1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
GENTEX
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
GENTEX
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
2
GENTEX CORPORATION LOGO
600 N. CENTENNIAL STREET
ZEELAND, MICHIGAN 49464
NOTICE OF 1996 ANNUAL MEETING
- --------------------------------------------------------------------------------
The Annual Meeting of the Shareholders of Gentex Corporation, a Michigan
corporation, will be held at the Amway Grand Plaza Hotel, Pearl at Monroe, Grand
Rapids, Michigan, on Thursday, May 9, 1996, at 4:30 p.m. E.S.T., for the
following purposes:
1. To elect three directors as set forth in the Proxy Statement.
2. To act upon a proposal to amend the Articles of Incorporation to
increase the authorized shares of common stock.
3. To transact any other business that may properly come before the
meeting.
Shareholders of record as of the close of business on March 22, 1996, are
entitled to notice of, and to vote at the meeting. You are requested to sign,
date, and return the accompanying Proxy in the enclosed, self-addressed
envelope, regardless of whether you expect to attend the meeting in person. You
may withdraw your Proxy at the meeting if you are present and desire to vote
your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
Connie Hamblin
Secretary
March 29, 1996
3
GENTEX CORPORATION LOGO
600 N. CENTENNIAL STREET
ZEELAND, MICHIGAN 49464
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD MAY 9, 1996
SOLICITATION OF PROXIES
This Proxy Statement is being furnished on or about March 29, 1996, to the
shareholders of Gentex Corporation in connection with the solicitation by the
Board of Directors of the Corporation of Proxies to be used at the Annual
Meeting of Shareholders to be held on Thursday, May 9, 1996, at 4:30 p.m. E.S.T.
at the Amway Grand Plaza Hotel, Pearl at Monroe, Grand Rapids, Michigan.
If the form of Proxy accompanying this Proxy Statement is properly executed
and returned to the Company, the shares represented by the Proxy will be voted
at the Annual Meeting of Shareholders in accordance with the directions given in
the Proxy, unless the Proxy is revoked. Any shareholder executing and returning
the form of Proxy which accompanies this Proxy Statement may revoke the Proxy,
at any time before it has been exercised, by delivering a written notice of
revocation to the Secretary of the Company, executing a subsequent proxy or
attending the meeting and voting in person.
The cost of the solicitation of Proxies will be borne by the Company. In
addition to the use of the mails, Proxies may be solicited personally or by
telephone or facsimile by a few regular employees of the Company without
additional compensation. The Company does not intend to pay any compensation for
the solicitation of Proxies, except that brokers, nominees, custodians, and
other fiduciaries will be reimbursed by the Company for their expenses in
connection with sending proxy materials to beneficial owners and obtaining their
Proxies.
VOTING SECURITIES AND RECORD DATE
March 22, 1996, has been fixed by the Board of Directors as the record date
for determining shareholders entitled to vote at the Annual Meeting. On that
date, 17,068,947 shares of the Company's common stock, par value $.06 per share,
were issued and outstanding. Shareholders are entitled to one vote for each
share of the Company's common stock registered in their names at the close of
business on the record date.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation specify that the Board of Directors
shall consist of at least six but not more than nine members, with the exact
number to be determined by the Board. The Board has fixed the number of
directors at eight. The Articles of Incorporation also specify that the Board of
Directors be divided into three classes as nearly equal in number as possible,
with the classes to hold office for staggered terms of three years each. Arlyn
Lanting, Kenneth La Grand, and Ted Thompson, incumbent directors previously
elected by shareholders, are nominees for re-election to a three-year term
expiring in 1999.
Unless otherwise directed by a shareholder's marking on the Proxy card, the
persons named as proxy voters in the accompanying Proxy will vote for the
nominees described below. In the event any of these nominees is no longer a
candidate at the time of the Annual Meeting of Shareholders (a situation which
is not now anticipated), the Board of Directors may designate a substitute
nominee, in which case the accompanying Proxy will be voted for the substituted
nominee.
