  any
subsequently  filed  document  which also is  incorporated  herein  modifies  or
supersedes  such statement.  Any such statement so modified or superseded  shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.

     The  consolidated   financial   statements  of  Donnelly   Corporation  and
subsidiaries as of June 28, 1997 and June 29, 1996, and for each of the years in
the  three-year  period  ended June 28,  1997,  have been  incorporated  in this
Registration   Statement  by  reference  in  reliance  upon  the  report,   also
incorporated in this  Registration  Statement by reference,  of BDO Seidman LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing.

     The  description  of the  Company's  Class A  Common  Stock,  the  class of
securities offered pursuant to this Registration  Statement, is contained in the
Company's  Registration  Statement  filed pursuant to Section 12 of the Exchange
Act,  and  is  incorporated  herein  by  reference,   including  any  subsequent
amendments or reports filed for the purpose of updating that description.

Item 4.  Description of Securities

     The class of securities to be offered is registered under Section 12 of the
Exchange Act.

Item 5.  Interests of Named Experts and Counsel

     Not applicable.

Item 6.  Indemnification of Directors and Officers

     The Articles of Incorporation of the Company provide that its directors and
officers are to be indemnified as of right to the fullest extent permitted under
the Michigan  Business  Corporation  Act  ("MBCA").  Under the MBCA,  directors,
officers,  employees or agents are entitled to indemnification  against expenses
(including  attorneys' fees) whenever they successfully defend legal proceedings
brought  against them by reason of the fact that they hold such a position  with
the corporation.  In addition,  with respect to actions not brought by or in the
right  of the  corporation,  indemnification  is  permitted  under  the MBCA for
expenses (including attorneys' fees), judgments, fines, penalties and reasonable
settlement if it is determined that the person seeking  indemnification acted in
a good  faith  and in a manner  he or she  reasonably  believed  to be in or not
opposed to the best interests of the corporation or its  shareholders  and, with
respect to criminal  proceedings,  he or she had no reasonable  cause to believe
that his or her conduct was unlawful.  With respect to actions  brought by or in
the right of the  corporation,  indemnification  is permitted under the MBCA for
expenses  (including  attorneys'  fees)  and  reasonable  settlements,  if it is
determined that the person seeking  indemnification acted in good faith and in a
manner  he or she  reasonably  believed  to be in or  not  opposed  to the  best
interests of the corporation or its shareholders;  provided,  indemnification is
not permitted if the person is found liable

                                      S-1
<PAGE>
to the corporation  unless the court in which the action or suit was brought has
determined  that  indemnification  is  fair  and  reasonable  in view of all the
circumstances of the case.

     The MBCA  specifically  provides  that it is not the  exclusive  source  of
indemnity.   As  a  result,  the  Company  adopted  individual   indemnification
agreements  with its  directors.  Approved by the  Company's  shareholders,  the
indemnification agreements provide a contractually enforceable right, upon which
written notice, for prompt  indemnification,  except that indemnification is not
required  where:  (I)  indemnification  is provided  under an insurance  policy,
except for amounts in excess of insurance coverage;  (ii) a director is entitled
to  indemnification  by reason of having given notice of any circumstance  which
might  give rise to a claim  under any policy of  insurance,  the terms of which
have expired  prior to the  effective  date of the  indemnity  agreement;  (iii)
indemnification  is provided by the Company  outside of the agreement;  (iv) the
claim for indemnity is based upon or attributable to any transaction  involving:
intentional  misconduct  or a knowing  violation  of law, a violation of Section
551(1) or any  successor  provision  of the  MBCA,  or from  which the  director
derived an improper  personal  benefit;  (v) the claim  involved a violation  of
Section 16(b) of the Securities  Exchange Act of 1934 and amendments thereto, or
similar  provisions  of state law;  or (vi)  indemnification  by the  Company is
otherwise  prohibited  by  applicable  law. In the case of a derivative or other
action by or in the  right of the  Company  where a  director  is found  liable,
indemnity is predicted on the determination that indemnification is nevertheless
appropriate,  by:  majority  vote of a  committee  of two or more  disinterested
directors  appointed by the Board of Directors;  independent  legal counsel in a
written  opinion;  or the court in which the claim is  litigated,  whichever the
indemnitee chooses. The protection provided by the indemnification agreements is
broader than that under the MBCA, where indemnification in such circumstances is
available  only where  specifically  authorized  by the court where the claim is
litigated.

     In addition to the available  indemnification,  the  Company's  Articles of
Incorporation,  as amended,  limit the personal  liability of the members of its
Board of Directors for monetary damages with respect to claims by the Company or
its shareholders resulting from certain negligent acts or omissions.

Item 7.  Exemption from Registration Claimed

     Not applicable.

Item 8.  Exhibits

     Reference is made to the Exhibit Index which appears on page S-6.

Item 9.  Undertakings

     The undersigned registrant hereby undertakes:

          (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement:

               (i) To include any prospectus required by Section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  registration  statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate,  represents a  fundamental  change in the  information  set
          forth in the registration statement;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  registration
          statement  or  any  material   change  to  such   information  in  the
          registration statement;  provided, however, that paragraphs (1)(I) and
          (1) (ii) do not apply if the  registration  statement  is on Form S-3,
          Form S-8, or Form F-3, and the information  required to be included in
          a  post-effective  amendment  by  those  paragraphs  is  contained  in
          periodic  reports  filed by the  registrant  pursuant to Section 13 or
          Section  15  (d)  of   Securities   Exchange  Act  of  1934  that  are
          incorporated by reference in the  registration  statement.  

                                      S-2
<PAGE>

          (2) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  registration  statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     The  undersigned   registrant  hereby  undertakes  that,  for  purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bonafide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted  to  directors,  officers  and  controlling
persons of the registrant pursuant to the foregoing  provisions  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is,  therefore,  unenforceable.  In the  event a claim  for  indemnification
against such  liabilities  (other than the payment by the registrant of expenses
incurred  or  paid by a  director,  officer  or by the  registrant  of  expenses
incurred or paid by a director,  officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                       S-3
<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements  of the  Securities  Act of 1933, the Company
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of Holland,  State of Michigan, on 17th day of October,
1997.

                                        DONNELLY CORPORATION


                                        By /s/ J. Dwane Baumgardner
                                        J. Dwane Baumgardner, President and
                                        Chief Executive Officer


                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below constitutes and appoints J. Dwane Baumgardner and Maryam Komejan, and each
of them, his or her true and lawful  attorney-in-fact and agent, with full power
of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities,  to sign any and all amendments (including
post-effective  amendments) to this Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory authority,  granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing  required and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person,  hereby  ratifying and  confirming  all that said  attorney-in-fact  and
agent, or his or her  substitute,  may lawfully do or cause to be done by virtue
hereof.

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been  signed  below on  October  17,  1997,  by the
following persons in the capacities indicated.



/s/ John A. Borden                          /s/ B. Patrick Donnelly, III
John A. Borden, Director                    B. Patrick Donnelly, III, Director


/s/ R. Eugene Goodson                       /s/ Joan E. Donnelly
R. Eugene Goodson, Director                 Joan E. Donnelly, Director


/s/ Donald R. Uhlmann                       /s/ Thomas E. Leonard
Donald R. Uhlmann, Director                 Thomas E. Leonard, Director


/s/ J. Dwane Baumgardner                    /s/ Gerald T. McNeive
J. Dwane Baumgardner, Director              Gerald T. McNeive, Jr., Director


/s/ Arnold F. Brookstone                    /s/ William R. Jellison
Arnold F. Brookstone, Director              William R. Jellison, Vice President,
                                            Corporate Controller and Treasurer


/s/ Rudolph B. Pruden
Rudolph B. Pruden, Director

                                       S-4
<PAGE>
               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Donnelly Corporation
Holland, Michigan


We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement  of our  report  dated  August  1,  1997,  relating  to  the  combined
consolidated  financial  statements  of Donnelly  Corporation  appearing  in the
Company's  Annual  Report on Form 10-K for the year ended June 28, 1997,  and to
the reference to us as experts included in this Registration Statement.


/s/ BDO Seidman LLP
BDO SEIDMAN LLP

Grand Rapids, Michigan
November 21, 1997

                                       S-5
<PAGE>
                                  EXHIBIT INDEX

     The following exhibits are filed as a part of the Registration Statement:


Exhibit 4           Donnelly Corporation 1997 Employee Stock Option Plan

Exhibit 5           Opinion of Varnum, Riddering, Schmidt & Howlett LLP

Exhibit 23(a)       Consent of BDO Seidman, LLP - included on page S-5 hereof

Exhibit 23(b)       Consent of Varnum, Riddering, Schmidt & Howlett LLP-included
                    in Exhibit 5

Exhibit 24          Power of Attorney - included on page S-4 hereof



                                       S-6
<PAGE>
                                   EXHIBIT 4


                              DONNELLY CORPORATION
                         1997 EMPLOYEE STOCK OPTION PLAN


1.       NAME AND PURPOSE

     This plan shall be called the  Donnelly  Corporation  1997  Employee  Stock
Option Plan (the "Plan").  The Plan is intended to encourage  stock ownership by
certain  key  employees  of  Donnelly  Corporation  (the  "Company")  and of its
subsidiaries,  and to provide them with an additional incentive to contribute to
the  success  of the  Company.  The term  "Company"  when  used in the Plan with
reference to employment shall include  subsidiaries of the Company as defined by
Subsection 425(f) of the Internal Revenue Code of 1986, as amended (the "Code").

