SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR FISCAL YEAR ENDED DECEMBER 31, 2001. ------------------ ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to . --------------- --------------------- Commission File No.: 0-10235 ------- GENTEX CORPORATION (Exact name of registrant as specified in its charter) MICHIGAN 38-2030505 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 600 N. CENTENNIAL STREET, ZEELAND, MICHIGAN 49464 (Address of principal executive offices) (Zip Code) (616) 772-1800 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each Class Name of each exchange on which registered NONE ----------------------------------------------- Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR VALUE $.06 PER SHARE (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No: ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( ) As of March 1, 2002, 75,357,181 shares of the registrant's common stock, par value $.06 per share, were outstanding. The aggregate market value of the common stock held by non-affiliates of the registrant (i.e., excluding shares held by executive officers, directors, and control persons as defined in Rule 405, 17 CFR 203.405) on that date was $2,205,906,779 computed at the closing price on that date. Portions of the Company's Proxy Statement for its 2002 Annual Meeting of Shareholders are incorporated by reference into Part III. Exhibit Index located at Page 31 - 1 -

Statements in this Annual Report on Form 10-K which express "belief", "anticipation" or "expectation" as well as other statements which are not historical fact, such as availability and the impact of new technology, penetration of the automotive market, and foreign exchange rates, are forward-looking statements and involve risks and uncertainties described below under the headings "Business" and "Management's Discussion and Analysis of Results of Operations and Financial Condition" that could cause actual results to differ materially from those projected. All forward-looking statements in this Annual Report are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. PART I ITEM 1. BUSINESS (a) GENERAL DEVELOPMENT OF BUSINESS Gentex Corporation (the "Company") designs, develops, manufactures and markets proprietary products employing electro-optic technology: automatic-dimming rearview mirrors and fire protection products. The Company was organized in 1974 to manufacture residential smoke detectors, a product line that has since evolved into a more sophisticated group of fire protection products for commercial applications. In 1982, the Company introduced an automatic interior rearview mirror that was the first commercially successful glare-control product offered as an alternative to the conventional, manual day/night mirror. In 1987, the Company introduced its interior Night Vision Safety(TM) (NVS(R)) Mirror, an electrochromic automatic-dimming interior rearview mirror, providing the first successful commercial application of electrochromic technology in the automotive industry and world. Through the use of electrochromic technology, this mirror is continually variable and automatically darkens to the degree required to eliminate rearview headlight glare. In 1991, the Company introduced its exterior Night Vision Safety(TM) Mirror Sub-Assembly, which works as a complete glare-control system with the interior NVS(R) Mirror. In 1997, the Company began making volume shipments of three new exterior mirror sub-assembly products: thin glass flat, convex and aspheric. During 2001, the Company began shipments of its NVS(R) mirrors for a number of mid-sized, medium-priced vehicles, including the Toyota Camry, Ford Taurus, Mercury Sable, Volkswagen Passat, Jetta, Golf and Beetle, and Nissan Altima. The Company also began shipments of interior automatic-dimming mirrors with telematics functions to Ford for its Lincoln Town Car. (B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS See Note (8) to the Consolidated Financial Statements filed with this report. (C) NARRATIVE DESCRIPTION OF BUSINESS The Company currently manufactures electro-optic products, including automatic-dimming rearview mirrors for the automotive industry and fire protection products primarily for the commercial building industry. AUTOMATIC-DIMMING REARVIEW MIRRORS Interior NVS(R) Mirrors. In 1987, the Company achieved a significant technological breakthrough by applying electrochromic technology to the glare-sensing capabilities of its Motorized Mirror. Through the use of this technology, the mirror gradually darkens to the degree necessary to eliminate rearview glare from following vehicle headlights. The NVS(R) Mirror offers all of the continuous reflectance levels between its approximate 75% full-reflectance state and its 7% least-reflectance state, taking just a few seconds to span the entire range. Special electro-optic sensors in the mirror detect glare and electronic circuitry supplies electricity to darken the mirror to only the precise level required to eliminate glare, allowing the driver to maintain maximum vision. This is accomplished by the utilization of two layers of precision glass with special conductive coatings that are separated by the Company's proprietary electrochromic materials. When the appropriate light differential is detected, an electric current causes the electrochromic material to darken, decreasing the mirror's reflectance, thereby eliminating glare. - 2 -

During 1991, the Company began shipping the first advanced-feature interior NVS(R) Mirror, the NVS(R) Headlamp Control Mirror, an automatic-dimming mirror that automatically turns car head- and taillamps "on" and "off" in response to the level of light observed. During 1993, the Company began shipping its NVS(R) Compass Mirror, with an electronic compass that automatically compensates for changes in the earth's magnetic field. During 1997, the Company began shipping a new interior NVS(R) Mirror that digitally displays either a compass or outside temperature reading. During 1998, the Company began shipping new compass mirrors with integral LED map lamps, a major improvement over mirrors with standard incandescent map lamps. At the beginning of 2000, the Company began shipping to General Motors interior NVS(R) Mirrors that serve as the driver interface for the OnStar(R) System, an in-vehicle safety, security and information service using Global Positioning System (GPS) satellite technology. The Company sold approximately 4,008,000 interior NVS(R) Mirrors in 1999, approximately 4,609,000 in 2000, and approximately 5,000,000 in 2001. During 2001, the Company began shipments of its NVS(R) Mirrors for a number of mid-sized, medium-priced vehicles, including the Toyota Camry, Ford Taurus, Mercury Sable, Volkswagen Passat, Jetta and Beetle, and Nissan Altima. The Company also began shipments of interior automatic-dimming mirrors with telematics functions to Ford for its Lincoln Town Car. During 2001, the unit growth primarily resulted from increased penetration of light vehicles manufactured in Europe and Asia. The Company's interior NVS(R) Mirrors are standard equipment or factory or distributor/dealer-installed options on the following 2002 and 2002-1/2 vehicle models: TABLE 1. INTERIOR NVS(R) MIRROR AVAILABILITY BY VEHICLE LINE (NORTH AMERICAN MANUFACTURERS) GM/Cadillac Deville / DHS / DTS ECC/OS DaimlerChrysler / 300M Eldorado ESC / ETC ECC/OS Chrysler Concorde LX / Lxi / Limited Seville SLS / STS OS* Sebring Convertible Lxi / Lxi EL Limited Escalade / EXT ECC/T Town & Country Limited EH GM/Buick LeSabre Custom / Limited OS* Prowler ECC/T/L Park Avenue / Ultra ECC/OS DaimlerChrysler / Dakota Pickup GM/Oldsmobile Aurora V6 / V8 ECC/OS Dodge Durango SLT / RT Intrigue GLS ECC/L/OS Grand Caravan ES / AWD EH GM/Pontiac Bonneville SE / SLE / SSEi OS Intrepid ES / RT GM/Chevrolet Blazer Ram Pickup Corvette EL DaimlerChrysler / Grand Cherokee Laredo/Limited/Overland Express Van ECC/T Jeep Silverado Pickup / Crew Cab LS/LT ECC/T/OS DaimlerChrysler/ ML 320 / 500 / 55 Suburban 1500 / 2500 ECC/T Mercedes-Benz Avalanche 1500 / 2500 ECC/T BMW X5 Tahoe ECC/T Southeast Toyota / 4-Runner Limited / SR5 ECC/T GM/GMC Jimmy OS Gulf State Toyota / Avalon ECC Savana Van ECC/T Toyota Motor Sales Camry ECC Sierra Pickup / Crew Cab SLE/SLT ECC/T/OS Celica ECC/T Yukon / XL / Denali ECC/T Tundra ECC/T Ford Crown Victoria LX ECC RAV4 ECC/T Taurus SES / SEL / SE Wagon ECC Sienna ECC/T Expedition Eddie Bauer / XLT Solara ECC/T F150 Lariat / King Ranch Highlander Limited ECC/T Windstar SE / SEL / Limited Sequoia Ford/Lincoln LS V6 / V8 ECC Subaru / Forester ECC/T Continental ECC/L New England Dist. Impreza ECC/L Navigator Legacy / Outback ECC/L Town Car/Cartier/Executive/Signature TM Toyota Avalon Ford/Mercury Grand Marquis LS / LSE ECC Camry Solara Sable GS Plus / LS Premium ECC Camry ECC Sienna ECC Volkswagon Beetle GLX / Turbo S Nissan Altima - 3 -

TABLE 1. INTERIOR NVS(R) MIRROR AVAILABILITY BY VEHICLE LINE - CONTINUED (MANUFACTURERS OUTSIDE OF NORTH AMERICA) Audi A4 ECC Mitsubishi Montero Sport ECC/T A6 ECC Magna Verada A8 Nissan Cedric S8 Cima Bentley Bentley RKE Gloria Continental / R RKE Maxima BMW 700 Series Rolls Royce Arnage RKE 500 Series Saab 9-5 300 Series Samsung SM5 Daewoo/Ssangyong Chairman Toyota Land Cruiser ECC Korando Camry ECC Musso Cynus Rexton Celsior Istana Windom Fiat Alfa Romeo Century Lancia Thesis Toyota (Taiwan) Camry ECC Lancia Lybra Volkswagon Polo Fiat (Brazil) Marea Golf GTI Ford (Europe) Mondeo Jetta GLX Ford (Taiwan) Mondeo EH Passat GLX Ford / Jaguar XK8 -- X100 EH Yulon Motors Cefiro Ford / Land Rover Discovery ECC/HL Range Rover P38 Range Rover L32 HL GM (Brazil) Vectra GM (China) Buick Century/Regal ECC/L Hyundai Dynasty Grandeur XG EF Sonata Santa Fe Avante XD Equus Tuscani Terracan KEY: Starex ---- Infiniti Q45 * = ECC offered as upgrade option I30 ECC G35 HL Kia Motors Corp. Enterprise NVS(R) MIRROR ------------- WITH: Optima EH = Automatic Headlamp Control Carens EL = Map Lights Lexus IS300 * ECC = Electronic Compass Display ES300 * ECC/L = Electronic Compass Display with Map Lights GS300 * ECC/T = Electronic Compass and Temperature Display GS430 * ECC/T/L = Electronic Compass and Temperature Display LS430 with Map Lights RX300 * RKE = Remote Keyless Entry LX470 * OS = OnStar(R) SC430 TM = Telematics MG Rover 75R40 HL = HomeLink(R) Daimler/Chrysler / A Class Mercedes-Benz C 230/240/320/32 AMG CL 500/55 AMG/600 CLK 320/430/55 AMG E 320/430/55 AMG S 430/500/55 AMG/600 SL 500/600 SLK 230/320/32 AMG - 4 -