Under Michigan law, directors are elected by a plurality of the votes cast
by shareholders. Therefore, the three nominees who receive the largest number of
affirmative votes will be elected, irrespective of the number of votes received.
Broker nonvotes, votes withheld, and votes cast against any nominee will not
have a bearing
1
4
on the outcome of the election. Votes will be counted by Inspectors of Election
appointed by the presiding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR the election of all the
persons nominated by the Board.
The content of the following table relating to business experience is based
upon information furnished to the Company by the nominees and directors.
NAME, (AGE) BUSINESS EXPERIENCE
AND POSITION PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------
NOMINEES FOR TERMS TO EXPIRE IN 1999
Arlyn Lanting (55)...................... Mr. Lanting is the Vice President -- Finance of
Director since 1981 Aspen Enterprises, Ltd., Grand Rapids, MI
(syndication and operation of mobile home parks),
and he has held that position for more than five
years.
Kenneth La Grand (55)................... Mr. La Grand is the Executive Vice President of
Director since 1987 Gentex Corporation, and he has held that position
for more than five years.
Ted Thompson (66)....................... Mr. Thompson is the Chairman and Chief Executive
Director since 1987 Officer of X-Rite, Incorporated, Grandville, MI (a
manufacturer of light and color measuring
instruments), and he has held that position for
more than five years. Mr. Thompson is also a
director of X-Rite, Incorporated.
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Mickey E. Fouts (64).................... Mr. Fouts has been Chairman of the Board and
Director since 1982 interim C.E.O. of American Consolidated Growth
Capital (temporary services), Denver, CO, since
January of 1996, and Chairman of the Board, Equity
Services Company (investment services), Denver, CO,
for more than five years. In addition, he was the
Director of Corporate Finance, Tamaron Capital
Markets (investment banking), Denver, CO from
November 1993 to May 1994. Mr. Fouts is also a
director of American Consolidated Growth Capital.
John Mulder (59)........................ Mr. Mulder is the Vice President -- Automotive
Director since 1992 Marketing of Gentex Corporation, and he has held
that position for more than five years.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Fred Bauer (53)......................... Mr. Bauer is the Chairman and Chief Executive
Director since 1981 Officer of Gentex Corporation, and he has held that
position for more than five years.
Leo L. Weber (66)....................... Since 1990, Mr. Weber has been engaged in the
Director since 1991 consulting business as L. L. Weber & Associates,
West Bloomfield, MI. Previously, he was the
President of Robert Bosch Corporation, Farmington
Hills, MI (manufacturer of sophisticated automotive
components).
Dr. Harlan J. Byker (41)................ Dr. Byker has been the Vice President --
Director since 1993 Electrochemical Research of Gentex Corporation
since August of 1993. Prior to that time, he was
the Company's Director of Electrochemical
Development for more than five years.
- ----------------------------------------------------------------------------------------------
2
5
Arlyn Lanting and Kenneth La Grand are brothers-in-law. There are no other
family relationships between the nominees, directors, and executive officers of
the Company.
The Company has an Audit Committee comprised of Messrs. Thompson and
Lanting. The Audit Committee recommends to the Board of Directors the selection
of independent public accountants and reviews the scope of their audit, their
audit report, and any recommendations made by them. This Committee met on two
occasions during the fiscal year ended December 31, 1995.
The Company has a Compensation Committee comprised of Messrs. Bauer,
Lanting, and Thompson. The Compensation Committee is responsible for
administering the Company's stock-based incentive plans and supervising other
compensation arrangements for executive officers of the Company. The
Compensation Committee met four times during the fiscal year ended December 31,
1995.
In addition, the Company has an Executive Committee comprised of Messrs.
Bauer, Lanting, and La Grand which is authorized to act on behalf of the Board
between full Board meetings, to the extent permitted by law. This Committee did
not meet during the fiscal year ended December 31, 1995.