2.       EFFECTIVE DATE AND TERM OF PLAN

     The  effective  date of the Plan shall be the date the Plan is  approved by
the shareholders of the Company. Options may not be granted under the Plan after
December 31, 1999;  provided,  however,  that all options outstanding as of that
date shall remain or become exercisable pursuant to their terms and the terms of
the Plan.

3.       ADMINISTRATION

     The Plan shall be administered by the Board of Directors of the Company, or
if a majority  of the  Directors  are not  "Disinterested  Persons"  (as defined
herein),  by a committee  appointed by the  Company's  Board of  Directors  (the
"Committee").   The   administrating   body   shall  be   referred   to  as  the
"Administrator".  The  Committee,  if appointed,  shall consist of not less than
three  (3)  members,  all of whom  are  "Disinterested  Persons".  The  Board of
Directors  may from time to time  remove  members  from,  or add members to, the
Committee.  Vacancies on the Committee,  however caused,  shall be filled by the
Board of  Directors.  A  "Disinterested  Person" is a person who  qualifies as a
"nonemployee  director" as such term is defined in Rule 16b-3 promulgated by the
Securities and Exchange  Commission under the Securities Act of 1934, as amended
from time to time or any successor rule.

     The   Administrator   may  establish  such   regulations,   provisions  and
procedures,  within the terms of the Plan,  as in the opinion of its members may
be advisable in the  administration  of the Plan. The  Administrator  shall keep
minutes of its  meetings.  A majority of the  Administrator  shall  constitute a
quorum, and the acts of a majority of a quorum at any meeting,  or acts approved
in writing by a majority of the members of the Administrator, shall be the valid
acts of the Administrator.

     The  Administrator  shall  determine  the persons to whom options are to be
granted and the number of shares subject to each such option.  The Administrator
shall also  determine  such other  matters with respect to the options as may be
specified in the Plan.
<PAGE>
     Without amending this Plan, the  Administrator may grant or amend awards to
employees  who are foreign  nationals or employed  outside the United  States or
both, on such terms and conditions  different from those  specified in this Plan
as may,  in the  judgment  of the  Administrator,  be  necessary  to comply with
foreign law or practice and to further the purposes of this Plan.

     The  interpretation and construction by the Administrator of any provisions
of the Plan or of any option  granted  under it shall be final and binding  upon
the Company,  the Board of Directors  and  optionees.  No member of the Board of
Directors or the  Administrator  shall be liable for any action or determination
made in good faith with respect to the Plan or any option granted under it.

4.       ELIGIBILITY

     Subject to the  limitations  contained in this  paragraph,  the persons who
shall be  eligible to receive  options  shall be such key  employees  (including
employee  officers  and  directors)  of the Company as the  Administrator  shall
select.   In  making  such  selections,   the  Administrator  may  consider  the
recommendations  of the Company's  chief  executive  officer,  the nature of the
services  rendered by the  respective  employees,  their  present and  potential
contributions  to the  Company's  success  and  the  success  of the  particular
subsidiary  or division of the Company by which they are employed and such other
factors as the Administrator shall deem relevant. An optionee may hold more than
one option, but only on the terms and subject to the restrictions  hereafter set
forth.  No person,  while a member of the  Administrator,  shall be  eligible to
receive an option under the Plan.  Subject to  adjustments  consistent  with the
provisions of Paragraph  6(h), no one optionee may be granted  options  covering
more  than a total of  twenty-five  percent  (25%) of the  Class A Common  Stock
originally  reserved  for  issuance  under this Plan,  as defined in Paragraph 5
hereof,  plus  such  increases  as may  from  time to time  be  approved  by the
Company's shareholders.

5.       STOCK AVAILABLE FOR OPTIONS

     Subject to adjustments as provided in Paragraph 6(i), the aggregate  number
of shares  reserved for  purposes of the Plan shall be one hundred  seventy five
thousand five hundred  ninety three  (175,593)  shares of the Company's  Class A
Common  Stock,  par  value $ .10 per  share  ("Class  A Common  Stock"),  either
authorized but unissued shares or shares held in treasury.  Such number shall be
reduced  by the  aggregate  number of shares  covered by the  options  purchased
pursuant to Paragraph  6(f).  If any  outstanding  option under the Plan for any
reason  expires or is terminated  for any reason before  December 31, 1999,  the
shares  allocable  to the  unexercised  portion  of such  option  may  again  be
subjected  to an option  under the Plan. A surrender of all or part of an option
pursuant to Paragraph 6(f) shall not be considered an expiration or termination,
and the shares allocable thereto may not again be subject to an option under the
Plan.
<PAGE>
6.       DATE OF GRANT,  TERMS AND CONDITIONS OF OPTIONS AND STOCK  APPRECIATION
         RIGHTS.

     Stock options granted pursuant to the Plan shall be authorized by the Board
of Directors.  The date on which an option shall be granted shall be the date of
the  Board's  authorization  of the  option  or  such  later  date as  shall  be
determined by the Board at the time the option is authorized.  All stock options
granted pursuant to the Plan shall be either  incentive stock options  ("ISOs"),
intended to qualify under  Section 422 of the Internal  Revenue Code of 1986, as
amended (the "Code"),  or a nonqualified  stock option,  not intended to qualify
under  Section 422 of the Code,  as  determined  in each case by the  Committee.
Options granted under this Plan shall be evidenced by agreements in such form as
the  Administrator  shall  approve,  which  agreements  shall comply with and be
subject to the following terms and conditions:

          (a) Number and Maximum  Value of Shares.  Each option  shall state the
     number of shares to which it  pertains.  The  aggregate  fair market  value
     (determined as of the time the option is granted) of shares with respect to
     which ISOs are  exercisable  for the first time by any employee  during any
     calendar  year  (under  this Plan or any  other  stock  option  plan of the
     Company  or of any  "parent  or  subsidiary  corporation"  [as  defined  in
     Subsections  425 (e), (f) and (g) of the Code] of the  Company),  shall not
     exceed $100,000.

          (b) Option Price. Each option shall state the option price. The option
     price for ISOs will be the fair market  value of the shares on the date the
     option  is  granted;  provided,   however,  if  the  optionee  owns  shares
     representing  more than ten percent  (10%) of the total voting power of the
     Company's  Class A Common  Stock at the time an ISO is granted,  the option
     price will be one hundred ten  percent  (110%) of the fair market  value of
     the  shares  on the date the  option is  granted.  The  option  price for a
     nonqualified  option  will be esta  blished  by the  Administrator.  If the
     shares are listed on an established  stock exchange or exchanges,  the fair
     market value per share shall be the closing sale price on such  exchange or
     exchanges  or, if no sale of the  shares  shall have been made on any stock
     exchange on that day, on the next  preceding  day on which there was a sale
     of  shares.  If the  shares  are not  listed  on such a stock  exchange  or
     exchanges,  the fair market value per share shall be the closing sale price
     as reported in the National  Association  of Securities  Dealers Auto mated
     Quotation  System  ("NASDAQ") on the day the option is granted or, if there
     are no sales reported by the NASDAQ on that date, the next preceding day on
     which there was a sale reported by NASDAQ.  The fair market value of shares
     for options granted prior to the Company's initial public offering shall be
     the price to  public in the  initial  public  offering  as set forth on the
     cover of the Company's final prospectus.

          (c)  Medium of  Payment.  The  option  price  shall be  payable to the
     Company  either:  (i) in United  States  dollars in cash or by check,  bank
     draft or money order payable to the order of the Company;  (ii) through the
     delivery  of shares with a fair  market  value on the date of the  exercise
     equal to the option price  provided  such shares are utilized as
<PAGE>
     payment  to  acquire  at least 100  shares of  optioned  stock,  unless the
     remaining  shares covered by an option are fewer than 100 shares,  or (iii)
     by a  combination  of (i)  and  (ii)  above.  Fair  market  value  will  be
     determined in the manner  specified in Paragraph 6(b) except as to the date
     of determination.

