--------------------------------------------------------------------------------
 As filed with the Securities and Exchange Commission on November 25, 1998 - 
                                                           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)

               49 West Third Street, Holland, Michigan 49423-2813
               (Address of Principal Executive Offices) (Zip Code)

            Donnelly Corporation 1998 Employees' Stock Purchase Plan
                            (Full Title of the Plan)

       Maryam Komejan, 49 West Third Street, Holland, Michigan 49423-2813
                    (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)                   300,000 Shares(1)          $15.1875             $4,556,250              $1,345
========================================================================================================================
</TABLE>
(1)      Represents the number of shares of Common Stock authorized for issuance
         under the Donnelly Corporation 1998 Employees' Stock Purchase 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 $15.1875 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, 1998, 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 27, 1998,
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 27, 1998 and June 28, 1997, and for each of the years in
the  three-year  period  ended June 27,  1998,  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-5.

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

                                       S-2
<PAGE>
          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.

          (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 the 16th day of
October, 1998.

                                     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 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  16,  1998,  by the
following persons in the capacities indicated.



/s/ J. Dwane Baumgardner                      /s/ B. Patrick Donnelly, III    
J. Dwane Baumgardner, Director                B. Patrick Donnelly, III, Director

/s/ Arnold F. Brookstone                      /s/ Joan E. Donnelly  
Arnold F. Brookstone, Director                Joan E. Donnelly, Director

/s/ John A. Borden                            /s/ Thomas E. Leonard   
John A. Borden, Director                      Thomas E. Leonard, Director

/s/ R. Eugene Goodson                         /s/ Gerald T. McNeive, Jr.
R. Eugene Goodson, Director                   Gerald T. McNeive, Jr., Director

/s/ Donald R. Uhlmann                         /s/ Scott E. Reed  
Donald R. Uhlmann, Director                   Scott E. Reed, Senior Vice
                                              President and Chief Financial
                                              Officer

/s/ Rudolph B. Pruden                         /s/ Ronald L. Winowiecki
Rudolph B. Pruden, Director                   Ronald L. Winowiecki, Corporate
                                              Controller and Chief Accounting
                                              Officer


::ODMA\PCDOCS\GRR\212674\1

                                       S-4
<PAGE>
                                  EXHIBIT INDEX

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




Exhibit 4          Donnelly Corporation 1998 Employees' Stock Purchase Plan

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

Exhibit 23(a)      Consent of BDO Seidman LLP

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-5
<PAGE>
EXHIBIT 4



                              DONNELLY CORPORATION

                       1998 EMPLOYEES' STOCK PURCHASE PLAN
<PAGE>
                                TABLE OF CONTENTS

                                                                            Page

1.       Purpose...............................................................1

2.       Committee to Administer...............................................1

3.       Eligibility...........................................................1

4.       Stock Available for Plan..............................................2

5.       Effective Dates.......................................................2

6.       Participation.........................................................2

7.       Payroll Deductions and Lump Sum Payments..............................3

8.       Changes in Payroll Deduction..........................................3

9.       Termination of Participation; Withdrawal of Funds.....................3

10.      Purchase of Shares....................................................4

11.      Registration of Certificates..........................................4

12.      Rights on Retirement, Death, or Termination of Employment.............4

13.      Rights Not Transferable...............................................5

14.      Application of Funds..................................................5

15.      Amendment of the Plan.................................................5

16.      Termination of the Plan...............................................5

17.      Governmental Regulations..............................................5


                                        i
<PAGE>
                              DONNELLY CORPORATION
                       1998 EMPLOYEES' STOCK PURCHASE PLAN


     1. Purpose.  The purpose of the Donnelly  Corporation 1998 Employees' Stock
Purchase Plan (the "Plan") is to provide employees of Donnelly  Corporation (the
"Company")  and the  "Participating  Subsidiaries"  (as herein  defined)  with a
further  inducement  to  continue  their  employment  with  the  Company  or the
Participating  Subsidiaries  and to encourage  such  employees to increase their
efforts to promote the best  interests  of the  Company and to promote  employee
ownership of the Company by permitting them to purchase shares of Class A Common
Stock,  par value $0.10 per share (the "Stock") of the Company,  at a price less
than the market  price  thereof,  under  such  circumstances  that the  purchase
qualifies as the exercise of an option  granted under an employee stock purchase
plan, as defined by Section 423 of the Internal Revenue Code of 1986, as amended
(the  "Code").  As  used  herein,  the  term  "Company"  does  not  include  any
subsidiaries of the Company.  This Plan may be adopted by the board of directors
of any subsidiary  corporation  (as defined in Section 424(f) of the Code),  and
upon such adoption and with the approval of the  committee  described in Section
2,  such  corporation   shall  be  deemed  to  be  one  of  the   "Participating
Subsidiaries."

