1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 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 Identification No.)
incorporation or organization)
600 N. CENTENNIAL, ZEELAND, MICHIGAN 49464
(Address of principal executive offices) (Zip Code)
(616) 772-1800
(Registrant's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
--- ---
APPLICABLE ONLY TO CORPORATE USERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding
Class at April 17, 1995
----- -----------------
Common Stock, $0.06 Par Value 16,620,256
Exhibit Index located at page 10
Page 1 of 15
2
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 1995 AND DECEMBER 31, 1994
ASSETS
March 31, 1995 December 31, 1994
-------------- ----------------
CURRENT ASSETS
Cash and cash equivalents $16,969,763 $11,183,991
Short term investments 12,334,862 8,146,964
Accounts receivable, net 10,995,911 11,086,980
Inventories 5,132,065 5,303,552
Prepaid expenses and other 525,413 715,466
------------- -------------
Total current assets 45,958,014 36,436,953
PLANT AND EQUIPMENT - NET 17,425,262 17,172,523
OTHER ASSETS
Long-term investments 24,805,060 26,282,085
Patents and other assets, net 632,532 598,918
------------- -------------
Total other assets 25,437,592 26,881,003
------------- -------------
Total assets $88,820,868 $80,490,479
============= =============
LIABILITIES AND SHAREHOLDERS' INVESTMENT
----------------------------------------
CURRENT LIABILITIES
Accounts payable $4,140,968 $4,115,391
Accrued liabilities 6,768,170 4,621,936
------------- -------------
Total current liabilities 10,909,138 8,737,327
DEFERRED INCOME TAXES 414,454 377,691
SHAREHOLDERS' INVESTMENT
Common stock, par value $.06 per share 997,216 990,569
Additional paid-in capital 33,436,153 31,875,455
Retained earnings 43,997,120 39,409,938
Deferred compensation (946,909) (899,136)
Cumulative Translation Adjustment 13,696 (1,365)
------------- -------------
Total shareholders' investment 77,497,276 71,375,461
------------- -------------
Total liabilities and
shareholders' investment $88,820,868 $80,490,479
============= =============
See accompanying notes to condensed consolidated financial statements.
- 2 -
3
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
1995 1994
------------- -------------
NET SALES $26,042,968 $21,158,790
COST OF GOODS SOLD 15,426,405 11,923,835
------------- -------------
Gross profit 10,616,563 9,234,955
OPERATING EXPENSES:
Research and development 1,388,550 1,217,566
Selling, general
& administrative 3,068,884 2,186,022
------------- -------------
Total operating expenses 4,457,434 3,403,588
------------- -------------
Income from operations 6,159,129 5,831,367
OTHER INCOME
Interest and dividend income 627,217 290,488
Other, net 61,836 3,938
------------- -------------
Total other income 689,053 294,426
------------- -------------
Income before provision
for federal income taxes 6,848,182 6,125,793
PROVISION FOR FEDERAL INCOME TAXES 2,261,000 2,024,000
------------- -------------
NET INCOME $4,587,182 $4,101,793
============= =============
EARNINGS PER SHARE $0.27 $0.24
WEIGHTED DAILY AVERAGE OF
COMMON STOCK OUTSTANDING 17,057,610 17,027,885
See accompanying notes to condensed consolidated financial statements.
- 3 -
4
GENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
1995 1994
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,587,182 $4,101,793
Adjustments to reconcile net income to
net cash provided by operating activities-
Depreciation and amortization 764,609 696,094
Gain on disposal of equipment (5,000) 0
Deferred income taxes 78,160 40,845
Amortization of deferred compensation 74,477 134,280
Change in assets and liabilities:
Accounts receivable, net 91,069 (704,024)
Inventories 171,487 157,559
Prepaid expenses and other 148,656 209,973
Accounts payable 25,577 1,076,638
Accrued liabilities 2,146,234 1,583,300
-------------- --------------
Net cash provided by
operating activities 8,082,451 7,296,458
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (Increase) in short-term investments (4,187,898) 2,203,412
Plant and equipment additions (1,012,232) (603,149)
Proceeds from sale of plant and equipment 5,000 0
Decrease (Increase) in long-term investments 1,477,025 (6,789,667)
Decrease in other (23,669) (37,156)
-------------- --------------
Net cash used for
investing activities (3,741,774) (5,226,560)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock and tax benefit of
stock plan transactions 1,445,095 1,629,696
-------------- --------------
Net cash provided by
financing activities 1,445,095 1,629,696
-------------- --------------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 5,785,772 3,699,594
CASH AND CASH EQUIVALENTS,
beginning of period 11,183,991 5,979,530
-------------- --------------
CASH AND CASH EQUIVALENTS,
end of period $16,969,763 $9,679,124
============== ==============
See accompanying notes to condensed consolidated financial statements
-4-
5
GENTEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) The condensed consolidated financial statements included herein have
been prepared by the Registrant, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Registrant believes that the disclosures are
adequate to make the information presented not misleading. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and notes thereto
included in the Registrant's 1994 annual report on Form 10-K.
