<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant / /
Filed by a party other than the registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary proxy statement / / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
GENTEX CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
GENTEX CORPORATION
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE> 2
[GENTEX CORPORATION LOGO]
600 N. CENTENNIAL STREET
ZEELAND, MICHIGAN 49464
NOTICE OF 1995 ANNUAL MEETING
--------------------------------------------------------------------------------
The Annual Meeting of the Shareholders of Gentex Corporation, a Michigan
corporation, will be held at the Amway Grand Plaza Hotel, Pearl at Monroe, Grand
Rapids, Michigan, on Thursday, May 11, 1995, at 4:30 p.m. E.S.T., for the
following purposes:
1. To elect two directors as set forth in the Proxy Statement.
2. To consider and act upon a proposal to approve an Amended and Restated
Gentex Corporation Qualified Stock Option Plan.
3. To transact any other business that may properly come before the
meeting.
Shareholders of record as of the close of business on March 17, 1995, are
entitled to notice of, and to vote at the meeting. You are requested to sign,
date, and return the accompanying Proxy in the enclosed, self-addressed
envelope, regardless of whether you expect to attend the meeting in person. You
may withdraw your Proxy at the meeting if you are present and desire to vote
your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
Connie Hamblin
Secretary
March 31, 1995
<PAGE> 3
[GENTEX CORPORATION LOGO]
600 N. CENTENNIAL STREET
ZEELAND, MICHIGAN 49464
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD MAY 11, 1995
SOLICITATION OF PROXIES
This Proxy Statement is being furnished on or about March 31, 1995, to the
shareholders of Gentex Corporation in connection with the solicitation by the
Board of Directors of the Corporation of Proxies to be used at the Annual
Meeting of Shareholders to be held on Thursday, May 11, 1995, at 4:30 p.m.
E.S.T. at the Amway Grand Plaza Hotel, Pearl at Monroe, Grand Rapids, Michigan.
If the form of Proxy accompanying this Proxy Statement is properly executed
and returned to the Company, the shares represented by the Proxy will be voted
at the Annual Meeting of Shareholders in accordance with the directions given in
the Proxy, unless the Proxy is revoked. Any shareholder executing and returning
the form of Proxy which accompanies this Proxy Statement may revoke the Proxy,
at any time before it has been exercised, by delivering a written notice of
revocation to the Secretary of the Company, executing a subsequent proxy or
attending the meeting and voting in person.
The cost of the solicitation of Proxies will be borne by the Company. In
addition to the use of the mails, Proxies may be solicited personally or by
telephone or facsimile by a few regular employees of the Company without
additional compensation. The Company does not intend to pay any compensation for
the solicitation of Proxies, except that brokers, nominees, custodians, and
other fiduciaries will be reimbursed by the Company for their expenses in
connection with sending proxy materials to beneficial owners and obtaining their
Proxies.
VOTING SECURITIES AND RECORD DATE
March 17, 1995, has been fixed by the Board of Directors as the record date
for determining shareholders entitled to vote at the Annual Meeting. On that
date, 16,583,983 shares of the Company's common stock, par value $.06 per share,
were issued and outstanding. Shareholders are entitled to one vote for each
share of the Company's common stock registered in their names at the close of
business on the record date.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation specify that the Board of Directors
shall consist of at least six but not more than nine members, with the exact
number to be determined by the Board. The Board has fixed the number of
directors at eight. The Articles of Incorporation also specify that the Board of
Directors be divided into three classes as nearly equal in number as possible,
with the classes to hold office for staggered terms of three years each. Mickey
E. Fouts and John Mulder, incumbent directors previously elected by
shareholders, are nominees for re-election to a three-year term expiring in
1998.
Unless otherwise directed by a shareholder's marking on the Proxy card, the
persons named as proxy voters in the accompanying Proxy will vote for the
nominees described below. In the event any of these nominees is no longer a
candidate at the time of the Annual Meeting of Shareholders (a situation which
is not now anticipated), the Board of Directors may designate a substitute
nominee, in which case the accompanying Proxy will be voted for the substituted
nominee.
Under Michigan law, directors are elected by a plurality of the votes cast
by shareholders. Therefore, the two nominees who receive the largest number of
affirmative votes will be elected, irrespective of the number of votes received.
Broker nonvotes, votes withheld, and votes cast against any nominee will not
have a bearing on
1
<PAGE> 4
the outcome of the election. Votes will be counted by Inspectors of Election
appointed by the presiding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR the election of all the
persons nominated by the Board.
The content of the following table relating to business experience is based
upon information furnished to the Company by the nominees and directors.
<TABLE>
<CAPTION>
NAME, (AGE) BUSINESS EXPERIENCE
AND POSITION PAST FIVE YEARS
----------------------------------------------------------------------------------------------
NOMINEES FOR TERMS TO EXPIRE IN 1998
<S> <C>
Mickey E. Fouts (63).................... Mr. Fouts has been the Chairman of the Board,
Director since 1982 Equity Services Company (investment services),
Denver, CO, for more than five years. In addition,
he was the Director of Corporate Finance, Tamaron
Capital Markets (investment banking), Denver, CO
from November 1993 to May 1994.
John Mulder (58)........................ Mr. Mulder is the Vice President-Automotive
Director since 1992 Marketing of Gentex Corporation, and he has held
that position for more than five years.
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 1997
<S> <C>
Fred Bauer (52)......................... Mr. Bauer is the Chairman and Chief Executive
Director since 1981 Officer of Gentex Corporation, and he has held that
position for more than five years.