     2.  Committee  to  Administer  Plan.  The Plan shall be  administered  by a
committee  appointed by the Board of Directors of the Company (the "Committee").
The  Committee  shall  consist  of not less  than  three  members.  The Board of
Directors  may from time to time  remove  members  from,  or add members to, the
Committee.  Vacancies on the Committee, howsoever caused, shall be filled by the
Board  of  Directors.  The  Committee  may  establish  from  time to  time  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
Committee shall keep minutes of its meetings.  A majority of the Committee shall
constitute  a quorum,  and the acts of a majority of the members  present at any
meeting at which a quorum is present,  or acts reduced to or approved in writing
by a majority  of the members of the  Committee,  shall be the valid acts of the
Committee.   The  interpretation  and  construction  by  the  Committee  of  any
provisions of the Plan shall be final unless  otherwise  determined by the Board
of  Directors.  No member of the Board of  Directors or the  Committee  shall be
liable for any action or  determination  made in good faith with  respect to the
Plan.

     3.  Eligibility.  Participation  under the Plan shall be open to all active
employees  (the  "Eligible  Employees")  of the  Company  or  the  Participating
Subsidiaries  except (a)  employees who have been  continuously  employed by the
Company, and/or a Participating Subsidiary,  and/or a joint venture at least 50%
owned by the Company for less than one (1) month at the  beginning  of an Option
Period (as hereinafter defined); (b) employees whose customary employment by the
Company, and/or a Participating Subsidiary,  and/or a joint venture at least 50%
owned by the  Company is twenty (20) hours or less per week;  and (c)  employees
whose customary  employment by the Company,  and/or a Participating  Subsidiary,
and/or a joint  venture  at least 50% owned by the  Company is for not more than
five (5) months in a calendar year.  Participation  under the Plan for employees
of a joint  venture at least  50%-owned by the Company,  shall be open only upon
their active  service with the Company  and/or a  Participating  Subsidiary.  No
option rights shall be granted
<PAGE>
under the Plan to any person who is not an  Eligible  Employee,  and no Eligible
Employee  shall be granted  option  rights under the Plan (a) if such  employee,
immediately after receiving the grant of such option rights under the Plan, owns
(under the rules of Sections  423(b)(3) and 424(d) of the Code) stock possessing
five percent or more of the total combined  voting power or value of all classes
of stock of the  Company or any of its  subsidiary  corporations  (as defined by
Section 424(f) of the Code); or (b) which permit such employee to purchase stock
under this Plan and any other  employee  stock  purchase plan of the Company and
its subsidiary corporations (as defined by Section 424(f) of the Code) at option
prices  aggregating  more than $25,000 in any one calendar year, and in no event
may such option rights accrue at a rate which exceeds that  permitted by Section
423(b)(8) of the Code.

     4. Stock Available for Plan. Purchase of Stock pursuant to and on behalf of
this  Plan  for  delivery  under  this  Plan  may be made  out of the  Company's
presently or hereafter  authorized but unissued Stock, or out of shares of Stock
now or hereafter held in treasury by the Company,  or from outstanding shares of
Stock, or partly out of each, as determined by the Committee. The maximum number
of shares of Stock  which may be  purchased  under the Plan is  300,000  shares,
subject,  however,  to adjustment  as  hereinafter  set forth.  In the event the
Company  shall,  at any time after the  effective  date of the Plan,  change its
issued  Stock into an increased  number of shares of Stock,  with or without par
value,  through a Stock dividend or split of shares,  or into a decreased number
of shares,  with or without par value,  through a  combination  of shares,  then
effective with the record date for such change,  the maximum number of shares of
Stock  which  thereafter  may be  purchased  under the Plan shall be the maximum
number  of  shares  which,  immediately  prior  to such  record  date,  remained
available for purchase under the Plan, proportionately increased, in the case of
such Stock dividend or split up of shares, or  proportionately  decreased in the
case of such  combination of shares.  In the event of any other change affecting
Stock,  such adjustment shall be made as may be deemed equitable by the Board of
Directors to give proper effect to such event.

     5. Effective  Dates.  This Plan shall become effective on the date that the
Plan has been adopted by the  Company's  Board of Directors  and approved by the
shareholders of the Company at a duly called meeting or any adjournment thereof.
The first Option Period under the Plan shall  commence on a date selected by the
Board of Directors.  A new Option Period shall commence on the first day of each
calendar  quarter  year of the  Company  and end on the  last  day of each  such
calendar  quarter  year;  provided,  however,  that the Board of  Directors  may
redetermine the term of an Option Period hereunder.

