<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:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] 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:
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(4) Date filed:
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<PAGE> 2
GENTEX
CORPORATION
600 N. CENTENNIAL STREET
ZEELAND, MICHIGAN 49464
NOTICE OF 1998 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 21, 1998, at 4:30 p.m. E.D.S.T., for
the following purposes:
1. To elect two directors as set forth in the Proxy Statement.
2. To act upon a proposal to amend and restate the Gentex
Corporation Qualified Stock Option Plan.
3. To act upon a proposal to amend the Articles of Incorporation
to increase the authorized shares of common stock.
4. To transact any other business that may properly come before
the meeting.
Shareholders of record as of the close of business on March 27, 1998, 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
April 3, 1998
<PAGE> 3
GENTEX CORPORATION
600 N. Centennial Street
Zeeland, Michigan 49464
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD MAY 21, 1998
SOLICITATION OF PROXIES
This Proxy Statement is being furnished on or about April 3, 1998, 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 21, 1998, at 4:30 p.m.
E.D.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 27, 1998, 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, 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 seven. The Articles of Incorporation also specify that the
Board of Directors be divided into three classes, with the classes to hold
office for staggered terms of three years each. John Mulder and Mickey Fouts
are incumbent directors previously elected by shareholders, and they are
nominees for re-election to a three-year term expiring in 2001.
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 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.
<PAGE> 4
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
- --------------------------------------------------------------------------------------------------
<S> <C>
NOMINEES FOR TERMS TO EXPIRE IN 2001
Mickey E. Fouts (66) 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 Mulder (61) 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.
DIRECTORS WHOSE TERMS EXPIRE IN 2000
Fred Bauer (55) Mr. Bauer is the Chairman and Chief Executive Officer of
Director since 1981 Gentex Corporation, and he has held that position for
more than five years.
Leo L. Weber (68) Since 1990, Mr. Weber has been engaged in the consulting
Director since 1991 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).
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Arlyn Lanting (57) 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 La Grand (57) Mr. La Grand is the Executive Vice President of Gentex
Director since 1987 Corporation, and he has held that position for more than
five years.
Ted Thompson (68) Mr. Thompson is the Chairman and Chief Executive Officer
Director since 1987 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. 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, 1997.
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,
1997.
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 1997 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 1995, 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
2,250,000 shares of the Company's common stock, adjusted to 4,500,000 to
reflect a subsequent 100 percent stock dividend. At March 1, 1998, 1,346,731
shares had been reserved for issuance upon the exercise of outstanding options
and 3,042,749 shares remained available for the grant of options.
Effective August 25, 1997, the Board of Directors took action to amend and
restate the plan (the "Option Plan"), subject to the approval of the Company's
shareholders. The amended and restated Option Plan modifies the existing plan
by removing the special provision applicable to C.E.O. F. Bauer that specified
an automatic annual option grant in his favor, and extending the expiration
date from 2004 to 2007. The automatic grant provision was originally included
in order to permit Mr. Bauer to participate in decisions of the committee that
administers the Option Plan, in accordance with the then applicable Securities
and Exchange Commission rules. Those rules have been subsequently modified,
and the Option Plan, as amended, now removes that automatic grant so that Mr.
Bauer will hereafter be subject to the same provisions as all other grantees.
At the time the Board of Directors approved the amendment of the Plan, an
additional option grant was made to Mr. Bauer in the amount of 15,000 shares,
subject to approval of the amended Plan by shareholders. If the Plan is
approved by shareholders, this 15,000 share grant will supplement the 15,000
share automatic grant during 1997 under the then existing Plan, for a total of
30,000 shares under option grants in 1997. 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
3
<PAGE> 6
Company, except for persons who own more than 10 percent of the Company's
voting securities. As of March 1, 1998, two hundred forty-two employees
(including eight 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 4,500,000 shares of the Company's common stock, par
value $.06 per share, are authorized for sale pursuant to options granted under
the Plan, and 3,042,749 shares currently remain available for grants. Shares
may be supplied to satisfy the requirements of options granted under the Option
Plan out of shares held in treasury, authorized 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 of 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, 1998, the closing sale price for the Company's common
stock as reported by The Nasdaq Stock Market was $32.25.
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.
Amendment and Termination. The Option Plan, as amended, will terminate
automatically on August 25, 2007, 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 capital gain treatment
upon the sale or disposition. The current capital gain rate is 20 percent if
the shares have been held for more than 18 months. If the shares have been
held for at least one year but 18 months or less, the current capital gain rate
is 28 percent.
4
<PAGE> 7
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 receive 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 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.
PROPOSAL TO APPROVE INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
Article III of the Company's Articles of Incorporation currently provides
for authorized capital stock of 55,000,000 shares, consisting of 50,000,000
shares of common stock, par value $.06 per share, and 5,000,000 shares of
preferred stock, no par value. No preferred stock is presently outstanding.