          (d) Term and Exercise of Options.  The term of each ISO granted  under
     the Plan  shall be not more than ten (10)  years from the date on which the
     ISO is granted; provided, however, that in the case of an employee who owns
     shares  representing  more than ten percent (10%) of the total voting power
     of the Company's  Class A Common Stock at the time the ISO is granted,  the
     term of such option  shall be not more than five (5) years from the date of
     grant.  The term of a  nonqualified  option shall be not more than ten (10)
     years and one day from the date the option is granted.  No option  shall be
     exercisable  either in whole or in part prior to twelve (12)  months  after
     the date such option is granted  except as provided in  Paragraphs  6(f) or
     (6)(h).   (Notwithstanding   the  preceding  sentence,   options  shall  be
     exercisable  immediately in the event of a "Change in Control". A Change in
     Control shall be deemed to have occurred  hereunder if (i) any "person" (as
     such term is used in Section 13(d) and 14(d) of the Securities Exchange Act
     of 1934 ("Act")) is or becomes the  "beneficial  owner" (as defined in Rule
     13d-3 under the Act), directly or indirectly,  of securities of the Company
     representing 20% or more of the combined voting power of the Company's then
     outstanding  securities  (except for persons who are such beneficial owners
     as of the  effective  date of this Plan)  without the prior  approval of at
     least 2/3 of the members of the Board in office  immediately  prior to such
     person attaining such percentage interest; (ii) the Company is a party to a
     merger, consolidation,  sale of assets or other reorganization,  or a proxy
     contest,  as a  consequence  of  which  members  of  the  Board  in  office
     immediately  prior to such  transaction  or event  constitute  less  than a
     majority  of the  Board  thereafter;  or (iii)  during  any  period  of two
     consecutive  years,  individuals  who  at  the  beginning  of  such  period
     constituted  the Board  (including  for this purpose any new director whose
     election or  nomination  for  election by the  Company's  shareholders  was
     approved  by a vote of at least 2/3 of the  directors  still in office  who
     were  directors at the  beginning  of such period)  cease for any reason to
     constitute at least a majority of the Board.) Thereafter,  an option may be
     exercised  at any time or from time to time  during  the term of the option
     upon written notice to the Company of the optionee's  intention to exercise
     the  option  as  to  any  or  all  full  shares   covered  by  the  option.
     Notwithstanding  the  foregoing,  an option shall not be  exercisable  with
     respect to less than 100 shares unless the remaining  shares  covered by an
     option are fewer than 100 shares. The purchase price of the shares shall be
     paid in full upon delivery to the optionee of certificates for such shares.
     Excluding nonemployee directors,  and except as provided in Paragraph 6(g),
     an option may be  exercised  by the  optionee  only while the  optionee  is
     employed by the Company and only during his lifetime. Options granted under
     the Plan may be exercised in any order,  regardless of the date of grant or
     the existence of any other outstanding stock option of the Company.
<PAGE>
          (e)  Options  not  Transferable.  Options  may not be  sold,  pledged,
     assigned or transferred in any manner otherwise than by will or the laws of
     descent or  distribution  to the extent  provided in  Paragraph  6(g)(iii).
     During the lifetime of an optionee,  the options shall be exercisable  only
     by the optionee.  Following the death of an optionee,  the options shall be
     exercisable only to the extent provided in Paragraph 6(g)(iii).

          (f) Stock Appreciation  Rights. Any option granted under the Plan may,
     if the  Administrator  in its  discretion  so  determines,  contain a Stock
     Appreciation  Right  which  shall be subject to the terms  hereinafter  set
     forth and  shall be  exercisable  by  submitting  notice of the  optionee's
     election   to  exercise   such  Stock   Appreciation   Right.   Unless  the
     Administrator otherwise consents, such election may only be made during the
     period  commencing  on the third (3rd)  business day  following the date on
     which the Company  releases for publication its quarterly or annual summary
     statements of sales and earnings and ending on the twelfth (12th)  business
     day following such date (Election Period). A Stock Appreciation Right shall
     provide that the Company shall,  at the election of the optionee during the
     Election  Period and upon surrender of all or part of the underlying  stock
     option ,  purchase  all or any part of such  option to the extent that such
     option is exercisable at the date of such election,  for an amount (payable
     in cash,  shares of the  Company's  Class A Common Stock valued at the then
     fair  market  value,  or  a  combination   thereof  as  determined  by  the
     Administrator)  equal to the excess of the fair  market  value per share of
     Class A Common Stock over the option  price per share,  times the number of
     shares  called  for  by the  option,  or a  proportion  thereof,  which  is
     surrendered.  If the shares are listed on an established  stock exchange or
     exchanges,  the fair market value per share shall be the closing sale price
     on such  exchange or exchanges or, if no sale of the shares shall have been
     made on the date of exercise on any stock  exchange,  on the next preceding
     day on which  there was a sale of  shares.  If the shares are not listed on
     such a stock  exchange or exchanges,  the fair market value per share shall
     be the closing  sale price as reported by NASDAQ on the date of exercise of
     the Stock  Appreciation  Right, or if there are no sales reported by NASDAQ
     on that date,  the date  immediately  preceding the exercise on which there
     was a sale reported by NASDAQ.  Stock or cash or both received on surrender
     of  options  under  the Plan are not to be taken  into  account  under  any
     pension, retirement,  deferred profit sharing or any other employee benefit
     program of any kind.  Expiration  or  termination  of any option shall also
     result in the expiration or  termination of the related Stock  Appreciation
     Right.

          (g) Terminating of Employment with Respect to An Employee/Optionee

               (i) Termination of Employment for Reasons Other Than  Retirement,
          Disability or Death. In the event an employee/ optionee shall cease to
          be employed  by the Company for any reason  other than normal or early
          retirement  (as  determined  under the  Company's  retirement  plan or
          plans)  or on  account  of  disability  or death,  no option  shall be
          exercisable by the optionee more than ninety
<PAGE>
          (90)  days  after  termination;   provided,  if  an  optionee  accepts
          employment  with or otherwise  aids or assists any  competitor  of the
          Company (or any of its subsidi aries),  all options shall be void upon
          the date such employment was accepted or such assistance was provided;
          and provided  further that if an  optionee's  employment is terminated
          due to  malfeasance,  no option shall be  exercisable by the optionee.
          Whether an optionee has accepted employment with or otherwise aided or
          assisted a competitor  of the Company or a  subsidiary  of the Company
          shall be the  sole  determination  of the  Administrator.  Whether  an
          authorized  leave  of  absence  or  absence  because  of  military  or
          governmental  service shall  constitute  termination of employment for
          such  purposes  shall  be  determined  by  the  Administrator,   which
          determination shall be final and conclusive.

               (ii)  Termination of Employment for Retirement or Disability.  In
          the event an employee/optionee ceases to be employed by the Company by
          reason  of  normal  or  early  retirement  (as  determined  under  the
          Company's  retirement  plan or  plans) or  retirement  on  account  of
          physical  disability,  each option held by such optionee shall, to the
          extent exercisable on the date of such retirement, remain exercisable,
          in whole  or in part,  for a period  of two (2)  years  following  the
          optionee's  termination  of  employment;  subject,  however,  to prior
          expiration according to its terms and other limitations imposed by the
          Plan.  Notwithstanding  the  foregoing,  if  an  optionee  during  the
          foregoing  exercise  period  accepts  employment  with a competitor of
          either the Company or any subsidiary of the Company,  any  outstanding
          options held by the optionee on the date of  termination of employment
          shall  terminate as of the date of  termination.  If the optionee dies
          after such retirement,  the optionee's options shall be exercisable in
          accordance with Paragraph 6(g) (iii) hereof.

               (iii)  Termination  of Employment  for Death.  In the event of an
          employee/optionee's death, each option held by such optionee shall, to
          the extent rights to purchase shares under the options have accrued at
          the  date of death  and  shall  not  have  been  fully  exercised,  be
          exercisable,  in whole or in part, by the personal  representative  of
          the  optionee's  estate or by any  person or  persons  who shall  have
          acquired the option or options  directly  from the optionee by bequest
          or inheritance only under the following  circumstances  and during the
          following periods:

                    (a) If the optionee dies while  employed by the Company,  at
               any time within two (2) years after his or her death, or

                    (b) If the optionee dies during the extended exercise period
               following   termination  of  employment  specified  in  Paragraph
               6(g)(ii), at any
<PAGE>
               time  within the longer time of such  extended  period or six (6)
               months after death.

               In any case, the foregoing is subject to the prior  expiration of
          the term of the  option or  options  and any other  limitation  on the
          exercise of such option or options in effect at the date of  exercise.
          No option  shall be  transferable  by the optionee  otherwise  then by
          will,  or if he or she  dies  intestate,  by the laws of  descent  and
          distribution of the state of his or her domicile.

               (iv)  Termination  of Options.  Any option that is not  exercised
          within whichever of the exercise  periods  specified in this paragraph
          6(g) is applicable  shall  terminate upon  expiration of such exercise
          period.

          (h)  Adjustment  in Shares  Covered  by  Option.  The number of shares
     covered by each outstanding option, and the price per share thereof,  shall
     be  proportionately  adjusted for any increase or decrease in the number of
     issued  shares  resulting  from a split in or com bination of shares or the
     payment of a stock dividend on the shares or any other increase or decrease
     in the number of such shares effected  without receipt of  consideration by
     the Company.

     If the  Company  shall  be the  surviving  corporation  in  any  merger  or
consolidation or if the Company is merged into a wholly owned subsidiary  solely
for purposes of changing the Company's state of incorporation,  each outstanding
option  shall  pertain to and apply to the  securities  to which a holder of the
number of shares of stock subject to the option would have been entitled. A sale
of all  or  substantially  all  of the  Company's  assets  or a  dissolution  or
liquidation of the Company or a merger or  consolidation in which the Company is
not the  surviving  corporation,  except as above  provided,  shall  cause  each
outstanding  option to terminate;  provided,  that each optionee  shall, in such
event, have the right  immediately prior to such sale of assets,  dissolution or
liquidation,  or  merger  or  consolidation  in  which  the  Company  is not the
surviving corporation, to exercise his or her option in whole or in part.

     In the event of a change in the shares as presently  constituted,  which is
limited to a change of all of its authorized shares with par value into the same
number of shares  with a different  par value or without  par value,  the shares
resulting  from any such  change  shall be deemed to be the  shares  within  the
meaning of the Plan.