     6.  Participation.  An  employee  who  is a  participant  in  the  Donnelly
Corporation  1987 Employees' Stock Purchase Plan (the "1987 Plan") on January 1,
1999, will automatically  participate in this Plan as of such date. In addition,
an  employee  of the Company or a  Participating  Subsidiary  who is an Eligible
Employee  at or  prior  to the  first  day of any  Option  Period  may  become a
Participant as of such date by (a) completing and forwarding a payroll deduction
authorization form (the "Authorization") to the Eligible Employee's  appropriate
payroll location,  by the 15th day of the month ending the Option Period; and/or
(b)  completing  and forwarding a lump sum payment form furnished by the Company
accompanied by payment to the Company in the amount of the lump sum

                                        2
<PAGE>
to be credited to the Eligible  Employee's  Purchase Account, by the 15th day of
the month prior to the month ending the Option Period.  The  Authorization  will
direct a regular  payroll  deduction from the  Participant's  compensation to be
made on each of the  Participant's pay dates occurring during each Option Period
in which he or she is a Participant.  The term  "Authorizations"  as used herein
includes Authorizations as defined in and filed pursuant to the 1987 Plan.

     7.  Payroll  Deductions  and  Lump  Sum  Payments.   The  Company  and  its
Participating  Subsidiaries may maintain payroll  deduction  accounts for all of
their   respective   employees   who  are   Participants   and  who  have  filed
Authorizations for Payroll Deduction. Payments made by Participants,  whether by
payroll deduction, lump sum payment or dividend reinvestment,  shall be credited
to the Participant's Stock Purchase Account (the "Purchase Account"). No amounts
other than payroll  deductions,  lump sum payments,  and dividend  reinvestments
authorized under this Plan may be credited to a Participant's  Purchase Account.
A Participant may authorize a payroll  deduction in any amount not less than $10
for each pay date, but not more than a maximum of 10% of the Participant's gross
earnings (before withholding or other deductions) with respect to which payments
are to be made to him or her by the Company or the  Participating  Subsidiary on
such pay date. A Participant  may make one lump sum payment in any Option Period
in any  amount  not less  than $25,  but not more  than a maximum  of 10% of the
Participant's gross earnings for the immediately preceding Option Period (before
withholding or other deductions) payable as wages, salary and bonus compensation
by the Company or the Participating Subsidiary. In the event a Participant makes
payments  for  credit  to his or  her  Purchase  Account  through  both  payroll
deductions  and lump sum  payments,  the total of all such  payments  during any
Option  Period  shall not exceed 10% of the  Participant's  gross  earnings  for
wages,  salary  and  bonus  compensation  payable  by  the  Company  during  the
immediately  preceding Option Period. In no event shall payments of any kind for
credit to a Purchase  Account by or on behalf of any Participant  aggregate more
than $25,000 in any calendar year.

     8. Changes in Payroll  Deduction.  Payroll  deductions may be made for each
Participant  in  accordance  with  the  Participant's  Authorization  and  shall
continue until the Participant's  participation terminates, the Authorization is
revised or the Plan  terminates.  A Participant  may, as of the beginning of any
Option Period,  increase or decrease the Participant's  payroll deduction within
the limits specified in Section 7 by filing a new  Authorization by the 15th day
of the month ending the Option Period.

     9.  Termination of  Participation  - Withdrawal of Funds. A Participant may
for any reason at any time on written  notice given to the Company  prior to the
Participant's  last pay date in any Option  Period elect to terminate his or her
participation in the Plan, except with respect to funds deposited as one or more
lump  sum  payments  in  the  current  calendar  quarter,   and  thereafter  may
permanently  draw out the balance  accumulated  in his or her Purchase  Account,
less the  amount  of such  lump sum  payment(s).  Lump sum  payments  may not be
withdrawn  in the  quarter in which  they are made.  Upon any  termination  by a
Participant of participation,  he or she shall cease to be a Participant. His or
her Authorization  shall be revoked insofar as subsequent payroll deductions are
concerned,  and the amount to his or her credit in his or her Purchase  Account,
and not payable in

                                        3
<PAGE>
respect of the  exercise of any option to  purchase  Stock  theretofore  granted
under the Plan, as well as any unauthorized  payroll  deductions made after such
revocation,  shall be promptly refunded to the former  Participant.  An Eligible
Employee who has thus terminated  participation in the Plan may thereafter begin
participation  in the Plan again only  during the  calendar  year of the Company
following  the  calendar  year of the  Company  in which  such  termination  and
withdrawal  of  funds  occurred,  except  that  an  Eligible  Employee  who  has
terminated  participation  in the  Plan in the  last  quarter  of the  Company's
calendar year may not thereafter begin participation in the Plan again until the
second  calendar  year  of the  Company  following  the  calendar  year  of such
termination. Partial withdrawals of funds will not be permitted.

