<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
- -------------------------------------------------------------------------------
(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 LOGO]
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, 35,691,815 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 two nominees who receive the largest number
of affirmative votes will be elected, irrespective of the number of votes
received. Broker nonvotes, votes withheld, and votes cast against any nominee
will not have a bearing on the outcome
<PAGE> 4
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 both
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 2001
Mickey E. Fouts (66) Mr. Fouts has been Chairman
Director since 1982 of the Board, Equity 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
Director since 1992 -- Automotive Marketing 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
Director since 1981 Chief Executive Officer of Gentex
Corporation, and he has held that
position for more than five years.
Leo L. Weber (68) Since 1990, Mr. Weber has
Director since 1991 been engaged in the 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).
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Arlyn Lanting (57) Mr. Lanting is the Vice
Director since 1981 President -- Finance of Aspen
Enterprises, Ltd., Grand Rapids,
MI (real estate investments), and
he has held that position for more
than five years.
2
<PAGE> 5
Kenneth La Grand (57) Mr. La Grand is the Executive
Director since 1987 Vice President of Gentex
Corporation, and he has held that
position for more than five years.
Ted Thompson (68) Mr. Thompson is the
Director since 1987 Chairman and Chief Executive
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.
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
3
<PAGE> 6
Meeting. The following paragraphs summarize the principal features of
the amended and restated Option Plan, and the full text of the Option Plan, as
amended, is appended to this Proxy Statement as Appendix A.
Purpose. The purpose of the Option Plan is to provide the Company with
the opportunity to use stock options as a means of recruiting new managerial and
technical personnel, where appropriate, and to provide employees with an
additional incentive to contribute to the success of the Company and remain in
the Company's employ.
Eligibility and Administration. The Option Plan is administered by a
Committee appointed by the Board of Directors. The Committee is authorized to
determine which of the Company's employees are entitled to receive options, the
number of shares subject to each option, the option term (not to exceed a period
of ten years), and such other matters as are specified in the Option Plan.
Options may be granted under the terms of the Option Plan to all employees of
the Company, including employees of its majority-owned subsidiaries. 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, except for estate planning transfers
permitted under Section 12 of the Plan. During the lifetime of an optionee,
options may be exercised only by the optionee, or such a permitted tranferee.
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.
4
<PAGE> 7
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.
5
<PAGE> 8
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, or makes a disqualifying disposition under Section 12 of the Plan,
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
6
<PAGE> 9
of common stock from 50,000,000 to 100,000,000.
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 2,928,630 419,025 8.2%
officers as a group
(8 persons)
- --------------------------------------------------------------------------------------------------------------------
</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,
7
<PAGE> 10
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.
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.
8
<PAGE> 11
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 $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION
--------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION --------------------------- -------
-------------------------------- RESTRICTED SECURITIES ALL OTHER
SALARY BONUS OTHER STOCK UNDERLYING COMPENSATION
EXECUTIVE ($) ($) ($) 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 $268,750.
9
<PAGE> 12
The following table contains information regarding stock options
granted to the above-named executive officers during the preceding fiscal year.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------
NUMBER OF PERCENT GRANT DATE
SECURITIES, OF OPTIONS EXERCISE PRESENT
UNDERLYING TO ALL PRICE EXPIRATION VALUE
EXECUTIVE OPTIONS(#)(1) EMPLOYEES ($/SH)(2) DATE ($)(3)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fred Bauer 30,000 5.9 23.3125 8/25/04 633,171
Kenneth La Grand 20,000 3.9 24.625 9/26/04 445,330
John Mulder 15,000 2.9 24.625 9/26/04 333,998
Enoch Jen 12,000 2.3 19.75 3/26/04 214,901
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These options become exercisable, so long as employment with the
Company continues, for 20 percent of the shares on each anniversary of
the grant date commencing with the first anniversary of the grant date.
(2) The exercise price may be paid in cash, in shares of the Company's
common stock, and/or by the surrender of exercisable options valued at
the difference between the exercise price and the market value of the
underlying shares.
(3) Based on the Black-Scholes option valuation model, assuming volatility
of 118%, a risk-free rate of return equal to seven year treasury bonds,
a dividend yield of zero, and an exercise date of seven years after
grant. This model is an alternative suggested by the Securities and
Exchange Commission, and the Company neither endorses this particular
model, nor necessarily agrees with this method for valuing options. The
ultimate value of options will depend on the Company's success, as
reflected by an increase in the price of its shares, which will inure
to the benefit of all shareholders.
10
<PAGE> 13
The following table contains information regarding the exercise of
options during the preceding fiscal year by the above-named executives, as well
as unexercised options held by them at fiscal year-end.
Aggregated Option Exercises in Last Fiscal Year and Year-end Values
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
ON VALUE YEAR-END (#) FISCAL YEAR-END ($)
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,
11
<PAGE> 14
salaried employees, and executive officers.
Annual bonus compensation for executive officers is composed of two
elements: payments under the Company's Gain Sharing Bonus Plan and performance
bonuses. All employees of the Company, including executive officers, are
eligible to share in the Company's Gain Sharing Bonus Plan after the first six
months of employment. A percentage of pre-tax income, in excess of an
established threshold for shareholder return on equity, is distributed quarterly
to eligible employees. The amount to be distributed is allocated among all
eligible employees in proportion to the salary or wages (including overtime)
paid to those employees during the quarter. In addition, performance bonuses are
paid to various managerial 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
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<PAGE> 15
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.
<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
12/31/95 $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.
13
<PAGE> 16
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 $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.
14
<PAGE> 17
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
15
<PAGE> 18
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.
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<PAGE> 19
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> 20
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.
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<PAGE> 21
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
A-4
<PAGE> 22
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
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- --------------------------------------------------------------------------------
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.
1. Election of Directors (except where marked to the contrary) for a
three-year term. [ ] FOR [ ] WITHHELD
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.)
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.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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.
(To be Signed on Reverse Side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
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.
Signature Date Signature Date
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