SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
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GENTEX CORPORATION
(Name of Registrant as Specified in its Charter)
----------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[LOGO GENTEX CORPORATION]
600 N. Centennial Street
Zeeland, Michigan 49464
NOTICE OF 2003 ANNUAL MEETING
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The Annual Meeting of the Shareholders of Gentex Corporation ("the
Company"), a Michigan corporation, will be held at the Amway Grand Plaza Hotel,
Ambassador Ballroom, Pearl at Monroe, Grand Rapids, Michigan, on Wednesday, May
14, 2003, at 4:30 p.m. E.D.S.T., for the following purposes:
1. To elect four directors as set forth in the Proxy Statement.
2. To act upon a proposal to approve the Gentex Corporation 2003
Employee Stock Purchase Plan.
3. To consider a shareholder proposal on board diversity.
4. To transact any other business that may properly come before the
meeting, or any adjournment thereof.
Shareholders of record as of the close of business on March 21, 2003, are
entitled to notice of, and to vote at the meeting. We are pleased to offer
multiple options for voting your shares. As detailed in the "Solicitation of
Proxies" section of this notice and Proxy Statement, you can vote your shares
via the Internet, by telephone, by mail or by written ballot at the Annual
Meeting. We encourage you to use the Internet to vote your shares as it is the
most cost-effective method.
Whether or not you expect to be present at the meeting, you are urged to
promptly vote your shares using one of the methods discussed above. If you do
attend the meeting and wish to vote in person, you may withdraw your
earlier-dated Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Connie Hamblin
April 9, 2003 Connie Hamblin
Secretary
GENTEX CORPORATION
600 N. Centennial Street
Zeeland, Michigan 49464
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD MAY 14, 2003
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QUESTIONS & ANSWERS
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PROXY STATEMENT
Why am I receiving this Proxy Statement?
Gentex Corporation's Board of Directors is soliciting proxies for the 2003
Annual Meeting of Shareholders. You are receiving a Proxy Statement because you
own shares of Gentex common stock on March 21, 2003, which entitles you to vote
at the meeting. By use of a Proxy, you can vote whether or not you attend the
meeting. The Proxy Statement describes the matters on which we would like you to
vote and provides information on those matters so that you can make an informed
decision.
The notice of the Annual Meeting, Proxy Statement and Proxy are being mailed to
shareholders on or about April 9, 2003.
What will I be voting on?
o Election of four directors (see page 8).
o Approval of the Gentex Corporation 2003 Employee Stock Purchase Plan
(see page 12 and Appendix B).
The Board of Directors recommends a vote FOR each of the nominees to the Board
of Directors and FOR the approval of the Gentex Corporation 2003 Employee Stock
Purchase Plan.
o A shareholder proposal on Board Diversity (see page 14).
The Board of Directors recommends a vote AGAINST the shareholder proposal.
How do I vote?
You can vote either in person at the Annual Meeting or by Proxy without
attending the Annual Meeting. We urge you to vote by Proxy even if you plan to
attend the Annual Meeting so that we will know as soon as possible that enough
votes will be present for us to hold the meeting. If you attend the meeting in
person, you may vote at the meeting and your Proxy will not be counted.
Please note that there are separate telephone and Internet arrangements
depending upon whether you are a holder of record [that is, if your shares are
registered in your own name with our transfer agent and you have possession of
your stock certificate(s)] or whether you hold your shares in "street name"
(that is, if your shares are held for you by your bank, broker or other record
holder).
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Shareholders of record voting by Proxy may use one of the following three
options:
o Voting by Internet (log on to https://www.proxyvote.com and follow
the directions there). We recommend you vote this way as it is the
most cost-effective method; or
o Voting by toll-free telephone (instructions are on the Proxy Card or
voter instruction form); or
o Filling out the enclosed Proxy Card or voter instruction form,
signing it, and mailing it in the enclosed postage paid envelope.
If you hold your shares in "street name", please refer to the information
forwarded by your bank, broker or other holder of record to see which options
are available to you.
The telephone and Internet voting facilities for shareholders of record will
close at 11:59 p.m. EST on May 13, 2003. If you vote over the Internet, you may
incur cost, such as telephone and Internet access charges, for which you will be
responsible. The telephone and Internet voting procedures are designed to
authenticate shareholders by the use of control numbers and to allow you to
confirm that instructions have been properly recorded.
Can I change my vote?
Yes. At any time before your Proxy is voted at the meeting, you may change your
vote by:
o Revoking it by written notice to the Secretary of the Company at the
address on the cover of the Proxy Statement;
o delivering a later-dated Proxy (including a telephone or Internet
vote); or
o voting in person at the meeting.
If you hold your shares in "street name", please refer to the information
forwarded by your bank, broker or other holder of record for procedures on
revoking or changing your Proxy.
How many votes do I have?
You will have one vote for every share of common stock that you owned on March
21, 2003.
How many shares are entitled to vote?
There were 75,927,602 shares of Gentex common stock outstanding as of March 21,
2003, and entitled to vote at the meeting. Each share is entitled to one vote.
How many votes must be present to hold the meeting?
Under the Company's By-Laws, a majority of all of the voting shares of the
capital stock as of March 21, 2003, must be present in person or by Proxy to
hold the Annual Meeting.
What if I do not vote for some or all the matters listed on my Proxy Card?
If you return a Proxy Card without indicating your vote for some or all of the
matters, your shares will be voted as follows for any matter you did not vote
on:
o For the approval of the director nominees to the Board listed on the
card.
o For the approval of the Gentex Corporation 2003 Employee Stock
Purchase Plan.
o Against the shareholder proposal that the Company issue a report on
board diversity.
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How many votes are needed for the proposals to pass?
o The four nominees for director will be elected by a plurality of the
votes cast.
o The Gentex Corporation 2003 Employee Stock Purchase Plan must be
approved by a majority of the votes cast.
o The shareholder proposal must be approved by a majority of the votes
cast.
What if I vote "abstain"?
A vote to "abstain" on the election of the directors or on the proposals will
have no effect on the outcome.
What if I do not return my Proxy Card and do not attend the Annual Meeting?
If you are a holder of record and you do not vote your shares, your shares will
not be voted. If you hold your shares in "street name", and you do not give your
bank, broker or other holder of record specific voting instructions for your
shares, your bank, broker or other holder of record may not be permitted to
exercise voting discretion with respect to certain matters to be acted upon.
If you do not give your record holder specific voting instructions and your
record holder does not vote on any of the proposals, the votes will be "broker
non-votes". "Broker non-votes" will have no effect on the vote for the election
of directors or the proposals, since "broker non-votes" will not be treated as
votes cast.
Is my vote confidential?
Proxy instructions, ballots, and voting tabulations that identify individual
shareholders are handled in a manner that protects your voting privacy. Your
vote will not be disclosed either within the Company or to third parties,
except:
o as necessary to meet applicable legal requirements;
o to allow for the tabulation of votes and certification of the vote;
or
o to facilitate successful Proxy solicitation by our Board.
Occasionally, shareholders provide written comments on their Proxy Cards which
are then forwarded to the Company's management.
ANNUAL REPORT
Will I receive a copy of the Company's Annual Report?
Unless you have previously elected to view the Company's Annual Report over the
Internet, we have mailed you the Annual Report for the year ended December 31,
2002, with this Proxy Statement. The Annual Report includes the Company's
audited financial statements, along with other financial and product
information. We urge you to read it carefully.
How can I receive a copy of the Company's Form 10-K?
You can obtain, free of charge, a copy of our Annual Report and/or Form 10-K for
the year ended December 31, 2002, which we recently filed with the Securities
and Exchange Commission, by writing to:
Corporate Secretary
Gentex Corporation
600 N. Centennial St.
Zeeland, MI 49464
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You can also obtain a copy of the Company's Annual Report, Form 10-K and other
periodic filings with the Securities and Exchange Commission (SEC) on the
Company's Internet site at www.gentex.com/investor_quick.html. The Company's
Form 10-K and other SEC filings mentioned above are also available from the
SEC's EDGAR database at www.sec.gov.
ELECTRONIC DELIVERY OF PROXY STATEMENT AND ANNUAL REPORT
Can I access the Company's proxy materials and Annual Report electronically?