Leo L. Weber (65)....................... For more than five years prior to his retirement in
Director since 1991 December 1990, Mr. Weber was the President of
Robert Bosch Corporation, Farmington Hills, MI
(manufacturer of sophisticated automotive
components). Since 1990, Mr. Weber has been engaged
in the consulting business as L. L. Weber &
Associates, West Bloomfield, MI. Mr. Weber is also
a director of American Electronics Components,
Inc., Elkhart, IN, (manufacturer of electronic and
electromechanical products).
Dr. Harlan J. Byker (40)................ Dr. Byker has been the Vice
Director since 1993 President-Electrochemical Research of Gentex
Corporation since August of 1993. Prior to that
time, he was the Company's Director of Electro-
chemical Development for more than five years.
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 1996
<S> <C>
Arlyn Lanting (54)...................... Mr. Lanting is the Vice President-Finance of Aspen
Director since 1981 Enterprises, Ltd., Grand Rapids, MI (syndication
and operation of mobile home parks), and he has
held that position for more than five years.
Kenneth La Grand (54)................... Mr. La Grand is the Executive Vice President of
Director since 1987 Gentex Corporation, and he has held that position
for more than five years.
Ted Thompson (65)....................... Mr. Thompson is the Chairman and Chief Executive
Director since 1987 Officer of X-Rite, Incorporated, Grandville, MI (a
manufacturer of light and color measuring
instruments), and he has held that position for
more than five years. Mr. Thompson is also a
director of X-Rite, Incorporated.
----------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 5
Arlyn Lanting and Kenneth La Grand are brothers-in-law. There are no other
family relationships between the nominees, directors, and executive officers of
the Company.
The Company has an Audit Committee comprised of Messrs. Thompson and
Lanting. The Audit Committee recommends to the Board of Directors the selection
of independent public accountants and reviews the scope of their audit, their
audit reports, and any recommendations made by them. This Committee met on two
occasions during the fiscal year ended December 31, 1994.
The Company has a Compensation Committee comprised of Messrs. Bauer,
Lanting, and Thompson. The Compensation Committee is responsible for
administering the Company's stock-based incentive plans and supervising other
compensation arrangements for executive officers of the Company. The
Compensation Committee met five times during the fiscal year ended December 31,
1994.
In addition, the Company has an Executive Committee comprised of Messrs.
Bauer, Lanting, and La Grand which is authorized to act on behalf of the Board
between full Board meetings, to the extent permitted by law. This Committee did
not meet during the fiscal year ended December 31, 1994.
The Company does not have a standing nominating committee.
During 1994, the Board of Directors met on four occasions. All directors
attended at least 75 percent of the aggregate number of meetings of the Board
and Board committees on which they served.
PROPOSAL TO AMEND AND RESTATE THE QUALIFIED STOCK OPTION PLAN
In 1993, the shareholders of the Company approved the Amended and Restated
Gentex Corporation Qualified Stock Option Plan providing for the grant of
options to key employees of the Company for the purchase of not more than
1,125,000 shares of the Company's common stock, adjusted to 2,250,000 to reflect
a subsequent 100 percent stock dividend. At March 1, 1995, 1,777,050 shares had
been reserved for issuance upon the exercise of outstanding options and 701,600
shares remained available for the grant of options.
On August 12, 1994, the Board of Directors took action to amend and restate
this Plan (the "Option Plan"), subject to the approval of the Company's
shareholders. The amended and restated Option Plan modifies the existing plan in
the following significant ways: employees of subsidiary corporations will become
eligible for participation in the plan; Fred Bauer, Chairman and C.E.O., will
become eligible for participation in the plan; the number of shares available
for issuance under the plan will be restored to a total of 2,250,000 shares, and
the expiration date of the plan will be extended to August 12, 2004.
Shareholders will be asked to consider and approve the Option Plan, as amended
and restated, at the Annual Meeting. The following paragraphs summarize the
principal features of the amended and restated Option Plan, and the full text of
the Option Plan, as amended, is appended to this Proxy Statement as Appendix A.
Purpose. The purpose of the Option Plan is to provide the Company with the
opportunity to use stock options as a means of recruiting new managerial and
technical personnel, where appropriate, and to provide employees with an
additional incentive to contribute to the success of the Company and remain in
the Company's employ.
Eligibility and Administration. The Option Plan is administered by a
Committee appointed by the Board of Directors. The Committee is authorized to
determine which of the Company's employees are entitled to receive options, the
number of shares subject to each option, the option term (not to exceed a period
of ten years), and such other matters as are specified in the Option Plan.
Options may be granted under the terms of the Option Plan to all employees of
the Company, except for persons who own more than 10 percent of the Company's
voting securities. As of March 1, 1995, one hundred and twelve employees
(including seven officers), have been granted options under the Plan.
Shares Subject to the Plan. In its existing form, the Option Plan provides
that a maximum of 2,250,000 shares of the Company's common stock, par value $.06
per share, are authorized for sale pursuant to options granted under the Plan,
and 701,600 shares currently remain available for grants. If the amended Option
Plan is approved, the maximum will be restored to 2,250,000 shares authorized
for sale. Shares may be supplied to satisfy the requirements of options granted
under the Option Plan out of shares held in treasury, authorized
3
<PAGE> 6
but unissued shares, or partly out of each. Upon expiration or termination of
options without exercise, the shares subject to those options are available for
options subsequently granted under the Option Plan. The Option Plan provides for
appropriate adjustments in the number of shares and option prices in the event
of any stock dividends, stock splits, reclassifications of shares or
recapitalizations to prevent dilution of the interest of the optionees. Options
may also contain provisions for termination or acceleration of exercise rights
in the event of any merger or consolidation involving the Company. If options
are granted containing provisions for acceleration of exercise rights in the
event of a merger or consolidation of the Company, the effect may be to
discourage attempts to acquire control of the Company which shareholders may
deem to be in their best interests.