The Company does not have a standing nominating committee.
During 1995, the Board of Directors met on four occasions. All directors
attended at least 75 percent of the aggregate number of meetings of the Board
and Board committees on which they served.
PROPOSAL TO APPROVE INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
Article III of the Company's Articles of Incorporation currently provides
for authorized capital stock of 30,000,000 shares, consisting of 25,000,000
shares of common stock, par value $.06 per share, and 5,000,000 shares of
preferred stock, no par value. No preferred stock is presently outstanding.
There are 17,068,947 shares of common stock presently outstanding, and 6,154,000
shares have been reserved for issuance under the Company's various incentive
stock option and purchase plans.
At a meeting held on March 8, 1996, the Board of Directors unanimously
resolved to amend Article III of the Articles of Incorporation to increase the
authorized shares of common stock from 25,000,000 to 50,000,000, and recommend
the amendment for approval by the Company's shareholders. The Board believes
that the authorization of an additional 25,000,000 shares of common stock will
provide increased flexibility for future growth and provide the opportunity for
enhanced marketability of the Company's common stock, although the Board has no
present intention of issuing those shares for any particular purpose at the
present time.
From time to time, the Company has considered potential acquisitions and
management expects to continue to consider acquisition opportunities in the
future. The Company's common stock could be used as a means for accomplishing an
acquisition. The increase in authorized common stock would also enhance the
ability of the Board of Directors to consider the possibility of declaring a
stock dividend to existing shareholders and/or provide for the reservation of
additional shares for potential issuance under the Company's various stock plans
as a means of retaining key personnel and attracting new personnel. It is also
possible that the additional shares of common stock could be utilized by the
Company as a part of a defensive strategy to counter any hostile takeover
attempts. Shares of the Company's common stock do not carry preemptive rights to
purchase additional shares of the Company's stock.
The Board recommends that Article III of the Company's Articles of
Incorporation be amended to read as stated on Appendix A to this Proxy
Statement. The only change in the Articles is the increase in the number of
shares of common stock from 25,000,000 to 50,000,000.
The affirmative vote of a majority of the outstanding shares of common
stock, in person or by proxy, on the proposed amendment to Article III is
required for approval. Since an absolute majority of outstanding shares is
required, any ballot or proxy marked "abstain" will have the same effect as a
negative vote. Votes will be counted by Inspectors of Election appointed by the
presiding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR adoption of the proposed
increase in authorized common stock.
3
6
SECURITIES OWNERSHIP OF MANAGEMENT
The following table contains information with respect to ownership of the
Company's common stock by all directors, nominees for election as directors,
executive officers named in the tables under the caption Executive Compensation,
and all executive officers and directors as a group. The content of this table
is based upon information supplied by the Company's officers, directors, and
nominees for election as directors, and represents the Company's understanding
of circumstances in existence as of March 1, 1996.
AMOUNT AND NATURE OF OWNERSHIP
------------------------------------
NAME OF SHARES BENEFICIALLY EXERCISABLE PERCENT
BENEFICIAL OWNER OWNED (1) OPTIONS (2) OF CLASS
- -----------------------------------------------------------------------------------------------
Fred Bauer................................ 1,201,116(3) 3,000 7.1
Dr. Harlan J. Byker....................... 98,899 2,000 *
Mickey E. Fouts........................... 20,000 20,000 *
Enoch Jen................................. 35,300 18,200 *
Arlyn Lanting............................. 138,000(4) 38,000 *
Kenneth La Grand.......................... 167,400 60,400 *
John Mulder............................... 53,700 15,700 *
Ted Thompson.............................. 53,000 52,000 *
Leo L. Weber.............................. 12,000 10,000 *
All directors and executive officers as a
group
(9 persons)............................. 1,779,415 219,300 10.5%
- -----------------------------------------------------------------------------------------------
* Less than one percent.
(1) Except as otherwise indicated by footnote, each named person claims sole
voting and investment power with respect to the shares indicated.