This Proxy Statement and the 2002 Annual Report are available on the
Company's Internet site at:
o www.gentex.com/investor_quick.html
Most shareholders can elect to view future Proxy Statements and Annual Reports
over the Internet instead of receiving paper copies in the mail.
If you are a holder of record, you can choose this option and save the Company
the cost of producing and mailing these documents by:
o Following the instructions provided when you vote over the Internet,
or
o Going to: https://www.icsdelivery.com/gntx/index.html and following
the instructions provided.
If you are a holder of record and you choose to view future Proxy Statements and
Annual Reports over the Internet, you will receive an e-mail message next year
containing the Internet address to access the Company's Proxy Statement and
Annual Report. The e-mail also will include instructions for voting over the
Internet. Your choice will remain in effect until you tell us otherwise. You do
not have to elect Internet access each year.
If you hold your shares in "street name", and choose to view future Proxy
Statements and Annual Reports over the Internet and your bank, broker or other
holder of record participates in the service, you will receive an e-mail message
next year containing the Internet address to use to access the Company's Proxy
Statement and Annual Report.
HOUSEHOLDING INFORMATION
What is "householding"?
We have adopted a procedure called "householding", which has been approved by
the Securities and Exchange Commission. Under this procedure, a single copy of
the Annual Report and Proxy Statement will be sent to any household at which two
or more shareholders reside if they appear to be members of the same family,
unless one of the shareholders at the address notifies us that they wish to
receive individual copies. This procedure reduces our printing costs and fees.
Shareholders who participate in householding will continue to receive separate
Proxy Cards. If a single copy of the Annual Report and Proxy Statement was
delivered to an address that you share with another shareholder, at your request
we will promptly deliver a separate copy.
How do I withhold my consent to the householding program?
If you are a holder of record and share an address and last name with one or
more holders of record, and you wish to continue to receive separate Annual
Reports, Proxy Statements and other disclosure documents, you must withhold your
consent by checking the appropriate box on the enclosed Proxy Card and returning
it by mail in the enclosed envelope. Even if you vote by telephone or Internet,
the enclosed Proxy Card must be returned and marked appropriately to withhold
your consent to householding.
Even if you do not return the Proxy Card to withhold your consent to the
householding program, you may revoke your consent at a future date. Please
contact Automatic Data
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Processing, Inc. ("ADP"), either by calling toll free at (800) 542-1061 or
writing to ADP, Householding Department, 51 Mercedes Way, Edgewood, New York
11717. You will be removed from the householding program within 30 days of the
receipt of the revocation of your consent.
If you are receiving multiple copies of the Annual Reports and Proxy Statements
at an address shared with another shareholder, you may also contact ADP to
participate in the householding program.
A number of brokerage firms have instituted householding. If you hold shares in
"street name", please contact your bank, broker or other holder of record to
request information about householding.
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SOLICITATION OF PROXIES
This Proxy Statement is being furnished by mail, or if shareholders have
consented, by electronic delivery, on or about April 9, 2003, to the
shareholders of Gentex Corporation in connection with the solicitation by the
Board of Directors of the Company of Proxies to be used at the Annual Meeting of
Shareholders to be held on Wednesday, May 14, 2003, at 4:30 p.m., at the Amway
Grand Plaza Hotel, Ambassador Ballroom, Pearl at Monroe, Grand Rapids, Michigan.
Each shareholder, as an owner of the Company, is entitled to vote on
matters to come before the Annual Meeting. The use of Proxies allows a
shareholder of the Company to be represented at the Annual Meeting if he or she
is unable to attend in person.
There are four ways to vote your shares:
1) By Internet at https://www.proxyvote.com. We encourage you to vote
this way.
2) By toll-free telephone (refer to your Proxy Card or voter
instruction form for the correct number).
3) By completing and mailing your Proxy Card or voter instruction form.
4) By written ballot at the Annual Meeting.
If the form of Proxy accompanying this Proxy Statement is properly
executed using any of the methods described above, the shares represented by the
Proxy will be voted at the Annual Meeting of Shareholders and at any adjournment
of the meeting. Where shareholders specify a choice, the Proxy will be voted as
specified. If no choice is specified, the shares represented by Proxy will be
voted for the election of all nominees named in the Proxy, for the Gentex
Corporation 2003 Employee Stock Purchase Plan proposal, and against the
shareholder proposal, each of which are described in this Proxy Statement. A
Proxy may be revoked prior to its exercise by (1) delivering a written notice of
revocation to the Secretary of the Company, (2) delivery of a later-dated Proxy
including a telephone or Internet vote, or (3) attending the meeting and voting
in person.
VOTING SECURITIES AND RECORD DATE
March 21, 2003, 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, 75,927,602 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. Abstentions and broker non-votes are counted for
the purposes of determining the presence or absence of a quorum for the
transaction of business. Abstentions and broker non-votes are not, however,
counted in tabulations of votes cast on proposals presented to shareholders.
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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 nine. The Articles of Incorporation also specify that the Board
be divided into three classes, with the classes to hold office for staggered
terms of three years each. The Board has nominated Fred Bauer, Leo Weber and
Gary Goode for election as directors at the Annual Meeting, each to serve a
three-year term expiring in 2006. Mr. Bauer and Mr. Weber have each previously
been elected as a director by the Company's shareholders. Gary Goode was
appointed to the Board in January 2003 and qualifies as an audit committee
financial expert and will serve as chairman of the Board's Audit Committee. John
Mulder was elected as a director at the Company's 2001 Annual Meeting to serve a
term until 2004. The Company's Articles of Incorporation, however, provide that
his term of office as a director expired due to his retirement as an employee of
the Company in 2002. The Board, however, appointed Mr. Mulder to fill the
vacancy left by his retirement. The Company's Articles of Incorporation require
that directors, like Mr. Goode and Mr. Mulder, who were appointed to the Board
by the directors, stand for reelection at the next Annual Meeting of
Shareholders.
Unless otherwise specifically directed by a shareholder's marking on the
Proxy Card, or in directions given either via the Internet or telephone, the
persons named as Proxy voters in the accompanying Proxy will vote for the
nominees described below. If any of these nominees becomes unavailable, which is
not now anticipated, the Board may designate a substitute nominee, in which case
the accompanying Proxy will be voted for the substituted nominee. Proxies cannot
be voted for a greater number of persons than the number of nominees named.
A plurality of votes cast by shareholders at the meeting is required to
elect directors of the Company under Michigan law. Accordingly, the four
nominees who receive the largest number of affirmative notes will be elected,
regardless of the number of votes received. Broker nonvotes, votes withheld, and
votes cast against any nominee will not have a bearing on the outcome of the
election. Votes will be counted by Inspectors of Election appointed by the
presiding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR the election of all persons
nominated by the Board.
The content of the following table relating to age and business experience
is based upon information furnished to the Company by the nominees and
directors.
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Name, (Age) and Position Business Experience Past Five Years
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Nominees for Terms to Expire in 2006
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Fred Bauer (60) Mr. Bauer is the Chairman and Chief
Director since 1981 Executive Officer of Gentex
Corporation, and he has held that
position for more than five years.
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Leo Weber (73) Since 1990, Mr. Weber has been
Director since 1991 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).
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Name, (Age) and Position Business Experience Past Five Years
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Nominees for Terms to Expire in 2006 (continued)
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Gary Goode (58) Mr. Goode was an audit engagement
Director since 2003 partner at Arthur Andersen LLP from
September 1982 until his retirement
in March 2001. During his public
accounting career, Mr. Goode had
extensive experience working with
suppliers to the automotive
industry. Since his retirement, Mr.
Goode has provided independent
consulting services to
non-automotive industry companies.
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Nominee for Term to Expire in 2004
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John Mulder (66) Mr. Mulder was the Vice President -
Director since 1992 Customer Relations of Gentex
Corporation from February 2000 to June
2002. Previously, he was Senior Vice
President - Automotive Marketing from
September 1998 to February 2000. Prior
to September 1998, he was Vice
President - Automotive Marketing for
more than five years.
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Directors Whose Terms Expire in 2005
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Arlyn Lanting (62) Mr. Lanting is the Vice President -
Director since 1981 Finance of Aspen Enterprises, Ltd.,
Grand Rapids, MI (investments), and he
has held that position for more than
five years.
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Kenneth La Grand (62) Mr. La Grand was the Executive Vice
Director since 1987 President of Gentex Corporation from
September 1987 to January 2003. Mr.
