<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
GENTEX CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[GENTEX CORPORATION LOGO]
600 N. CENTENNIAL STREET
ZEELAND, MICHIGAN 49464
NOTICE OF 1997 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 15, 1997, at 4:30 p.m. E.S.T., for the
following purposes:
1. To elect three directors as set forth in the Proxy Statement.
2. To transact any other business that may properly come before
the meeting.
Shareholders of record as of the close of business on March 21, 1997, 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 28, 1997
<PAGE> 3
[GENTEX CORPORATION LOGO]
600 N. Centennial Street
Zeeland, Michigan 49464
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD MAY 15, 1997
SOLICITATION OF PROXIES
This Proxy Statement is being furnished on or about March 28, 1997, 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 15, 1997, 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 21, 1997, 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, 34,885,533 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. Fred T. Bauer, Leo L. Weber, and Harlan J. Byker, Ph.D., incumbent
directors previously elected by shareholders, are nominees for re-election to a
three-year term expiring in 2000.
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.
<PAGE> 4
Under Michigan law, directors are elected by a plurality of the votes
cast by shareholders. Therefore, the three 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 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.
NAME, (AGE) BUSINESS EXPERIENCE
AND POSITION PAST FIVE YEARS
- -----------------------------------------------------------------------------
NOMINEES FOR TERMS TO EXPIRE IN 2000
Fred T. Bauer (54) Mr. Bauer is the Chairman and Chief Executive Officer
Director since 1981 of Gentex Corporation, and he has held that position
for more than five years.
Leo L. Weber (67) Since 1990, Mr. Weber has been engaged in the
Director since 1991 consulting business as L. L. Weber & Associates, West
Bloomfield, MI. Previously, he was the President of
Robert Bosch Corporation, Farmington Hills, MI
(manufacturer of sophisticated automotive
components).
Harlan Byker, Ph.D. (42) Dr. Byker has been the Vice President --
Director since 1993 Electrochemical Research of Gentex Corporation since
August of 1993. Prior to that time, he was the
Company's Director of Electrochemical Development for
more than five years.
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Arlyn Lanting (56) Mr. Lanting is the Vice President -- Finance of Aspen
Director since 1981 Enterprises, Ltd., Grand Rapids, MI (real estate
investments), and he has held that position for more
than five years.
Kenneth L. La Grand (56) 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 (67) 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.
2
<PAGE> 5
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Mickey E. Fouts (65) Mr. Fouts has been Chairman of the Board, Equity
Director since 1982 Services Company (investment services), Denver, CO, for
more than five years. In addition, he was Chairman of
the Board and interim C.E.O. of American Consolidated
Growth Capital (temporary services), Denver, CO, from
January to June of 1996, and the Director of Corporate
Finance, Tamaron Capital Markets (investment banking),
Denver, CO from November 1993 to May 1994.
John A. Mulder (60) Mr. Mulder is the Vice President -- Automotive Marketing
Director since 1992 of Gentex Corporation, and he has held that position
for more than five years.
- ------------------------------------------------------------------------------
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. Lanting and Weber.
The Audit Committee recommends to the Board of Directors the selection of
independent public accountants and reviews the scope of their audit, their
audit report, and any recommendations made by them. This Committee met on two
occasions during the fiscal year ended December 31, 1996.
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,
1996.
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, 1996.
The Company does not have a standing nominating committee.
During 1996 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, except for Mr. Lanting who attended
eight of eleven, or 73 percent.
3
<PAGE> 6
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, 1997.
<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 2,214,233(3) 18,001 6.4
Harlan Byker, Ph.D. 181,598 12,800 *
Mickey Fouts 30,000 30,000 *
Enoch Jen 66,801 31,801 *
Arlyn Lanting 286,000(4) 86,000 *
Kenneth La Grand 336,202 112,202 *
John Mulder 92,200 24,400 *
Ted Thompson 116,000 114,000 *
Leo Weber 34,000 30,000 *
All directors and executive
officers as a group
(9 persons) 3,357,034 459,204 9.6%
- -----------------------------------------------------------------------------------------------
</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) Includes 16,000 shares held by Mr. Bauer's minor child living with him.