(2) This column reflects shares subject to options exercisable within 60 days,
and these shares are included in the column captioned "Shares Beneficially
Owned."
(3) Includes 8,000 shares held by Mr. Bauer's minor child living with him.
(4) Includes 100,000 shares owned of record by Aspen Enterprises, Ltd., of which
Mr. Lanting is a director, officer, and substantial shareholder, and Mr.
Lanting disclaims beneficial ownership of those shares.
4
7
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table contains information with respect to ownership of the
Company's common stock by persons or entities who are beneficial owners of more
than five percent of the Company's voting securities. The information contained
in this table is based on information contained in Schedules 13D and 13G
furnished to the Company.
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------------------------------------------------------------------
Dan Bauer 983,244(1) 5.8
2361 Sunset Bluff Drive
Holland, MI 49424
State Treasurer 1,006,800(2) 5.9
State of Michigan
P.O. Box 15128
Lansing, MI 48901
FMR Corp. 1,135,900(3) 6.7
82 Devonshire Street
Boston, MA 02109
Denver Investment Advisors LLC 1,024,000 6.1
1225 17th Street
Denver, CO 80202
- --------------------------------------------------------------------------------
(1) Mr. Bauer is a record owner of 559,244 shares as trustee of a trust
established by him. In addition, 424,000 shares are held of record by Mr.
Bauer's spouse as trustee of her own trust and as custodian for their minor
children, and Mr. Bauer disclaims beneficial ownership of those shares.
(2) The State Treasurer acts as the investment fiduciary for retirement systems
sponsored by the State of Michigan for Public School Employees, State
Employees, State Police, Judges, and Probate Judges.
(3) FMR Corp. derives beneficial ownership through its wholly-owned
subsidiaries, Fidelity Management & Research Company and Fidelity Management
Trust Company.
5
8
EXECUTIVE COMPENSATION
The following table contains information regarding compensation paid by the
Company with respect to the preceding fiscal year to its chief executive officer
and to each executive officer whose salary and bonus compensation exceeded
$100,000.
Summary Compensation Table
LONG-TERM COMPENSATION
-----------------------------------
AWARDS
ANNUAL COMPENSATION ------------------------
------------------------- RESTRICTED SECURITIES PAYOUTS ALL OTHER
SALARY BONUS OTHER STOCK UNDERLYING -------- COMPENSATION
EXECUTIVE YEAR ($) ($) ($) AWARD($) OPTIONS(#) LTIP($) ($)(1)
- ----------------------------------------------------------------------------------------------------------------
Fred Bauer 1995 245,143 82,749 -- 15,000 3,389
Chairman and CEO 1994 230,495 76,204 -- 15,000 3,339
1993 219,244 58,352 -- -- 3,265
Kenneth La Grand 1995 148,083 45,827 238,750(2) 14,000 3,125
Executive Vice 1994 139,496 44,914 -- 12,000 3,094
President 1993 131,144 31,987 -- 10,000 2,585
John Mulder 1995 178,084 47,055 191,000(2) 12,000 3,654
Vice President, 1994 168,640 40,146 -- 10,000 3,188
Automotive Marketing 1993 159,052 36,579 -- 8,000 3,026
Dr. Harlan J. Byker 1995 114,714 20,009 -- 12,000 832
Vice President, 1994 104,219 18,636 256,250(2) 10,000 504
Electrochemical 1993 89,490 11,632 -- -- 504
Research
Enoch Jen 1995 91,885 35,334 106,875(2) 8,000 2,786
Vice President, 1994 85,885 33,665 -- 9,000 2,963
Finance & Treasurer 1993 78,887 28,565 -- 16,000 1,806
- ----------------------------------------------------------------------------------------------------------------
(1) These amounts represent the sum of "matching" contributions by the Company
pursuant to its 401(k) Plan and annual premiums for term life insurance
attributed to each executive officer.