     To the extent that the foregoing  adjustments relate to stock or securities
of the  Company,  such  adjustments  shall be made by the  Administrator,  whose
determination in that respect shall be final,  binding and conclusive.  Any such
adjustment may provide for the  elimination of any fractional  share which might
otherwise become subject to an option.
<PAGE>
     Except as  hereinbefore  expressly  provided in this  Paragraph  6(h),  the
optionee  shall have no rights by reason of any  subdivision  or  combination of
shares of stock of any class or the  payment of any stock  dividend or any other
increase  or decrease in the number of shares of stock of any class or by reason
of any sale of assets,  dissolution,  liquidation,  merger or  consolidation  or
spinoff of assets or stock of another corporation,  and any issue by the Company
of shares of stock of any class, or securities  convertible into shares of stock
of any class,  shall not affect,  and no adjustment  by reason  thereof shall be
made with  respect  to,  the  number or price of shares of stock  subject to the
option.

     The grant of an option pursuant to the Plan shall not affect in any way the
right  or  power  of  the  Company  to  make   adjustments,   reclassifications,
reorganizations  or changes of its capital or business  structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

          (i) Rights of a  Shareholder.  An  optionee  shall have no rights as a
     shareholder  with respect to any shares  covered by his or her option until
     the  date he or she  becomes  the  holder  of  record  of such  shares.  No
     adjustment  shall be made for dividends,  distributions or other rights for
     which the  record  date is prior to the date on which he or she shall  have
     become the holder of record  thereof,  except as provided in Paragraph 6(h)
     hereof.  With respect to an  employee/optionee,  the Plan and any agreement
     executed  hereunder  shall not impose upon the Company  any  obligation  to
     retain the optionee in its employ for any period.

          (j)  Modification,  Extension  and Renewal of Options.  Subject to the
     terms  and  conditions  and  within  the   limitations  of  the  Plan,  the
     Administrator, subject to approval of the Board of Directors, may modify or
     renew  outstanding  options granted under the Plan, or accept the surrender
     of  outstanding  options  (to the extent  not  theretofore  exercised)  and
     authorize  the  granting of new options in  substitution  therefor  (to the
     extent  not  theretofore  exercised).  Notwithstanding  the  foregoing,  no
     modification of an option shall, without the consent of the optionee, alter
     or impair any rights or obligations  under any option  theretofore  granted
     under the Plan.

          (k)  Postponement  of  Delivery  of Shares  and  Representations.  The
     Company  may  postpone  the  issuance  and/or  delivery  of shares upon any
     exercise of an option until com pletion of such stock exchange listing,  or
     registration,  or other qualification of such shares under any state and/or
     federal law, rule or  regulation as the Company may consider  appro priate,
     and  may   require   any   person   exercising   an  option  to  make  such
     representations,  including  a  representation  that  it is the  optionee's
     intention  to  acquire  shares  for  investment  and  not  with a  view  to
     distribution  thereof,  and furnish  such  information  as it may  consider
     appropriate  in  connection  with the issuance or delivery of the shares in
     compliance with applicable laws,  rules and  regulations.  In such event no
     shares  shall be issued to such  holder  unless  and until the  Company  is
     satisfied with the correctness of any such representations.
<PAGE>
          (l) Other Provisions.  The option agreements authorized under the Plan
     shall  contain  such  other  provisions,   including,  without  limitation,
     restrictions  upon the exercise of the option, as the Administrator and the
     Board of Directors shall deem advisable.
<PAGE>
7.       ADJUSTMENTS IN SHARES AVAILABLE FOR OPTIONS

     The  adjustments  in number  and kind of  shares  and the  substitution  of
shares,  affecting  outstanding options in accordance with Paragraph 6(h), shall
also apply to the number and kind of shares  reserved for  issuance  pursuant to
the Plan but not yet covered by options.

8.       AMENDMENT OF THE PLAN

     The Board of Directors of the Company,  insofar as permitted by law,  shall
have the right  from time to time,  with  respect  to any shares at the time not
subject to options,  to suspend or discontinue the Plan or revise or amend it in
any respect  whatsoever except that, without approval of the shareholders of the
Company, no such revision or amendment shall: (a) increase the maximum number of
shares  which may be subject to the Plan;  (b)  increase  the maximum  number of
shares which may be optioned to any one employee;  (c) change the designation of
the class of employees eligible to receive options;  (d) materially increase the
benefits  accruing to option  holders under the Plan;  (e) decrease the price at
which  options may be granted;  (f) remove the adminis  tration of the Plan from
the  Administrator;  (g)  render  any member of the  Administrator  eligible  to
receive  an option  under the Plan  while  serving  thereon;  or (h)  permit the
granting of options under the Plan after December 31, 1999.

9.       APPLICATION OF FUNDS

     The proceeds  received by the Company  from the sale of shares  pursuant to
options will be used for general corporate purposes.

10.      NO OBLIGATION TO EXERCISE OPTION

     The granting of an option shall impose no  obligation  upon the optionee to
exercise such option.

11.      TAX WITHHOLDING

     The exercise of any option under the Plan is subject to the condition  that
if at any time the Administrator  shall determine,  in its discretion,  that the
satisfaction of withholding tax or other withholding liabilities under any state
or federal law is necessary or  desirable  as a condition  of, or in  connection
with,  such  exercise or the  delivery or purchase of shares  pursuant  thereto,
then,  in such event,  the  exercise of the option  right shall not be effective
unless  such  withholding  shall  have been  effected  or  obtained  in a manner
acceptable to the Administrator.
<PAGE>
12.      CONSTRUCTION

     This Plan  shall be  construed  under  the laws of the  State of  Michigan,
United States of America.

     Adopted by the Board of Directors of the Company on August 22, 1997.


                                              /s/ Maryam Komejan
                                              Secretary
                                              Donnelly Corporation

     Approved by the Shareholders of the Company on October 17, 1997.


                                              /s/ Maryam Komejan
                                              Secretary
                                              Donnelly Corporation
<PAGE>
                                   EXHIBIT 5



                                       November 25, 1997



Donnelly Corporation
414 East Fortieth Street
Holland, Michigan 49423-5368

         Re:      Registration Statement on Form S-8 Relating to the
                  Donnelly Corporation 1997 Employee Stock Option Plan

Gentlemen:

     With respect to the Registration  Statement on Form S-8 (the  "Registration
Statement"),   filed  by  Donnelly  Corporation,  a  Michigan  corporation  (the
"Company"),  with the  Securities  and  Exchange  Commission  for the purpose of
registering under the Securities Act of 1933, as amended,  175,593 shares of the
Company's Class A common stock, par value $0.10 per share, for issuance pursuant
to the Company's 1997 Employee Stock Option Plan (the "Plan"),  we have examined
such documents and questions of law we consider necessary or appropriate for the
purpose of giving this opinion.  On the basis of such evaluation,  we advise you
that in our opinion the 175,593  shares covered by the  Registration  Statement,
upon the exercise of stock options,  at the prices described in the Registration
Statement,  but not less than the par value  thereof,  and upon delivery of such
shares and payment  therefor in accordance with the terms stated in the Plan and
the  Registration  Statement,  will be duly and legally  authorized,  issued and
outstanding and will be fully paid and nonassessable.

     We hereby  consent  to the  filing of this  opinion  as an  exhibit  to the
Registration  Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required  under Section 7 of
the  Securities Act of 1933, as amended,  or under the rules and  regulations of
the Securities and Exchange Commission relating thereto.

                                   Sincerely,

                     VARNUM, RIDDERING, SCHMIDT & HOWLETTLLP

                            William J. Lawrence III
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 51335}]
{"company-data": {"conformed-name": "DONNELLY CORP", "cik": "0000805583", "assigned-sic": "3231", "irs-number": "380493110", "state-of-incorporation": "MI", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-40987", "film-number": "97728227"}, "business-address": {"street1": "414 E FORTIETH ST", "city": "HOLLAND", "state": "MI", "zip": "49423", "phone": "6167867000"}, "mail-address": {"street1": "424 EAST 40TH STREET", "city": "HOLLAND", "state": "MI", "zip": "49423"}}
------------------------------------------------------------------------------
As filed with the Securities and Exchange Commission on November 25, 1997 - 
Registration No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                              DONNELLY CORPORATION
             (Exact name of registrant as specified in its charter)

            Michigan                                    38-0493110
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

             414 East Fortieth Street, Holland, Michigan 49423-5368
               (Address of Principal Executive Offices) (Zip Code)

              Donnelly Corporation 1997 Employee Stock Option Plan
                            (Full Title of the Plan)

   William R. Jellison, 414 East Fortieth Street, Holland, Michigan 49423-5368
                     (Name and address of agent for service)

                          Copies of Communications to:
                             William J. Lawrence III
                    Varnum, Riddering, Schmidt & Howlett LLP
                      333 Bridge Street, N.W., P.O. Box 352
                        Grand Rapids, Michigan 49501-0352
                                 (616) 336-6000

                         CALCULATION OF REGISTRATION FEE

                                                              Proposed              Proposed
           Title of                                            Maximum               Maximum
       Securities to be              Amount to be          Offering Price           Aggregate             Amount of
          Registered                  Registered            Per Share(2)         Offering Price       Registration Fee
Class A Common Stock
     ($.10 Par Value)             175,593 Shares(1)           $18.35              $3,222,132             $977.00
===============================  ===================== ====================== =====================  ===================
(1)      Represents the number of shares of Common Stock authorized for issuance
         under the Donnelly  Corporation  1997  Employee  Stock Option Plan (the
         "Plan").  This Registration  Statement also covers such  indeterminable
         additional number of shares as may be issuable under the Plan by reason
         of adjustments in the number of shares covered  thereby as described in
         the Prospectus.
(2)      For the purpose of computing the registration fee only, the price shown
         is based  upon the price of $18.35 per share, the  average of the  high
         and low sales prices for the Common  Stock of  Donnelly  Corporation on
         the  New York Stock Exchange  on November 20, 1997, in  accordance with
         Rule 457(h).