     10. Purchase of Shares.  Each  Participant  during each Option Period under
this  Plan  will be  granted  an option  as of the  "Purchase  Date" (as  herein
defined) for the purchase of as many shares of Stock,  including partial shares,
as may be purchased with the funds in his or her Purchase Account. This election
shall be  automatically  made as provided in this Section unless the Participant
terminates  participation  as provided in Section 9. The purchase price for each
share of Stock purchased shall be 85 percent of the fair market value of a share
of Stock on the "Purchase Date" (as herein defined).  If such percentage results
in a fraction  of a cent,  the  purchase  price shall be  increased  to the next
higher full cent. The term "Purchase Date" shall be the last business day of the
Option Period. If, as of each Purchase Date, the Participant's  Purchase Account
contains funds,  the Participant  shall be deemed to have exercised an option to
purchase shares at the purchase price, the Participant's  Purchase Account shall
be charged  for the amount of the  purchase,  and an entry  shall be made to the
Participant's  account  maintained by the Company's  transfer  agent. As of each
subsequent  Purchase  Date when funds have  again  accrued in the  Participant's
Purchase Account, shares will be purchased in the same manner.

     If the shares are listed on an  established  stock  exchange or  exchanges,
Fair Market Value per share shall be the closing sale price on such  exchange or
exchanges on the day the option is granted or, if no sale of the shares shall be
made on any stock  exchange on that day, 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 the National  Association of Securities  Dealer Automated  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.

     11. Registration of Certificates.  Upon the request of a Participant during
participation   in  the  Plan,   and  upon  a   Participant's   termination   of
participation,  a stock  certificate  representing  the full number of shares of
Stock owned by such Participant  under the Plan shall be issued and delivered to
the  Participant.  Fractional  share  interests  shall  be  paid  in cash to the
Participant.  Certificates may be registered only in the name of the Participant
or the names of the Participant and his or her spouse.

     12. Rights on Retirement, Death, or Termination of Employment. In the event
of a Participant's  retirement,  death or termination of employment,  no payroll
deduction shall be taken

                                        4
<PAGE>
from any pay due and owing to a Participant  at such time and the balance in the
Participant's Purchase Account shall be paid to the Participant or, in the event
of the Participant's death, to the Participant's estate.

     13. Rights Not Transferable. Rights under this Plan are not transferable by
a Participant  and are  exercisable  only by the  Participant  during his or her
lifetime.

     14.  Application  of Funds.  All funds received or held by the Company or a
Participating  Subsidiary  under  this Plan may be used by the  Company  or such
Participating Subsidiary for any corporate purpose.

     15. Amendment of the Plan. The Board of Directors of the Company may at any
time, or from time to time, amend this Plan in any respect, except that, without
the  approval of the  Company's  shareholders,  no  amendment  shall be made (a)
increasing  the number of shares  approved for this Plan (other than as provided
in Section 4), (b) decreasing the Purchase Price per share,  (c) withdrawing the
administration of this Plan from the Committee,  (d) changing the designation of
the class of employees  eligible to receive options under the Plan, or (e) which
would  render  options  granted  under  the Plan  unqualified  for  special  tax
treatment under the Code.

     16.  Termination  of the Plan.  Unless  sooner  terminated  as  hereinafter
provided,  this Plan shall  terminate  on January 1, 2009.  The Company  may, by
action  of its Board of  Directors,  terminate  the Plan at any time.  Notice of
termination  shall be given to all then  Participants,  but any  failure to give
such notice shall not impair the termination.  Upon termination of the Plan, all
amounts in Purchase Accounts of Participants shall be promptly refunded.

     17. Governmental Regulations.  The Company's obligation to sell and deliver
Stock under this Plan is subject to the approval of any  governmental  authority
required in connection with the  authorization,  issuance or sale of such Stock.
If at any  time  shares  of  Stock  deliverable  hereunder  are  required  to be
registered or qualified  under any applicable law, or delivery of such shares is
required to be  accompanied  or preceded by a  prospectus  or similar  circular,
delivery of  certificates  for such shares may be deferred for a reasonable time
until such  registrations or  qualifications  are effected or such prospectus or
similar circular is available.

                                        5
<PAGE>
                                    EXHIBIT 5




                                November 23, 1998



Donnelly Corporation
49 West Third Street
Holland, Michigan 49423-2813

         Re:      Registration Statement on Form S-8 Relating to the
                  Donnelly Corporation 1998 Employees' Stock Purchase 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,  300,000 shares of the
Company's Class A common stock, par value $0.10 per share, for issuance pursuant
to the Company's  1998  Employees'  Stock  Purchase  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 300,000 shares covered by the
Registration  Statement,  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

                  /s/ Varnum, Riddering, Schmidt & Howlett LLP
<PAGE>
                                  EXHIBIT 23(a)


Consent of Independent Certified Public Accountants


Donnelly Corporation
Holland, Michigan

We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement of Donnelly  Corporation for its 1998 Employees'  Stock Purchase Plan,
of our  reports  dated  August 6, 1998,  relating to the  combined  consolidated
financial  statements  and  schedules of Donnelly  Corporation  appearing in the
Company's Annual Report on Form 10-K for the year ended June 27, 1998.

We  also  consent  to  the  reference  to us as  experts  in  this  Registration
Statement.