La Grand is also a director of
Clarion Technologies, Inc.
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Ted Thompson (73) Mr. Thompson was the Chairman of
Director since 1987 X-Rite, Incorporated, Grandville,
MI (a manufacturer of light and
color-measuring instruments) from May
1989 to October 2002.
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Directors Whose Terms Expire in 2004
- --------------------------------------------------------------------------------
Mickey Fouts (71) Mr. Fouts has been Chairman of the
Director since 1982 Board, Equity Services Company
(investment services), Castle Rock,
CO, for more than five years.
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Frederick Sotok (68) Mr. Sotok was Executive Vice
Director since 2000 President and Chief Operating
Officer of Prince Corporation
(manufacturer of automotive interior
parts that was acquired by Johnson
Controls, Inc, in 1996) from October
1977 to October 1996. Mr. Sotok is also
a director of Clarion Technologies,
Inc.
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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. Ken La Grand and Frederick Sotok both sit on the Board of Directors
of Clarion Technologies, Inc.
During 2002, the Board of Directors met on three occasions and acted once
by unanimous written consent. All directors attended at least seventy-five
percent of the aggregate number
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of meetings of the Board and Board committees on which they served, except for
Mr. Sotok who attended three of five meetings, or 60 percent. Mr. Sotok missed
two meetings on two consecutive dates due to the untimely death of his mother.
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 four times during the fiscal year ended December 31,
2002.
In addition, the Company has an Executive Committee comprised of Messrs.
Bauer, Lanting and La Grand. The Executive Committee is authorized to act on
behalf of the Board between full Board meetings, to the extent permitted by law.
This Committee met once during the fiscal year ended December 31, 2002.
The Company also has an Audit Committee, which during the fiscal year
ending December 31, 2002, was comprised of Messrs. Weber, Sotok and Thompson.
Each of these individuals qualifies as an "independent director" as determined
in accordance with the current listing standards of the Nasdaq National Market.
Information regarding the functions performed by the Committee, its membership,
and the number of meetings held during the fiscal year, is set forth in the
following "Report of the Audit Committee." The Audit Committee is governed by a
written charter approved by the Board of Directors.
The Company does not have a standing nominating committee.
Report of the Audit Committee
The Committee has reviewed and discussed with management the Company's
financial statements as of and for the year ended December 31, 2002, including a
discussion of the quality, not just the acceptability, of the accounting
principles; the reasonableness of significant judgments; and the clarity of
disclosures in the financial statements.
The Committee reviewed with the independent auditors their judgments as to
the quality, not just the acceptability, of the Company's accounting principles
and other such matters required to be discussed by Statement on Auditing
Standards No. 61, Communications with Audit Committees, as amended, by the
Auditing Standards Board of the American Institute of Certified Public
Accountants.
The Committee has received and reviewed the written disclosures and the
letter from the independent auditors required by Independence Standard No. 1,
Independence Discussions with Audi Committees, as amended, by the Independence
Standards Board. The Committee has also discussed with the auditors the
auditor's independence. The Committee held two formal meetings during calendar
year 2002 and has communicated with the independent auditors on a quarterly
basis.
Management is responsible for the Company's financial reporting process
including its system of internal control, and for the preparation of financial
statements in accordance with accounting principles generally accepted in the
United States of America. The Company's independent auditors are responsible for
auditing those financial statements. The Committee's responsibility is to
monitor and review these processes. It is not the Committee's duty or
responsibility to conduct auditing or accounting reviews or procedures. No
member of the
9
Committee is an employee of the Company. Certain members of the Committee may be
deemed to be financial experts if they are or serve as accountants or auditors
by profession and meet the strict definition of an expert in the field of
accounting or auditing. Other members of the Committee may not be, and may not
represent themselves to be or to serve as, accountants or auditors by profession
or experts in the fields of accounting or auditing. Therefore, the Committee has
relied, without independent verification, on management's representation that
the financial statements have been prepared with integrity and objectivity and
in conformity with accounting principles generally accepted in the United States
of America and on the representations of the independent auditors included in
their report on the Company's financial statements. The Committee's oversight
does not provide us with an independent basis to determine that management has
maintained appropriate accounting and financial reporting principles or
policies, or appropriate internal controls and procedures designed to assure
compliance with accounting standards and applicable laws and regulations.
Furthermore, the Committee's considerations and discussions with management and
the independent auditors do not assure that the Company's financial statements
are presented in accordance with accounting principles generally accepted in the
United States, that the audit of the Company's financial statements has been
carried out in accordance with auditing standards generally accepted in the
United States of America, or that the Company's independent accountants are in
fact "independent."
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-K for the year ended December 31, 2002, and Annual Report to Shareholders for
filing with the Securities and Exchange Commission. The Committee and the Board
have also selected Ernst & Young LLP as the Company's independent auditors for
the year ending December 31, 2003.
The Committee in 2003 consists of Gary Goode, Leo Weber, Fred Sotok and
Ted Thompson, and operates under a revised charter approved by the Board of
Directors in February of 2003, which is attached to this Proxy Statement as
Appendix A.
This report of the Committee does not constitute soliciting material and
should not be deemed filed or incorporated by reference into any other Company
filing under the Securities Exchange Act of 1933 or the Securities Exchange Act
of 1934, except to the extent the Company specifically incorporates this report
by reference therein.
Audit Committee Members:
Gary Goode
Leo Weber
Fred Sotok
Ted Thompson
February 26, 2003
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Proposal to Approve The Gentex Corporation 2003
Employee Stock Purchase Plan
In 1993, the shareholders of the Company approved an employee stock
purchase plan providing for the sale of shares of the Company's common stock to
employees of the Company at a price equal to eighty-five percent (85%) of the
market value, limited to one million six hundred thousand (1,600,000) shares (as
adjusted for stock splits) over a period of ten (10) years. The 1993 Plan
expired March 31, 2003. During the ten-year existence of such plan, five hundred
sixty one thousand, one hundred eighty-seven (561,187) shares were sold to
employees and six hundred thirty-three (633) persons were participating in the
plan at expiration.
On February 27, 2003, the Board of Directors adopted a new plan called the
Gentex Corporation 2003 Employee Stock Purchase Plan, subject to approval of the
Company's shareholders, to take effect at the expiration of and to replace the
expired plan. The Board of Directors believes that the existence of an employee
stock purchase plan has been valuable to the Company as a means for promoting
employee loyalty and strengthening the identity of the interest of the employees
and the shareholders. Therefore, the Board of Directors is recommending that the
shareholders approve the Gentex Corporation 2003 Employee Stock Purchase Plan
(the "Plan") appended to this Proxy Statement as Appendix B.
Purpose. The purpose of the Plan is to encourage stock ownership by
employees, to provide employees with a further inducement to continue their
employment with the Company, and to encourage such employees to increase their
efforts to promote the best interests of the Company.
Eligibility and Administration. All full-time employees of the Company,
except executive officers, are eligible for participation in the Plan after
completing one (1) year of continuous full-time employment. Executive officers
of the Company will be excluded from participation in the Plan because the
Company maintains other stock based plans that are more appropriate as
incentives for such senior managers. In the event that an employee becomes the
owner of five percent (5%) or more of the combined voting power or value of the
Company's capital stock, the employee would automatically be disqualified from
further participation. The Plan will be administered by a committee of not less
than three (3) members appointed by the Board of Directors who are not eligible
to participate in the Plan.
Shares Subject to the Plan. A maximum of six hundred thousand (600,000)
shares of the Company's common stock, par value $.06 per share (the "Shares"),
are authorized for purchase under the Plan, subject to appropriate adjustments
as a result of stock dividends, splits, combinations, or similar stock changes.
Shares supplied to meet the requirements of the Plan will be out of authorized
but unissued shares.
Operation of the Plan. The Plan provides an opportunity for eligible
employees to purchase the Shares at a price equal to eighty-five percent (85%)
of the fair market value of the Shares at the last payroll date in each of the
Company's fiscal quarters, when purchases are made under the Plan. Fair market
value is specified as the last reported sale price per share of common stock on
the purchase date, or if there is no reported sale, the mean between the highest
closing bid and closing asked price, as quoted on the NASDAQ stock market.