(2) Represents the aggregate market value at the date of grant for shares of
common stock awarded under the Company's Restricted Stock Plan. Assuming
continued employment with the Company, restrictions on shares lapse upon the
expiration of five years from the date of grant in the case of Messrs. Jen
and Byker, and one-third each on the 4th, 5th, and 6th anniversaries of the
grant in all other cases. Dividends will be paid on these shares if, and to
the same extent paid on the Company's common stock generally. At the close
of the Company's fiscal year, the following officers held the following
number of restricted shares with the corresponding net market values: K. La
Grand 26,000 shares for $572,000; J. Mulder 20,000 shares for $440,000; H.
Byker 10,000 shares for $220,000; and E. Jen 15,000 shares for $330,000.
------------------------
6
9
The following table contains information regarding stock options granted to
the above-named executive officers during the preceding fiscal year.
Option Grants in Last Fiscal Year
INDIVIDUAL GRANTS
------------------------------------------------------
NUMBER OF PERCENT
SECURITIES OF OPTIONS EXERCISE GRANT DATE
UNDERLYING TO ALL PRICE EXPIRATION PRESENT VALUE
EXECUTIVE OPTIONS(#)(1) EMPLOYEES ($/SH)(2) DATE ($)(3)
- ----------------------------------------------------------------------------------------------------
Fred Bauer 15,000 4.4 24.25 8/18/02 201,000
Kenneth La Grand 14,000 4.1 24.00 9/29/02 172,060
John Mulder 12,000 3.5 24.00 9/29/02 147,480
Dr. Harlan J. Byker 12,000 3.5 19.25 6/29/02 125,880
Enoch Jen 8,000 2.4 20.75 3/28/02 96,880
- --------------------------------------------------------------------------------
(1) These options become exercisable, so long as employment with the Company
continues, for 20 percent of the shares on each anniversary of the grant
date commencing with the first anniversary of the grant date.
(2) The exercise price may be paid in cash, in shares of the Company's common
stock, and/or by the surrender of exercisable options valued at the
difference between the exercise price and the market value of the underlying
shares.
(3) Based on the Black-Scholes option valuation model, assuming volatility
ranging from .38 to .46, a risk-free rate of return equal to ten year
treasury bonds, a dividend yield of zero, and an exercise date of seven
years after grant. This model is an alternative suggested by the Securities
and Exchange Commission, and the Company neither endorses this particular
model, nor necessarily agrees with this method for valuing options. The
ultimate value of options will depend on the Company's success, as reflected
by an increase in the price of its shares, which will inure to the benefit
of all shareholders.
------------------------
The following table contains information regarding the exercise of options
during the preceding fiscal year by the above-named executives, as well as
unexercised options held by them at fiscal year-end.
Aggregated Option Exercises in Last Fiscal Year and Year-end Values
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE YEAR-END (#) AT FISCAL YEAR-END ($)
EXERCISE REALIZED ----------------------------- -----------------------------
EXECUTIVE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------
Fred Bauer -- -- 3,000 27,000 6,000 24,000
Kenneth La Grand -- -- 80,400 42,600 1,276,893 199,287
John Mulder 15,000 256,249 15,700 34,300 167,342 157,812
Dr. Harlan J. Byker 10,000 187,970 2,000 20,000 -- 33,000
Enoch Jen 16,500 286,281 9,800 40,200 82,249 297,185
- -----------------------------------------------------------------------------------------------------------------
7
10
Executive Compensation Report
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. This Committee is comprised of
three members: two independent outside directors and the Chief Executive Officer
(C.E.O.). The Committee makes recommendations to the Board of Directors with
respect to executive compensation matters, except for awards made pursuant to
the Company's stock-based incentive plans, which are the exclusive prerogative
of the Committee in order to meet the "disinterested administration" requirement
of Exchange Act Rule 16b-3.
The executive compensation program is composed of three elements: base
salary, annual bonus, and stock-based incentives. These elements are utilized to
accommodate several objectives:
- Provide the means to attract, motivate, and retain executive management
personnel.