                                   /s/ BDO Seidman, LLP

Grand Rapids, Michigan
November 25, 1998
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 41123}]
{"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": "333-67969", "film-number": "98759490"}, "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, 1998 - 
                                                           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)

               49 West Third Street, Holland, Michigan 49423-2813
               (Address of Principal Executive Offices) (Zip Code)

            Donnelly Corporation 1998 Employees' Stock Purchase Plan
                            (Full Title of the Plan)

       Maryam Komejan, 49 West Third Street, Holland, Michigan 49423-2813
                    (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)                   300,000 Shares(1)          $15.1875             $4,556,250              $1,345
========================================================================================================================
(1)      Represents the number of shares of Common Stock authorized for issuance
         under the Donnelly Corporation 1998 Employees' Stock Purchase 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 $15.1875 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, 1998, 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 27, 1998,
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 27, 1998 and June 28, 1997, and for each of the years in
the  three-year  period  ended June 27,  1998,  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-5.

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

                                       S-2
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.

          (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 the 16th day of
October, 1998.

                                     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 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  16,  1998,  by the
following persons in the capacities indicated.

/s/ J. Dwane Baumgardner                      /s/ B. Patrick Donnelly, III    
J. Dwane Baumgardner, Director                B. Patrick Donnelly, III, Director

/s/ Arnold F. Brookstone                      /s/ Joan E. Donnelly  
Arnold F. Brookstone, Director                Joan E. Donnelly, Director

/s/ John A. Borden                            /s/ Thomas E. Leonard   
John A. Borden, Director                      Thomas E. Leonard, Director

/s/ R. Eugene Goodson                         /s/ Gerald T. McNeive, Jr.
R. Eugene Goodson, Director                   Gerald T. McNeive, Jr., Director

/s/ Donald R. Uhlmann                         /s/ Scott E. Reed  
Donald R. Uhlmann, Director                   Scott E. Reed, Senior Vice
                                              President and Chief Financial
                                              Officer

/s/ Rudolph B. Pruden                         /s/ Ronald L. Winowiecki
Rudolph B. Pruden, Director                   Ronald L. Winowiecki, Corporate
                                              Controller and Chief Accounting
                                              Officer

::ODMA\PCDOCS\GRR\212674\1

                                       S-4
EXHIBIT INDEX

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

Exhibit 4          Donnelly Corporation 1998 Employees' Stock Purchase Plan

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

Exhibit 23(a)      Consent of BDO Seidman LLP

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-5
EXHIBIT 4

                              DONNELLY CORPORATION

                       1998 EMPLOYEES' STOCK PURCHASE PLAN
TABLE OF CONTENTS

                                                                            Page

1.       Purpose...............................................................1

2.       Committee to Administer...............................................1

3.       Eligibility...........................................................1

4.       Stock Available for Plan..............................................2

5.       Effective Dates.......................................................2

6.       Participation.........................................................2

7.       Payroll Deductions and Lump Sum Payments..............................3

8.       Changes in Payroll Deduction..........................................3

9.       Termination of Participation; Withdrawal of Funds.....................3

10.      Purchase of Shares....................................................4

11.      Registration of Certificates..........................................4

12.      Rights on Retirement, Death, or Termination of Employment.............4

13.      Rights Not Transferable...............................................5

14.      Application of Funds..................................................5

15.      Amendment of the Plan.................................................5

16.      Termination of the Plan...............................................5

17.      Governmental Regulations..............................................5

                                        i
DONNELLY CORPORATION
                       1998 EMPLOYEES' STOCK PURCHASE PLAN

     1. Purpose.  The purpose of the Donnelly  Corporation 1998 Employees' Stock
Purchase Plan (the "Plan") is to provide employees of Donnelly  Corporation (the
"Company")  and the  "Participating  Subsidiaries"  (as herein  defined)  with a
further  inducement  to  continue  their  employment  with  the  Company  or the
Participating  Subsidiaries  and to encourage  such  employees to increase their
efforts to promote the best  interests  of the  Company and to promote  employee
ownership of the Company by permitting them to purchase shares of Class A Common
Stock,  par value $0.10 per share (the "Stock") of the Company,  at a price less
than the market  price  thereof,  under  such  circumstances  that the  purchase
qualifies as the exercise of an option  granted under an employee stock purchase
plan, as defined by Section 423 of the Internal Revenue Code of 1986, as amended
(the  "Code").  As  used  herein,  the  term  "Company"  does  not  include  any
subsidiaries of the Company.  This Plan may be adopted by the board of directors
of any subsidiary  corporation  (as defined in Section 424(f) of the Code),  and
upon such adoption and with the approval of the  committee  described in Section
2,  such  corporation   shall  be  deemed  to  be  one  of  the   "Participating
Subsidiaries."