Pursuant  to  Rule  416(a)  of the  General  Rules  and  Regulations  under  the
Securities Act of 1933, this Registration  Statement shall cover such additional
securities as may be offered or issued to prevent dilution  resulting from stock
splits, stock dividends or similar transactions.
INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference

     The Company's  Annual Report on Form 10-K for the year ended June 28, 1997,
which has been filed by the Company with the Commission  (File No.  1-9716),  is
incorporated  herein  by  reference.  All  other  reports  filed by the  Company
pursuant to Section  13(a) or 15(d) of the  Securities  Exchange Act of 1934, as
amended  (the  "Exchange  Act") since the end of the fiscal year  covered by the
foregoing Annual Report on Form 10-K are incorporated  herein by reference.  All
other reports or documents filed by the Company  pursuant to the requirements of
Sections 13(a),  13(c), 14 and 15(d) of the Exchange Act, subsequent to the date
of this  Registration  Statement and prior to the termination of the offering of
the securities  offered hereby shall be deemed to be  incorporated  by reference
herein  and to be a part  hereof  from the date of  filing  of such  reports  or
documents.  Any  statements  contained  in a  document  incorporated  herein  by
reference  shall be deemed to be modified  or  superseded  for  purposes of this
Prospectus  to  the  extent  that  a  statement   contained  herein  or  in  any
subsequently  filed  document  which also is  incorporated  herein  modifies  or
supersedes  such statement.  Any such statement so modified or superseded  shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.

     The  consolidated   financial   statements  of  Donnelly   Corporation  and
subsidiaries as of June 28, 1997 and June 29, 1996, and for each of the years in
the  three-year  period  ended June 28,  1997,  have been  incorporated  in this
Registration   Statement  by  reference  in  reliance  upon  the  report,   also
incorporated in this  Registration  Statement by reference,  of BDO Seidman LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing.

     The  description  of the  Company's  Class A  Common  Stock,  the  class of
securities offered pursuant to this Registration  Statement, is contained in the
Company's  Registration  Statement  filed pursuant to Section 12 of the Exchange
Act,  and  is  incorporated  herein  by  reference,   including  any  subsequent
amendments or reports filed for the purpose of updating that description.

Item 4.  Description of Securities

     The class of securities to be offered is registered under Section 12 of the
Exchange Act.

Item 5.  Interests of Named Experts and Counsel

     Not applicable.

Item 6.  Indemnification of Directors and Officers

     The Articles of Incorporation of the Company provide that its directors and
officers are to be indemnified as of right to the fullest extent permitted under
the Michigan  Business  Corporation  Act  ("MBCA").  Under the MBCA,  directors,
officers,  employees or agents are entitled to indemnification  against expenses
(including  attorneys' fees) whenever they successfully defend legal proceedings
brought  against them by reason of the fact that they hold such a position  with
the corporation.  In addition,  with respect to actions not brought by or in the
right  of the  corporation,  indemnification  is  permitted  under  the MBCA for
expenses (including attorneys' fees), judgments, fines, penalties and reasonable
settlement if it is determined that the person seeking  indemnification acted in
a good  faith  and in a manner  he or she  reasonably  believed  to be in or not
opposed to the best interests of the corporation or its  shareholders  and, with
respect to criminal  proceedings,  he or she had no reasonable  cause to believe
that his or her conduct was unlawful.  With respect to actions  brought by or in
the right of the  corporation,  indemnification  is permitted under the MBCA for
expenses  (including  attorneys'  fees)  and  reasonable  settlements,  if it is
determined that the person seeking  indemnification acted in good faith and in a
manner  he or she  reasonably  believed  to be in or  not  opposed  to the  best
interests of the corporation or its shareholders;  provided,  indemnification is
not permitted if the person is found liable

                                      S-1
to the corporation  unless the court in which the action or suit was brought has
determined  that  indemnification  is  fair  and  reasonable  in view of all the
circumstances of the case.

     The MBCA  specifically  provides  that it is not the  exclusive  source  of
indemnity.   As  a  result,  the  Company  adopted  individual   indemnification
agreements  with its  directors.  Approved by the  Company's  shareholders,  the
indemnification agreements provide a contractually enforceable right, upon which
written notice, for prompt  indemnification,  except that indemnification is not
required  where:  (I)  indemnification  is provided  under an insurance  policy,
except for amounts in excess of insurance coverage;  (ii) a director is entitled
to  indemnification  by reason of having given notice of any circumstance  which
might  give rise to a claim  under any policy of  insurance,  the terms of which
have expired  prior to the  effective  date of the  indemnity  agreement;  (iii)
indemnification  is provided by the Company  outside of the agreement;  (iv) the
claim for indemnity is based upon or attributable to any transaction  involving:
intentional  misconduct  or a knowing  violation  of law, a violation of Section
551(1) or any  successor  provision  of the  MBCA,  or from  which the  director
derived an improper  personal  benefit;  (v) the claim  involved a violation  of
Section 16(b) of the Securities  Exchange Act of 1934 and amendments thereto, or
similar  provisions  of state law;  or (vi)  indemnification  by the  Company is
otherwise  prohibited  by  applicable  law. In the case of a derivative or other
action by or in the  right of the  Company  where a  director  is found  liable,
indemnity is predicted on the determination that indemnification is nevertheless
appropriate,  by:  majority  vote of a  committee  of two or more  disinterested
directors  appointed by the Board of Directors;  independent  legal counsel in a
written  opinion;  or the court in which the claim is  litigated,  whichever the
indemnitee chooses. The protection provided by the indemnification agreements is
broader than that under the MBCA, where indemnification in such circumstances is
available  only where  specifically  authorized  by the court where the claim is
litigated.

     In addition to the available  indemnification,  the  Company's  Articles of
Incorporation,  as amended,  limit the personal  liability of the members of its
Board of Directors for monetary damages with respect to claims by the Company or
its shareholders resulting from certain negligent acts or omissions.

Item 7.  Exemption from Registration Claimed

     Not applicable.

Item 8.  Exhibits

     Reference is made to the Exhibit Index which appears on page S-6.

Item 9.  Undertakings

     The undersigned registrant hereby undertakes:

          (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement:

               (i) To include any prospectus required by Section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  registration  statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate,  represents a  fundamental  change in the  information  set
          forth in the registration statement;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  registration
          statement  or  any  material   change  to  such   information  in  the
          registration statement;  provided, however, that paragraphs (1)(I) and
          (1) (ii) do not apply if the  registration  statement  is on Form S-3,
          Form S-8, or Form F-3, and the information  required to be included in
          a  post-effective  amendment  by  those  paragraphs  is  contained  in
          periodic  reports  filed by the  registrant  pursuant to Section 13 or
          Section  15  (d)  of   Securities   Exchange  Act  of  1934  that  are
          incorporated by reference in the  registration  statement.  

                                      S-2
(2) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  registration  statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     The  undersigned   registrant  hereby  undertakes  that,  for  purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bonafide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted  to  directors,  officers  and  controlling
persons of the registrant pursuant to the foregoing  provisions  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is,  therefore,  unenforceable.  In the  event a claim  for  indemnification
against such  liabilities  (other than the payment by the registrant of expenses
incurred  or  paid by a  director,  officer  or by the  registrant  of  expenses
incurred or paid by a director,  officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                       S-3
SIGNATURES

     Pursuant to the  requirements  of the  Securities  Act of 1933, the Company
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of Holland,  State of Michigan, on 17th day of October,
1997.

                                        DONNELLY CORPORATION

                                        By /s/ J. Dwane Baumgardner
                                        J. Dwane Baumgardner, President and
                                        Chief Executive Officer

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below constitutes and appoints J. Dwane Baumgardner and Maryam Komejan, and each
of them, his or her true and lawful  attorney-in-fact and agent, with full power
of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities,  to sign any and all amendments (including
post-effective  amendments) to this Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory authority,  granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing  required and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person,  hereby  ratifying and  confirming  all that said  attorney-in-fact  and
agent, or his or her  substitute,  may lawfully do or cause to be done by virtue
hereof.

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been  signed  below on  October  17,  1997,  by the
following persons in the capacities indicated.