- Provide for long-term success by focusing on continuing technical
development and improvement in customer satisfaction.
- Provide base salary compensation that is competitive in the market for
managerial talent.
- Provide annual bonus compensation reflective of both individual
achievement and overall Company performance.
- Provide stock-based incentive compensation that focuses on long-term
Company performance and aligning the interests of management with the
interests of shareholders.
Base salary compensation for executive officers is predicated primarily on
competitive circumstances for managerial talent and positions reflecting
comparable responsibility. These competitive circumstances are determined from
local, regional, and national surveys of employers comparable to the Company in
size, stage of development, and industry. Historically, base salaries for
executive officers have been relatively low, and stock-based incentives have
received more emphasis, reflecting the entrepreneurial, high growth rate stage
of the Company's development. Base salary decisions for executive officers other
than the C.E.O. are determined by C.E.O. F. Bauer and reviewed annually by the
Committee. The base salary for C.E.O. Bauer for 1995 was established by the
Committee (without participation by C.E.O. Bauer) and approved by the Board of
Directors. The Committee's recommendation was made after reviewing survey
information from several sources, textual materials regarding executive
compensation strategies in general, the past and expected contributions of
C.E.O. Bauer to the Company's progress, the quality, loyalty, and performance of
the management team assembled and led by him, and the relationships between his
salary and the average salary levels for the Company's hourly paid workers,
salaried employees, and executive officers.
Annual bonus compensation for executive officers is composed of two
elements: payments under the Company's Gain Sharing Bonus Plan and performance
bonuses. All employees of the Company, including executive officers, are
eligible to share in the Company's Gain Sharing Bonus Plan after the first six
months of employment. A percentage of pre-tax income, in excess of an
established threshold for shareholder return on equity, is distributed quarterly
to eligible employees. The amount to be distributed is allocated among all
eligible employees in proportion to the salary or wages (including overtime)
paid to those employees during the quarter. In addition, performance bonuses are
paid to various managerial employees, including executive officers, based upon
individual performance during the year and the overall performance of the
Company during the year. Regarding 1995, C.E.O. F. Bauer evaluated the
performance of each executive officer, sometimes in consultation with other
officers, and determined performance bonuses predicated approximately one-half
on the individual's achievements and contributions to Company success, and
one-half on the overall performance of the Company for the year. C.E.O. F. Bauer
participated in the Gain Sharing Plan along with all other eligible employees.
In addition, Mr. Bauer was awarded a performance bonus in the amount of $40,000.
The award was recommended by the Committee (without participation by Mr. Bauer)
based upon the Company's significant gains in both sales and earnings, its
competitive position in the marketplace, and the effectiveness of management
despite the demands of ongoing litigation, and the recommendation was approved
by the Board of Directors.
8
11
Stock-based incentive compensation is intended to align the interests of
shareholders and senior management by making the managers shareholders in a
significant amount, and providing them incentives to work to increase the price
of the Company's shares by granting them options to acquire additional shares.
Generally, restricted stock grants are subject to forfeiture if the executive
officer does not continue employment with the Company for the period specified
at the time of grant. Similarly, stock options become exercisable generally for
a portion of the shares after one or two years and for additional portions each
year thereafter, subject however to the requirement that the optionee must be
employed by the Company at the time of exercise. During 1995, stock options were
awarded to executive officers, other than the C.E.O., by the Committee, based
upon recommendations from C.E.O. F. Bauer, taking into consideration for each
executive the scope of responsibility, contribution to success in prior periods,
ability to influence success in the future, and demonstrated ability to achieve
agreed-upon goals. In 1995, an amendment to the Company's Qualified Stock Option
Plan was approved by shareholders that provides for the award of an automatic
annual option for 15,000 shares to C.E.O. F. Bauer. This provision was
recommended by the Committee consistent with its belief that a portion of the
compensation package for all executives should be in the form of stock options.