Operation of the Plan. The Option Plan provides for the granting of
options which qualify as incentive stock options as defined by Section 422 of
the Internal Revenue Code. The exercise price of an option may not be less than
100 percent of the per share fair market value of the Company's common stock on
the date the option is granted. Upon exercise, the price must be paid in full,
and may be paid in cash and/or by the surrender of previously issued shares or
outstanding options. Under the terms of the Option Plan, fair market value is
deemed to equal the closing sale price on the date of grant of the option. On
March 1, 1995, the closing sale price for the Company's common stock as reported
by The Nasdaq Stock Market was $23.25.
Options may be exercised in whole or in part after such dates as may be
specified in the option agreements, and no option may extend for a period of
more than ten years. Individual option agreements will contain such termination
provisions as the Committee deems advisable, except that no option may be
exercised more than twelve months after termination of employment on account of
death or disability, nor more than three months after termination of employment
for any other reason, without specific approval by the Committee. Options are
not transferable except by will or pursuant to the laws of descent and
distribution upon an optionee's death. During the lifetime of an optionee,
options may be exercised only by the optionee.
As amended, the Option Plan provides for an automatic annual option grant
to Chairman Fred Bauer of 15,000 shares as of the time the Compensation
Committee reviews his compensation arrangements. The Board of Directors wanted
Chairman Bauer to be eligible for stock options because they believe that a
portion of the compensation for the Chief Executive Officer should be in the
form of options. The "automatic" feature was added to the Option Plan in order
to preserve Chairman Bauer's ability to continue his service as a member of the
Compensation Committee as a "disinterested person" as defined by Rule 16b-3
promulgated by the Securities and Exchange Commission. Chairman Bauer has been
awarded an initial grant of 15,000 shares, subject to the approval of
shareholders of the Option Plan, as amended.
Amendment and Termination. The Option Plan, as amended, will terminate
automatically on August 12, 2004, unless terminated earlier by the Board of
Directors. The Board of Directors may amend the Option Plan at any time,
provided that no amendment may, without shareholder approval: (a) alter the
aggregate number of shares that may be issued; (b) decrease the price at which
options may be granted; or (c) modify the eligibility requirements for
optionees.
Summary of Federal Income Tax Consequences. The following paragraphs
summarize the federal income tax consequences with respect to options granted
under the Option Plan, based upon management's understanding of the existing
federal income tax laws.
No tax consequences will result, except in the case of an optionee who is
subject to the alternative minimum tax, to the optionee or the Company from the
grant of an option to, or the exercise of an option by, the optionee. Instead,
the optionee will recognize gain or loss when the shares received upon exercise
of the option are disposed of or sold. For purposes of determining the gain or
loss, the optionee's basis in the shares will be the option price. If the date
of sale or disposition of the shares is at least two years after the date of the
grant of the option and at least one year after receipt of the shares upon
exercise of the option, the optionee will be entitled to long-term capital gain
treatment upon the sale or disposition.
The Company generally will not be allowed a deduction with respect to an
option. However, if an optionee fails to meet the holding period requirements,
any gain realized upon sale or disposition of the shares received upon exercise
will be treated as ordinary income, rather than capital gain, to the extent of
the excess, if any, of the fair market value of the shares at the time of
exercise (or, if less, in certain cases the amount
4
<PAGE> 7
realized on such sale or disposition) over the option price. In that case, the
Company will be allowed a corresponding deduction.
The amount, if any, by which the fair market value of the shares
transferred to the optionee upon the exercise of an option exceeds the option
price will constitute an item of tax preference, subject, in certain
circumstances, to the alternative minimum tax.
The rules governing the tax treatment of options and stock acquired upon
the exercise of options are quite technical. Therefore, the foregoing
description of tax consequences is necessarily general and does not purport to
be complete.
The affirmative vote of a majority of the Company's outstanding common
stock represented and voted at the Annual Meeting is required to approve the
adoption of the Option Plan, as amended and restated. Since a majority of the
votes cast is required for approval, any negative vote will necessitate an
offsetting affirmative vote to assure approval. Any ballot or proxy marked
"abstain" and any broker nonvote will be counted as a negative vote. Votes will
be counted by Inspectors of Election appointed by the presiding officer at the
Annual Meeting.
The Board of Directors recommends a vote FOR adoption of the proposed
Amended and Restated Qualified Stock Option Plan.
SECURITIES OWNERSHIP OF MANAGEMENT
The following table contains information with respect to ownership of the
Company's common stock by all directors, nominees for election as directors,
executive officers named in the tables under the caption Executive Compensation,
and all executive officers and directors as a group. The content of this table
is based upon information supplied by the Company's officers, directors, and
nominees for election as directors, and represents the Company's understanding
of circumstances in existence as of March 1, 1995.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF OWNERSHIP
-------------------------------------
NAME OF SHARES BENEFICIALLY EXERCISABLE PERCENT
BENEFICIAL OWNER OWNED (1) OPTIONS (2) OF CLASS
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fred Bauer 1,206,116(3) -- 7.3
Dr. Harlan J. Byker 101,899 10,000 *
Mickey E. Fouts 15,000 15,000 *
Enoch Jen 30,800 18,800 *
Arlyn Lanting 133,000(4) 33,000 *
Kenneth La Grand 162,000 64,000 *
John Mulder 31,600 1,600 *
Ted Thompson 48,000 47,000 *
Leo L. Weber 7,000 5,000 *
All directors and executive officers as
a group (9 persons) 1,735,415 194,400 10.5
----------------------------------------------------------------------------------------------
</TABLE>
* Less than one percent.