At March 1, 1998, there were 35,650,765 shares of common stock outstanding, and
6,932,031 shares have been reserved for issuance under the Company's various
stock plans.
At a meeting held on March 6, 1998, the Board of Directors unanimously
resolved to amend Article III of the Articles of Incorporation to increase the
authorized shares of common stock from 50,000,000 to 100,000,000, and recommend
the amendment for approval by the Company's shareholders. The Board believes
that the authorization of an additional 50,000,000 shares of common stock will
provide increased flexibility for future growth and provide the opportunity for
enhanced marketability of the Company's common stock, although the Board has no
present intention of issuing those shares for any particular purpose at the
present time.
From time to time, the Company has considered potential acquisitions and
management expects to continue to consider acquisition opportunities in the
future. The Company's common stock could be used as a means for accomplishing
an acquisition. The increase in authorized common stock would also enhance the
ability of the Board of Directors to consider the possibility of declaring a
stock dividend to existing shareholders and/or provide for the reservation of
additional shares for potential issuance under the Company's various stock
plans as a means of retaining key personnel and attracting new personnel. It
is also possible that the additional shares of common stock could be utilized
by the Company as a part of a defensive strategy to counter any hostile
takeover attempts. Shares of the Company's common stock do not carry
preemptive rights to purchase additional shares of the Company's stock.
The Board recommends that Article III of the Company's Articles of
Incorporation be amended to read as stated on Appendix B to this Proxy
Statement. The only change in the Articles is the increase in the number of
shares of common stock from 50,000,000 to 100,000,000.
5
<PAGE> 8
The affirmative vote of a majority of the outstanding shares of common
stock, in person or by proxy, on the proposed amendment to Article III is
required for approval. Since an absolute majority of outstanding shares is
required, any ballot or proxy marked "abstain" will have the same effect as a
negative vote. Votes will be counted by Inspectors of Election appointed by
the preceding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR adoption of the proposed
increase in authorized common stock.
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, 1998.
<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 2,013,233(3) 33,001 5.7%
Mickey E. Fouts 5,000 5,000 *
Enoch Jen 52,600 33,200 *
Arlyn Lanting 291,000(4) 91,000 *
Kenneth La Grand 317,002(5) 77,002 *
John Mulder 89,795 25,822 *
Ted Thompson 121,000 119,000 *
Leo L. Weber 39,000 35,000 *
All directors and executive
officers as a group
(8 persons) 2,928,630 419,025 8.2%
- -------------------------------------------------------------------------------------------
</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 owned by one of Mr. Bauer's children who lives
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.
(5) Includes 25,000 shares held in a trust established by Mr. La Grand's
spouse and Mr. La Grand disclaims beneficial ownership of those shares.
6
<PAGE> 9
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) 5.7%
State of Michigan
P.O. Box 15128
Lansing, MI 48901
Denver Investment Advisors LLC 2,351,370 6.6%
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.
7
<PAGE> 10
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>
Fred Bauer 1997 267,680 74,433 -- 30,000(2) 3,952
Chairman and CEO 1996 257,548 120,790 -- 15,000 3,467
1995 245,143 82,749 -- 30,000 3,389
Kenneth La Grand 1997 160,643 55,259 -- 20,000 3,701
Executive Vice 1996 156,221 52,769 -- 17,000 3,703
President 1995 148,083 45,827 238,750(3) 28,000 3,125
John Mulder 1997 179,133 57,372 -- 15,000 3,772
Vice President, 1996 188,642 54,519 -- 14,500 4,261
Automotive Marketing 1995 178,084 47,055 191,000(3) 24,000 3,654
Enoch Jen 1997 101,176 40,477 -- 12,000 3,564
Vice President, 1996 96,488 38,253 -- 20,000 3,564
Finance & Treasurer 1995 91,885 35,334 106,875(3) 16,000 2,786
- -----------------------------------------------------------------------------------------------------------------------------------
</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) One-half of these shares are continent on the approval of shareholders.
See the discussion under the caption Proposal to Amend and Restate the
Qualified Stock Option Plan.
(3) 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 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 20,000 shares for $537,500; J. Mulder 16,000 shares
for $430,000; and E. Jen 10,000 shares for $268,750.
8
<PAGE> 11
The following table contains information regarding stock options granted
to the above-named executive officers during the preceding fiscal year.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------
NUMBER OF PERCENT GRANT DATE
SECURITIES, OF OPTIONS EXERCISE PRESENT
EXECUTIVE UNDERLYING TO ALL PRICE EXPIRATION VALUE
OPTIONS(#)(1) EMPLOYEES ($/SH)(2) DATE ($)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fred Bauer 30,000 5.9 23.3125 8/25/04 633,171
Kenneth La Grand 20,000 3.9 24.625 9/26/04 445,330
John Mulder 15,000 2.9 24.625 9/26/04 333,998
Enoch Jen 12,000 2.3 19.75 3/26/04 214,901
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These options become exercisable, so long as employment with the Company
continues, for 20 percent of the shares on each anniversary of the grant
date commencing with the first anniversary of the grant date.