Exterior NVS(R) Mirror Sub-Assemblies. The Company has devoted substantial research and development efforts to the development of its electrochromic technology to permit its use in exterior rearview mirrors. Exterior NVS(R) mirrors are controlled by the sensors and electronic circuitry in the interior NVS(R) Mirror, and both the interior and exterior mirrors dim simultaneously. During 1991, the Company's efforts culminated in a design that is intended to provide acceptable long-term performance in all environments likely to be encountered. In 1994, the Company began shipments of its complete three-mirror system, including the convex (curved glass) wide-angle NVS(R) Mirror to BMW. During 1997, the Company began making volume shipments of three new exterior mirror products - - thin glass flat, convex and aspheric. During 2001, the Company began shipments of the world's first exterior automatic-dimming mirrors with built-in turn-signal indicators to Southeast Toyota. The Company currently sells its exterior NVS(R) Mirror Sub-Assemblies to exterior mirror suppliers of General Motors, DaimlerChrysler, Ford, Audi, BMW, Fiat, Infiniti and Mitsubishi, who assemble the exterior NVS(R) Mirror Sub-Assemblies into full mirror units for subsequent resale to the automakers. The Company sold approximately 1,952,000 exterior NVS(R) Mirror Sub-Assemblies during 1999, approximately 2,148,000 in 2000, and approximately 2,181,000 in 2001. During 2001, unit growth primarily resulted from the increased penetration of light vehicles in Asia. The exterior NVS(R) Mirror is standard equipment or a factory-installed option on the following 2002 and 2002- 1/2 vehicle models: TABLE 2. EXTERIOR NVS(R) MIRROR AVAILABILITY BY VEHICLE LINE GM/Cadillac Deville/DHS/DTS Bentley Bentley F/C/A Eldorado ESC/ETC Continental / R F/C/A Escalade/EXT DaimlerChrysler / A Seville SLS/STS F/C Mercedes- Benz C 230/240/320/32 AMG F/A GM / Buick Century Limited CL 500/55 AMG/600 Regal LS/GS CLK 320/430/55 AMG LeSabre Limited E 320/430/55 AMG F/A Park Avenue/Ultra ML320/500/55 F/A GM / Chevrolet Blazer S 430/500/55 AMG/600 F/A Corvette SL 500/600 F/A Suburban 1500/2500 SLK 230/320/32 AMG F/A Tahoe Fiat Lancia Thesis A Avalanche 1500/2500 Ford / Jaguar XJ / X300 C GM / GMC Sierra Denali XK8 / X100 C Yukon / Denali / XL Ford / Land Rover Range Rover L32 F/C/A Ford/Lincoln Continental Infiniti Q45 F/C Town Car / Cartier / Mitsubishi Magna Verada Executive / Nissan Cima C Signature DaimlerChrysler/ Town & Country Limited Rolls Royce Arnage F/C/A Chrysler 300 M F/C Toyota Motor Sales Sequoia F/C Concorde Limited F/C DaimlerChrysler/Dodge Durango SLT / RT DaimlerChrysler/Jeep Grand Cherokee Limited / Overland KEY: Audi A3 F/C/A A = Aspheric Glass A6 F/C/A F = Flat Glass (unless otherwise A8 F/C/A indicated) S8 F/C/A C = Convex Glass 700 Series F/C/A BMW 500 Series F/C/A X5 F/C/A Product Development. The Company plans to continue introducing additional advanced-feature NVS(R) Mirrors. Advanced-feature NVS(R) Mirrors currently being offered by the Company include the NVS(R) Headlamp Control Mirror, the NVS(R) Lighted Mirror with LED map lamps, the NVS(R) Compass Mirror, the NVS(R) Mirror with Remote Keyless Entry, the NVS(R) Compass/Temperature Mirror, the NVS(R) Dual Display Compass/Temperature Mirror, the NVS(R) telematics mirrors and the NVS(R) - 5 -

HomeLink(R) Mirror. During 2001, the Company announced a revolutionary new technology, called SmartBeam(TM), using a custom, active-pixel, CMOS (complementary metal oxide semiconductor) sensor, that maximizes a driver's forward vision by significantly improving utilization of the vehicle's highbeam headlamps during nighttime driving. The Company has received product planning commitments from two major automotive OEM customers for certain 2004 1/2 and 2005 model year vehicles. In addition, the Company announced a new ALS (Active Light Sensor) technology as a cost-effective, improved-performance, intelligent CMOS light sensor to control the dimming of its rearview mirrors. Also during 2001, the Company developed a new microphone designed specifically for use in the automotive environment for telematics applications. Of particular importance to the Company has been the development of its electrochromic technology for use in complete 3-mirror systems. In these systems, both the driver and passenger-side exterior NVS(R) Mirrors are controlled by the sensors and electronic circuitry in the interior rearview mirror, and the interior and both exterior mirrors dim simultaneously. At the end of 1999, the Company announced the development of the second generation of its LED technology, which represents the first time that white light for illumination purposes can be achieved using high intensity LEDs on a cost-effective basis. LEDs as illuminators could have significant automotive and non-automotive lighting applications as they have many advantages over incandescent lamps, including extremely long life, low heat generation, lower current draw, more resistance to shock, and lower total cost of ownership. In the fourth quarter of 2001, the Company installed a new prototype microelectronics line to produce pilot production LED samples, which are currently undergoing internal testing and validation and which should be available to key customers and partners during the first half of 2002. Strategic discussions with potential alliance partners in the lighting industry, LED component industry and LED chip industry are continuing, with some small licensing revenues possible beginning in 2002. The Company's success with electrochromic technology provides an opportunity for other potential commercial applications, which the Company expects to explore in the future as resources permit. Examples of possible applications of electrochromic technology include windows for both the automotive and architectural markets, sunroofs and sunglasses. Progress in adapting electrochromic technology to the specialized requirements of the window market continued in 2001. However, achieving the rigorous performance standards needed for launching a commercial product still could require several years of additional development work. Markets and Marketing. The Company markets its automatic rearview mirrors to domestic and foreign automotive manufacturers under the trademarks "Night Vision Safety(TM)" or NVS(R) Mirrors. In North America, the Company markets these products primarily through a direct sales force. The Company currently supplies NVS(R) Mirrors to General Motors Corporation and DaimlerChrysler AG (North America) under long-term agreements. During 2000, the Company negotiated a contract extension for inside mirrors with General Motors through the 2004 model year. The long-term supply agreement with DaimlerChrysler AG extends through the 2003 model year. The Company's exterior NVS(R) Mirror Sub-Assemblies are supplied to General Motors, Ford and DaimlerChrysler AG by means of sales to exterior mirror suppliers. During 1993, the Company established a sales and engineering office in Germany and the following year, the Company formed a German limited liability company, Gentex GmbH, to expand its sales and engineering support activities in Europe. During 1999, the Company established Gentex Mirrors, Ltd., as a sales and engineering office in the United Kingdom. During 2000, the Company established Gentex France, SAS, as a sales and engineering office in France. The Company's marketing efforts in Europe are conducted through Gentex GmbH, Gentex Mirrors, Ltd., and Gentex France SAS, with limited assistance from independent manufacturers' representatives. The Company is currently supplying mirrors for Audi, Bavarian Motor Works, A.G. (BMW), Bentley, Fiat, Jaguar, Land Rover, MG Rover, Mercedes-Benz, Opel, Rolls Royce, Saab and Volkswagen. - 6 -

Since 1991, the Company has been shipping electrochromic mirror assemblies for Nissan Motor Co., Ltd. under a reciprocal distribution agreement with Ichikoh Industries, Ltd. (Ichikoh), a major Japanese supplier of automotive products. Under this agreement, Ichikoh markets the Company's automatic mirrors to certain Japanese automakers and their subsidiaries with manufacturing facilities in Asia. The arrangement involves very limited technology transfer by the Company and does not include the Company's proprietary electrochromic gel formulation. During 1993, the Company hired a sales agent to market NVS(R) Mirrors to other Japanese automakers beyond Nissan. Subsequently in 1998, the Company established Gentex Japan, Inc., as a sales and engineering office to expand its sales and engineering support in Japan. During 1999, the Company signed an agreement with Murakami Corporation, a major Japanese mirror manufacturer, to cooperate in expanding sales of automatic-dimming mirrors using the Gentex electrochromic technology. The Company is currently supplying mirrors for Daewoo, Ford (Taiwan), GM (China), Hyundai, Infiniti, Kia Motors, Lexus, Mitsubishi, Nissan, Samsung, Toyota and Yulon Motors. Historically, new safety and comfort options have entered the original equipment automotive market at relatively low rates on "top of the line" or luxury model automobiles. As the selection rates for the options on the luxury models increase, they generally become available on more models throughout the product line and may become standard equipment. The recent trend of domestic and foreign automakers is to offer several options as a package. As consumer demand increases for a particular option, the mirror tends to be offered on more vehicles and in higher option rate packages. The Company anticipates that its NVS(R) Mirrors will be offered as standard equipment, in higher option rate packages, and on more models as consumer awareness of the safety and comfort features becomes more well-known and acceptance grows. Since 1998, Gentex Corporation has contracted with MITO Corporation to sell several of its most popular automatic-dimming mirrors directly to consumers in the automotive aftermarket; in addition, the Company currently sells some NVS(R) Mirrors to automotive distributors. It is management's belief that these sales have limited potential until the Company achieves a significantly higher penetration of the original equipment manufacturing market. Competition. Gentex is the leading producer of automatic rearview mirrors in the world and currently is the dominant supplier to the automotive industry with an approximate 80% market share worldwide. While the Company believes it will retain a dominant position, one other U.S. manufacturer (Donnelly Corporation) is competing for sales to domestic and foreign vehicle manufacturers and is supplying a number of domestic and foreign vehicle models with its hybrid version of electrochromic mirrors. In addition, two Japanese manufacturers are currently supplying a number of vehicle models in Japan with solid-state electrochromic mirrors. The Company believes its electrochromic automatic mirrors offer significant performance advantages over competing products. However, Gentex recognizes that Donnelly Corporation, a competitor, is considerably larger than the Company and presents a significant competitive threat There are numerous other companies in the world conducting research on various technologies, including electrochromics, for controlling light transmission and reflection. Gentex believes that the electrochromic materials and manufacturing process it uses for automotive mirrors remains the most efficient and cost-effective way to produce such products. While automatic-dimming mirrors using other technologies may eliminate glare, each of these technologies have inherent cost or performance limitations. - 7 -