     2.  Committee  to  Administer  Plan.  The Plan shall be  administered  by a
committee  appointed by the Board of Directors of the Company (the "Committee").
The  Committee  shall  consist  of not less  than  three  members.  The Board of
Directors  may from time to time  remove  members  from,  or add members to, the
Committee.  Vacancies on the Committee, howsoever caused, shall be filled by the
Board  of  Directors.  The  Committee  may  establish  from  time to  time  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
Committee shall keep minutes of its meetings.  A majority of the Committee shall
constitute  a quorum,  and the acts of a majority of the members  present at any
meeting at which a quorum is present,  or acts reduced to or approved in writing
by a majority  of the members of the  Committee,  shall be the valid acts of the
Committee.   The  interpretation  and  construction  by  the  Committee  of  any
provisions of the Plan shall be final unless  otherwise  determined by the Board
of  Directors.  No member of the Board of  Directors or the  Committee  shall be
liable for any action or  determination  made in good faith with  respect to the
Plan.

     3.  Eligibility.  Participation  under the Plan shall be open to all active
employees  (the  "Eligible  Employees")  of the  Company  or  the  Participating
Subsidiaries  except (a)  employees who have been  continuously  employed by the
Company, and/or a Participating Subsidiary,  and/or a joint venture at least 50%
owned by the Company for less than one (1) month at the  beginning  of an Option
Period (as hereinafter defined); (b) employees whose customary employment by the
Company, and/or a Participating Subsidiary,  and/or a joint venture at least 50%
owned by the  Company is twenty (20) hours or less per week;  and (c)  employees
whose customary  employment by the Company,  and/or a Participating  Subsidiary,
and/or a joint  venture  at least 50% owned by the  Company is for not more than
five (5) months in a calendar year.  Participation  under the Plan for employees
of a joint  venture at least  50%-owned by the Company,  shall be open only upon
their active  service with the Company  and/or a  Participating  Subsidiary.  No
option rights shall be granted
under the Plan to any person who is not an  Eligible  Employee,  and no Eligible
Employee  shall be granted  option  rights under the Plan (a) if such  employee,
immediately after receiving the grant of such option rights under the Plan, owns
(under the rules of Sections  423(b)(3) and 424(d) of the Code) stock possessing
five percent or more of the total combined  voting power or value of all classes
of stock of the  Company or any of its  subsidiary  corporations  (as defined by
Section 424(f) of the Code); or (b) which permit such employee to purchase stock
under this Plan and any other  employee  stock  purchase plan of the Company and
its subsidiary corporations (as defined by Section 424(f) of the Code) at option
prices  aggregating  more than $25,000 in any one calendar year, and in no event
may such option rights accrue at a rate which exceeds that  permitted by Section
423(b)(8) of the Code.

     4. Stock Available for Plan. Purchase of Stock pursuant to and on behalf of
this  Plan  for  delivery  under  this  Plan  may be made  out of the  Company's
presently or hereafter  authorized but unissued Stock, or out of shares of Stock
now or hereafter held in treasury by the Company,  or from outstanding shares of
Stock, or partly out of each, as determined by the Committee. The maximum number
of shares of Stock  which may be  purchased  under the Plan is  300,000  shares,
subject,  however,  to adjustment  as  hereinafter  set forth.  In the event the
Company  shall,  at any time after the  effective  date of the Plan,  change its
issued  Stock into an increased  number of shares of Stock,  with or without par
value,  through a Stock dividend or split of shares,  or into a decreased number
of shares,  with or without par value,  through a  combination  of shares,  then
effective with the record date for such change,  the maximum number of shares of
Stock  which  thereafter  may be  purchased  under the Plan shall be the maximum
number  of  shares  which,  immediately  prior  to such  record  date,  remained
available for purchase under the Plan, proportionately increased, in the case of
such Stock dividend or split up of shares, or  proportionately  decreased in the
case of such  combination of shares.  In the event of any other change affecting
Stock,  such adjustment shall be made as may be deemed equitable by the Board of
Directors to give proper effect to such event.

     5. Effective  Dates.  This Plan shall become effective on the date that the
Plan has been adopted by the  Company's  Board of Directors  and approved by the
shareholders of the Company at a duly called meeting or any adjournment thereof.
The first Option Period under the Plan shall  commence on a date selected by the
Board of Directors.  A new Option Period shall commence on the first day of each
calendar  quarter  year of the  Company  and end on the  last  day of each  such
calendar  quarter  year;  provided,  however,  that the Board of  Directors  may
redetermine the term of an Option Period hereunder.