(2) The exercise price may be paid in cash, in shares of the Company's common
stock, and/or by the surrender of exercisable options valued at the
difference between the exercise price and the market value of the
underlying shares.
(3) Based on the Black-Scholes option valuation model, assuming volatility of
118%, a risk-free rate of return equal to seven year treasury bonds, a
dividend yield of zero, and an exercise date of seven years after grant.
This model is an alternative suggested by the Securities and Exchange
Commission, and the Company neither endorses this particular model, nor
necessarily agrees with this method for valuing options. The ultimate
value of options will depend on the Company's success, as reflected by an
increase in the price of its shares, which will inure to the benefit of
all shareholders.
9
<PAGE> 12
The following table contains information regarding the exercise of options
during the preceding fiscal year by the above-named executives, as well as
unexercised options held by them at fiscal year-end.
Aggregated Option Exercises in Last Fiscal Year and Year-end Values
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
ON VALUE YEAR-END (#) FISCAL YEAR-END ($)
EXERCISE REALIZED ----------------------------------- --------------------------
EXECUTIVE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fred Bauer -- -- 33,001 71,999 484,514 589,858
Kenneth La Grand 35,000 743,280 103,002 63,998 1,985,788 575,515
John Mulder 20,000 324,843 45,300 49,200 687,473 432,272
Enoch Jen 5,000 76,719 26,801 52,799 492,859 709,987
- -----------------------------------------------------------------------------------------------------------------------
</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. F. Bauer and reviewed annually
by the Committee. The base salary for C.E.O. Bauer for 1997 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.
10
<PAGE> 13
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 1997, 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 $25,000. 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 his management leadership, 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 year 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 1997 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.
Currently, the Company's Qualified Stock Option Plan provides for an
automatic annual option for C.E.O. F. Bauer for 15,000 shares. 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 S.E.C. rules
applicable at the time this provision was approved by shareholders. An
Amendment to the Plan has been adopted by the Board of Directors, subject to
the approval of shareholders. (See Proposal to Amend and Restated the
Qualified Stock Option Plan). At the time the Board of Directors approved the
amendment of the Plan, an additional option grant was made to Mr. Bauer in the
amount of 15,000 shares. If the Plan amendment is approved by shareholders,
this 15,000 share grant will supplement the 15,000 share automatic grant during
1997 under the then existing Plan, for a total of 30,000 shares under option
grants in 1997. The size of the grants in 1997 reflect the Committee's belief
that an increase in Mr. Bauer's compensation should be weighted more heavily
towards stock-based incentive compensation.
Compensation Committee Members:
Fred Bauer
Arlyn Lanting
Ted Thompson
11
<PAGE> 14
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 1992, and reinvestment of
dividends in all cases.
[GRAPH]
<TABLE>
<CAPTION>
Dow Jones Auto
The Nasdaq Parts & Equipment
Stock Market Companies (Excluding
Gentex Corp. (U.S. Companies) Tire and Rubber Makers)
<S> <C> <C> <C>
12/31/92 $100 $100 $100
12/31/93 $332 $115 $131
12/31/94 $228 $112 $115
12/30/95 $207 $159 $142
12/31/96 $379 $195 $161
12/31/97 $506 $240 $208
</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 nonemployee 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.
12
<PAGE> 15
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, 1997. 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. In prior
years, Mr. Bauer was not eligible for any discretionary stock-based incentive
awards; rather Mr. Bauer received an automatic annual stock option grant for
15,000 shares under the Company's Qualified Stock Option Plan. That Plan has
been proposed for amendment. (See Proposal to Amend and Restate 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 fifteen 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 1997 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 1997 the Company paid $496,000 for airline
travel booked 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, 1997, 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, 1998. 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, except that Kenneth La Grand was
sixteen days late in reporting an option exercise for 1,000 shares during the
year.
SHAREHOLDER PROPOSALS -- 1999 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 4,
1998, if the shareholder wishes the proposal to be included in the Company's
proxy statement relating to that meeting.
13
<PAGE> 16
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
April 3, 1998
14
<PAGE> 17
APPENDIX A
GENTEX CORPORATION
QUALIFIED STOCK OPTION PLAN
(AS AMENDED AND RESTATED, EFFECTIVE AUGUST 25, 1997)
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, August 25, 1997.
f. "Market Value" means the closing sale price of Common
Stock reported in the NASDAQ National 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 4,500,000 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.