Eligible employees who have elected to participate may contribute cash to the
Plan through payroll deductions (up to ten percent (10%) of regular wages for
that period), by lump sum contribution, or both, but contributions in any
calendar year for any employee may not exceed Twenty Thousand Dollars
11
($20,000) in the aggregate or Ten Thousand Dollars ($10,000) by payroll
deductions or Ten Thousand Dollars ($10,000) by lump sum contribution. Purchases
in whole number of shares are to be made as of the last payroll date of each
fiscal quarter with funds contributed by participating employees during that
quarter. Participants may terminate their participation at any time by written
notice to the Company, but will not be eligible to reenter the Plan for the next
three (3) fiscal quarters of the Company's fiscal year.
Nontransferability. Rights under the Plan are not transferable in any
manner, or for any purpose whatsoever. Any termination of employment, including
death or retirement, automatically terminates participation in the Plan.
Amendment and Termination. The Plan automatically terminates on March 31,
2013, unless terminated earlier by the Board of Directors. The Board of
Directors may amend the Plan at any time, except that the Plan cannot be amended
without shareholder approval if the amendment would: (i) increase the maximum
number of shares subject to the Plan; (ii) decrease the purchase price for
Shares subject to the Plan; or (iii) change the eligibility requirements for
participation in the Plan.
Summary of Federal Income Tax Consequences. The following paragraph
summarizes the federal income tax consequences with respect to shares acquired
under the Plan, based upon management's understanding of the existing federal
income tax laws.
The Plan is intended to be a qualified employee stock purchase plan as
defined in Section 423 of the Internal Revenue Code, as amended. Funds
contributed by employees through payroll deduction are part of the compensation,
taxed as ordinary income although not actually received by employees. As of the
purchase date near the end of each quarter, a participating employee will be
considered to have been granted an option to purchase Shares and shall have
simultaneously exercised that option with respect to the Shares purchased on
that date. If the employee does not dispose of those Shares for a period of two
(2) years after the date of grant, then upon such subsequent disposition, or
upon death, employee will realize compensation taxable as ordinary income equal
to the lesser of: (i) the amount by which the fair market value of the Shares at
the time of disposition or death exceeds the purchase price; or (ii) the amount
by which the fair market value of the Shares at the time of purchase exceeded
the purchase price. Additional gain will be considered gain from the sale of a
capital asset. In the event the two (2) year holding period requirement above is
not met, the amount treated as compensation on disposition of the Shares is the
difference between the purchase price and the fair market value of the Shares at
the time of purchase.
The Company generally will not be allowed a deduction with respect to
Shares sold to employees under the Plan. If, however, an employee who purchases
Shares under the Plan does not satisfy the two (2) year holding period
requirement described above, then the Company will be entitled to a deduction
for federal income tax purposes equal to the amount recognized as compensation
by the employee.
The rules governing tax treatment of options and shares acquired under
various tax-favored plans, such as the Plan, are quite technical. Therefore, the
foregoing description of tax consequences is necessarily general and does not
purport to be complete.
12
A majority of votes cast by holders of shares entitled to vote at the
Annual Meeting of Shareholders, in person or by Proxy, on the proposal to adopt
the Plan is required for approval.
The Board of Directors recommends a vote FOR approval of the Gentex
Corporation 2003 Employee Stock Purchase Plan.
Shareholder Proposal on Board Diversity
A shareholder, Calvert Social Index Fund, 4550 Montgomery Avenue,
Bethesda, Maryland, 20814, has informed the Company that it intends to present
the proposal set forth below at the Gentex Corporation Annual Meeting of
Shareholders on May 14, 2003. Calvert Social Index Fund is the beneficial owner
of 428 shares of the Company's Common Stock as of November 22, 2002.
PROPOSAL
Whereas, we, Calvert Social Index Fund, believe that board diversity is
not a social imperative, but a strategic one. Diversified boards promote better
understanding of the market place and this understanding can lead to increased
revenues and profitability.
We believe board diversity enhances shareholder value. A growing body of
academic research shows that there is a significant positive relationship
between the percentage of women or minorities on boards and firm value. This is
a view strongly supported by Connecticut State Treasurer Denise L. Nappier,
principal fiduciary of the $18 billion Connecticut Retirement Plans and Trust
Fund, who believes that "shareholder value and corporate bottom lines are
enhanced by an independent and diverse board."
We believe diversity provides for more effective problem solving and
decision making and even high caliber boards can suffer from "group think" if
not infused with different perspectives.
We believe that boards that look more like the workforce can help dispel
negative stereotypes and catalyze efforts to recruit, retain, and promote the
best people including women and minorities.
We believe board diversity is a growing focal point for social investors,
who now account for one in eight dollars invested. Increasingly, all-white
all-male boards are viewed negatively by these investors which may diminish your
attractiveness to an important investor community. For example, TIAA-CREF, an
institutional investor with over $270 billion in assets under management, has
issued a set of corporate governance guidelines which include a call for
"diversity of directors by experience, sex and race;"
We believe that the Board of Directors or its Nominating Committee should
take every reasonable step to ensure that women and minorities are a routine
part of every board search the company undertakes.
13
BE IT RESOLVED:
That the Board of Directors, or its Nominating Committee, in its search
for suitable board candidates, makes a greater effort to search for qualified
women and minority candidates for nomination to the Board of Directors. To that
end, we request that the company provide to shareholders, at reasonable expense,
four months from the date of the 2003 Annual Meeting, a report which includes a
description of:
1. The company's efforts to encourage diversified representation on the
board.
2. A description of the criteria for selecting board candidates.
3. A description of the process used to select board nominees.
4. A description of the process used to select the board's nominating
committee members.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS HAS CONSIDERED THE ABOVE PROPOSAL AND RECOMMENDS THAT
SHAREHOLDERS VOTE AGAINST IT FOR THE FOLLOWING REASONS:
The Company offers equal employment opportunity to all persons without
regard to race, creed, color, sex, age, religion, national origin, physical or
mental disability, or veteran status, and abides by all applicable federal and
state statutes and regulations related to equal employment practices. A Company
priority is to ensure its employees have the right to work in an environment
free from all forms of discrimination and conduct which can be considered
harassing, coercive, or disruptive. The Company values and respects the rights
of each employee and will not tolerate discrimination or harassment based on
race, creed, color, sex, age, religious, national origin, physical or mental
disability, or veteran status.
Consistent with that policy, and in keeping with the expanding global
nature of the Company's operations, the Board of Directors recognizes that
highly qualified and independent Board members with diverse backgrounds and
perspective can enhance Company performance. The principal criteria, however, in
selecting an individual for Board membership should be that individual's
qualifications, experience, skills, and ability to contribute to the enhancement
of shareholder value. Accordingly, the Board will achieve diversity over time,
as vacancies occur, by acting in accordance with the Company's policy of equal
employment opportunity in selecting the most qualified candidates, regardless of
gender, minority, or other status.
The Company agrees with the merits of achieving diversity in all aspects
of the Company's governance and operations, and the Company has and expects to
continue to work hard to bring diversity throughout the Company. The shareholder
proposal would unnecessarily require the Board of Directors to issue a report on
diversity four months from the date of the Annual Meeting, when the Company
already regularly reports to shareholders on composition of the Board in its
annual Proxy Statement.
The Board of Directors believes that to impose a burden of reporting as
proposed above could disrupt an on-going process of determining the appropriate
size and composition of the Board, which process by its very nature is extremely
sensitive and requires maximum flexibility. Recent enactments, rules, and
regulations have only made the process of selecting and retaining
14
Board members even more difficult. Since the Company's commitment to equal
opportunity is part of its ordinary business operations and since the Company
annually reports on Board composition in its Proxy Statement, the Board believes
the above proposal would not enhance the current Board selection process, would
not further the Company's commitment to diversity, and would involve substantial
costs, time, effort, without corresponding benefit. Thus, the proposal is not in
the best interests of the Company.
AGAIN, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE AGAINST THIS PROPOSAL.
A majority of votes cast by holders of shares entitled to vote at the
Annual Meeting of Shareholders, in person or by Proxy, on the shareholder
proposal on diversity is required for approval.
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 directors and 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, 2003.