The award was made "automatic" in order to preserve Chairman Bauer's ability to
continue his service on the Committee as a "disinterested person" under the
applicable S.E.C. rules.
Compensation Committee Members:
Fred Bauer
Arlyn Lanting
Ted Thompson
------------------------
9
12
Stock Performance Graph
The following graph depicts the cumulative total return of the Company's
common stock compared to the cumulative total return on the NASDAQ Stock Market
index (all U.S. companies) and the Dow Jones Index for Automobile Parts and
Equipment Companies (excluding tire and rubber makers). The graph assumes an
investment of $100 on the last trading day in 1990, and reinvestment of
dividends in all cases.
[Keyline CRC]
Dow Jones
Auto Parts
NASDAQ Stock & Equipment
Market Companies
Date Gentex Index Index
12/31/90 100 100 100
12/31/91 248 161 123
12/31/92 405 187 158
12/31/93 1343 215 206
12/30/94 923 210 181
12/29/95 838 296 221
------------------------
The Company has not adopted any long-term incentive plan or any defined
benefit or actuarial plan, as those terms are defined in the applicable
regulations promulgated by the Securities and Exchange Commission. Neither does
the Company have any contracts with its executive officers assuring them of
continued employment, nor any compensatory arrangement for executives linked to
a change in control of the Company.
Directors who are employees of the Company receive no compensation for
services as directors. Directors who are not employees of the Company receive a
director's retainer in the amount of $6,000 per year plus $800 for each meeting
of the Board attended and $500 for each committee meeting attended. In addition,
each nonemployee person who is a director immediately following each annual
meeting of shareholders is entitled to receive an option to purchase 5,000
shares of the Company's common stock at a price per share equal to the fair
market value on that date. Each option has a term of ten years and becomes
exercisable in full six months after the date of the grant.
10
13
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
Fred Bauer, Chairman and C.E.O., was a member of the Company's Compensation
Committee during the fiscal year ended December 31, 1995. That Committee was
responsible for supervising the Company's executive compensation arrangements,
including the making of decisions with respect to the award of stock-based
incentives for executive officers during that year. Mr. Bauer is not eligible
for any discretionary stock-based incentive awards; rather Mr. Bauer receives an
automatic annual stock option grant for 15,000 shares under the Company's
Qualified Stock Option Plan. Certain transactions between Mr. Bauer and the
Company are described below under Transactions With Management.
Arlyn Lanting, a director and member of the Company's Compensation
Committee, was an officer of the Company more than ten years ago.
TRANSACTIONS WITH MANAGEMENT
Since 1978, prior to the time the Company became a publicly-held
corporation, the Company has leased a building that previously housed its main
office, manufacturing and warehouse facilities, and currently houses production
operations for the Company's fire protection products. The lessor for that
building is G & C Associates, a general partnership, and nearly all of the
partnership interests in G & C Associates are held by persons related to Fred
Bauer. The lease is a "net" lease, obligating the Company to pay all expenses
for maintenance, taxes and insurance, in addition to rent. During 1995, the rent
paid to this partnership was for $52,153, and the rent for the current fiscal
year is the same. The Board of Directors believes that the terms of this lease
are at least as favorable to the Company as could have been obtained from
unrelated parties.
Arlyn Lanting and Kenneth La Grand are both substantial shareholders in GTI
Travel Inc., a local travel agency used by the Company to book airline travel
for its employees. During 1995, the Company booked $256,000 in airline travel
through this agency. This arrangement has been reviewed by the Company's Board
of Directors and approved on the basis that the prices and services provided
afford the best value available to the Company.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of the Company for the fiscal year
ended December 31, 1995, have been audited by Arthur Andersen LLP, independent
public accountants, and the Board of Directors has selected Arthur Andersen LLP,
to serve as the Company's independent accountants for the fiscal year ending
December 31, 1996. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting to respond to appropriate questions, and will have
an opportunity to make a statement if they desire.