/s/ John A. Borden                          /s/ B. Patrick Donnelly, III
John A. Borden, Director                    B. Patrick Donnelly, III, Director

/s/ R. Eugene Goodson                       /s/ Joan E. Donnelly
R. Eugene Goodson, Director                 Joan E. Donnelly, Director

/s/ Donald R. Uhlmann                       /s/ Thomas E. Leonard
Donald R. Uhlmann, Director                 Thomas E. Leonard, Director

/s/ J. Dwane Baumgardner                    /s/ Gerald T. McNeive
J. Dwane Baumgardner, Director              Gerald T. McNeive, Jr., Director

/s/ Arnold F. Brookstone                    /s/ William R. Jellison
Arnold F. Brookstone, Director              William R. Jellison, Vice President,
                                            Corporate Controller and Treasurer

/s/ Rudolph B. Pruden
Rudolph B. Pruden, Director

                                       S-4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Donnelly Corporation
Holland, Michigan

We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement  of our  report  dated  August  1,  1997,  relating  to  the  combined
consolidated  financial  statements  of Donnelly  Corporation  appearing  in the
Company's  Annual  Report on Form 10-K for the year ended June 28, 1997,  and to
the reference to us as experts included in this Registration Statement.

/s/ BDO Seidman LLP
BDO SEIDMAN LLP

Grand Rapids, Michigan
November 21, 1997

                                       S-5
EXHIBIT INDEX

     The following exhibits are filed as a part of the Registration Statement:

Exhibit 4           Donnelly Corporation 1997 Employee Stock Option Plan

Exhibit 5           Opinion of Varnum, Riddering, Schmidt & Howlett LLP

Exhibit 23(a)       Consent of BDO Seidman, LLP - included on page S-5 hereof

Exhibit 23(b)       Consent of Varnum, Riddering, Schmidt & Howlett LLP-included
                    in Exhibit 5

Exhibit 24          Power of Attorney - included on page S-4 hereof

                                       S-6
EXHIBIT 4

                              DONNELLY CORPORATION
                         1997 EMPLOYEE STOCK OPTION PLAN

1.       NAME AND PURPOSE

     This plan shall be called the  Donnelly  Corporation  1997  Employee  Stock
Option Plan (the "Plan").  The Plan is intended to encourage  stock ownership by
certain  key  employees  of  Donnelly  Corporation  (the  "Company")  and of its
subsidiaries,  and to provide them with an additional incentive to contribute to
the  success  of the  Company.  The term  "Company"  when  used in the Plan with
reference to employment shall include  subsidiaries of the Company as defined by
Subsection 425(f) of the Internal Revenue Code of 1986, as amended (the "Code").

2.       EFFECTIVE DATE AND TERM OF PLAN

     The  effective  date of the Plan shall be the date the Plan is  approved by
the shareholders of the Company. Options may not be granted under the Plan after
December 31, 1999;  provided,  however,  that all options outstanding as of that
date shall remain or become exercisable pursuant to their terms and the terms of
the Plan.

3.       ADMINISTRATION

     The Plan shall be administered by the Board of Directors of the Company, or
if a majority  of the  Directors  are not  "Disinterested  Persons"  (as defined
herein),  by a committee  appointed by the  Company's  Board of  Directors  (the
"Committee").   The   administrating   body   shall  be   referred   to  as  the
"Administrator".  The  Committee,  if appointed,  shall consist of not less than
three  (3)  members,  all of whom  are  "Disinterested  Persons".  The  Board of
Directors  may from time to time  remove  members  from,  or add members to, the
Committee.  Vacancies on the Committee,  however caused,  shall be filled by the
Board of  Directors.  A  "Disinterested  Person" is a person who  qualifies as a
"nonemployee  director" as such term is defined in Rule 16b-3 promulgated by the
Securities and Exchange  Commission under the Securities Act of 1934, as amended
from time to time or any successor rule.

     The   Administrator   may  establish  such   regulations,   provisions  and
procedures,  within the terms of the Plan,  as in the opinion of its members may
be advisable in the  administration  of the Plan. The  Administrator  shall keep
minutes of its  meetings.  A majority of the  Administrator  shall  constitute a
quorum, and the acts of a majority of a quorum at any meeting,  or acts approved
in writing by a majority of the members of the Administrator, shall be the valid
acts of the Administrator.

     The  Administrator  shall  determine  the persons to whom options are to be
granted and the number of shares subject to each such option.  The Administrator
shall also  determine  such other  matters with respect to the options as may be
specified in the Plan.
Without amending this Plan, the  Administrator may grant or amend awards to
employees  who are foreign  nationals or employed  outside the United  States or
both, on such terms and conditions  different from those  specified in this Plan
as may,  in the  judgment  of the  Administrator,  be  necessary  to comply with
foreign law or practice and to further the purposes of this Plan.

     The  interpretation and construction by the Administrator of any provisions
of the Plan or of any option  granted  under it shall be final and binding  upon
the Company,  the Board of Directors  and  optionees.  No member of the Board of
Directors or the  Administrator  shall be liable for any action or determination
made in good faith with respect to the Plan or any option granted under it.

4.       ELIGIBILITY

     Subject to the  limitations  contained in this  paragraph,  the persons who
shall be  eligible to receive  options  shall be such key  employees  (including
employee  officers  and  directors)  of the Company as the  Administrator  shall
select.   In  making  such  selections,   the  Administrator  may  consider  the
recommendations  of the Company's  chief  executive  officer,  the nature of the
services  rendered by the  respective  employees,  their  present and  potential
contributions  to the  Company's  success  and  the  success  of the  particular
subsidiary  or division of the Company by which they are employed and such other
factors as the Administrator shall deem relevant. An optionee may hold more than
one option, but only on the terms and subject to the restrictions  hereafter set
forth.  No person,  while a member of the  Administrator,  shall be  eligible to
receive an option under the Plan.  Subject to  adjustments  consistent  with the
provisions of Paragraph  6(h), no one optionee may be granted  options  covering
more  than a total of  twenty-five  percent  (25%) of the  Class A Common  Stock
originally  reserved  for  issuance  under this Plan,  as defined in Paragraph 5
hereof,  plus  such  increases  as may  from  time to time  be  approved  by the
Company's shareholders.

5.       STOCK AVAILABLE FOR OPTIONS

     Subject to adjustments as provided in Paragraph 6(i), the aggregate  number
of shares  reserved for  purposes of the Plan shall be one hundred  seventy five
thousand five hundred  ninety three  (175,593)  shares of the Company's  Class A
Common  Stock,  par  value $ .10 per  share  ("Class  A Common  Stock"),  either
authorized but unissued shares or shares held in treasury.  Such number shall be
reduced  by the  aggregate  number of shares  covered by the  options  purchased
pursuant to Paragraph  6(f).  If any  outstanding  option under the Plan for any
reason  expires or is terminated  for any reason before  December 31, 1999,  the
shares  allocable  to the  unexercised  portion  of such  option  may  again  be
subjected  to an option  under the Plan. A surrender of all or part of an option
pursuant to Paragraph 6(f) shall not be considered an expiration or termination,
and the shares allocable thereto may not again be subject to an option under the
Plan.
6.       DATE OF GRANT,  TERMS AND CONDITIONS OF OPTIONS AND STOCK  APPRECIATION
         RIGHTS.

     Stock options granted pursuant to the Plan shall be authorized by the Board
of Directors.  The date on which an option shall be granted shall be the date of
the  Board's  authorization  of the  option  or  such  later  date as  shall  be
determined by the Board at the time the option is authorized.  All stock options
granted pursuant to the Plan shall be either  incentive stock options  ("ISOs"),
intended to qualify under  Section 422 of the Internal  Revenue Code of 1986, as
amended (the "Code"),  or a nonqualified  stock option,  not intended to qualify
under  Section 422 of the Code,  as  determined  in each case by the  Committee.
Options granted under this Plan shall be evidenced by agreements in such form as
the  Administrator  shall  approve,  which  agreements  shall comply with and be
subject to the following terms and conditions:

          (a) Number and Maximum  Value of Shares.  Each option  shall state the
     number of shares to which it  pertains.  The  aggregate  fair market  value
     (determined as of the time the option is granted) of shares with respect to
     which ISOs are  exercisable  for the first time by any employee  during any
     calendar  year  (under  this Plan or any  other  stock  option  plan of the
     Company  or of any  "parent  or  subsidiary  corporation"  [as  defined  in
     Subsections  425 (e), (f) and (g) of the Code] of the  Company),  shall not
     exceed $100,000.

          (b) Option Price. Each option shall state the option price. The option
     price for ISOs will be the fair market  value of the shares on the date the
     option  is  granted;  provided,   however,  if  the  optionee  owns  shares
     representing  more than ten percent  (10%) of the total voting power of the
     Company's  Class A Common  Stock at the time an ISO is granted,  the option
     price will be one hundred ten  percent  (110%) of the fair market  value of
     the  shares  on the date the  option is  granted.  The  option  price for a
     nonqualified  option  will be esta  blished  by the  Administrator.  If the
     shares are listed on an established  stock exchange or exchanges,  the fair
     market value per share shall be the closing sale price on such  exchange or
     exchanges  or, if no sale of the  shares  shall have been made on any stock
     exchange on that day, on the next  preceding  day on which there was a sale
     of  shares.  If the  shares  are not  listed  on such a stock  exchange  or
     exchanges,  the fair market value per share shall be the closing sale price
     as reported in the National  Association  of Securities  Dealers Auto mated
     Quotation  System  ("NASDAQ") on the day the option is granted or, if there
     are no sales reported by the NASDAQ on that date, the next preceding day on
     which there was a sale reported by NASDAQ.  The fair market value of shares
     for options granted prior to the Company's initial public offering shall be
     the price to  public in the  initial  public  offering  as set forth on the
     cover of the Company's final prospectus.