- --------------------------------------------------------------------------------
Amount and Nature of Ownership
------------------------------
Shares
Beneficially Exercisable Percent
Name of Beneficial Owner Owned (1) Options (2) of Class
- --------------------------------------------------------------------------------
Dennis Alexejun 31,625 23,250 *
- --------------------------------------------------------------------------------
Fred Bauer 3,184,606 213,800 4.2%
- --------------------------------------------------------------------------------
John Carter 47,140 14,400 *
- --------------------------------------------------------------------------------
Garth Deur 20,900 10,400 *
- --------------------------------------------------------------------------------
Mickey E. Fouts 41,000 41,000 *
- --------------------------------------------------------------------------------
Gary Goode 2,500 -- *
- --------------------------------------------------------------------------------
Arlyn Lanting 597,000(3) 141,000 *
- --------------------------------------------------------------------------------
Kenneth La Grand 554,278(4) 74,000 *
- --------------------------------------------------------------------------------
John Mulder 128,026 5,606 *
- --------------------------------------------------------------------------------
Frederick Sotok 20,938(5) 14,590 *
- --------------------------------------------------------------------------------
Ted Thompson 201,000 141,000 *
- --------------------------------------------------------------------------------
Leo Weber 102,300 81,000 *
- --------------------------------------------------------------------------------
All directors and executive
officers as a group (13 persons) 5,034,502 799,595 6.6%
- --------------------------------------------------------------------------------
*Less than one percent.
15
(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 400,000 shares owned of record by Aspen Enterprises, Ltd., of
which Mr. Lanting is a director, officer and substantial shareholder, and
Mr. Lanting disclaims beneficial ownership of those shares.
(4) Includes 50,000 shares held in a trust established by Mr. La Grand's
spouse, and Mr. La Grand disclaims beneficial ownership of those shares.
Also includes 11,014 shares held in trust by Mr. La Grand's spouse for Mr.
La Grand's grandchildren, and Mr. La Grand disclaims beneficial ownership
of these shares.
(5) Includes 174 shares owned by Mr. Sotok's spouse through a partnership, and
Mr. Sotok disclaims beneficial ownership of these shares.
EXECUTIVE COMPENSATION
The following table contains information regarding compensation paid by
the Company for each of the last three fiscal years to its chief executive
officer and to the Company's four most highly compensated executive officers
other than the chief executive officer.
Summary Compensation Table
- ---------------------------------------------------------------------------------------------------------------------
Long-Term
Compensation
- ---------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------------------------------------
Restricted Securities All Other
Bonus Other Stock Underlying LTP Compensation
Executive Year Salary ($) ($) ($) Award($)(1) Options (#) ($) ($)(2)
- ---------------------------------------------------------------------------------------------------------------------
Fred Bauer 2002 319,806 66,528 -- 80,000 5,784
Chairman and CEO 2001 309,414 52,508 -- 80,000 4,572
2000 298,510 63,441 -- 72,000 4,554
- ---------------------------------------------------------------------------------------------------------------------
Kenneth La Grand 2002 197,548 76,067 -- -- 4,706
Executive Vice 2001 185,391 31,798 -- -- 4,428
President (3) 2000 190,138 75,411 -- 12,000 4,416
- ---------------------------------------------------------------------------------------------------------------------
Garth Deur 2002 176,636 65,331 -- 22,000 4,672
Executive Vice 2001 160,928 38,041 -- 18,000 3,281
President (4)
- ---------------------------------------------------------------------------------------------------------------------
Dennis Alexejun 2002 158,379 57,951 -- 14,820 4,073
Vice President, 2001 150,800 45,587 134,850 13,850 3,641
North American 2000 143,722 45,546 -- 13,200 3,687
Automotive
Marketing
- ---------------------------------------------------------------------------------------------------------------------
John Carter 2002 168,931 48,152 -- 14,700 4,111
Vice President, 2001 160,847 43,273 -- 14,000 3,193
Mechanical Engineering 2000 153,133 46,518 217,549 12,500 3,223
- ---------------------------------------------------------------------------------------------------------------------
16
(1) 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
one-third each on the 4th, 5th, and 6th anniversaries of the grant in the
case of Ken La Grand, and upon the expiration of five years from the date
of 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 8,000 shares for $253,100, Garth Deur 9,000 shares for
$284,760, Dennis Alexejun 5,000 shares for $158,200, and John Carter 8,500
shares for $268,940.
(2) These amounts represent the sum of "matching" contributions by the Company
pursuant to its 401(k) Plan and annual premiums for term life insurance
attributed to each named executive officer.
(3) Ken La Grand retired from the Company, effective January 6, 2003.
(4) The Company named Garth Deur as an executive officer in March of 2001.
The following table contains information regarding stock options granted
to the above-named executive officers during the preceding fiscal year.
Option Grants in Last Fiscal Year
- -------------------------------------------------------------------------------------------------------
Individual Grants
- -------------------------------------------------------------------------------------------------------
Number
of
Securities, Percent of Grant Date
Underlying Options Exercise Present
Options to Price Expiration Value
Executive (#)(1) All Employees ($/sh)(2) Date ($)(3)
- -------------------------------------------------------------------------------------------------------
Fred Bauer 80,000 6.9% 28.22 8/15/09 1,035,664
- -------------------------------------------------------------------------------------------------------
Kenneth La Grand -- -- -- -- --
- -------------------------------------------------------------------------------------------------------
Garth Deur 22,000 1.9% 32.30 12/27/09 325,985
- -------------------------------------------------------------------------------------------------------
Dennis Alexejun 14,820 1.3% 28.57 9/25/09 194,215
- -------------------------------------------------------------------------------------------------------
John Carter 14,700 1.3% 27.47 6/28/09 185,246
- -------------------------------------------------------------------------------------------------------
(1) These options become exercisable, so long as employment with the Company
continues, for twenty 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
53 percent, 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
17
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.
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
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at Fiscal In-the-Money Options at
Acquired on Value Year-End (#) Fiscal Year-End ($)
Exercise Realized ------------ -------------------
Executive (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------------
Fred Bauer 60,000 1,211,250 213,800 223,200 3,065,262 1,106,420
Kenneth La Grand 94,400 1,743,086 74,000 12,000 1,479,110 150,180
Garth Deur -- -- 10,400 46,600 103,186 196,808
Dennis Alexejun -- -- 23,250 40,620 271,345 268,081
John Carter 10,240 162,547 14,400 39,720 48,879 206,886
- ------------------------------------------------------------------------------------------------------------------------------------
The following table summarizes securities issued and to be issued under the
Company's equity compensation plans as of December 31, 2002:
Equity Compensation Plan Summary
- --------------------------------------------------------------------------------
Number of
securities
Number of Weighted available for
securities to average future issuance
be issued upon exercise under equity
exercise of price of compensation
outstanding outstanding plans (excluding
options, options, securities
warrants and warrants and reflected in the
Plan Category rights rights first column)
- --------------------------------------------------------------------------------
Equity compensation Plans
approved by Shareholders 4,919,630 $23.95 3,693,306
- --------------------------------------------------------------------------------
Equity Compensation Plans not
approved by Shareholders -- -- --
- --------------------------------------------------------------------------------
Total 4,919,630 $23.95 3,693,306
- --------------------------------------------------------------------------------
18
Executive Compensation Report
Responsibility for the Company's executive compensation program has been
delegated by the Board of Directors to the Compensation Committee, except for
compensation of the Chief Executive Officer (C.E.O.), which is determined by the
Board based on recommendations from the Committee (without participation by
C.E.O. Bauer). This Committee is comprised of three members: two independent
outside directors and the C.E.O.
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:
o Provide the means to attract, motivate, and retain executive
management personnel.
o Provide long-term success by focusing on continuing technical
development and improvement in customer satisfaction.
o Provide base salary compensation that is competitive in the market
for managerial talent.
o Provide annual bonus compensation reflective of both individual
achievement and overall Company performance.
o 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 circumstance 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. have been determined by C.E.O. F. Bauer. The base salary for
C.E.O. Bauer for 2002 was recommended 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.
During 2003, the Company intends to comply with the proposals of the NASDAQ
National Market with respect to independent director approval of CEO
compensation in an executive session where the CEO is not present as well as
independent director approval of all executive officer compensation (which can
be at a meeting where the CEO is present, but during which the CEO may not
vote).
19
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 three
months of employment. A percentage of pretax 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 2002, 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.