(4) Includes 200,000 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.
4
<PAGE> 7
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.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ---------------------------------------------------------------------------
<S> <C> <C>
State Treasurer 2,013,600(1) 5.8
State of Michigan
P.O. Box 15128
Lansing, MI 48901
Denver Investment Advisors LLC 1,760,400 5.1
1225 17th Street
Denver, CO 80202
- ---------------------------------------------------------------------------
</TABLE>
(1) 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.
5
<PAGE> 8
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 $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ------------------------ -------
----------------------------------- RESTRICTED SECURITIES ALL OTHER
SALARY BONUS OTHER STOCK UNDERLYING COMPENSATION
EXECUTIVE YEAR ($) ($) ($) AWARD($) OPTIONS(#) LTIP($) ($)(1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fred Bauer 1996 257,548 120,790 - 15,000 3,967
Chairman and CEO 1995 245,143 82,749 - 30,000 3,389
1994 230,495 76,204 - 30,000 3,339
Kenneth La Grand 1996 156,221 52,769 - 17,000 3,703
Executive Vice 1995 148,083 45,827 238,750(2) 28,000 3,125
President 1994 139,496 44,914 - 24,000 3,094
John Mulder 1996 188,642 54,519 - 14,500 4,261
Vice President, 1995 178,084 47,055 191,000(2) 24,000 3,654
Automotive Marketing 1994 168,640 40,146 - 20,000 3,188
Harlan Byker, Ph.D. 1996 92,416 16,538 503,125(2) 25,000 907
Vice President, 1995 114,714 20,009 - 24,000 832
Electrochemical Research 1994 104,219 18,636 256,250(2) 20,000 504
Enoch Jen 1996 96,488 38,253 - 20,000 3,564
Vice President, 1995 91,885 35,334 106,875(2) 16,000 2,786
Finance & Treasurer 1994 85,885 33,665 - 18,000 2,963
- ---------------------------------------------------------------------------------------------------------------------------------
</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.
6
<PAGE> 9
(2) Represents the aggregate market value at the date of grant for shares of
common stock awarded under the Company's Restricted Stock Plan. Assuming
continued employment with the Company, restrictions on shares lapse upon
the expiration of five years from the date of grant in the case of Mr. Jen
and the 1994 grant for Dr. Byker, and one-third each on the 4th, 5th, and
6th anniversaries of the grant in all other cases. 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 52,000 shares for
$1,046,500; J. Mulder 40,000 shares for $805,000; H. Byker 45,000 shares
for $905,625; and E. Jen 30,000 shares for $603,750.
---------------
The following table contains information regarding stock options granted
to the above-named executive officers during the preceding fiscal year.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------------------------
NUMBER OF PERCENT GRANT DATE
SECURITIES OF OPTIONS EXERCISE PRESENT
UNDERLYING TO ALL PRICE EXPIRATION VALUE
EXECUTIVE OPTIONS(#)(1) EMPLOYEES ($/SH)(2) DATE ($)(3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fred Bauer 15,000 2.7 25.63 8/22/03 224,892
Kenneth La Grand 17,000 3.1 21.75 9/27/03 216,730
John Mulder 14,500 2.6 21.75 9/27/03 184,858
Harlan Byker, Ph.D. 25,000 4.5 20.00 6/29/03 295,110
Enoch Jen 20,000 3.6 14.88 3/29/03 172,954
- ------------------------------------------------------------------------------------------------------------------------------
</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 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 of
.47, a risk-free rate of return equal to seven year treasury bonds, a
dividend yield of zero, and an exercise date of seven years after grant.
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.