(1) Except as otherwise indicated by footnote, each named person claims sole
voting and investment power with respect to the shares indicated.
(2) This column reflects shares subject to options exercisable within 60 days,
and these shares are included in the column captioned "Shares Beneficially
Owned."
(3) Fred Bauer is the record owner of 1,190,116 shares, and two of his children
living with him, one of whom is a minor, each owns 8,000 shares. He
disclaims beneficial ownership of all of the shares listed in the preceding
table except for the shares owned of record by him and the shares owned by
his minor child.
(4) Includes 100,000 shares owned of record by Aspen Enterprises, Ltd., of which
Mr. Lanting is a director, officer, and substantial shareholder, and Mr.
Lanting disclaims beneficial ownership of those shares.
5
<PAGE> 8
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table contains information with respect to ownership of the
Company's common stock by persons or entities who are beneficial owners of more
than five percent of the Company's voting securities. The information contained
in this table is based on information contained in Schedules 13D and 13G
furnished to the Company and represents the Company's understanding of
circumstances in existence on March 1, 1995.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
-----------------------------------------------------------------------------------------
<S> <C> <C>
Dan Bauer 983,244(1) 6.0
2361 Sunset Bluff Drive
Holland, MI 49424
State Treasurer 1,006,800(2) 6.1
State of Michigan
P.O. Box 15128
Lansing, MI 48901
-----------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Bauer is a record owner of 559,244 shares as trustee of a trust
established by him. In addition, 424,000 shares are held of record by
Mr.Bauer's spouse as trustee of her own trust and as custodian for their
minor children, and Mr. Bauer disclaims beneficial ownership of those
shares.
(2) The State Treasurer acts as the investment fiduciary for retirement systems
sponsored by the State of Michigan for Public School Employees, State
Employees, State Police, Judges, and Probate Judges.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table contains information regarding compensation paid by the
Company with respect to the preceding fiscal year to its chief executive officer
and to each executive officer whose salary and bonus compensation exceeded
$100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------
AWARDS
ANNUAL COMPENSATION --------------------------
---------------------------- RESTRICTED SECURITIES PAYOUTS ALL OTHER
SALARY BONUS OTHER STOCK UNDERLYING -------- COMPENSATION
EXECUTIVE YEAR ($) ($) ($) AWARDS($) OPTIONS (#) LTIP ($) ($)(1)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fred Bauer 1994 230,495 76,204 -- 15,000 3,339
Chairman and CEO 1993 219,244 58,352 -- -- 3,265
1992 211,955 19,158 -- -- 2,974
Kenneth La Grand 1994 139,496 44,914 -- 12,000 3,094
Executive Vice 1993 131,144 31,987 -- 10,000 2,585
President 1992 125,333 21,333 165,000(2) 16,000 2,500
John Mulder 1994 168,640 40,146 -- 10,000 3,188
Vice President, 1993 159,052 36,579 -- 8,000 3,026
Automotive Marketing 1992 152,880 25,816 106,500(2) 10,000 2,974
Dr. Harlan J. Byker 1994 104,219 18,636 256,250(2) 10,000 504
Vice President, 1993 89,490 11,632 -- -- 504
Electrochemical 1992 86,943 7,869 712,500(2) -- 453
Research
Enoch Jen 1994 85,885 33,665 -- 9,000 2,963
Vice President, 1993 78,887 28,565 -- 16,000 1,806
Finance & Treasurer 1992 74,135 22,601 103,250(2) 16,000 1,593
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These amounts represent the sum of "matching" contributions by the Company
pursuant to its 401(k) Plan and annual premiums for term life insurance
attributed to each executive officer.
(2) Represents the aggregate market value at the date of grant for shares of
common stock awarded under the Company's Restricted Stock Plan. Restrictions
on shares lapse upon the expiration of five years from the date of grant,
assuming continued employment with the Company. Dividends will be paid on
these shares if, and to the same extent paid on the Company's common stock
generally. At the close of the Company's fiscal year, the following officers
held the following number of restricted shares with the corresponding net
market values: K. La Grand 46,000 shares for $1,115,500; J. Mulder 22,000
shares for $533,500; H. Byker 10,000 shares for $242,500; and E. Jen 10,000
shares for $242,500.
------------------------
7
<PAGE> 10
The following table contains information regarding stock options granted to
the above-named executive officers during the preceding fiscal year.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER OF PERCENT
SECURITIES OF OPTIONS EXERCISE GRANT DATE
UNDERLYING TO ALL PRICE EXPIRATION PRESENT VALUE
EXECUTIVE OPTIONS(#)(1) EMPLOYEES ($/SH)(2) DATE ($)(3)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fred Bauer 15,000(4) 5.5 20.00 8/12/01 191,400
Kenneth La Grand 12,000 4.4 21.00 9/23/01 161,520
John Mulder 10,000 3.6 21.00 9/23/99 115,900
Dr. Harlan J. Byker 10,000 3.6 25.50 6/30/01 162,900
Enoch Jen 9,000 3.3 22.75 3/13/01 123,840
--------------------------------------------------------------------------------------------------
</TABLE>
(1) These options become exercisable, so long as employment with the Company
continues, for 20 percent of the shares on each anniversary of the grant
date, except in the case of Mr. Mulder where they become exercisable for 25
percent annually commencing with the first anniversary of the grant date.