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 2002, 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, contributions to success in prior
periods, ability to influence success in the future, and demonstrated ability to
achieve agreed-upon goals. In addition, the Board approved the recommendation of
the Committee (arrived at without the participation of Mr. Bauer) to grant
C.E.O. F. Bauer an option to acquire 80,000 shares of the common stock, based
upon the Committee's evaluation of his management of the Company's other
managerial employees and his desire to receive bonus compensation in the form of
options rather than cash.
Compensation Committee Members:
Fred Bauer
Arlyn Lanting
Ted Thompson
20
Stock Performance Graph
The following graph depicts the cumulative total return on the Company's
common stock compared to the cumulative total return on The NASDAQ Stock
Market(R) 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 of 1997, and reinvestment
of dividends in all cases.
[GRAPH]
DOW JONES AUTO
THE NASDAQ PARTS & EQUIPMENT
GENTEX STOCK MARKET COMPANIES (EXCLUDING)
CORPORATION (U.S. COMPANIES) TIRE AND RUBBER MARKERS)
----------- ---------------- ------------------------
12/31/97 $100 $100 $100
12/31/98 $149 $141 $ 99
12/31/99 $207 $261 $101
12/29/00 $139 $157 $ 74
12/31/01 $199 $125 $ 97
12/31/02 $235 $ 86 $ 87
-------------------------
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 $7,000 per year plus $1,000 for each
meeting of the Board attended and $750 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
6,000 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.
The Company has entered into a consulting agreement with John Mulder
subsequent to his retirement in June 2002. During 2002, the Company paid Mr.
Mulder $11,000 in consulting fees, plus reimbursement of business expenses. The
Company has entered into a consulting agreement with Ken La Grand subsequent to
his retirement in January 2003.
21
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, 2002. 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.
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 warehouses 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 2001, 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 were both substantial shareholders in
MTA Travel, Inc., a local travel agency used by the Company to book airline
travel for its employees. MTA Travel was sold on April 12, 2002. During the
period of their ownership in 2002, the Company paid $132,685 for airline travel
booked through this agency and the travel agency received a small percentage
(usually less than five percent) of this amount as a commission from the
airlines. 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 Board of Directors has selected Ernst & Young LLP to serve as the
Company's independent auditors for the fiscal year ending December 31, 2003. The
following fees were billed by Ernst & Young LLP, the Company's independent
auditors, for the services provided to the Company during the fiscal year ended
December 31, 2002: Audit Fees of $104,000; Audit-related Fees of $24,555;
Financial Information Systems Design and Implementation Fees of $0; and all
other fees of $74,071 for tax consulting and compliance services.
Representatives of Ernst & Young 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.
22
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 3, 4, and 5 furnished to the Company during
or with respect to the preceding fiscal year and written representations from
certain reporting persons, the Company is not aware of any failure by any
reporting person to make timely filings of those Forms as required by Section
16(a) of the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS
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 5,
2003, if the shareholder wishes the proposal to be included in the Company's
Proxy Statement relating to that meeting. In addition, the Company's Bylaws
contain certain notice and procedural requirements applicable to shareholder
proposals, irrespective of whether the proposal is to be included in the
Company's Proxy materials. A copy of the Company's Bylaws is filed with the
Securities and Exchange Commission and can be obtained from the Public Reference
Section of the Commission or the Company.
MISCELLANEOUS
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, it is the intention of the persons
named as Proxy holders in the accompanying Proxy to vote the shares in
accordance with their judgment. Discretionary authority to do so is included in
the Proxy.
The cost of the solicitation of Proxies will be borne by the Company. In
addition to the use of the mail, 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 registered and beneficial owners and
obtaining their Proxies.
Shareholders are urged to promptly vote your shares either on the Internet
(preferred method), via telephone, or by dating, signing, and returning the
accompanying Proxy in the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Connie Hamblin
Connie Hamblin
April 9, 2003 Secretary
23
APPENDIX A
GENTEX CORPORATION
AUDIT COMMITTEE CHARTER
Effective February 27, 2003
I. ROLE:
The primary purpose of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities for management's
conduct of the Company's accounting and financial reporting processes and
the Company's system of internal controls regarding finance, accounting,
legal compliance and ethics.
II. MEMBERSHIP:
A. Independence/Composition. The Audit Committee shall be comprised of not
less than three (3) members of the Board of Directors. Each member of the
Audit Committee shall meet independence and experience requirements of
NASDAQ, the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission (the "Commission").
Accordingly, the members of the Audit Committee will consist of directors:
o None of whom has any relationship to the Company that would
interfere with the exercise of his or her independent judgment as a
member of the Audit Committee; and
o All of whom, as determined by the Board of Directors in its business
judgment, are financially literate and have a working familiarity
with basic financial and accounting practices and at least one
member of the Audit Committee shall be an "audit committee financial
expert" in compliance with the criteria established by the
Commission.
B. Appointment. The members of the Audit Committee shall be nominated and
appointed annually to one-year terms by the Board of Directors. The Board
shall designate one member of the Audit Committee as Chair. Audit
Committee members may be replaced by the Board.
III. MEETINGS:
A. Schedule. The Audit Committee shall hold regular meetings at least
quarterly each fiscal year. The meeting schedule shall include sessions
with management, and the independent auditor. Each regularly scheduled
meeting of the Audit Committee shall, however, conclude with an executive
session of the Audit Committee, absent members of management and on such
terms and conditions as the Audit Committee may elect. Special meetings of
the Audit Committee may be called pursuant to any procedures established
by the Audit Committee. Pre-meeting materials are expected to be
distributed
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to Audit Committee members in sufficient time prior to meetings to permit
review by members before such meetings.
B. Minutes/Reports. The Audit Committee shall keep written minutes of its
meetings, including a report of all actions taken by the Audit Committee.
Such minutes shall be delivered to the Board of Directors and shall be
maintained with the books and records of the Company.
IV. RESPONSIBILITIES:
The Company's management is responsible for preparing the Company's
financial statements, and the independent auditor is responsible for
auditing the Company's financial statements. The Company's financial
management, including the independent auditor, has more time, knowledge
and more detailed information of the Company than does the Audit
Committee. Consequently, the Audit Committee's role is one of oversight
and does not provide any expert assurance or certification as to the
Company's financial statements or the work of the independent auditor.
The following functions are the common recurring activities of the Audit
Committee in carrying out its oversight function:
A. Document And Report Review
1. Review, assess the adequacy of, and update this Charter
periodically or as conditions dictate (no less often than
annually).
2. Review and discuss with management the Company's annual
financial statements and any reports or other financial
information submitted to the Securities and Exchange
Commission or to the public, including any report issued by
the independent auditor, and including matters required to be
reviewed under applicable legal, regulatory, or NASDAQ
requirements. In lieu of the entire Audit Committee
undertaking such review and discussion, the Chair may review
and discuss with management if the entire Audit Committee's
involvement is not required by any applicable law, rule, or
regulation.
3. Recommend to the Board of Directors whether the financial
statements should be included in the Annual Report on Form
10-K.
4. Review and discuss with management and the independent auditor
the quarterly report on Form 10-Q prior to its filing,
including matters required to be reviewed under applicable
legal, regulatory, or NASDAQ requirements.
5. Discuss with management earnings press releases prior to
dissemination, and financial information and earnings guidance
provided to analysts and rating agencies. In lieu of the
entire Audit Committee undertaking such discussions, the Chair
may hold such discussions with management if the entire Audit
Committee's involvement is not required by any applicable law,
rule, or regulations.
2
B. Independent Auditors
1. Select and appoint, determine the compensation of and funding
for, evaluate, and provide oversight of the Company's
independent auditor, including the removal of the Company's
independent auditor, all within the Audit Committee's sole
authority. The independent auditor shall report and be
accountable directly to the Audit Committee, and the Audit
Committee shall oversee the resolution of any disagreements
between management and the independent auditor.
2. On an annual basis, review and discuss with the independent
auditor all significant relationships the auditor has with the
Company to determine the auditor's objectivity and
independence, undertaking or recommending appropriate action
to ensure and continue that independence.
3. Implement and administer the Company's Policy Regarding the
Approval of Audit and Permissible Nonaudit Services Provided
by the Independent Auditor.
4. Review the independent auditor's attestation and report on
management's internal control report, and hold timely
discussions with the independent auditor regarding the content
of that attestation and report.