COMPLIANCE WITH REPORTING REQUIREMENTS
Based upon a review of Forms 3, 4, and 5 furnished to the Company during or
with respect to the preceding fiscal year, and written representations from
certain reporting persons, the Company is not aware of any failure by any
reporting person to make timely filings of those Forms as required by Section
16(a) of the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS -- 1996 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the next annual
meeting of the Company must be received by the Company at its headquarters at
600 N. Centennial Street, Zeeland, Michigan 49464, no later than December 1,
1996, if the shareholder wishes the proposal to be included in the Company's
proxy statement relating to that meeting.
The Company's Annual Report to Shareholders, including financial
statements, is being mailed to shareholders with this Proxy Statement.
Management is not aware of any matters to be presented for action at the
Annual Meeting, other than as set forth in this Proxy Statement. If other
business should come before the meeting, the persons named as
11
14
proxy holders in the accompanying Proxy intend to vote the shares in accordance
with their judgment, and discretionary authority to do so is included in the
Proxy.
A COPY OF THE COMPANY'S REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE, UPON WRITTEN REQUEST, FROM THE
SECRETARY OF THE COMPANY, 600 N. CENTENNIAL STREET, ZEELAND, MICHIGAN 49464.
Shareholders are urged to promptly date, sign, and return the accompanying
Proxy in the enclosed envelope.
By Order of the Board of Directors
Connie Hamblin
Secretary
March 29, 1996
12
15
APPENDIX A
ARTICLE III
The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is 55,000,000 shares, consisting of 50,000,000
shares of Common Stock, par value $.06 per share and 5,000,000 shares of
Preferred Stock, no par value.
The authorized shares of Common Stock of the par value of $.06 per share
are all of one class with equal voting power, and each such share shall be equal
to every other such share.
The shares of Preferred Stock may be divided into and issued in one or more
series. The Board of Directors is hereby authorized to cause the Preferred Stock
to be issued from time to time in one or more series with such designations and
such relative voting, dividend, liquidation and other rights, preferences and
limitations as shall be stated and expressed in the resolution providing for the
issue of such Preferred Stock adopted by the Board of Directors. The Board of
Directors by vote of a majority of the whole Board is expressly authorized to
adopt such resolution or resolutions and issue such stock from time to time as
it may deem desirable.
A-1
16
GENTEX CORPORATION
600 N. CENTENNIAL STREET
ZEELAND, MI 49464
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shareholder(s) signing on the reverse side hereby appoint(s) Connie Hamblin and Enoch Jen as Proxies, each with the
power to appoint a substitute, and hereby authorizes them to represent and to vote, as designated herein, all of the shares of
common stock of Gentex Corporation held of record by such shareholder(s) on March 22, 1996, at the Annual Meeting of Shareholders to
be held on May 9, 1996, or any adjournment thereof.
When properly executed, this proxy will be voted in the manner directed by the shareholder(s). IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED FOR A THREE-YEAR TERM.
(TO BE SIGNED ON REVERSE SIDE)
[SEE REVERSE SIDE]
/X/ PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of Directors / / / / 2. Proposal to amend Articles of Incorporation / / / / / /
(except where to increase authorized shares of
marked to the common stock.
contrary) for a
three-year term. 3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
NOMINEES: Kenneth La Grand, Arlyn Lanting,
Ted Thompson
(Instruction: To withhold authority to vote
for an individual nominee, strike a line
through the nominee's name listed above.)
I plan to attend the meeting. / /
I do not plan to attend the meeting. / /
SIGNATURE DATE
----------------------------------------------------------------------------------------- ----------------------------
SIGNATURE DATE
----------------------------------------------------------------------------------------- ----------------------------
NOTE: Please sign as your name appears hereon. When shares are held jointly,
each holder should sign. When signing for an estate,trust or corporation, the
title and capacity should be stated. Persons signing as attorney-in-fact should
submit powers of attorney.