(2) The exercise price may be paid in cash, in shares of the Company's common
stock, and/or by the surrender of exercisable options valued at the
difference between the exercise price and the market value of the underlying
shares.
(3) Based on the Black-Scholes option valuation model, assuming volatility
ranging from .50 to .54, a risk-free rate of return equal to ten year
treasury bonds, a dividend yield of zero, and an exercise date of seven
years after grant, except for the Mulder option which has a five-year
exercise date. This model is an alternative suggested by the Securities and
Exchange Commission, and the Company neither endorses this particular model,
nor necessarily agrees with this method for valuing options. The ultimate
value of options will depend on the Company's success, as reflected by an
increase in the price of its shares, which will inure to the benefit of all
shareholders.
(4) The grant of these options is contingent on approval by shareholders of the
Amended and Restated Qualified Stock Option Plan discussed supra.
------------------------
The following table contains information regarding the exercise of options
during the preceding fiscal year by the above-named executives, as well as
unexercised options held by them at fiscal year-end.
Aggregated Option Exercises in Last Fiscal Year and Year-end Values
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE YEAR-END (#) FISCAL YEAR-END ($)
EXERCISE REALIZED ----------------------------- -----------------------------
EXECUTIVE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fred Bauer -- -- -- 15,000 -- 63,750
Kenneth La Grand 51,000 1,009,906 64,000 45,000 1,218,875 480,063
John Mulder -- -- 16,000 36,400 278,750 392,656
Dr. Harlan J. Byker 10,000 162,344 10,000 10,000 222,969 --
Enoch Jen 2,500 64,531 11,500 47,000 198,719 555,625
-----------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
Executive Compensation Report
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. This Committee is comprised of
three members: two independent outside directors and the Chief Executive Officer
(C.E.O.). The Committee makes recommendations to the Board of Directors with
respect to executive compensation matters, except for awards made pursuant to
the Company's stock-based incentive plans, which are the exclusive prerogative
of the Committee in order to meet the "disinterested administration" requirement
of Exchange Act Rule 16b-3.
The executive compensation program is composed of three elements: base
salary, annual bonus, and stock-based incentives. These elements are utilized to
accommodate several objectives:
- Provide the means to attract, motivate, and retain executive management
personnel.
- Provide for long-term success by focusing on continuing technical
development and improvement in customer satisfaction.
- Provide base salary compensation that is competitive in the market for
managerial talent.
- Provide annual bonus compensation reflective of both individual
achievement and overall Company performance.
- Provide stock-based incentive compensation that focuses on long-term
Company performance and aligning the interests of management with the
interests of shareholders.
Base salary compensation for executive officers is predicated primarily on
competitive circumstances for managerial talent and positions reflecting
comparable responsibility. These competitive circumstances are determined from
local, regional, and national surveys of employers comparable to the Company in
size, stage of development, and industry. Historically, base salaries for
executive officers have been relatively low, and stock-based incentives have
received more emphasis, reflecting the entrepreneurial, high growth rate stage
of the Company's development. Base salary decisions for executive officers other
than the C.E.O. are determined by C.E.O. F. Bauer and reviewed annually by the
Committee. The base salary for C.E.O. Bauer for 1994 was established by the
Committee (without participation by C.E.O. Bauer) and approved by the Board of
Directors. The Committee's recommendation was made after reviewing survey
information from several sources, textual materials regarding executive
compensation strategies in general, the past and expected contributions of
C.E.O. Bauer to the Company's progress, the quality, loyalty, and performance of
the management team assembled and led by him, and the relationships between his
salary and the average salary levels for the Company's hourly paid workers,
salaried employees, and executive officers.
Annual bonus compensation for executive officers is composed of two
elements: payments under the Company's Gain Sharing Bonus Plan and performance
bonuses. All employees of the Company, including executive officers, are
eligible to share in the Company's Gain Sharing Bonus Plan after the first six
months of employment. A percentage of pre-tax income, in excess of an
established threshold for shareholder return on equity, is distributed quarterly
to eligible employees. The amount to be distributed is allocated among all
eligible employees in proportion to the salary or wages (including overtime)
paid to those employees during the quarter. In addition, performance bonuses are
paid to various managerial and technical employees, including executive
officers, based upon individual performance during the year and the overall
performance of the Company during the year. Regarding 1994, C.E.O. F. Bauer
evaluated the performance of each executive officer, sometimes in consultation
with other officers, and determined performance bonuses predicated approximately
one-half on the individual's achievements and contributions to Company success,
and one-half on the overall performance of the Company for the year. C.E.O. F.
Bauer participated in the Gain Sharing Plan along with all other eligible
employees. In addition, Mr. Bauer was awarded a performance bonus in the amount
of $35,000. The award was recommended by the Committee (without participation by
Mr. Bauer) based upon the Company's significant gains in both sales and
earnings, its competitive position in the marketplace, and the effectiveness of
management despite the demands of ongoing litigation, and the recommendation was
approved by the Board of Directors.
9
<PAGE> 12
Stock-based incentive compensation is intended to align the interests of
shareholders and senior management by making the managers shareholders in a
significant amount, and providing them incentives to work to increase the price
of the Company's shares by granting them options to acquire additional shares.