5. At least annually, obtain and review a report by the
independent auditor regarding:
(a) The firm's internal quality control procedures;
(b) Any material issues raised by the most recent internal
quality-control review, peer review of the firm, or by
any inquiry or investigation by governmental or
professional authorities, within the preceding five
years, respecting one or more independent audits carried
out by the firm, and any steps taken to deal with any
such issues; and
(c) All relationships between the independent auditor and
its related entities and the Company and its related
entities (with a confirmation that in the professional
judgment the auditor is independent of the Company under
all applicable laws, rules, and regulations).
C. Financial Reporting Processes
1. Review the integrity of the Company's financial reporting
process, both internal and external, giving consideration to
consultation with management and the independent auditors.
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2. Review the Company's critical accounting policies and
practices as well as consider and approve, as appropriate,
major changes to the Company's accounting policies and
practices as suggested by the independent auditor and/or
management.
3. Review and approve all related party transactions.
4. Establish and maintain procedures for the receipt, retention
and treatment of complaints regarding accounting, internal
accounting controls, or auditing matters, including procedures
necessary to receive and respond to confidential and anonymous
submissions by Company employees regarding questionable
accounting or auditing matters.
D. Internal Audit
1. Discuss with management and the independent auditor the
necessity of an internal audit function.
2. To the extent an internal audit function is considered
necessary, to oversee the organization, objectivity,
responsibilities, plans, budgets, and staffing of such a
function.
E. Ethical and Legal Compliance
1. Review the Company's Code of Conduct, when and as approved by
the Board of Directors, to ensure that management has
maintained a system to comply with expected ethical and legal
requirements.
2. Review, with the Company's counsel, legal compliance matters
including corporate securities trading policies.
3. Review, with the Company's counsel, any legal matter that
could have a significant impact on the Company's financial
statements.
4. Discuss the Company's risk assessment and risk management, any
steps taken by management to control or mitigate risk
exposure, as well as any audit problems or difficulties and
management's response.
F. Other
1. Prepare the Audit Committee report, in accordance with all
applicable rules and regulations, to be included in the
Company's annual Proxy Statement to shareholders.
2. Perform an annual self-assessment relative to the Audit
Committee's purpose, duties and responsibilities set forth in
this Charter.
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3. Obtain advice and assistance from outside legal, accounting or
other advisors as deemed appropriate to perform the Audit
Committee's duties and responsibilities. The Audit Committee
has the sole authority to retain and determine the funding for
such advisors and shall be given the necessary resources to
retain such advisors and to otherwise fulfill its functions as
set forth in this Charter.
4. Perform any other activities consistent with this Charter, the
Company's Bylaws and governing law, as the Audit Committee or
the Board of Directors deems necessary or appropriate.
V. LIMITATIONS:
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine if the Company's financial statements and
disclosures are complete and accurate and are in accordance with generally
accepted accounting principles and applicable rules and regulations. These
are the responsibilities of management and the independent auditor.
5
APPENDIX B
GENTEX CORPORATION
2003 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Gentex Corporation 2003 Employee Stock Purchase
Plan (the "Plan") is to provide employees of Gentex Corporation (the "Company")
with a further inducement to continue their employment with the Company and to
encourage such employees to increase their efforts to promote the best interests
of the Company by permitting them to purchase shares of common stock, par value
$.06 per share, (the "Shares") of the Company, at a price less than the market
price, under such circumstances that the purchase qualifies as the exercise of
an option granted under an employee stock purchase plan, as defined by Section
423 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Administration. The Plan shall be administered by a committee appointed by
the Board of Directors of the Company (the "Committee"). The Committee shall
consist of not less than three (3) members who are not eligible to participate
in the Plan. The Board of Directors may from time to time remove members from,
or add members to, the Committee. Vacancies on the Committee shall be filled by
the Board of Directors. The Committee may establish from time to time such
regulations, provisions and procedures, within the terms of the Plan, as in the
opinion of its members may be advisable in the administration of the Plan. The
Committee shall keep minutes of its meetings. A majority of the Committee shall
constitute a quorum, and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts reduced to or approved in writing
by a majority of the members of the Committee, shall be the valid acts of the
Committee. The interpretation and construction by the Committee of any
provisions of the Plan shall be final and conclusive. Each person who is or
shall have been a member of the Committee shall be indemnified and held harmless
by the Company 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.
3. Eligibility. Participation under the Plan shall be open to all active
employees (the "Eligible Employees") of the Company except: (a) employees who
have not been continuously employed by the Company on a full-time basis for at
least 12 months at the beginning of an Option Period (as hereinafter defined);
(b) employees whose customary employment by the Company is for less than 20
hours per week; (c) employees whose customary employment is less than five
months in a calendar year; and (d) officers, for purposes of Section 16 of the
1934 Securities Exchange Act, as amended, of the Company. The exceptions
providing active employees are not Eligible Employees shall be interpreted in
the Company's discretion and the Company may provide that once an active
employee is an Eligible Employee that such person will remain an Eligible
Employee as long as he or she remains an employee. No option rights shall be
granted under the Plan to any person who is not an Eligible Employee, and no
Eligible Employee shall be granted option rights under the Plan: (a) if such
employee, immediately after receiving the grant of such option rights under the
Plan, owns (under the rules of Section 423(b)(3) and 424(d) of the Code) stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company; or (b) which permit such employee to
purchase Shares under this Plan and any other employee stock purchase plan of
the Company (but not an incentive stock option plan) at option prices
aggregating more than Twenty Thousand Dollars ($20,000) of the purchase price of
the shares (determined at the time the
1
respective options are granted) in any one calendar year and, notwithstanding
anything to the contrary, in no event may such option rights accrue at a rate
which exceeds that permitted by Section 423(b) (8) of the Code.
4. Shares Available for Plan. Purchases of Shares pursuant to this Plan may be
made out of the Company's presently or hereafter authorized but unissued Shares,
or from outstanding Shares, or partly out of each, as determined by the Board of
Directors. The maximum number of Shares which may be purchased under the Plan is
six hundred thousand (600,000) Shares, subject, however, to adjustment as
hereinafter set forth. In the event the Company shall, at any time after the
effective date of the Plan, change its issued Shares into an increased number of
Shares, with or without par value, through a stock dividend or stock split, or
into a decreased number of Shares, with or without par value, through a
combination of Shares, then effective with the record date for such change, the
maximum number of Shares which thereafter may be purchased under the Plan shall
be the maximum number of Shares which, immediately prior to such record date,
remained available for purchase under the Plan, proportionately increased, in
the case of such stock dividend or split, or proportionately decreased, in the
case of such combination of Shares. In the event of any other change affecting
Shares, such adjustment shall be made as may be deemed equitable by the Board of
Directors to give proper effect to such event.
5. Effective Dates. This Plan shall become effective on April 1, 2003, provided
that the Plan is subsequently approved, at a duly called meeting (or any
adjournment thereof) of the shareholders of the Company not later than the first
anniversary of adoption of the Plan by the Board of Directors. The first "Option
Period" under the Plan shall commence on April 1, 2003, and end on the Company's
last payroll date in June 2003. Thereafter, as long as the Plan remains in
effect, a new "Option Period" shall commence on the first day following the end
of the immediately preceding Option Period and end on the Company's last payroll
date in that fiscal quarter.
6. Participation. An employee of the Company who is an Eligible Employee at or
prior to the first day of any Option Period may become a Participant as of such
date by: (a) at least seven (7) days prior to such date, completing and
delivering a payroll deduction Authorization Form (the "Authorization") to the
Company's payroll department; and/or (b) at least twenty-one (21) days prior to
the last day of the Option Period, completing and delivering to the Company a
lump sum payment form furnished by the Company, accompanied by payment to the
Company in the amount of the lump sum to be credited to the Eligible Employee's
Purchase Account. The Authorization will direct a regular payroll deduction from
the Participant's compensation to be made on each of the Participant's pay dates
occurring during each Option Period in which he or she is a Participant.