     6.  Participation.  An  employee  who  is a  participant  in  the  Donnelly
Corporation  1987 Employees' Stock Purchase Plan (the "1987 Plan") on January 1,
1999, will automatically  participate in this Plan as of such date. In addition,
an  employee  of the Company or a  Participating  Subsidiary  who is an Eligible
Employee  at or  prior  to the  first  day of any  Option  Period  may  become a
Participant as of such date by (a) completing and forwarding a payroll deduction
authorization form (the "Authorization") to the Eligible Employee's  appropriate
payroll location,  by the 15th day of the month ending the Option Period; and/or
(b)  completing  and forwarding a lump sum payment form furnished by the Company
accompanied by payment to the Company in the amount of the lump sum

                                        2
to be credited to the Eligible  Employee's  Purchase Account, by the 15th day of
the month prior to the month ending the Option Period.  The  Authorization  will
direct a regular  payroll  deduction from the  Participant's  compensation to be
made on each of the  Participant's pay dates occurring during each Option Period
in which he or she is a Participant.  The term  "Authorizations"  as used herein
includes Authorizations as defined in and filed pursuant to the 1987 Plan.

     7.  Payroll  Deductions  and  Lump  Sum  Payments.   The  Company  and  its
Participating  Subsidiaries may maintain payroll  deduction  accounts for all of
their   respective   employees   who  are   Participants   and  who  have  filed
Authorizations for Payroll Deduction. Payments made by Participants,  whether by
payroll deduction, lump sum payment or dividend reinvestment,  shall be credited
to the Participant's Stock Purchase Account (the "Purchase Account"). No amounts
other than payroll  deductions,  lump sum payments,  and dividend  reinvestments
authorized under this Plan may be credited to a Participant's  Purchase Account.
A Participant may authorize a payroll  deduction in any amount not less than $10
for each pay date, but not more than a maximum of 10% of the Participant's gross
earnings (before withholding or other deductions) with respect to which payments
are to be made to him or her by the Company or the  Participating  Subsidiary on
such pay date. A Participant  may make one lump sum payment in any Option Period
in any  amount  not less  than $25,  but not more  than a maximum  of 10% of the
Participant's gross earnings for the immediately preceding Option Period (before
withholding or other deductions) payable as wages, salary and bonus compensation
by the Company or the Participating Subsidiary. In the event a Participant makes
payments  for  credit  to his or  her  Purchase  Account  through  both  payroll
deductions  and lump sum  payments,  the total of all such  payments  during any
Option  Period  shall not exceed 10% of the  Participant's  gross  earnings  for
wages,  salary  and  bonus  compensation  payable  by  the  Company  during  the
immediately  preceding Option Period. In no event shall payments of any kind for
credit to a Purchase  Account by or on behalf of any Participant  aggregate more
than $25,000 in any calendar year.

     8. Changes in Payroll  Deduction.  Payroll  deductions may be made for each
Participant  in  accordance  with  the  Participant's  Authorization  and  shall
continue until the Participant's  participation terminates, the Authorization is
revised or the Plan  terminates.  A Participant  may, as of the beginning of any
Option Period,  increase or decrease the Participant's  payroll deduction within
the limits specified in Section 7 by filing a new  Authorization by the 15th day
of the month ending the Option Period.

     9.  Termination of  Participation  - Withdrawal of Funds. A Participant may
for any reason at any time on written  notice given to the Company  prior to the
Participant's  last pay date in any Option  Period elect to terminate his or her
participation in the Plan, except with respect to funds deposited as one or more
lump  sum  payments  in  the  current  calendar  quarter,   and  thereafter  may
permanently  draw out the balance  accumulated  in his or her Purchase  Account,
less the  amount  of such  lump sum  payment(s).  Lump sum  payments  may not be
withdrawn  in the  quarter in which  they are made.  Upon any  termination  by a
Participant of participation,  he or she shall cease to be a Participant. His or
her Authorization  shall be revoked insofar as subsequent payroll deductions are
concerned,  and the amount to his or her credit in his or her Purchase  Account,
and not payable in

                                        3
respect of the  exercise of any option to  purchase  Stock  theretofore  granted
under the Plan, as well as any unauthorized  payroll  deductions made after such
revocation,  shall be promptly refunded to the former  Participant.  An Eligible
Employee who has thus terminated  participation in the Plan may thereafter begin
participation  in the Plan again only  during the  calendar  year of the Company
following  the  calendar  year of the  Company  in which  such  termination  and
withdrawal  of  funds  occurred,  except  that  an  Eligible  Employee  who  has
terminated  participation  in the  Plan in the  last  quarter  of the  Company's
calendar year may not thereafter begin participation in the Plan again until the
second  calendar  year  of the  Company  following  the  calendar  year  of such
termination. Partial withdrawals of funds will not be permitted.