FIRE PROTECTION PRODUCTS The Company manufactures approximately 60 different models of smoke alarms and smoke detectors, combined with over 160 different models of signaling appliances. All of the smoke detectors/alarms operate on a photoelectric principle to detect smoke. While the use of photoelectric technology entails greater manufacturing costs, the Company believes that these detectors/alarms are superior in performance to competitive devices that operate through an ionization process, and are preferred in most commercial residential occupancies. Photoelectric detectors/alarms feature low light-level detection, while ionization detectors utilize an ionized atmosphere, the electrical conductivity of which varies with changes in the composition of the atmosphere. Photoelectric detectors/alarms are widely recognized to respond more quickly to slow, smoldering fires, a common form of dwelling unit fire and a frequent cause of fire-related deaths. In addition, photoelectric detectors are less prone to nuisance alarms and do not require the use of radioactive materials necessary for ionization detectors. Photoelectric smoke detectors/alarms are now being required by an increasing number of city and state laws, and national codes. The Company's fire protection products provide the flexibility to be wired as part of multiple-function systems and consequently are generally used in fire detection systems common to large office buildings, hotels, motels, military bases, college dormitories and other commercial establishments. However, the Company also offers single-station alarms for both commercial and residential applications. While the Company does not emphasize the residential market, some of its fire protection products are used in single-family residences that utilize fire protection and security systems. The Company's detectors emit audible and/or visual signals in the immediate location of the device, and certain models are able to communicate with monitored remote stations. In recent years, the Company introduced further improvements to its line of smoke detectors/alarms, including submersibility to enhance maintenance, and a new design feature that permits greater ease in sensitivity testing. The Company offers the only detection device that may be completely submersed in water for cleaning purposes. This feature permits more effective and convenient cleaning of the product, thereby enhancing reliability. In addition, the patented sensitivity test feature permits the user to check the calibration of the least and most sensitive detection levels of the detector with the simple turn of a knob. The National Fire Protection Association's code requires that all single station smoke alarms installed in dwellings larger than 1-2 family must annually conduct this sensitivity test. In 1997, the Company introduced a new visual and audible signaling line. The visual (strobe) was designed to meet the Underwriters Laboratories standard without any loss of efficiency. This product draws one of the lowest amounts of current consumption in the industry. It is also available with the largest array of visual intensities offered to meet virtually all room sizes and configurations. Also, during 1997, the Company became one of the first companies in the fire alarm market to implement the temporal code 3 pattern on the smoke detection/alarm products. In 1999, the Company introduced a new low current visual signaling appliance for general evacuation purposes. The new audible/visual series offers the widest array of light intensities in the industry and is one of the lowest current consumption appliances available. Markets and Marketing. The Company's fire protection products are sold directly to fire protection and security product distributors under the Company's brand name, electrical wholesale houses, and to original equipment manufacturers of fire protection systems under both the Company's brand name and private labels. The fire protection and security industries have experienced a tremendous number of mergers and consolidations during the past few years. The Company markets its fire protection products throughout the United States through regional sales managers and manufacturer representative organizations. Competition. The fire protection products industry is highly competitive in terms of both the smoke detectors and signaling device markets. The Company estimates that it competes principally with eleven manufacturers of smoke detection products for - 8 -

commercial use and approximately four manufacturers within the residential market, three of which produce photoelectric smoke detectors. In the signaling device markets, the Company estimates it competes with approximately eight manufacturers. While the Company faces significant competition in the sale of smoke detectors and signaling devices, it believes that the recent introduction of new products, improvements to its existing products, its diversified product line, and the availability of special features will permit the Company to maintain its competitive position. TRADEMARKS AND PATENTS The Company owns 6 U.S. trademarks and 113 U.S. patents, 108 of which relate to electrochromic technology and/or automotive rearview mirrors. These patents expire between 2003 and 2020. The Company believes that these patents provide the Company a significant competitive advantage in the automotive rearview mirror market; however, none of these patents is required for the success of any of the Company's products. The Company also owns 1 foreign trademark and 31 foreign patents, 30 of which relate to automotive rearview mirrors. These patents expire at various times between 2002 and 2019. The Company believes that the competitive advantage derived in the relevant foreign markets for these patents is comparable to that experienced in the U.S. market. The remaining 5 U.S. patents and 1 foreign patent relate to the Company's fire protection products, and the Company believes that the competitive advantage provided by these patents is relatively small. The Company also has in process 146 U.S. patent applications, 164 foreign patent applications, and 6 trademark applications. The Company continuously seeks to improve its core technologies and apply those technologies to new and existing products. As those efforts produce patentable inventions, the Company expects to file appropriate patent applications. MISCELLANEOUS The Company considers itself to be engaged in the manufacture and sale of automatic rearview mirrors for the automotive industry and fire protection products for the commercial building industry. The Company has several important customers within the automotive industry, two of which each account for 10% or more of the Company's annual sales: General Motors Corporation and DaimlerChrysler AG. The loss of either of these customers could have a material adverse effect on the Company. The Company's backlog of unshipped orders was $83,856,000 and $74,503,000 at March 1, 2002 and 2001, respectively. At March 1, 2002, the Company had 1,750 full-time employees. None of the Company's employees are represented by a labor union or other collective bargaining representative. The Company believes that its relations with its employees are good. ITEM 2. PROPERTIES. The Company operates out of four office/manufacturing facilities in Zeeland, Michigan, approximately 25 miles southwest of Grand Rapids. The office and production facility for the Fire Protection Products Group is a 25,000-square-foot, one-story building leased by the Company since 1978 from related parties (see Part III, Item 13, of this report). The corporate office and production facility for the Company's Automotive Products Group is a modern, two-story, 150,000-square-foot building of steel and masonry construction situated on a 40-acre site in a well-kept industrial park. An additional 128,000-square-foot office/manufacturing facility on this site was opened during 1996. The Company has expanded its automotive production facilities by constructing a third 170,000 square-foot facility on its current site which opened in the second quarter of 2000 to meet the Company's current and near term future automotive production needs. ITEM 3. LEGAL PROCEEDINGS None that are material. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. - 9 -

EXECUTIVE OFFICERS OF THE REGISTRANT. The following table lists the names, ages, and positions of all of the Company's executive officers. Officers are elected at the first meeting of the Board of Directors following the annual meeting of shareholders. NAME AGE POSITION POSITION HELD SINCE - ------------------------------------------------------------------------------------------------------------------- Fred Bauer 59 Chief Executive Officer May 1986 Kenneth La Grand 61 Executive Vice President September 1987 Garth Deur 45 Senior Vice President May 2001 Dennis Alexejun 50 Vice President, North American Automotive Marketing September 1998 John Carter 54 Vice President, Engineering / Mechanical June 1997 Enoch Jen 50 Vice President-Finance, Treasurer February 1991 There are no family relationships among the officers listed in the preceding table. Garth Deur has served as Senior Vice President of the Company since May 2001, and joined the Company as Vice President -- Business Development and Planning in November 2000. Prior to joining the Company, Mr. Deur served as a Principal of Landmark Group, an investment management company, from March 1999 through November 2000. Prior to that time, Mr. Deur served as Vice President, Chrysler Business Operations, from March 1995 through March 1999 at the Automotive Interiors division of Johnson Controls, Inc. (formerly Prince Corporation, which was acquired by Johnson Controls in 1996). Dennis Alexejun has served as Vice President, North American Automotive Marketing, of the Company since September 1998. Prior to that time, Mr. Alexejun served as Vice President, General Motors Business Operations, from February 1995 through September 1998 at the Automotive Interiors division of Johnson Controls, Inc. (formerly Prince Corporation, which was acquired by Johnson Controls in 1996). John Carter has served as Vice President, Engineering/Mechanical of the Company since June 1997. Prior to that time, Mr. Carter served as President and Chief Executive Officer of CS Technology, a plastic molding and tooling company, from September 1995 through April 1997. - 10 -

PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Company's common stock trades on The Nasdaq Stock Market(R). As of March 1, 2002, there were 2,390 record holders of the Company's common stock. Ranges of high and low sale prices of the Company's common stock reported through The Nasdaq Stock Market for the past two fiscal years appear in the following table. YEAR QUARTER HIGH LOW ----------------------------------------------------------------- 2000 First 39.87 24.75 Second 37.69 24.37 Third 30.06 20.50 Fourth 27.25 16.19 2001 First 27.94 18.44 Second 31.84 21.56 Third 34.23 20.00 Fourth 28.18 21.75 The Company has never paid any cash dividends on its common stock, and management does not anticipate paying any cash dividends in the foreseeable future. ITEM 6. SELECTED FINANCIAL DATA (in thousands except per share data) - ------------------------------------------------------------------------------------------------------------------- 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------- Net Sales $310,305 $297,421 $262,155 $222,292 $186,328 Net Income 65,217 70,544 64,864 50,307 35,230 - ------------------------------------------------------------------------------------------------------------------- Earnings Per Share* 0.86 0.93 0.86 0.68 0.49 - ------------------------------------------------------------------------------------------------------------------- Total Assets $506,823 $428,129 $337,673 $254,890 $189,783 - ------------------------------------------------------------------------------------------------------------------- Long-Term Debt Outstanding at Year End $ - $ - $ - $ - $ - - ------------------------------------------------------------------------------------------------------------------- *Diluted; adjusted for 2-for-1 stock split in June 1998. - 11 -