7. Payroll Deductions and Lump Sum Payments. The Company will maintain payroll
deduction accounts for all employees who are Participants and who have filed
Authorizations for Payroll Deduction. Payments made by Participants, whether by
payroll deduction or lump sum payment, shall be credited to the Participant's
Stock Purchase Account (the "Purchase Account"). No amounts other than payroll
deductions and lump sum payments authorized under this Plan may be credited to a
Participant's Purchase Account. Subject to Section 3 above, a Participant may
authorize a payroll deduction in any amount not less than Ten Dollars ($10) for
each pay period, but not more than a maximum of ten percent (10%) of the
Participant's regular wages (not including any bonuses), before withholding or
other deduction, with respect to which payments are to be made to him or her by
the Company on such pay date. One time only during
2
any calendar year, a Participant may make one lump sum payment during any Option
Period in any amount not less than One Hundred Dollars ($100), but not more than
a maximum of Ten Thousand Dollars ($10,000). Lump sum payments must be received
by the Company at least twenty-one (21) days before the end of an Option Period.
In no event shall payments of any kind for credit to a Purchase Account by or on
behalf of any Participant aggregate more than Ten Thousand Dollars ($10,000) by
payroll deduction and Ten Thousand Dollars ($10,000) by lump sum contribution,
or a total of Twenty Thousand Dollars ($20,000) in any calendar year.
8. Changes in Payroll Deduction. Payroll deductions shall be made for each
Participant in accordance with the Participant's Authorization and shall
continue until the Participant's participation terminates, the Authorization is
revised or revoked, or the Plan terminates. A Participant may, as of the
beginning of any Option Period, increase or decrease the Participant's payroll
deduction within the limits specified in Section 7 by filing a new Authorization
at least seven (7) days prior to the beginning of such Option period.
9. Termination of Participation-Withdrawal of Funds. A Participant may for any
reason and at any time, on written notice given to the Company prior to the
Participant's last pay date in any Option Period, elect to terminate his or her
participation in the Plan and permanently draw out the balance accumulated in
his or her Purchase Account. Upon any such termination by a Participant, he or
she shall cease to be a Participant, his or her Authorization shall be revoked
effective upon receipt, and the amount to his or her credit in his or her
Purchase Account (exclusive of accounts payable in respect of the exercise of
any option to purchase Shares theretofore granted under the Plan), as well as
any unauthorized payroll deductions made after such revocation, shall be
promptly refunded in cash to the former Participant. An Eligible Employee who
has thus terminated participation in the Plan may thereafter begin participation
in the Plan again only after the expiration of three of the Company's full
fiscal quarters after such termination and withdrawal of funds occurred. Partial
withdrawals of funds shall not be permitted.
10. Purchase of Shares. During each Option Period while this Plan remains in
effect, each Participant shall be granted an option as of the last business day
of such Option Period for the purchase of as many full Shares, but not less than
one (1) full share, as may be purchased with the funds in his or her Purchase
Account. This election shall be automatically made as provided in this Section
unless the Participant terminates participation as provided in Section 9. The
purchase price for each Share purchased shall be eighty-five percent (85%) of
the fair market value of a Share on the last day of the Option Period (the
"Purchase Date"), where fair market value means the closing sale price reported
on the NASDAQ National Market on the Purchase Date. If such percentage results
in a fraction of a cent, the purchase price shall be increased to the next
higher full cent. If, as of each Purchase Date, the Participant's Purchase
Account contains sufficient funds to purchase at least one (1) or more full
Share(s), the Participant shall be deemed to have exercised an option to
purchase any such Share(s) at the purchase price; the Participant's Purchase
Account shall be charged for the amount of the purchase; and a stock certificate
shall be issued to the Participant. As of each subsequent Purchase Date when
sufficient funds have again accrued in the Participant's Purchase Account to
purchase one (1) or more Share(s), Share(s) will be purchased in the same
manner. Any balance remaining in a Participant's Purchase Account after a
Purchase Date will be carried forward into the following Option Period.
Notwithstanding the foregoing, any balance remaining in a Purchase Account at
the termination of the Plan will be automatically refunded to the Participant in
accordance with Section 17.
3
11. Registration of Certificates. Certificates may be registered only in the
name of the Participant.
12. Rights as a Shareholder. None of the rights or privileges of a shareholder
of the Company shall exist with respect to Shares purchased under this Plan
unless and until certificates representing such Shares shall have been issued.
13. Rights on Retirement, Death or Termination of Employment. In the event of a
Participant's retirement, death or termination of employment, no payroll
deduction shall be taken from any pay due and owing to a Participant at such
time, and the balance in the Participant's Purchase Account shall be paid to the
Participant or, in the event of the Participant's death, to the Participant's
estate.
14. Rights Not Transferable. Rights under this Plan are not transferable by a
Participant and are exercisable only by the Participant during his or her
lifetime.
15. Application of Funds. All funds received or held by the Company under this
Plan may be commingled with other funds and may be used by the Company for any
corporate purpose.
16. Amendment of the Plan. The Board of Directors of the Company may at any
time, or from time to time, amend this Plan in any respect, except that, without
the approval of the Company's shareholders, no amendment shall be made: (a)
increasing the number of Shares approved for this Plan (other than as provided
in Section 4); (b) decreasing the Purchase Price per Share; (c) changing the
eligibility requirements for participation in this Plan; or (d) which would
render options granted under the Plan unqualified for special tax treatment
under the Code.
17. Termination of the Plan. Unless sooner terminated as hereinafter provided,
this Plan shall terminate on March 31, 2013. The Company may, by action of its
Board of Directors, terminate the Plan at any time. Notice of termination shall
be given to all then Participants, but any failure to give such notice shall not
impair the termination. Upon termination of the Plan, all amounts in Purchase
Accounts of Participants shall be promptly refunded.
18. Governmental Regulations. The Company's obligation to sell and deliver
Shares under this Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance, or sale of such Shares.
If, at any time, Shares deliverable hereunder are required to be registered or
qualified under any applicable law, or delivery of such Shares is required to be
accompanied or preceded by a prospectus or similar circular, delivery of
certificates for such Shares may be deferred for a reasonable time until such
registrations or qualifications are effected or such prospectus or similar
circular is available.
CERTIFICATION
The foregoing Plan was duly adopted by the Board of Directors on the 27th day of
February, 2003, subject to approval by the Company's shareholders.
/s/ Connie Hamblin
Connie Hamblin, Secretary
Gentex Corporation
4
[LOGO]
GENTEX CORPORATION
600 N. CENTENNIAL STREET
ZEELAND, MI 49464
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before the
cut-off date or meeting date. Have your proxy card in hand when you access the
web site. You will be prompted to enter your 12-digit Control Number which is
located below to obtain your records and to create an electronic voting
instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date. Have your
proxy card in hand when you call. You will be prompted to enter your 12-digit
Control Number which is located below and then follow the simple instructions
the Vote Voice provides you.
VOTE BY MAIL
Mark, sign, and date your proxy card and return it in the postage-paid envelope
we have provided or return it to Gentex Corporation, c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN
BLUE OR BLACK INK AS FOLLOWS: GENTEX KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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GENTEX CORPORATION
The Board of Directors recommends a vote FOR
Proposals 1 and 2.
1. Election of Directors (except where marked
to the contrary) for a three-year term. For Withhold For All
Nominees: 01) Fred Bauer, 02) Leo Weber, All All Except
03) Gary Goode
[ ] [ ] [ ]
1A. Election of Director for a one-year term.
Nominee: 04) John Mulder
To withhold authority to vote, mark "For All
Except" and write the nominee's number on the
line below.
---------------------------------------------
For Against Abstain
2. Proposal to approve the 2003 Gentex
Corporation Employee Stock Purchase Plan. [ ] [ ] [ ]
The Board of Directors recommends a vote For Against Abstain
AGAINST Shareholder Proposal 3.
3. Shareholder proposal on Board diversity. [ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting.
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.
For address changes and/or comments, please check
this box and write them on the back where indicated. [ ]
Yes No
Please indicate if you plan to attend the meeting [ ] [ ]
HOUSEHOLDING ELECTION - Please indicate if you Yes No
consent to receive certain future investor
communications in a single package per household [ ] [ ]
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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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 21, 2003, at the Annual Meeting of Shareholders to be
held on May 14, 2003, 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 ELECTION OF THE
NOMINEE LISTED FOR A ONE-YEAR TERM; FOR THE APPROVAL OF THE 2003 GENTEX
CORPORATION EMPLOYEE STOCK PURCHASE PLAN; AND AGAINST THE SHAREHOLDER PROPOSAL
ON BOARD DIVERSITY.
Address Changes/Comments: _________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(If you noted any address changes/comments above, please mark
corresponding box on other side.)
(To be Signed on Reverse Side)
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