     10. Purchase of Shares.  Each  Participant  during each Option Period under
this  Plan  will be  granted  an option  as of the  "Purchase  Date" (as  herein
defined) for the purchase of as many shares of Stock,  including partial shares,
as may be purchased with the funds in his or her Purchase Account. This election
shall be  automatically  made as provided in this Section unless the Participant
terminates  participation  as provided in Section 9. The purchase price for each
share of Stock purchased shall be 85 percent of the fair market value of a share
of Stock on the "Purchase Date" (as herein defined).  If such percentage results
in a fraction  of a cent,  the  purchase  price shall be  increased  to the next
higher full cent. The term "Purchase Date" shall be the last business day of the
Option Period. If, as of each Purchase Date, the Participant's  Purchase Account
contains funds,  the Participant  shall be deemed to have exercised an option to
purchase shares at the purchase price, the Participant's  Purchase Account shall
be charged  for the amount of the  purchase,  and an entry  shall be made to the
Participant's  account  maintained by the Company's  transfer  agent. As of each
subsequent  Purchase  Date when funds have  again  accrued in the  Participant's
Purchase Account, shares will be purchased in the same manner.

     If the shares are listed on an  established  stock  exchange or  exchanges,
Fair Market Value per share shall be the closing sale price on such  exchange or
exchanges on the day the option is granted or, if no sale of the shares shall be
made on any stock  exchange on that day, 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 the National  Association of Securities  Dealer Automated  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.

     11. Registration of Certificates.  Upon the request of a Participant during
participation   in  the  Plan,   and  upon  a   Participant's   termination   of
participation,  a stock  certificate  representing  the full number of shares of
Stock owned by such Participant  under the Plan shall be issued and delivered to
the  Participant.  Fractional  share  interests  shall  be  paid  in cash to the
Participant.  Certificates may be registered only in the name of the Participant
or the names of the Participant and his or her spouse.

     12. Rights on Retirement, Death, or Termination of Employment. In the event
of a Participant's  retirement,  death or termination of employment,  no payroll
deduction shall be taken

                                        4
from any pay due and owing to a Participant  at such time and the balance in the
Participant's Purchase Account shall be paid to the Participant or, in the event
of the Participant's death, to the Participant's estate.

     13. Rights Not Transferable. Rights under this Plan are not transferable by
a Participant  and are  exercisable  only by the  Participant  during his or her
lifetime.

     14.  Application  of Funds.  All funds received or held by the Company or a
Participating  Subsidiary  under  this Plan may be used by the  Company  or such
Participating Subsidiary for any corporate purpose.

     15. Amendment of the Plan. The Board of Directors of the Company may at any
time, or from time to time, amend this Plan in any respect, except that, without
the  approval of the  Company's  shareholders,  no  amendment  shall be made (a)
increasing  the number of shares  approved for this Plan (other than as provided
in Section 4), (b) decreasing the Purchase Price per share,  (c) withdrawing the
administration of this Plan from the Committee,  (d) changing the designation of
the class of employees  eligible to receive options under the Plan, or (e) which
would  render  options  granted  under  the Plan  unqualified  for  special  tax
treatment under the Code.

     16.  Termination  of the Plan.  Unless  sooner  terminated  as  hereinafter
provided,  this Plan shall  terminate  on January 1, 2009.  The Company  may, by
action  of its Board of  Directors,  terminate  the Plan at any time.  Notice of
termination  shall be given to all then  Participants,  but any  failure to give
such notice shall not impair the termination.  Upon termination of the Plan, all
amounts in Purchase Accounts of Participants shall be promptly refunded.

     17. Governmental Regulations.  The Company's obligation to sell and deliver
Stock under this Plan is subject to the approval of any  governmental  authority
required in connection with the  authorization,  issuance or sale of such Stock.
If at any  time  shares  of  Stock  deliverable  hereunder  are  required  to be
registered or qualified  under any applicable law, or delivery of such shares is
required to be  accompanied  or preceded by a  prospectus  or similar  circular,
delivery of  certificates  for such shares may be deferred for a reasonable time
until such  registrations or  qualifications  are effected or such prospectus or
similar circular is available.

                                        5
EXHIBIT 5

                                November 23, 1998

Donnelly Corporation
49 West Third Street
Holland, Michigan 49423-2813

         Re:      Registration Statement on Form S-8 Relating to the
                  Donnelly Corporation 1998 Employees' Stock Purchase 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,  300,000 shares of the
Company's Class A common stock, par value $0.10 per share, for issuance pursuant
to the Company's  1998  Employees'  Stock  Purchase  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 300,000 shares covered by the
Registration  Statement,  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

                  /s/ Varnum, Riddering, Schmidt & Howlett LLP
EXHIBIT 23(a)

Consent of Independent Certified Public Accountants

Donnelly Corporation
Holland, Michigan

We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement of Donnelly  Corporation for its 1998 Employees'  Stock Purchase Plan,
of our  reports  dated  August 6, 1998,  relating to the  combined  consolidated
financial  statements  and  schedules of Donnelly  Corporation  appearing in the
Company's Annual Report on Form 10-K for the year ended June 27, 1998.

We  also  consent  to  the  reference  to us as  experts  in  this  Registration
Statement.

                                   /s/ BDO Seidman, LLP

Grand Rapids, Michigan
November 25, 1998