Generally, restricted stock grants are subject to forfeiture if the executive
officer does not continue employment with the Company for the period specified
at the time of grant. Similarly, stock options become exercisable generally for
a portion of the shares after one or two years and for additional portions each
year thereafter, subject however to the requirement that the optionee must be
employed by the Company at the time of exercise. During 1994, stock options were
awarded to executive officers, other than the C.E.O., by the Committee, based
upon recommendations from C.E.O. F. Bauer, taking into consideration for each
executive the scope of responsibility, contribution to success in prior periods,
ability to influence success in the future, and demonstrated ability to achieve
agreed-upon goals. If the Amended and Restated Stock Option Plan is approved by
shareholders at the Annual Meeting, a 15,000 share option granted to Mr. Bauer
in 1994 will become effective (See discussion under the caption Proposal to
Amend and Restate the Qualified Stock Option Plan supra).
The Committee has considered the application of the $1,000,000 limitation
on compensation deductions contained in Sections 162(m) of the Internal Revenue
Code and has determined that the Company should take no action in response to
passage of that Section for the time being.
Compensation Committee Members:
Fred Bauer
Arlyn Lanting
Ted Thompson
------------------------
10
<PAGE> 13
Stock Performance Graph
The following graph depicts the cumulative total return of the Company's
common stock compared to the cumulative total return on The Nasdaq Stock Market
index (all U.S. companies) and the Dow Jones Index for Automobile Parts and
Equipment Companies (excluding tire and rubber makers). The graph assumes an
investment of $100 on the last trading day in 1989, and reinvestment of
dividends in all cases.
<TABLE>
<CAPTION>
Dow Jones
Auto Parts &
Equipment
Companies NASDAQ
DOW (Excluding Tire & Gentex Stock Market
JONES Rubber Makers) Corporation (U.S. Companies)
<S> <C> <C> <C> <C>
12/29/89 274.61 100.000 100 100
12/31/90 241.33 87.881 41.176 84.918
12/31/91 296.37 107.924 101.961 136.277
12/31/92 380.18 138.444 166.667 158.579
12/31/93 497.53 181.177 552.941 180.933
12/30/94 436.83 159.073 380.392 176.916
</TABLE>
------------------------
The Company has not adopted any long-term incentive plan or any defined
benefit or actuarial plan, as those terms are defined in the applicable
regulations promulgated by the Securities and Exchange Commission. Neither
does the Company have any contracts with its executive officers assuring them
of continued employment, nor any compensatory arrangement for executives
linked to a change in control of the Company.
Directors who are employees of the Company receive no compensation for
services as directors. Directors who are not employees of the Company receive a
director's retainer in the amount of $6,000 per year plus $800 for each meeting
of the Board attended and $500 for each committee meeting attended. In addition,
each person who is a director immediately following each annual meeting of
shareholders is entitled to receive an option to purchase 5,000 shares of the
Company's common stock at a price per share equal to the fair market value on
that date. Each option has a term of ten years and becomes exercisable in full
six months after the date of the grant.
11
<PAGE> 14
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
Fred Bauer, Chairman and C.E.O., was a member of the Company's Compensation
Committee during the fiscal year ended December 31, 1994. That Committee was
responsible for supervising the Company's executive compensation arrangements,
including the making of decisions with respect to the award of stock-based
incentives for executive officers during that year. Mr. Bauer is not eligible
for any discretionary stock-based incentive awards. However, Mr. Bauer will
become eligible for an automatic annual stock option grant for 15,000 shares if
the Proposal to Amend and Restate the Stock Option Plan, discussed supra, is
approved by shareholders at the Annual Meeting. Certain transactions between Mr.
Bauer and the Company are described below under Transactions With Management.
Arlyn Lanting, a director and member of the Company's Compensation
Committee, was an officer of the Company more than ten years ago.
TRANSACTIONS WITH MANAGEMENT
Since 1978, prior to the time the Company became a publicly-held
corporation, the Company has leased a building that previously housed its main
office, manufacturing and warehouse facilities, and currently houses production
operations for the Company's fire protection products. The lessor for that
building is G & C Associates, a general partnership, and nearly all of the
partnership interests in G & C Associates are held by persons related to Fred
Bauer. The lease is a "net" lease, obligating the Company to pay all expenses
for maintenance, taxes and insurance, in addition to rent. During 1994, the rent
paid to this partnership was for $52,153, and the rent for the current fiscal
year is the same. The Board of Directors believes that the terms of this lease
are at least as favorable to the Company as could have been obtained from
unrelated parties.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of the Company for the fiscal year
ended December 31, 1994, have been audited by Arthur Andersen LLP, independent
public accountants, and the Board of Directors has selected Arthur Andersen LLP,
to serve as the Company's independent accountants for the fiscal year ending
December 31, 1995. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting to respond to appropriate questions, and will have
an opportunity to make a statement if they desire.
COMPLIANCE WITH REPORTING REQUIREMENTS
Based upon a review of Forms 3, 4, and 5 furnished to the Company during or
with respect to the preceding fiscal year, and written representations from
certain reporting persons, the Company is not aware of any failure by any
reporting person to make timely filings of those Forms as required by Section
16(a) of the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS -- 1996 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the next annual
meeting of the Company must be received by the Company at its headquarters at
600 N. Centennial Street, Zeeland, Michigan 49464, no later than December 1,
1995, if the shareholder wishes the proposal to be included in the Company's
proxy statement relating to that meeting.
The Company's Annual Report to Shareholders, including financial
statements, is being mailed to shareholders with this Proxy Statement.
Management is not aware of any matters to be presented for action at the
Annual Meeting, other than as set forth in this Proxy Statement. If other
business should come before the meeting, the persons named as proxy holders in
the accompanying Proxy intend to vote the shares in accordance with their
judgment, and discretionary authority to do so is included in the Proxy.