---------------
7
<PAGE> 10
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
ACQUIRED VALUE YEAR-END (#) FISCAL YEAR-END ($)
ON EXERCISE REALIZED -------------------------- ---------------------------
EXECUTIVE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fred Bauer - - 18,001 56,999 169,508 374,242
Kenneth La Grand 81,000 1,062,585 112,202 69,798 1,696,377 499,583
John Mulder 15,000 177,500 44,400 55,100 546,790 373,487
Harlan Byker, Ph.D. - - 12,800 56,200 109,400 293,224
Enoch Jen 47,400 464,318 5,000 67,600 89,218 661,048
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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.
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. Fred Bauer and reviewed annually
by the Committee. The base salary for C.E.O. Bauer for 1996 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.
8
<PAGE> 11
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 employees, including executive officers, based
upon individual performance during the year and the overall performance of the
Company during the year. Regarding 1996, C.E.O. Fred 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. Fred
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 $75,000. 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, the effectiveness of his
management leadership, and the resolution of ongoing litigation, and the
recommendation was approved by the Board of Directors.
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 1996 stock options
were awarded to executive officers, other than the C.E.O., by the Committee,
based upon recommendations from C.E.O. Fred 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. The Company's Qualified Stock Option
Plan provides for an automatic annual option for C.E.O. Fred Bauer. The award
was made "automatic" in order to preserve Chairman Bauer's ability to continue
his service on the Committee as a "disinterested person" under the applicable
Securities and Exchange Commission rules.
Compensation Committee Members:
Fred Bauer
Arlyn Lanting
Ted Thompson
---------------
9
<PAGE> 12
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 1991, and reinvestment of
dividends in all cases.
[GRAPH]
<TABLE>
<CAPTION>
Dow Jones
Tire and
Auto Parts &
Equipment
Companies
(Excluding The Nasdaq
Tire and Stock Market
Gentex Corporation Rubber Makers) (U.S. Companies)
<S> <C> <C> <C>
12/31/91 100 100 100
12/31/92 163.462 128.2788 116.3785
12/31/93 542.308 167.8746 133.5945
12/30/94 373.077 147.3935 130.5866
12/29/95 338.462 181.7627 184.6739
12/31/96 619.231 207.2679 227.1641
</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 non-employee 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.
10
<PAGE> 13
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, 1996. 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; rather Mr.
Bauer receives an automatic annual stock option grant for 15,000 shares under
the Company's Qualified Stock Option Plan. The Compensation Committee makes
an annual recommendation to the Board of Directors with respect to Mr. Bauer's
salary and bonus (without participation by Mr. Bauer), and the full Board acts
on the recommendation. 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 1996 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.
Arlyn Lanting and Kenneth La Grand are both substantial shareholders in
GTI Travel Inc., a local travel agency used by the Company to book airline
travel for its employees. During 1996, the Company paid $357,000 in airline
travel through this agency. This arrangement has been reviewed by the
Company's Board of Directors and approved on the basis that the prices and
services provided afford the best value available to the Company.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of the Company for the fiscal year
ended December 31, 1996, 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, 1997. 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 -- 1998 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 8,
1997, if the shareholder wishes the proposal to be included in the Company's
proxy statement relating to that meeting.
11
<PAGE> 14
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.
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 28, 1997
12
<PAGE> 15
GENTEX CORPORATION
600 N. CENTENNIAL STREET
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 21, 1997, at the Annual Meeting of Shareholders to be
held on May 15, 1997, 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.
(TO BE SIGNED ON REVERSE SIDE)
See reverse
side
<PAGE> 16
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. Election of Directors (except where marked to the contrary) for a three-year
term.
FOR WITHHELD
[ ] [ ]
NOMINEES: Fred T. Bauer, Leo L. Weber, Harlan J. Byker
(Instruction: To withhold authority to vote for an individual nominee, strike a
line through the nominee's named listed above.)
I plan to attend the meeting. [ ]
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.