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. RESULTS OF OPERATIONS. The following table sets forth for the periods indicated certain items from the Company's Consolidated Statements of Income expressed as a percentage of net sales and the percentage change in the dollar amount of each such item from that in the indicated previous year. Percentage of Net Sales Percentage Change --------------------------------- --------------------- Year Ended December 31 2001 2000 --------------------------------- to to 2001 2000 1999 2000 1999 ---- ---- ---- ---- ---- Net Sales 100.0% 100.0% 100.0% 4.3% 13.5% Cost of Goods Sold 60.7 58.0 56.8 9.2 15.9 ------ ------ ------ ------ ------- Gross Profit 39.3 42.0 43.2 (2.4) 10.2 Operating Expenses: Research and Development 6.7 5.7 5.2 22.4 22.9 Selling, General and Administrative 6.2 5.9 5.4 9.2 25.5 ------ ------ ------ ------ ------- Total Operating Expenses 12.9 11.6 10.6 15.6 24.2 ------ ------ ------ ------ ------- Operating Income 26.4 30.4 32.6 (9.2) 5.7 Other Income 4.7 4.7 4.1 3.2 32.0 ------ ------ ------ ------ ------- Income Before Provision for Income Taxes 31.1 35.1 36.7 (7.6) 8.6 Provision for Income Taxes 10.1 11.4 12.0 (7.6) 8.4 ------ ------ ------ ------ ------- Net Income 21.0% 23.7% 24.7% (7.6)% 8.8% ====== ====== ====== ====== ======= RESULTS OF OPERATIONS: 2000 TO 2001 Net Sales. Automotive net sales increased by 5% and mirror shipments increased by 6%, from 6,757,000 to 7,180,000 units, primarily reflecting increased penetration on foreign 2001 and 2002 model year vehicles for interior electrochromic NVS(R) Mirrors. North American unit shipments decreased by 2%, primarily due to the 10% decline in light vehicle industry production levels, while overseas unit shipments increased by 21% during 2001. Net sales of the Company's fire protection products decreased 3%, primarily due to the construction industry slowdown after the September 11, 2001, terrorist attacks. Cost of Goods Sold. As a percentage of net sales, cost of good sold increased from 58% to 61%, primarily reflecting automotive customer price reductions, product mix, and the temporary excess plant capacity primarily associated with the Company's third automotive mirror manufacturing facility expansion in 2000, partially offset by engineering and purchasing cost reductions. Operating Expenses. Research and development expenses increased approximately $3,784,000, and increased from 6% to 7% of net sales, primarily due to additional staffing for new electronic product development, including telematics and SmartBeam(TM). Selling, general and administrative expenses increased approximately $1,618,000, but remained unchanged at 6% of net sales, primarily reflecting the expansion of the Company's overseas sales offices to support the Company's current and future overseas sales growth. Other Income -- Net. Investment income decreased $75,000 in 2001, primarily due to significantly lower interest rates, mostly offset by higher investable balances. Other income increased $521,000 in 2001, primarily due to realized equity gains in 2001 compared to realized equity losses in 2000. Taxes. The provision for federal income taxes varied from the statutory rate in 2001 primarily due to Foreign Sales Corporation exempted taxable income from increased foreign sales, and tax-exempt interest income. Net Income. Net income decreased by 8%, primarily reflecting the reduced gross margin and increased research and development expenses in 2001. - 12 -

RESULTS OF OPERATIONS: 2000 TO 1999 Net Sales. Automotive net sales increased by 14% and mirror shipments increased by 13%, from 5,960,000 to 6,757,000 units, primarily reflecting increased penetration on foreign 2000 and 2001 model year vehicles for interior and exterior electrochromic NVS(R) Mirrors. North American unit shipments increased by 3%, while overseas unit shipments increased by 39% during 2000. Net sales of the Company's fire protection products increased 2%. Cost of Goods Sold. As a percentage of net sales, cost of goods sold increased from 57% to 58%, primarily reflecting automotive customer price reductions and the opening of a third automotive manufacturing facility in 2000, partially offset by engineering and purchasing cost reductions, improved exterior mirror element glass yields, and increased sales volume spread over fixed overhead expenses. Operating Expenses. Research and development expenses increased approximately $3,145,000, and increased from 5% to 6% of net sales, primarily due to additional staffing for new electronic and telematics product development. Selling, general and administrative expenses increased approximately $3,584,000, and increased from 5% to 6% of net sales, primarily reflecting additional staffing in Europe and Japan, including the opening of a new sales and engineering office in France, to support the Company's current and future overseas sales growth. Other Income -- Net. Investment income increased $4,899,000 in 2000, primarily due to higher investable fund balances and higher interest rates, and other income decreased $1,480,000 in 2000, primarily due to realized equity losses in 2000 compared to realized equity gains in 1999. Taxes. The provision for federal income taxes varied from the statutory rate in 2000 primarily due to Foreign Sales Corporation exempted taxable income from increased foreign sales, and tax-exempt interest income. Net Income. Net income increased by 9%, primarily reflecting the increased sales level and investment income, partially offset by reduced gross and operating margins in 2000. LIQUIDITY AND CAPITAL RESOURCES The Company's financial condition throughout the periods presented has remained very strong. The Company's current ratio increased from 9.7 in 2000, to 12.4 in 2001, primarily as a result of the increase in cash and short-term investments generated from operations and maturities of long-term investments. Despite higher sales, accounts receivable decreased due to the timing of payments by the Company's largest customer. Management considers the Company's working capital of approximately $238,873,000 and long-term investments of approximately $132,771,000 at December 31, 2001, together with internally generated cash flow and an unsecured $5,000,000 line of credit from a bank, to be sufficient to cover anticipated cash needs for the foreseeable future. INFLATION, CHANGING PRICES AND OTHER In addition to price reductions over the life of its long-term agreements, the Company continues to experience pricing pressures from its automotive customers, which have affected, and which will continue to affect, its margins to the extent that the Company is unable to offset the price reductions with productivity and yield improvements, engineering and purchasing cost reductions, and increases in sales volume. In addition, the Company continues to experience some pressure for raw material cost increases. The Company currently supplies NVS(R) Mirrors to DaimlerChrysler AG (North America) and General Motors Corporation under long-term agreements. The long-term supply agreement with DaimlerChrysler AG runs through the 2003 Model Year, and the GM contract runs through the 2004 Model Year for inside mirrors. - 13 -

North American automakers have been experiencing increased volatility and uncertainty in executing planned new programs which have, in some cases, resulted in cancellations or delays of new vehicle platforms, package reconfigurations and inaccurate volume forecasts. This increased volatility and uncertainty has made it more difficult for the Company to forecast future sales and effectively utilize capital, R & D, and human resource investments. MARKET RISK DISCLOSURE The Company is subject to market risk exposures of varying correlations and volatilities, including foreign exchange rate risk, interest rate risk and equity price risk. The Company has some assets, liabilities and operations outside the United States, which currently are not significant. Because the Company sells its automotive mirrors throughout the world, it could be significantly affected by weak economic conditions in foreign markets that could reduce demand for its products. Virtually all non-U.S. sales are invoiced and paid in U.S. dollars; during 2001, approximately 1% of the Company's net sales were invoiced and paid in European euros. The Company currently expects that approximately 5% of the Company's net sales in 2002 will be invoiced and paid in European euros. The Company does not engage in hedging activities. The Company manages interest rate risk and default risk in its fixed-income investment portfolio by investing in shorter-term maturities and investment grade issues. The Company's fixed-income investments' maturities at carrying value ($000,000), which closely approximates fair value, and average interest rates are as follows: Total Balance as of December 31, 2002 2003 2004 2005 2006/07 2001 2000 --------------------------------------------------------- ------------------------- U.S. Treasuries Amount $49.3 $22.9 - - $72.2 $81.1 Average Interest Rate 6% 6% 6% 6% Municipal Amount $9.4 $5.6 $3.7 $7.8 $0.5 $27.0 $21.1 Average Interest Rate* 3% 3% 4% 3% 4% 3% 4% Other Amount $7.2 $14.4 $2.4 $10.1 $0.3 $34.4 $27.2 Average Interest Rate 6% 6% 7% 6% 7% 6% 7% *After-tax Most of the Company's equity investments are managed by a number of outside equity fund managers who invest primarily in large capitalization companies trading on the U.S. stock markets. ITEM 7. A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. See "Market Risk Disclosure" in Management's Discussion and Analysis (Item 7). - 14 -

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The following financial statements and reports of independent auditors are filed with this report as pages 18 through 31 following the signature page: Report of Independent Auditors Consolidated Balance Sheets as of December 31, 2001 and 2000 Consolidated Statements of Income for the years ended December 31, 2001, 2000 and 1999 Consolidated Statements of Shareholders' Investment for the years ended December 31, 2001, 2000 and 1999 Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999 Notes to Consolidated Financial Statements Selected quarterly financial data for the past two years appears in the following table: Quarterly Results of Operations (in thousands except per share data) - ------------------------------------------------------------------------------------------------------------------------------ First Second Third Fourth 2001 2000 2001 2000 2001 2000 2001 2000 - ------------------------------------------------------------------------------------------------------------------------------ Net Sales $79,397 $73,877 $77,075 $76,756 $74,116 $71,934 $79,717 $74,854 Gross Profit 31,726 32,507 30,364 32,120 28,430 28,550 31,484 31,776 Operating Income 21,901 24,494 20,258 23,363 18,654 19,985 21,246 22,570 Net Income 17,253 18,550 16,196 18,360 14,928 15,854 16,839 17,780 Earnings Per Share* $ .23 $ .25 $ .21 $ .24 $ .20 $ .21 $ .22 $ .24 *Diluted ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. - 15 -

PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Information relating to executive officers is included in this report in the last section of Part I under the caption "Executive Officers of the Registrant". Information relating to directors appearing under the caption "Election of Directors" in the definitive Proxy Statement for the 2002 Annual Meeting of Shareholders and filed with the Commission is hereby incorporated herein by reference. Information concerning compliance with Section 16(a) of the Securities and Exchange Act of 1934 appearing under the caption "Section 16(A) Beneficial Ownership Reporting Compliance" in the definitive Proxy Statement for the 2002 Annual Meeting of Shareholders and filed with the Commission is hereby incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION. The information contained under the caption "Executive Compensation" contained in the definitive Proxy Statement for the 2002 Annual Meeting of Shareholders and filed with the Commission is hereby incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information contained under the captions "Securities Ownership of Management" and "Securities Ownership of Certain Beneficial Owners" contained in the definitive Proxy Statement for the 2002 Annual Meeting of Shareholders and filed with the Commission is hereby incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information contained under the caption "Transactions with Management" contained in the definitive Proxy Statement for the 2002 Annual Meeting of Shareholders and filed with the Commission is hereby incorporated herein by reference. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) 1. Financial Statements. See Item 8. 2. Financial Statements Schedules. None required or not applicable. 3. Exhibits. See Exhibit Index located on page 32. (b) No reports on Form 8-K were filed during the three-month period ended December 31, 2001. - 16 -

SIGNATURES Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: March 6, 2002 GENTEX CORPORATION -------------------- By: /s/ Fred Bauer ---------------------------------- Fred Bauer, Chairman and Principal Executive Officer and /s/ Enoch Jen ---------------------------------- Enoch Jen, Vice President-Finance and Principal Financial and Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on this 6th day of March, 2001, by the following persons on behalf of the Registrant and in the capacities indicated. Each Director of the Registrant whose signature appears below hereby appoints Enoch Jen and Kenneth La Grand, each of them individually, as his attorney-in-fact to sign in his name and on his behalf, and to file with the Commission any and all amendments to this report on Form 10-K to the same extent and with the same effect as if done personally. /s/ Fred Bauer Director - ----------------------------------------------------- Fred Bauer /s/ Mickey E. Fouts Director - ----------------------------------------------------- Mickey E. Fouts /s/ Kenneth La Grand Director - ----------------------------------------------------- Kenneth La Grand /s/ Arlyn Lanting Director - ----------------------------------------------------- Arlyn Lanting /s/ John Mulder Director - ----------------------------------------------------- John Mulder Director - ----------------------------------------------------- Fred Sotok /s/ Ted Thompson Director - ----------------------------------------------------- Ted Thompson /s/ Leo Weber Director - ----------------------------------------------------- Leo Weber - 17 -

REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Shareholders of Gentex Corporation: We have audited the accompanying consolidated balance sheets of Gentex Corporation and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, shareholders' investment and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Gentex Corporation and subsidiaries at December 31, 2001 and 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Grand Rapids, Michigan January 18, 2002 - 18 -

GENTEX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2001 AND 2000 ASSETS 2001 2000 ---- ---- CURRENT ASSETS: Cash and cash equivalents $ 139,784,721 $ 110,195,583 Short-term investments 65,859,016 28,246,967 Accounts receivable, less allowances of $375,000 and $350,000 in 2001 and 2000 31,994,939 35,614,669 Inventories 14,405,350 12,087,513 Prepaid expenses and other 7,814,468 4,411,118 ------------- ------------- Total current assets 259,858,494 190,555,850 PLANT AND EQUIPMENT: Land, buildings and improvements 45,923,054 40,400,929 Machinery and equipment 118,809,575 84,480,366 Construction-in-process 6,446,221 4,816,097 ------------- ------------- 171,178,850 129,697,392 Less-Accumulated depreciation and amortization (60,316,540) (47,777,724) ------------- ------------- 110,862,310 81,919,668 OTHER ASSETS: Long-term investments 132,771,234 153,016,195 Patents and other assets, net 3,330,760 2,636,980 ------------- ------------- 136,101,994 155,653,175 ------------- ------------- $ 506,822,798 $ 428,128,693 ============= ============= LIABILITIES AND SHAREHOLDERS' INVESTMENT 2001 2000 ---- ---- CURRENT LIABILITIES: Accounts payable $ 9,378,937 $ 9,328,155 Accrued liabilities: Salaries, wages and vacation 2,219,079 1,973,485 Income taxes 1,947,404 1,805,500 Royalties 4,165,428 3,684,822 Other 3,274,556 2,899,290 ------------- ------------- Total current liabilities 20,985,404 19,691,252 DEFERRED INCOME TAXES 6,836,865 6,333,880 SHAREHOLDERS' INVESTMENT: Preferred stock, no par value, 5,000,000 shares authorized; none issued or outstanding -- -- Common stock, par value $.06 per share; 100,000,000 shares authorized 4,510,317 4,457,465 Additional paid-in capital 105,327,971 92,132,617 Retained earnings 368,430,152 303,213,652 Deferred compensation (3,035,580) (2,532,327) Unrealized gain on investments 3,832,074 4,874,928 Cumulative translation adjustment (64,405) (42,774) ------------- ------------- Total shareholders' investment 479,000,529 402,103,561 ------------- ------------- $ 506,822,798 $ 428,128,693 ============= ============= The accompanying notes are an integral part of these consolidated financial statements. - 19 -

GENTEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 2001 2000 1999 ---- ---- ---- NET SALES $310,304,996 $297,420,802 $262,155,498 COST OF GOODS SOLD 188,301,693 172,467,846 148,820,129 ------------ ------------ ------------ Gross profit 122,003,303 124,952,956 113,335,369 OPERATING EXPENSES: Research and development 20,684,996 16,900,659 13,755,318 Selling, general and administrative 19,259,065 17,641,306 14,057,560 ------------ ------------ ------------ Total operating expenses 39,944,061 34,541,965 27,812,878 ------------ ------------ ------------ Operating income 82,059,242 90,410,991 85,522,491 OTHER INCOME: Interest and dividend income 13,283,546 13,358,636 8,459,607 Other, net 1,274,712 753,439 2,233,658 ------------ ------------ ------------ Total other income 14,558,258 14,112,075 10,693,265 ------------ ------------ ------------ Income before provision for income taxes 96,617,500 104,523,066 96,215,756 PROVISION FOR INCOME TAXES 31,401,000 33,979,000 31,352,000 ------------ ------------ ------------ NET INCOME $65,216,500 $70,544,066 $64,863,756 ============ ============ ============ EARNINGS PER SHARE: Basic $ 0.87 $ 0.95 $ 0.89 ============ ============ ============ Diluted $ 0.86 $ 0.93 $ 0.86 ============ ============ ============ The accompanying notes are an integral part of these consolidated financial statements. - 20 -

GENTEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999 Common Stock Additional ------------ Paid-In Comprehensive Shares Amount Capital Income ------ ------ ------- ------ BALANCE AS OF DECEMBER 31, 1998 72,258,917 $ 4,335,535 $ 64,876,098 Issuance of common stock and the tax benefit of stock plan transactions 1,153,399 69,204 14,794,203 -- Amortization of deferred compensation -- -- -- -- Comprehensive Income: Net income -- -- -- $ 64,863,756 Other comprehensive income: Foreign currency translation adjustment -- -- -- (26,505) Unrealized gain on investments, net of tax -- -- -- 359,069 ------------ Other comprehensive income -- -- -- 332,564 ------------ Comprehensive income -- -- -- $65,196,320 ------------ ------------ ------------ ============ BALANCE AS OF DECEMBER 31, 1999 73,412,316 4,404,739 79,670,301 Issuance of common stock and the tax benefit of stock plan transactions 878,766 52,726 12,462,316 Amortization of deferred compensation -- -- -- Comprehensive Income: Net income -- -- -- $ 70,544,066 Other comprehensive income: Foreign currency translation adjustment -- -- -- (53,566) Unrealized gain on investments, net of tax -- -- -- 2,508,291 ------------ Other comprehensive income -- -- -- 2,454,725 ------------ Comprehensive income -- -- -- $72,998,791 ------------ ------------ ------------ ============ BALANCE AS OF DECEMBER 31, 2000 74,291,082 4,457,465 92,132,617 Issuance of common stock and the tax benefit of stock plan transactions 880,869 52,852 13,195,354 Amortization of deferred compensation -- -- -- Comprehensive Income: Net income -- -- -- $ 65,216,500 Other comprehensive income: Foreign currency translation adjustment -- -- -- (21,631) Unrealized loss on investments, net of tax -- -- -- (1,042,854) ------------ Other comprehensive loss -- -- -- (1,064,485) ------------ Comprehensive income -- -- -- $64,152,015 ------------ ------------ ------------ ============ BALANCE AS OF DECEMBER 31, 2001 75,171,951 $ 4,510,317 $105,327,971 ============ ============ ============ Accumulated Other Total Retained Deferred Comprehensive Shareholders' Earnings Compensation Income Investment -------- ------------ ------ ---------- BALANCE AS OF DECEMBER 31, 1998 $ 167,805,830 $ (2,054,110) $ 2,044,865 $ 237,008,218 Issuance of common stock and the tax benefit of stock plan transactions -- (759,504) -- 14,103,903 Amortization of deferred compensation -- 742,975 -- 742,975 Comprehensive Income: Net income 64,863,756 -- -- 64,863,756 Other comprehensive income: Foreign currency translation adjustment -- -- -- -- Unrealized gain on investments, net of tax -- -- -- -- Other comprehensive income -- -- 332,564 332,564 Comprehensive income -- -- -- -- ------------- ------------- ------------- ------------- BALANCE AS OF DECEMBER 31, 1999 232,669,586 (2,070,639) 2,377,429 317,051,416 Issuance of common stock and the tax benefit of stock plan transactions -- (1,269,959) -- 11,245,083 Amortization of deferred compensation -- 808,271 -- 808,271 Comprehensive Income: Net income 70,544,066 -- -- 70,544,066 Other comprehensive income: Foreign currency translation adjustment -- -- -- -- Unrealized gain on investments, net of tax -- -- -- -- Other comprehensive income -- -- 2,454,725 2,454,725 Comprehensive income -- -- -- -- ------------- ------------- ------------- ------------- BALANCE AS OF DECEMBER 31, 2000 303,213,652 (2,532,327) 4,832,154 402,103,561 Issuance of common stock and the tax benefit of stock plan transactions -- (1,444,019) -- 11,804,187 Amortization of deferred compensation -- 940,766 -- 940,766 Comprehensive Income: Net income 65,216,500 -- -- 65,216,500 Other comprehensive income: Foreign currency translation adjustment -- -- -- -- Unrealized loss on investments, net of tax -- -- -- -- Other comprehensive loss -- -- (1,064,485) (1,064,485) Comprehensive income -- -- -- -- ------------- ------------- ------------- ------------- BALANCE AS OF DECEMBER 31, 2001 $ 368,430,152 $ (3,035,580) $ 3,767,669 $ 479,000,529 ============= ============= ============= ============= The accompanying notes are an integral part of these consolidated financial statements. - 21 -

GENTEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999 2001 2000 1999 ------------ ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $65,216,500 $70,544,066 $64,863,756 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 15,192,818 11,334,104 9,656,700 (Gain) loss on disposal of assets 152,757 5,026 (112,252) Gain on sale of investments (1,595,634) (1,443,772) (2,580,397) Loss on sale of investments 1,259,381 2,068,229 1,068,288 Deferred income taxes 1,035,648 497,162 719,999 Amortization of deferred compensation 940,766 808,271 742,975 Change in operating assets and liabilities: Accounts receivable, net 3,619,730 (4,981,168) (376,706) Inventories (2,317,837) (2,112,335) (1,248,758) Prepaid expenses and other (3,374,477) (1,202,885) (358,346) Accounts payable 50,782 1,039,828 685,394 Accrued liabilities 1,243,370 2,181,213 937,927 ------------ ------------ ----------- Net cash provided by operating activities 81,423,804 78,737,739 73,998,580 ------------ ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Activity in Held-To-Maturity Securities Sales Proceeds -- 952,230 -- Maturities and Calls 25,658,600 23,160,550 22,755,000 Purchases (28,828,709) (23,558,062) (8,753,236) Activity in Available-For-Sale Securities Sales Proceeds 9,697,480 7,023,476 9,431,697 Purchases (25,162,596) (34,284,618) (69,912,210) Plant and equipment additions (45,298,429) (21,617,088) (21,968,447) Proceeds from sale of plant and equipment 1,248,287 51,200 516,184 Increase in other assets (953,486) (742,899) (971,246) ------------ ------------ ----------- Net cash used for investing activities (63,638,853) (49,015,211) (68,902,258) ------------ ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock and the tax benefit of stock plan transactions 11,804,187 11,245,083 14,103,903 ------------ ------------ ----------- Net cash provided by financing activities 11,804,187 11,245,083 14,103,903 ------------ ------------ ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 29,589,138 40,967,611 19,200,225 CASH AND CASH EQUIVALENTS, beginning of year 110,195,583 69,227,972 50,027,747 ------------ ------------ ----------- CASH AND CASH EQUIVALENTS, end of year $139,784,721 $110,195,583 $69,227,972 ============ ============ =========== The accompanying notes are an integral part of these consolidated financial statements. - 22 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES The Company Gentex Corporation designs, develops, manufactures and markets proprietary electro-optical products: automatic rearview mirrors for the automotive industry and fire protection products for the commercial building industry. A substantial portion of the Company's net sales and accounts receivable result from transactions with domestic and foreign automotive manufacturers and tier one suppliers. The Company's fire protection products are primarily sold to domestic distributors and original equipment manufacturers of fire and security systems. Significant accounting policies of the Company not described elsewhere are as follows: Consolidation The consolidated financial statements include the accounts of Gentex Corporation and all of its wholly-owned subsidiaries (together the "Company"). All significant intercompany accounts and transactions have been eliminated. Cash Equivalents Cash equivalents consist of funds invested in money market accounts. Investments Equity securities and U.S. Treasuries are available for sale and are stated at fair value based on quoted market prices. Adjustments to the fair value of available for sale investments are recorded as increases or decreases, net of income taxes, within accumulated other comprehensive income in shareholders' investment. Fixed income securities, excluding U.S. Treasuries, are considered held to maturity and, accordingly, are carried at amortized cost. The amortized cost, unrealized gains and losses, and market value of securities held to maturity and available for sale are shown as of December 31, 2001 and 2000: 2001 Cost Gains Losses Market Value --------------------------------------------------------------------------------------------------------- U.S. Treasuries $ 69,991,935 $2,172,456 $ - $ 72,164,391 Municipal 27,008,487 227,952 (42,554) 27,193,885 Other Fixed Income 34,427,986 506,260 (7,375) 34,926,871 Equity 61,306,343 5,345,938 (1,622,895) 65,029,386 ------------ ---------- ----------- ------------ $192,734,751 $8,252,606 $(1,672,824) $199,314,533 ============ ========== ============ ============ 2000 U.S. Treasuries $ 80,010,620 $1,109,708 $ (5,062) $ 81,115,266 Municipal 21,070,646 51,298 (29,381) 21,092,563 Other Fixed Income 27,095,719 175,666 (39,377) 27,232,008 Equity 45,586,289 7,130,465 (735,222) 51,981,532 ------------ ---------- ----------- ------------ $173,763,274 $8,467,137 $ (809,042) $181,421,369 ============ ========== =========== ============ Fixed income securities as of December 31, 2001, have contractual maturities as follows: Held to Maturity U.S. Treasuries ---------------- --------------- Due within one year $16,546,500 $48,239,263 Due between one and five years 44,598,954 21,752,672 Due over five years 291,019 - ----------- ----------- $61,436,473 $69,991,935 =========== =========== During 2000, the Company sold approximately $947,000 of securities classified as held to maturity for $952,000. The decision to sell these securities was based on deterioration in the credit worthiness of the issuer. - 23 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued Inventories Inventories include material, direct labor and manufacturing overhead and are valued at the lower of first-in, first-out (FIFO) cost or market. Inventories consisted of the following as of December 31, 2001 and 2000: 2001 2000 ---- ---- Raw materials $ 8,376,321 $ 7,362,544 Work-in-process 1,649,389 1,488,326 Finished goods 4,379,640 3,236,643 ----------- ----------- $14,405,350 $12,087,513 =========== =========== Plant and Equipment Plant and equipment are stated at cost. Depreciation and amortization are computed for financial reporting purposes using the straight-line method, with estimated useful lives of 7 to 40 years for buildings and improvements, and 3 to 10 years for machinery and equipment. Patents The Company's policy is to capitalize costs incurred to obtain patents. The cost of patents is amortized over their useful lives. The cost of patents in process is not amortized until issuance. Accumulated amortization was approximately $2,333,000 and $2,095,000 at December 31, 2001 and 2000, respectively. In 2000, fully amortized patents with an original cost of approximately $3,200,000 were written off. Patent amortization expense was approximately $238,000, $355,000 and $71,000 in 2001, 2000, and 1999, respectively. Revenue Recognition The Company's revenue is generated primarily from sales of its products. Sales are recognized when the product is shipped and legal title has passed to the customer. Advertising and Promotional Materials All advertising and promotional costs are expensed as incurred and amounted to approximately $653,000, $932,000, and $808,000, in 2001, 2000, and 1999, respectively. Repairs and Maintenance Major renewals and improvements of property and equipment are capitalized, and repairs and maintenance are expensed as incurred. The Company incurred expenses relating to the repair and maintenance of plant and equipment of approximately $3,780,000, $3,182,000, and $2,535,000, in 2001, 2000, and 1999, respectively. Self-Insurance The Company is self-insured for a portion of its risk on workers' compensation and employee medical costs. The arrangements provide for stop loss insurance to manage the Company's risk. Operations are charged with the cost of claims reported and an estimate of claims incurred but not reported. - 24 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued Earnings Per Share The following table reconciles the numerators and denominators used in the calculations of basic and diluted earnings per share (EPS) for each of the last three years: 2001 2000 1999 ---- ---- ---- Numerators: Numerator for both basic and diluted EPS, net income $65,216,500 $70,544,066 $64,863,756 Denominators: Denominator for basic EPS, weighted-average common shares outstanding 74,778,518 73,941,256 72,999,601 Potentially dilutive shares resulting from stock option plans 1,093,268 1,576,877 1,996,713 ----------- ----------- ----------- Denominator for diluted EPS 75,871,786 75,518,133 74,996,314 =========== =========== =========== For the years ended December 31, 2001, 2000, and 1999, 490,508, 373,865, and 101,897 shares related to stock option plans were not included in diluted average common shares outstanding because their effect would be antidilutive. Other Comprehensive Income Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income" establishes standards for reporting and display of comprehensive income and its components. Comprehensive income reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For Gentex, comprehensive income represents net income adjusted for unrealized gains and losses on certain investments and foreign currency translation adjustments. The changes in the components of other comprehensive income (loss) are as follows: Years Ended December 31, -------------------------------------------------------------------------------------------- 2001 2000 1999 --------------------------- -------------------------- ---------------------- Pre-Tax Tax Exp. Pre-Tax Tax Exp. Pre-Tax Tax Exp. Amount (Credit) Amount (Credit) Amount (Credit) ------ --------- ------ -------- ------ ------- Unrealized Gain (Loss) on Securities $(1,604,391) $(561,537) $3,858,909 $1,350,618 $552,415 $193,346 Foreign Currency Translation Adjustments (33,278) (11,647) (82,409) (28,843) (40,777) (14,272) ----------- ---------- ---------- ---------- -------- -------- Other Comprehensive Income (Loss) $(1,637,669) $(573,184) $3,776,500 $1,321,775 $511,638 $179,074 =========== ========= ========== ========== ======== ======== Foreign Currency Translation The financial position and results of operations of the Company's foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities are translated at the exchange rate in effect at year-end. Income statement accounts are translated at the average rate of exchange in effect during the year. The resulting translation adjustment is recorded as a separate component of shareholders' investment. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. - 25 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (1) SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES, continued New Accounting Standards In June 1998 and June 2000, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," and SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities -- an amendment of SFAS No. 133", respectively, which establish accounting and reporting standards for all derivative instruments and hedging activities. These statements require an entity to recognize all derivatives as either assets or liabilities in the balance sheet and measure those investments at fair value. Adoption of these pronouncements on January 1, 2001, had no effect on the Company's consolidated results of operations or financial position, because the Company does not hold derivative instruments or engage in hedging activities. (2) LINE OF CREDIT The Company has available an unsecured $5,000,000 line of credit from a bank at an interest rate equal to the lower of the bank's prime rate or 1.5% above the LIBOR rate. No borrowings were outstanding under this line in 2001 or 2000. No compensating balances are required under this line. (3) INCOME TAXES The provision for income taxes is based on the earnings reported in the accompanying consolidated financial statements. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the cumulative temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income tax expense is measured by the net change in deferred income tax assets and liabilities during the year. The components of the provision for income taxes are as follows: 2001 2000 1999 ------------ ------------ ----------- Currently payable: Federal $30,084,000 $33,417,000 $30,173,000 State 104,000 65,000 459,000 Foreign 177,000 -- -- ----------- ----------- ----------- Total 30,365,000 33,482,000 30,632,000 ----------- ----------- ----------- Net deferred: Federal 1,036,000 497,000 720,000 ----------- ----------- ----------- Provision for income taxes $31,401,000 $33,979,000 $31,352,000 =========== =========== =========== The currently payable provision is further reduced by the tax benefits associated with the exercise, vesting or disposition of stock under the stock plans described in Note 6. These reductions totaled approximately $3,929,000, $4,878,000, and $6,415,000, in 2001, 2000, and 1999, respectively. The effective income tax rates are different from the statutory federal income tax rates for the following reasons: 2001 2000 1999 ---- ---- ---- Statutory federal income tax rate 35.0% 35.0% 35.0% State income taxes, net of federal income tax benefit 0.1 0.1 0.2 Foreign Sales Corporation exempted income (2.2) (2.0) (1.5) Tax-exempt investment income (0.3) (0.4) (0.6) Other (0.1) (0.2) (0.5) ---- ---- ---- Effective income tax rate 32.5% 32.5% 32.6% ==== ==== ==== - 26 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (3) INCOME TAXES, continued The tax effect of temporary differences which give rise to deferred tax assets and liabilities at December 31, 2001 and 2000, are as follows: 2001 2000 --------------------------------- ---------------------------------- Current Non-Current Current Non-Current ------- ----------- ------- ----------- Assets: Accruals not currently deductible $ 1,073,408 $ 274,803 $ 969,589 $ 262,203 Deferred compensation -- 817,110 -- 635,326 Other 1,098,961 7,920 1,109,233 11,880 ----------- ----------- ----------- ----------- Total deferred tax assets 2,172,369 1,099,833 2,078,822 909,409 Liabilities: Excess tax over book depreciation -- (5,418,282) -- (4,257,983) Patent costs -- (454,992) -- (360,345) Unrealized gain/loss on investments -- (2,063,424) -- (2,624,961) Other (257,916) -- (193,242) -- ----------- ----------- ----------- ----------- Net deferred taxes $ 1,914,453 $(6,836,865) $ 1,885,580 $(6,333,880) =========== =========== =========== =========== Income taxes paid in cash were approximately $26,546,000, $28,302,000, and $26,530,000, in 2001, 2000, and 1999, respectively. (4) EMPLOYEE BENEFIT PLAN The Company has a 401(k) retirement savings plan in which substantially all of its employees may participate. The plan includes a provision for the Company to match a percentage of the employee's contributions at a rate determined by the Company's Board of Directors. In 2001, 2000, and 1999, the Company's contributions were approximately $718,000, $620,000, and $526,000, respectively. The Company does not provide health care benefits to retired employees. (5) SHAREHOLDER PROTECTION RIGHTS PLAN In March 2001, the Company's Board of Directors adopted an Amended and Restated Shareholder Protection Rights Plan (the Plan). The Plan is designed to protect shareholders against unsolicited attempts to acquire control of the Company in a manner that does not offer a fair price to all shareholders. Under the Plan, one purchase Right automatically trades with each share of the Company's common stock. Each Right entitles a shareholder to purchase 1/100 of a share of junior participating preferred stock at a price of $110, if any person or group attempts certain hostile takeover tactics toward the Company. Under certain hostile takeover circumstances, each Right may entitle the holder to purchase the Company's common stock at one-half its market value or to purchase the securities of any acquiring entity at one-half their market value. Rights are subject to redemption by the Company at $.005 per Right and, unless earlier redeemed, will expire on March 29, 2011. Rights beneficially owned by holders of 15 percent or more of the Company's common stock, or their transferees, automatically become void. - 27 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (6) STOCK-BASED COMPENSATION PLANS The Company has two stock option plans, including an employee stock option plan ("Employee Plan") and a non-employee directors stock option plan ("Director Plan"), and an employee stock purchase plan. The Company accounts for these plans in accordance with APB Opinion No. 25, as amended by FIN 44, "Accounting for Certain Transactions Involving Stock Compensation," under which no compensation cost has been recognized. Had compensation cost for these plans been determined consistent with FASB Statement No. 123, the Company's net income and earnings per share would have been reduced to the following pro-forma amounts: 2001 2000 1999 ---- ---- ---- Net Income: As Reported $ 65,216,500 $70,544,066 $64,863,756 Pro Forma 58,212,674 64,500,375 60,394,893 EPS (diluted): As Reported $ 0.86 $ 0.93 $ 0.86 Pro Forma 0.77 0.85 0.81 Because the Statement 123 method of accounting has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation cost may not be representative of that to be expected in future years. The Company may sell up to 1,600,000 shares of stock to its employees under the Employee Stock Purchase Plan. The Company has sold to employees 45,463 shares, 47,023 shares, and 50,550 shares in 2001, 2000, and 1999, respectively, and has sold a total of 517,178 shares through December 31, 2001. The Company sells shares at 85% of the stock's market price at date of purchase. The weighted average fair value of shares sold in 2001 was approximately $20.75. The Company may grant options for up to 9,000,000 shares under the Employee Plan. The Company has granted options on 6,487,710 shares through December 31, 2001. Under the Plan, the option exercise price equals the stock's market price on date of grant. The options vest after one to five years, and expire after five to seven years. A summary of the status of the Company's employee stock option plan at December 31, 2001, 2000, and 1999, and changes during the years then ended is presented in the table and narrative below: 2001 2000 1999 ------------------- ------------------- ------------------- Shares Wtd. Avg. Shares Wtd. Avg. Shares Wtd. Avg. (000) Ex. Price (000) Ex. Price (000) Ex. Price ----- --------- ----- --------- ----- --------- Outstanding at Beginning of Year 3,901 $ 18 3,807 $ 13 4,145 $ 10 Granted 1,017 26 887 27 774 25 Exercised (754) 9 (753) 7 (1,055) 6 Forfeited (20) 24 (40) 20 (57) 13 Expired -- -- -- -- -- -- ------ ------ ------ ------ ------ ------ Outstanding at End of Year 4,144 21 3,901 18 3,807 13 ------ ------ ------ ------ ------ ------ Exercisable at End of Year 1,792 16 1,736 12 1,660 9 Weighted Avg. Fair Value of Options Granted $13 $13 $12 Options Outstanding and Exercisable by Price Range As of December 31, 2001 Options Exercisable Options Outstanding -------------------------------- -------------------------------------------------------------------------------- Shares Weighted Average Range of Shares Outstanding Remaining Weighted Average Exercisable Exercise Exercise Prices (000) Contractual Life Exercise Price (000) Price --------------- ----------- ---------------- -------------- ----------- ----- $ 1 - $10 291 1 $ 8 286 $ 8 $ 11 - $20 1,443 2 15 1,023 14 $ 21 - $37 2,410 4 26 483 26 -------- ---- ------ ------ ---- Total 4,144 3 $21 1,792 $16 - 28 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (5) STOCK-BASED COMPENSATION PLANS, continued The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in 2001, 2000, and 1999, respectively: risk-free interest rates of 4.4, 4.8, and 5.9 percent; expected dividend yields of 0.0, 0.0 and 0.0 percent; expected lives of 5, 5 and 5 years; expected volatility of 54, 54, and 52 percent. The Company may grant options for up to 2,000,000 shares under the Director Plan. The Company has granted options on 1,124,590 shares through December 31, 2001. Under the plan the option exercise price equals the stock's market price on date of grant. The Director Plan options vest after six months, and all expire after ten years. A summary of the status of the Director Plan at December 31, 2001, 2000, and 1999, and changes during the years then ended is presented in the table and narrative below: 2001 2000 1999 -------------------- -------------------- -------------------- Shares Wtd. Avg. Shares Wtd. Avg. Shares Wtd. Avg. (000) Ex. Price (000) Ex. Price (000) Ex. Price ----- --------- ----- ---------- ----- --------- Outstanding at Beginning of Year 476 $ 9 500 $ 7 512 $ 6 Granted 25 27 24 30 20 29 Exercised (32) 1 (32) 1 (16) 1 Expired -- -- (16) 1 (16) 1 ---- ---- ---- ---- ---- ---- Outstanding at End of Year 469 10 476 9 500 7 ---- ---- ---- ---- ---- ---- Exercisable at End of Year 469 10 472 9 500 7 Weighted Avg. Fair Value of Options Granted $20 $21 $19 Options Outstanding and Exercisable by Price Range As Of December 31, 2001 Options Exercisable Options Outstanding --------------------------------- -------------------------------------------------------------------------------- Shares Weighted Average Range of Shares Outstanding Remaining Weighted Average Exercisable Exercise Exercise Prices (000) Contractual Life Exercise Price (000) Price --------------- ----------- ---------------- -------------- ----------- ----- $1 - $10 360 3 $ 6 360 $ 6 $11 - $31 109 8 25 109 25 ------ ------ ------ ------ ------- 469 4 $ 10 469 $ 10 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in 2001, 2000, and 1999, respectively: risk-free interest rates of 5.1, 5.0, and 5.6 percent; expected dividend yields of 0.0, 0.0 and 0.0 percent; expected lives of 9, 9, and 9 years; expected volatility of 54, 54, and 52 percent. In 2001, a restricted stock plan covering 1,600,000 shares expired, and a new restricted stock plan covering 500,000 shares of common stock was approved. The purpose of the plans is to permit grants of shares, subject to restrictions, to key employees of the Company as a means of retaining and rewarding them for long-term performance and to increase their ownership in the Company. Shares awarded under the plans entitle the shareholder to all rights of common stock ownership except that the shares may not be sold, transferred, pledged, exchanged or otherwise disposed of during the restriction period. The restriction period is determined by a committee, appointed by the Board of Directors, but may not exceed ten years. During 2001, 2000, and 1999, 57,800, 47,800, and 31,600 shares, respectively, were granted with restriction periods of four to six years at market prices ranging from $23.59 to $26.97 in 2001, $18.75 to $37.625 in 2000, and $20.72 to $33.063 in 1999. The related expense is reflected as a deferred compensation component of shareholders' investment in the accompanying consolidated financial statements and is being amortized over the applicable restriction periods. - 29 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (6) CONTINGENCIES From time to time, the Company is subject to legal proceedings and claims which arise in the ordinary course of its business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the financial position or future results of operations of the Company. (7) SEGMENT REPORTING SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information" requires that a public enterprise report financial and descriptive information about its reportable operating segments subject to certain aggregation criteria and quantitative thresholds. Operating segments are defined by SFAS No. 131 as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-makers in deciding how to allocate resources and in assessing performance. 2001 2000 1999 ------------ ------------ ----------- Revenue: Automotive Products U.S $153,685,309 $154,972,098 $151,222,877 Germany 63,245,473 60,754,241 47,870,761 Other 72,493,418 60,127,795 41,979,787 Fire Protection Products 20,880,796 21,566,668 21,082,073 ------------ ------------ ------------ Total $310,304,996 $297,420,802 $262,155,498 ============ ============ ============ Operating Income: Automotive Products $ 78,041,939 $ 86,218,950 $ 81,757,998 Fire Protection Products 4,017,303 4,192,041 3,764,493 ------------ ------------ ------------ Total $ 82,059,242 $ 90,410,991 $ 85,522,491 ============ ============ ============ Assets: Automotive Products $144,204,490 $119,720,400 $101,257,610 Fire Protection Products 3,779,501 4,396,643 4,353,082 Other 358,838,807 304,011,650 232,062,078 ------------ ------------ ------------ Total $506,822,798 $428,128,693 $337,672,770 ============ ============ ============ Depreciation & Amortization: Automotive Products $ 13,699,709 $ 10,349,325 $ 8,645,455 Fire Protection Products 294,956 315,018 323,477 Other 1,198,153 669,761 687,768 ------------ ------------ ------------ Total $ 15,192,818 $ 11,334,104 $ 9,656,700 ============ ============ ============ Capital Expenditures: Automotive Products $ 39,383,150 $ 21,084,629 $ 19,279,715 Fire Protection Products 280,251 192,222 322,962 Other 5,635,028 340,237 2,365,770 ------------ ------------ ------------ Total $ 45,298,429 $ 21,617,088 $ 21,968,447 ============ ============ ============ Other assets are principally cash, investments, deferred income taxes, and corporate fixed assets. Automotive Products revenues in the "Other" category are sales to U.S. automotive manufacturing plants in Canada, Mexico and other foreign automotive customers, primarily located in Japan. Virtually all non-U.S. sales are invoiced and paid in U.S. dollars; during 2001, approximately 1% of the Company's net sales were invoiced and paid in European euros. - 30 -

GENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (8) SEGMENT REPORTING, continued During the years presented, the Company had three automotive customers, which individually accounted for 10% or more of net sales as follows: Customer ----------------------------------------- #1 #2 #3 -- -- -- 2001 38% 18% * 2000 40% 20% * 1999 44% 22% 11% *Less than 10% - 31 -

EXHIBIT INDEX EXHIBIT NO. DESCRIPTION PAGE 3(a)(1) Registrant's Articles of Incorporation were filed in 1981 as Exhibit 2(a) to a Registration Statement on Form S-18 (Registration No. 2-74226C), an Amendment to those Articles was filed as Exhibit 3 to Registrant's Report on Form 10-Q in August of 1985, an additional Amendment to those Articles was filed as Exhibit 3(a)(1) to Registrant's Report on Form 10-Q in August of 1987, and an additional Amendment to those Articles was filed as Exhibit 3(a)(2) to Registrant's Report on Form 10-K dated March 10, 1992, and an additional Amendment to those Articles was filed as Exhibit 3(a)(2) to Registrant's Report on Form 10-Q dated July 31, 1996, all of which are hereby incorporated herein by reference. 3(a)(2) Amendment to Articles of Incorporation, adopted on May 21, 1998, was filed as Exhibit 3(a)(2) to Registrant's Report on Form 10-Q dated July 30, 1998, and the same is hereby incorporated herein by reference. 3(b)(1) Registrant's Bylaws as amended and restated August 18, 2000, were filed as Exhibit 3(b)(1) to Registrant's Report on Form 10-Q dated October 27, 2000, and the same is hereby incorporated herein by reference. 4(a) A specimen form of certificate for the Registrant's common stock, par value $.06 per share, was filed as part of a Registration Statement (Registration Number 2-74226C) as Exhibit 3(a), as amended by Amendment No. 3 to such Registration Statement, and the same is hereby incorporated herein by reference. 4(b) Amended and Restated Shareholder Protection Rights Agreement, dated as of March 29, 2001, including as Exhibit A the form of Certificate of Adoption of Resolution Establishing Series of Shares of Junior Participating Preferred Stock of the Company, and as Exhibit B the form of Rights Certificate and of Election to Exercise, was filed as Exhibit 4(b) to Registrant's Report on Form 10-Q on April 27, 2001, and the same is hereby incorporated herein by reference. 10(a)(1) A Lease, dated August 15, 1981, was filed as part of a Registration Statement (Registration Number 2-74226C) as Exhibit 9(a)(1), and the same is hereby incorporated herein by reference. 10(a)(2) A First Amendment to Lease, dated June 28, 1985, was filed as Exhibit 10(m) to Registrant's Report on Form 10-K dated March 18, 1986, and the same is hereby incorporated herein by reference. *10(b)(1) Gentex Corporation Qualified Stock Option Plan (as amended and restated, effective August 25, 1997) was filed as Exhibit 10(b)(1) to Registrant's Report on Form 10-Q dated July 30, 1998, and the same is hereby incorporated herein by reference. *10(b)(2) Gentex Corporation Second Restricted Stock Plan was filed as Exhibit 10(b)(2) to Registrant's Report on Form 10-Q dated April 27, 2001, and the same is hereby incorporated herein by reference. *10(b)(3) Gentex Corporation Non-Employee Director Stock Option Plan (as amended and restated, effective March 7, 1997) was filed as Exhibit 10(b)(4) to Registrant's Report on Form 10-K dated March 7, 1997, and the same is hereby incorporated herein by reference. 10(e) The form of Indemnity Agreement between Registrant and each of the Registrant's directors was filed as a part of a Registration Statement on Form S-2 (Registration No. 33-30353) as Exhibit 10(k) and the same is hereby incorporated herein by reference. 21 List of Company Subsidiaries 33 23(a) Consent of Independent Auditors 34 *Indicates a compensatory plan or arrangement. - 32 -

LIST OF GENTEX CORPORATION SUBSIDIARIES 1. E.C. Aviation Services, Inc., a Michigan corporation, is a wholly-owned subsidiary of Gentex Corporation. 2. Gentex International Corporation, a Foreign Sales Corporation incorporated in Barbados, is a wholly-owned subsidiary of Gentex Corporation. 3. Gentex Holdings, Inc., a Michigan corporation, is a wholly-owned subsidiary of Gentex Corporation. 4. Gentex GmbH, a German limited liability company, is a subsidiary 50% owned by Gentex Corporation and 50% owned by Gentex Holdings, Inc. 5. Gentex Japan, Inc., a Japanese corporation, is a wholly-owned subsidiary of Gentex Corporation. 6. Gentex Mirrors Ltd., a United Kingdom limited liability company, is a wholly-owned subsidiary of Gentex Corporation. 7. Gentex France, SAS, a French simplified liability corporation, is a wholly-owned subsidiary of Gentex Corporation. Exhibit 21 - 33 -

CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 33-31408, 33-50396, 33-64504 and 33-65321) pertaining to various stock option and incentive plans of Gentex Corporation of our report dated January 18, 2002, with respect to the consolidated financial statements of Gentex Corporation and subsidiaries included in the Annual Report on Form 10-K for the year ended December 31, 2001. /s/ Ernst & Young LLP Grand Rapids, Michigan March 7, 2002 Exhibit 23(a) - 34 -