A-1
<PAGE> 18
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. 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.
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.
A-2
<PAGE> 19
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.
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 August 25,
1997 Plan Restatement shall take effect only upon and as of the date of
approval of the Plan by the Corporation's shareholders. 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.
A-3
<PAGE> 20
12. DISQUALIFYING ASSIGNMENTS. At the request of an Optionee, the
Committee may authorize the amendment of any Option Agreement in order
to permit an assignment of the option, in whole or in part, to any Authorized
Transferee as hereinafter defined, subject to such procedures and conditions as
the Committee may establish from time to time; provided, however, any such
amendment may result in disqualification of the option from favorable tax
treatment under the applicable provisions of the Internal Revenue Code of 1986,
as amended, and the Company shall have no responsibility for that, or any other
adverse tax consequence that results from such an amendment. The amendment
shall: (i) permit transfers only to the Optionee's spouse and/or the Optionee's
descendants, and/or to a trust created primarily for the benefit of the
Optionee, the Optionee's spouse, and/or the Optionee's descendants ("Authorized
Transferee"); (ii) prohibit payment of any consideration by the Authorized
Transferee to the original Optionee; (iii) prohibit any further transfer of the
option; (iv) provide that the Authorized Transferee shall succeed to all of the
rights and benefits (except any right to further transfer the option) and be
subject to all obligations, conditions, and limitations applicable to the
original Optionee; (v) and set forth such other conditions, terms, and
provisions as the Committee may require in the exercise of its discretion. All
rights, benefits, obligations, conditions, and limitations of any option
transferred to an Authorized Transferee shall be determined as if the original
Optionee continued to hold the option, whereby provisions of this Plan dealing
with the death of an Optionee will continue to refer to the original Optionee
regardless of whether the option has been transferred to an Authorized
Transferee. Options may be exercised during the lifetime of the original
Optionee only by the original Optionee or an Authorized Transferee as the case
may be. In the event of an Optionee's death, options may be exercised to the
same extent exercisable by the optionee at the date of death, at any time prior
to the earlier of the specified expiration date, or a date after the Optionee's
death specified in the Option Agreement by any of the following persons: (i)
personal representatives of the estate of the Optionee; (ii) any person or
persons who shall have acquired the option directly from the Optionee by
bequest or inheritance; (iii) any person designated to exercise the option by
means of a specific written designation executed by the Optionee and filed with
the Company prior to the Optionee's death; or (iv) an Authorized Transferee.
Except as provided herein, no option shall be transferable by an Optionee
otherwise than by will or the laws of descent and distribution.
CERTIFICATION
The foregoing Plan Restatement was duly adopted by the Board of Directors,
effective August 25, 1997, subject to the approval of the Company's
shareholders.
/s/ CONNIE HAMBLIN
--------------------------
Connie Hamblin, Secretary
Gentex Corporation
<PAGE> 21
APPENDIX B
ARTICLE III
The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is 105,000,000 shares, consisting of
100,000,000 shares of Common Stock, par value $.06 per share and 5,000,000
shares of Preferred Stock, no par value.
The authorized shares of Common Stock of the par value of $.06 per share
are all of one class with equal voting power, and each such share shall be
equal to every other such share.
The shares of Preferred Stock may be divided into and issued in one or
more series. The Board of Directors is hereby authorized to cause the
Preferred Stock to be issued from time to time in one or more series with such
designations and such relative voting, dividend, liquidation and other rights,
preferences and limitations as shall be stated and expressed in the resolution
providing for the issue of such Preferred Stock adopted by the Board of
Directors. The Board of Directors by vote of a majority of the whole Board is
expressly authorized to adopt such resolution or resolutions and issue such
stock from time to time as it may deem desirable.
B-1
<PAGE> 22
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 27, 1998, at the Annual Meeting of Shareholders to be
held on May 21, 1998, 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; FOR THE APPROVAL OF AN
AMENDED AND RESTATED GENTEX QUALIFIED STOCK OPTION PLAN; AND FOR THE APPROVAL
TO AMEND THE ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF
COMMON STOCK.
(To be Signed on Reverse Side)
- --------------------------------------------------------------------------------
<PAGE> 23
1. Election of Directors (except FOR WITHHELD
where marked to the contrary) / / / /
for a three-year term.
NOMINEES: Mickey E. Fouts, John Mulder
(Instruction: To withhold authority to vote for an individual nominee, strike
a line through the nominee's name listed above.)
FOR AGAINST ABSTAIN
2. Proposal to approve an Amended
and Restated Qualified Stock Option Plan. / / / / / /
FOR AGAINST ABSTAIN
3. Proposal to amend the Articles of
Incorporation to increase the / / / / / /
authorized shares of common stock.
4. In their discretion, the Proxies are authorized
to vote upon such other business as may properly
come before the meeting.
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.