          (c)  Medium of  Payment.  The  option  price  shall be  payable to the
     Company  either:  (i) in United  States  dollars in cash or by check,  bank
     draft or money order payable to the order of the Company;  (ii) through the
     delivery  of shares with a fair  market  value on the date of the  exercise
     equal to the option price  provided  such shares are utilized as
payment  to  acquire  at least 100  shares of  optioned  stock,  unless the
     remaining  shares covered by an option are fewer than 100 shares,  or (iii)
     by a  combination  of (i)  and  (ii)  above.  Fair  market  value  will  be
     determined in the manner  specified in Paragraph 6(b) except as to the date
     of determination.

          (d) Term and Exercise of Options.  The term of each ISO granted  under
     the Plan  shall be not more than ten (10)  years from the date on which the
     ISO is granted; provided, however, that in the case of an employee who owns
     shares  representing  more than ten percent (10%) of the total voting power
     of the Company's  Class A Common Stock at the time the ISO is granted,  the
     term of such option  shall be not more than five (5) years from the date of
     grant.  The term of a  nonqualified  option shall be not more than ten (10)
     years and one day from the date the option is granted.  No option  shall be
     exercisable  either in whole or in part prior to twelve (12)  months  after
     the date such option is granted  except as provided in  Paragraphs  6(f) or
     (6)(h).   (Notwithstanding   the  preceding  sentence,   options  shall  be
     exercisable  immediately in the event of a "Change in Control". A Change in
     Control shall be deemed to have occurred  hereunder if (i) any "person" (as
     such term is used in Section 13(d) and 14(d) of the Securities Exchange Act
     of 1934 ("Act")) is or becomes the  "beneficial  owner" (as defined in Rule
     13d-3 under the Act), directly or indirectly,  of securities of the Company
     representing 20% or more of the combined voting power of the Company's then
     outstanding  securities  (except for persons who are such beneficial owners
     as of the  effective  date of this Plan)  without the prior  approval of at
     least 2/3 of the members of the Board in office  immediately  prior to such
     person attaining such percentage interest; (ii) the Company is a party to a
     merger, consolidation,  sale of assets or other reorganization,  or a proxy
     contest,  as a  consequence  of  which  members  of  the  Board  in  office
     immediately  prior to such  transaction  or event  constitute  less  than a
     majority  of the  Board  thereafter;  or (iii)  during  any  period  of two
     consecutive  years,  individuals  who  at  the  beginning  of  such  period
     constituted  the Board  (including  for this purpose any new director whose
     election or  nomination  for  election by the  Company's  shareholders  was
     approved  by a vote of at least 2/3 of the  directors  still in office  who
     were  directors at the  beginning  of such period)  cease for any reason to
     constitute at least a majority of the Board.) Thereafter,  an option may be
     exercised  at any time or from time to time  during  the term of the option
     upon written notice to the Company of the optionee's  intention to exercise
     the  option  as  to  any  or  all  full  shares   covered  by  the  option.
     Notwithstanding  the  foregoing,  an option shall not be  exercisable  with
     respect to less than 100 shares unless the remaining  shares  covered by an
     option are fewer than 100 shares. The purchase price of the shares shall be
     paid in full upon delivery to the optionee of certificates for such shares.
     Excluding nonemployee directors,  and except as provided in Paragraph 6(g),
     an option may be  exercised  by the  optionee  only while the  optionee  is
     employed by the Company and only during his lifetime. Options granted under
     the Plan may be exercised in any order,  regardless of the date of grant or
     the existence of any other outstanding stock option of the Company.
(e)  Options  not  Transferable.  Options  may not be  sold,  pledged,
     assigned or transferred in any manner otherwise than by will or the laws of
     descent or  distribution  to the extent  provided in  Paragraph  6(g)(iii).
     During the lifetime of an optionee,  the options shall be exercisable  only
     by the optionee.  Following the death of an optionee,  the options shall be
     exercisable only to the extent provided in Paragraph 6(g)(iii).

          (f) Stock Appreciation  Rights. Any option granted under the Plan may,
     if the  Administrator  in its  discretion  so  determines,  contain a Stock
     Appreciation  Right  which  shall be subject to the terms  hereinafter  set
     forth and  shall be  exercisable  by  submitting  notice of the  optionee's
     election   to  exercise   such  Stock   Appreciation   Right.   Unless  the
     Administrator otherwise consents, such election may only be made during the
     period  commencing  on the third (3rd)  business day  following the date on
     which the Company  releases for publication its quarterly or annual summary
     statements of sales and earnings and ending on the twelfth (12th)  business
     day following such date (Election Period). A Stock Appreciation Right shall
     provide that the Company shall,  at the election of the optionee during the
     Election  Period and upon surrender of all or part of the underlying  stock
     option ,  purchase  all or any part of such  option to the extent that such
     option is exercisable at the date of such election,  for an amount (payable
     in cash,  shares of the  Company's  Class A Common Stock valued at the then
     fair  market  value,  or  a  combination   thereof  as  determined  by  the
     Administrator)  equal to the excess of the fair  market  value per share of
     Class A Common Stock over the option  price per share,  times the number of
     shares  called  for  by the  option,  or a  proportion  thereof,  which  is
     surrendered.  If the shares are listed on an established  stock exchange or
     exchanges,  the fair market value per share shall be the closing sale price
     on such  exchange or exchanges or, if no sale of the shares shall have been
     made on the date of exercise on any stock  exchange,  on the next preceding
     day on which  there was a sale of  shares.  If the shares are not listed on
     such a stock  exchange or exchanges,  the fair market value per share shall
     be the closing  sale price as reported by NASDAQ on the date of exercise of
     the Stock  Appreciation  Right, or if there are no sales reported by NASDAQ
     on that date,  the date  immediately  preceding the exercise on which there
     was a sale reported by NASDAQ.  Stock or cash or both received on surrender
     of  options  under  the Plan are not to be taken  into  account  under  any
     pension, retirement,  deferred profit sharing or any other employee benefit
     program of any kind.  Expiration  or  termination  of any option shall also
     result in the expiration or  termination of the related Stock  Appreciation
     Right.

          (g) Terminating of Employment with Respect to An Employee/Optionee

               (i) Termination of Employment for Reasons Other Than  Retirement,
          Disability or Death. In the event an employee/ optionee shall cease to
          be employed  by the Company for any reason  other than normal or early
          retirement  (as  determined  under the  Company's  retirement  plan or
          plans)  or on  account  of  disability  or death,  no option  shall be
          exercisable by the optionee more than ninety
(90)  days  after  termination;   provided,  if  an  optionee  accepts
          employment  with or otherwise  aids or assists any  competitor  of the
          Company (or any of its subsidi aries),  all options shall be void upon
          the date such employment was accepted or such assistance was provided;
          and provided  further that if an  optionee's  employment is terminated
          due to  malfeasance,  no option shall be  exercisable by the optionee.
          Whether an optionee has accepted employment with or otherwise aided or
          assisted a competitor  of the Company or a  subsidiary  of the Company
          shall be the  sole  determination  of the  Administrator.  Whether  an
          authorized  leave  of  absence  or  absence  because  of  military  or
          governmental  service shall  constitute  termination of employment for
          such  purposes  shall  be  determined  by  the  Administrator,   which
          determination shall be final and conclusive.

               (ii)  Termination of Employment for Retirement or Disability.  In
          the event an employee/optionee ceases to be employed by the Company by
          reason  of  normal  or  early  retirement  (as  determined  under  the
          Company's  retirement  plan or  plans) or  retirement  on  account  of
          physical  disability,  each option held by such optionee shall, to the
          extent exercisable on the date of such retirement, remain exercisable,
          in whole  or in part,  for a period  of two (2)  years  following  the
          optionee's  termination  of  employment;  subject,  however,  to prior
          expiration according to its terms and other limitations imposed by the
          Plan.  Notwithstanding  the  foregoing,  if  an  optionee  during  the
          foregoing  exercise  period  accepts  employment  with a competitor of
          either the Company or any subsidiary of the Company,  any  outstanding
          options held by the optionee on the date of  termination of employment
          shall  terminate as of the date of  termination.  If the optionee dies
          after such retirement,  the optionee's options shall be exercisable in
          accordance with Paragraph 6(g) (iii) hereof.

               (iii)  Termination  of Employment  for Death.  In the event of an
          employee/optionee's death, each option held by such optionee shall, to
          the extent rights to purchase shares under the options have accrued at
          the  date of death  and  shall  not  have  been  fully  exercised,  be
          exercisable,  in whole or in part, by the personal  representative  of
          the  optionee's  estate or by any  person or  persons  who shall  have
          acquired the option or options  directly  from the optionee by bequest
          or inheritance only under the following  circumstances  and during the
          following periods:

                    (a) If the optionee dies while  employed by the Company,  at
               any time within two (2) years after his or her death, or

                    (b) If the optionee dies during the extended exercise period
               following   termination  of  employment  specified  in  Paragraph
               6(g)(ii), at any
time  within the longer time of such  extended  period or six (6)
               months after death.