12
<PAGE> 15
A COPY OF THE COMPANY'S REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE, UPON WRITTEN REQUEST, FROM THE
SECRETARY OF THE COMPANY, 600 N. CENTENNIAL STREET, ZEELAND, MICHIGAN 49464.
Shareholders are urged to promptly date, sign, and return the accompanying
Proxy in the enclosed envelope.
By Order of the Board of Directors
Connie Hamblin
Secretary
March 31, 1995
13
<PAGE> 16
APPENDIX A
GENTEX CORPORATION
QUALIFIED STOCK OPTION PLAN
(AS AMENDED AND RESTATED, EFFECTIVE MAY 11, 1995)
1. Purpose. The purpose of this Plan is to provide an opportunity for
certain employees of Gentex Corporation and its subsidiaries to purchase shares
of capital stock of the Corporation and thereby have an additional incentive to
contribute to the prosperity of the Corporation.
2. Definitions. The following terms are defined for use herein as follows:
a. "Board" means the Board of Directors of Gentex Corporation.
b. "Common Stock" means the common stock (par value ($.06 per share)
of Gentex Corporation.
c. "Committee" means the committee appointed pursuant to Paragraph 4
to administer the Plan.
d. "Corporation" means Gentex Corporation and any subsidiary
corporation where Gentex Corporation owns fifty percent (50%) or more of
the combined voting power of all outstanding securities within the meaning
of the applicable provisions of the Internal Revenue Code.
e. "Effective Date" means the effective date of this Amended and
Restated Plan, May 11, 1995.
f. "Market Value" means the closing sale price of Common Stock
reported in The Nasdaq Stock Market for the day on which the particular
option is granted, or, if prices of shares of Common Stock are not so
published for that date, then a fair market value determined by the
Committee by any reasonable method selected by it in good faith.
g. "Optionee" means any employee to whom an option has been granted
under the Plan.
h. "Option Agreement" means an agreement evidencing options as
provided in Paragraph 7 of the Plan.
i. "Plan" means this Qualified Stock Option Plan of the Corporation as
in effect from time to time.
j. "Option Price" means the purchase price for Common Stock under an
option, as determined under Paragraph 7 of this Plan.
3. Shares.
a. The total number of shares of the Common Stock which may be sold
under the Plan shall not exceed 2,250,000 shares, except that the total
number of shares which may be sold under the Plan may be increased to the
extent of adjustments authorized by Paragraph 10. Such shares shall be
authorized shares and may be either unissued shares or treasury shares.
b. If an option granted under the Plan shall expire or terminate for
any reason without having been exercised in full, the shares not delivered
under such option shall be available for options subsequently granted.
4. Administration.
a. The Plan shall be administered by a Committee appointed by the
Board, which shall consist of three (3) or more members. All members of the
Committee shall be directors who are "disinterested persons" within the
meaning of Rule 16b-3 promulgated by the Securities and Exchange
Commission. Except as provided in Paragraph 7 f., the Committee shall
determine the employees to be granted options, the amount of stock to be
optioned to each employee, and the terms of the options to be granted. The
Committee shall have full power and authority to interpret the provisions
of the Plan, to supervise the administration of the Plan and to adopt forms
and procedures for the administration of the Plan. All determinations made
by the Committee shall be final and conclusive.
A-1
<PAGE> 17
b. The granting of any option pursuant to this Plan shall be entirely
within the discretion of the Committee. Nothing herein contained shall be
construed to give any officer or employee any right to participate under
this Plan.
c. Each person who is or shall have been a member of the Committee
shall be indemnified and held harmless by the Corporation from and against
any cost, liability or expense imposed or incurred in connection with such
person's or the Committee's taking or failing to take any action under the
Plan. Each such person may rely on information furnished in connection with
the Plan's administration by any appropriate person or persons.
5. Eligibility. Only employees of the Corporation shall be eligible to
participate in the Plan. The Committee shall determine whether or not an
individual is eligible to participate in the Plan. An employee who has been
granted an option under this Plan or any other stock option plan of the
Corporation may be granted additional options.
6. Exercise Price. The per share exercise price of each option granted
under the Plan shall be at least one hundred percent (100%) of the Market Value
of a share of Common Stock; provided, however, any option granted to a
participant possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of Gentex Corporation shall be at an Option Price
not less than one hundred ten percent (110%) of the market value of a share of
Common Stock and shall not be exercisable after the expiration of five years
from the date the option is granted.
7. Terms of Options. Each option shall be evidenced by a written agreement
containing such terms and conditions as are set by the Board or the Committee,
including without limitation the following:
a. Number of Shares. Each Option Agreement shall state the number of
shares to which it pertains.
b. Exercise Price. Each Option Agreement shall state the exercise
price.
c. Medium and Time of Payment. The exercise price for each share
purchased pursuant to an option granted under the Plan shall be payable in
full upon exercise, and may be paid in cash or, in full or in part, by the
surrender of Common Stock owned by the Optionee valued at fair market value
or by the surrender of Option rights hereunder that are then exercisable,
valued at the difference between the Option Price and the fair market value
of the underlying Common Stock. Promptly after the exercise of an Option
and the payment of the full Option Price, the Optionee shall be entitled to
the issuance of a stock certificate evidencing ownership of such Common
Stock. However, an Optionee shall have none of the rights of a shareholder
until a certificate for those Shares is issued to the Optionee, and no
adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued, except as
provided in Paragraph 10 of this Plan.
d. Term and Exercise of Options. Each option shall be exercisable in
whole or in part in such amounts and at or after such dates as may be
specified in the option agreement. In no event, however, shall any option
be exercisable less than one (1) year from the date of grant.
e. Administrative Discretion. The Committee may in its discretion
vary, among employees and among options granted to the same employee, any
and all of the terms and conditions of options granted under the Plan,
including the term during which and the amounts in which and dates at or
after which such options may be exercised.
f. Special C.E.O. Terms. Notwithstanding any other provision of this
Plan to the contrary, the current chief executive officer of Gentex
Corporation shall receive, as of the date this Plan is approved by the
Board, and annually thereafter as of the time his compensation is reviewed
by the Committee, an option for 15,000 shares of Common Stock, and no other
options may be granted to that individual under this Plan. These options
shall become exercisable for twenty percent (20%) of the shares on the
first anniversary of the grant date and for an additional twenty percent
(20%) on each anniversary thereafter, and all unexercised options shall
expire on the seventh anniversary date of the grant.
A-2
<PAGE> 18
8. Transferability of Options and Common Stock. Options under this Plan
may not be transferred except by will or according to the laws of descent and
distribution. During the lifetime of the Optionee, an option may be exercised
only by the Optionee or his guardian or legal representative. After an
Optionee's death, options that were exercisable at the date of death may be
exercised at any time within one year after the date of death, subject to prior
expiration, by the executor or administrator of the Optionee's estate, any
person(s) who acquired the option directly from the Optionee by bequest or
inheritance, or any person designated specifically in a written designation
signed by the Optionee and filed with the Committee prior to the date of death.
The Corporation may, in the event it deems the same desirable to assure
compliance with applicable federal and state securities laws, legend any
certificate representing shares issued pursuant to the exercise of an option
with an appropriate restrictive legend, and may also issue appropriate stop
transfer instructions to its transfer agent with respect to such shares.
9. Termination of Options. Each option agreement shall contain such
provisions as the Committee may deem advisable for termination of the option in
the event of, and/or exercise of the option after the Optionee's death,
disability, or termination of employment by the Corporation. No option may be
exercised more than three (3) months after the termination of the Optionee's
employment by the Corporation, nor more than twelve (12) months after the
Optionee shall have died or become disabled, without the specific approval of
the Committee.
Option agreements may also contain, in the discretion of the Committee,
provisions for termination of options and/or acceleration of exercise rights in
the event of any merger or consolidation of the Corporation with, or acquisition
of the Corporation or substantially all of its assets by, any other corporation
or entity.
Nothing in the Plan or in any option shall limit or affect in any way the
right of the Corporation to terminate an Optionee's employment at any time nor
be deemed to confer upon any Optionee any right to continue in the employ of the
Corporation.
10. Adjustment Provision. If the number of shares of Common Stock
outstanding changes by reason of a stock dividend, stock split,
recapitalization, merger, consolidation, split-up, combination or exchange of
shares, the aggregate number and class of shares available under this Plan and
the number of shares subject to each outstanding option, together with the
option prices, shall be appropriately adjusted by the Board or Committee to
prevent dilution of the interests of Optionees and of the Plan.
11. Effective Date of Plan, Termination and Amendment. The May 18, 1995
Plan Restatement shall take effect only upon and as of the date of approval of
the Plan by the Corporation's stockholders. Unless earlier terminated by the
Board, the Plan shall terminate on the date ten (10) years subsequent to the
date of the adoption of the Plan Restatement by the Board, after which date no
options may be granted under this Plan. The Board may terminate the Plan at any
time, or may from time to time amend the Plan as it deems proper and in the best
interest of the Corporation, provided that no such amendment may (a) alter the
aggregate number of shares that may be issued under the Plan, (b) decrease the
price at which options may be granted, or (c) modify the eligibility
requirements set forth in Paragraph 5.
CERTIFICATION
The foregoing Plan Restatement was duly adopted by the Board of Directors
on the 12th day of August, 1994, subject to the approval of the Company's
shareholders.
/s/ CONNIE HAMBLIN
--------------------------------------
Connie Hamblin, Secretary
Gentex Corporation
A-3
<PAGE> 19
GENTEX CORPORATION
600 N. CENTENNIAL
ZEELAND MI 49464
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shareholder(s) signing on the reverse side hereby appoint(s)
Connie Hamblin and Enoch Jen as Proxies, each with the power to appoint a
substitute, and hereby authorizes them to represent and to vote, as designated
herein, all of the shares of common stock of Gentex Corporation held of record
by such shareholder(s) on March 17, 1995, at the Annual Meeting of Shareholders
to be held on May 11, 1995, or any adjournment thereof.
When properly executed, this proxy will be voted in the manner directed
by the shareholder(s). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEES LISTED FOR A THREE-YEAR TERM AND FOR THE APPROVAL
OF AN AMENDED AND RESTATED QUALIFIED STOCK OPTION PLAN.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
<TABLE>
<S><C>
AMERICAN STOCK TRANSFER & TRUST COMPANY
Please mark your
/X/ votes as in this
example.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of Directors / / / / 2. Proposal to approve an Amended and / / / / / /
(except where marked Restated Qualified Stock Option Plan.
to the contrary) for a
three-year term. 3. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come
before the meeting.
NOMINEES: Mickey E. Fouts, John Mulder
(Instruction: To withhold authority to vote for I plan to attend the meeting. / /
an individual nominee, strike a line through
the nominee's name listed above.)
I do not plan to attend the meeting. / /
SIGNATURE ______________________________ DATE ______________
SIGNATURE ______________________________ DATE ______________
NOTE: Please sign as your name appears hereon. When shares are held jointly, each holder should sign. When signing for an
estate, trust, or corporation, the title and capacity should be stated. Persons signing as attorney-in-fact should submit
powers of attorney.
</TABLE>