               In any case, the foregoing is subject to the prior  expiration of
          the term of the  option or  options  and any other  limitation  on the
          exercise of such option or options in effect at the date of  exercise.
          No option  shall be  transferable  by the optionee  otherwise  then by
          will,  or if he or she  dies  intestate,  by the laws of  descent  and
          distribution of the state of his or her domicile.

               (iv)  Termination  of Options.  Any option that is not  exercised
          within whichever of the exercise  periods  specified in this paragraph
          6(g) is applicable  shall  terminate upon  expiration of such exercise
          period.

          (h)  Adjustment  in Shares  Covered  by  Option.  The number of shares
     covered by each outstanding option, and the price per share thereof,  shall
     be  proportionately  adjusted for any increase or decrease in the number of
     issued  shares  resulting  from a split in or com bination of shares or the
     payment of a stock dividend on the shares or any other increase or decrease
     in the number of such shares effected  without receipt of  consideration by
     the Company.

     If the  Company  shall  be the  surviving  corporation  in  any  merger  or
consolidation or if the Company is merged into a wholly owned subsidiary  solely
for purposes of changing the Company's state of incorporation,  each outstanding
option  shall  pertain to and apply to the  securities  to which a holder of the
number of shares of stock subject to the option would have been entitled. A sale
of all  or  substantially  all  of the  Company's  assets  or a  dissolution  or
liquidation of the Company or a merger or  consolidation in which the Company is
not the  surviving  corporation,  except as above  provided,  shall  cause  each
outstanding  option to terminate;  provided,  that each optionee  shall, in such
event, have the right  immediately prior to such sale of assets,  dissolution or
liquidation,  or  merger  or  consolidation  in  which  the  Company  is not the
surviving corporation, to exercise his or her option in whole or in part.

     In the event of a change in the shares as presently  constituted,  which is
limited to a change of all of its authorized shares with par value into the same
number of shares  with a different  par value or without  par value,  the shares
resulting  from any such  change  shall be deemed to be the  shares  within  the
meaning of the Plan.

     To the extent that the foregoing  adjustments relate to stock or securities
of the  Company,  such  adjustments  shall be made by the  Administrator,  whose
determination in that respect shall be final,  binding and conclusive.  Any such
adjustment may provide for the  elimination of any fractional  share which might
otherwise become subject to an option.
Except as  hereinbefore  expressly  provided in this  Paragraph  6(h),  the
optionee  shall have no rights by reason of any  subdivision  or  combination of
shares of stock of any class or the  payment of any stock  dividend or any other
increase  or decrease in the number of shares of stock of any class or by reason
of any sale of assets,  dissolution,  liquidation,  merger or  consolidation  or
spinoff of assets or stock of another corporation,  and any issue by the Company
of shares of stock of any class, or securities  convertible into shares of stock
of any class,  shall not affect,  and no adjustment  by reason  thereof shall be
made with  respect  to,  the  number or price of shares of stock  subject to the
option.

     The grant of an option pursuant to the Plan shall not affect in any way the
right  or  power  of  the  Company  to  make   adjustments,   reclassifications,
reorganizations  or changes of its capital or business  structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

          (i) Rights of a  Shareholder.  An  optionee  shall have no rights as a
     shareholder  with respect to any shares  covered by his or her option until
     the  date he or she  becomes  the  holder  of  record  of such  shares.  No
     adjustment  shall be made for dividends,  distributions or other rights for
     which the  record  date is prior to the date on which he or she shall  have
     become the holder of record  thereof,  except as provided in Paragraph 6(h)
     hereof.  With respect to an  employee/optionee,  the Plan and any agreement
     executed  hereunder  shall not impose upon the Company  any  obligation  to
     retain the optionee in its employ for any period.

          (j)  Modification,  Extension  and Renewal of Options.  Subject to the
     terms  and  conditions  and  within  the   limitations  of  the  Plan,  the
     Administrator, subject to approval of the Board of Directors, may modify or
     renew  outstanding  options granted under the Plan, or accept the surrender
     of  outstanding  options  (to the extent  not  theretofore  exercised)  and
     authorize  the  granting of new options in  substitution  therefor  (to the
     extent  not  theretofore  exercised).  Notwithstanding  the  foregoing,  no
     modification of an option shall, without the consent of the optionee, alter
     or impair any rights or obligations  under any option  theretofore  granted
     under the Plan.

          (k)  Postponement  of  Delivery  of Shares  and  Representations.  The
     Company  may  postpone  the  issuance  and/or  delivery  of shares upon any
     exercise of an option until com pletion of such stock exchange listing,  or
     registration,  or other qualification of such shares under any state and/or
     federal law, rule or  regulation as the Company may consider  appro priate,
     and  may   require   any   person   exercising   an  option  to  make  such
     representations,  including  a  representation  that  it is the  optionee's
     intention  to  acquire  shares  for  investment  and  not  with a  view  to
     distribution  thereof,  and furnish  such  information  as it may  consider
     appropriate  in  connection  with the issuance or delivery of the shares in
     compliance with applicable laws,  rules and  regulations.  In such event no
     shares  shall be issued to such  holder  unless  and until the  Company  is
     satisfied with the correctness of any such representations.
(l) Other Provisions.  The option agreements authorized under the Plan
     shall  contain  such  other  provisions,   including,  without  limitation,
     restrictions  upon the exercise of the option, as the Administrator and the
     Board of Directors shall deem advisable.
7.       ADJUSTMENTS IN SHARES AVAILABLE FOR OPTIONS

     The  adjustments  in number  and kind of  shares  and the  substitution  of
shares,  affecting  outstanding options in accordance with Paragraph 6(h), shall
also apply to the number and kind of shares  reserved for  issuance  pursuant to
the Plan but not yet covered by options.

8.       AMENDMENT OF THE PLAN

     The Board of Directors of the Company,  insofar as permitted by law,  shall
have the right  from time to time,  with  respect  to any shares at the time not
subject to options,  to suspend or discontinue the Plan or revise or amend it in
any respect  whatsoever except that, without approval of the shareholders of the
Company, no such revision or amendment shall: (a) increase the maximum number of
shares  which may be subject to the Plan;  (b)  increase  the maximum  number of
shares which may be optioned to any one employee;  (c) change the designation of
the class of employees eligible to receive options;  (d) materially increase the
benefits  accruing to option  holders under the Plan;  (e) decrease the price at
which  options may be granted;  (f) remove the adminis  tration of the Plan from
the  Administrator;  (g)  render  any member of the  Administrator  eligible  to
receive  an option  under the Plan  while  serving  thereon;  or (h)  permit the
granting of options under the Plan after December 31, 1999.

9.       APPLICATION OF FUNDS

     The proceeds  received by the Company  from the sale of shares  pursuant to
options will be used for general corporate purposes.

10.      NO OBLIGATION TO EXERCISE OPTION

     The granting of an option shall impose no  obligation  upon the optionee to
exercise such option.

11.      TAX WITHHOLDING

     The exercise of any option under the Plan is subject to the condition  that
if at any time the Administrator  shall determine,  in its discretion,  that the
satisfaction of withholding tax or other withholding liabilities under any state
or federal law is necessary or  desirable  as a condition  of, or in  connection
with,  such  exercise or the  delivery or purchase of shares  pursuant  thereto,
then,  in such event,  the  exercise of the option  right shall not be effective
unless  such  withholding  shall  have been  effected  or  obtained  in a manner
acceptable to the Administrator.
12.      CONSTRUCTION

     This Plan  shall be  construed  under  the laws of the  State of  Michigan,
United States of America.

     Adopted by the Board of Directors of the Company on August 22, 1997.

                                              /s/ Maryam Komejan
                                              Secretary
                                              Donnelly Corporation

     Approved by the Shareholders of the Company on October 17, 1997.

                                              /s/ Maryam Komejan
                                              Secretary
                                              Donnelly Corporation
EXHIBIT 5

                                       November 25, 1997

Donnelly Corporation
414 East Fortieth Street
Holland, Michigan 49423-5368

         Re:      Registration Statement on Form S-8 Relating to the
                  Donnelly Corporation 1997 Employee Stock Option Plan

Gentlemen:

     With respect to the Registration  Statement on Form S-8 (the  "Registration
Statement"),   filed  by  Donnelly  Corporation,  a  Michigan  corporation  (the
"Company"),  with the  Securities  and  Exchange  Commission  for the purpose of
registering under the Securities Act of 1933, as amended,  175,593 shares of the
Company's Class A common stock, par value $0.10 per share, for issuance pursuant
to the Company's 1997 Employee Stock Option Plan (the "Plan"),  we have examined
such documents and questions of law we consider necessary or appropriate for the
purpose of giving this opinion.  On the basis of such evaluation,  we advise you
that in our opinion the 175,593  shares covered by the  Registration  Statement,
upon the exercise of stock options,  at the prices described in the Registration
Statement,  but not less than the par value  thereof,  and upon delivery of such
shares and payment  therefor in accordance with the terms stated in the Plan and
the  Registration  Statement,  will be duly and legally  authorized,  issued and
outstanding and will be fully paid and nonassessable.

     We hereby  consent  to the  filing of this  opinion  as an  exhibit  to the
Registration  Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required  under Section 7 of
the  Securities Act of 1933, as amended,  or under the rules and  regulations of
the Securities and Exchange Commission relating thereto.

                                   Sincerely,

                     VARNUM, RIDDERING, SCHMIDT & HOWLETTLLP

                            William J. Lawrence III