(2) In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting
of only a normal and recurring nature, necessary to present fairly the
financial position of the Registrant as of March 31, 1995, and
December 31, 1994, and the results of operations and cash flows for
the interim periods presented.
(3) Inventories consisted of the following at the respective quarter end:
March 31, 1995 December 31, 1994
-------------- -----------------
Raw materials $3,294,004 $3,568,074
Work-in-process 275,183 275,183
Finished goods 1,562,878 1,460,295
---------- ----------
$5,132,065 $5,303,552
========== ==========
(4) The Company owns four U.S. Patents for automatic mirrors and
electrochromic devices that were the subject of patent infringement
claims asserted against Donnelly Corporation ("Donnelly") during 1990
to 1993. All of those claims, except for the patent infringement
claim against the Donnelly "Polychromic" rearview mirror, have either
been adjudicated or were resolved in a settlement in May 1993. Gentex
received $3.6 million in damages and settlement fees.
Despite the May 1993 settlement agreement, in November 1993, Donnelly
requested that the U.S. Patent and Trademark office (USPTO) re-
examine certain claims it had granted to Gentex in the Company's U.S.
Patent No. 5,128,799. The USPTO agreed to do so, which is not
unusual, and that re-examination is proceeding.
In the case of Gentex Corporation vs. Donnelly Corporation (No. 1:93
CV 430), filed in U.S. District Court for the Western District of
Michigan, Southern Division, the patent infringement claim against
Donnelly's "Polychromic" rearview mirror was adjudicated by the
Federal District Court in March 1994, when it granted Donnelly's
motion for summary judgment of non-infringement of Gentex U.S. Patent
No. 5,128,799 by the Donnelly "Polychromic" rearview mirror. However,
Gentex appealed that March 1994 judgment to the Court of Appeals for
the Federal Circuit. Oral arguments were heard on that appeal in
November 1994, and a decision is pending.
The Company also is in litigation with Donnelly on the July 1993 and
October 1994 suits Donnelly filed for alleged patent infringement by
the Company's products. The July 1993 case of Donnelly Corporation
vs. Gentex Corporation (No. 1:93 CV 530), filed in U.S. District Court
for the Western District of Michigan, Southern Division, is related to
alleged infringement of three Donnelly patents directed to the use of
lights in mirrors ("light and rearview mirror assembly patents") and
of one Donnelly patent directed to the use of a rearview mirror with a
"dark or color-matched seal." The Company responded to this suit and
denied infringement of each patent, asserting that the Donnelly
patents are invalid and unenforceable and asserting that Donnelly had
failed to comply with the patent marking statute, precluding recovery
of pre-suit damages.
-5-
6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)
(4) (Cont.)
Gentex made a motion for summary judgment of invalidity of the
Donnelly "dark or color-matched seal" patent in June 1994, and a
decision on that motion is pending. Also pending is a decision on
Donnelly's motion for a preliminary injunction against alleged
infringement of that same patent. In April 1995, the Company also
filed motions for summary judgment of the non-infringement and
invalidity of the Donnelly light and rearview mirror assembly patents
and motions for partial summary judgment precluding Donnelly from
recovering any damages for certain acts of alleged infringement. A
decision also is pending on those motions.
In April 1995, Donnelly filed five motions for partial summary
judgment seeking to dismiss certain defenses asserted by the Company
against the "dark or color-matched seal" patent and against two of the
light and rearview mirror assembly patents, and seeking summary
judgment of the alleged infringement of the "dark or color-matched
seal" patent and one of the light and rearview mirror assembly
patents. Decisions also are pending on those motions. Both the "dark
or color-matched seal" patent and the light and rearview mirror
assembly patents are scheduled for a mini-trial (non-binding
alternative dispute resolution before a neutral advisor) in early May
1995. If the parties do not agree on a resolution of those claims at
the mini-trial, the case is scheduled for trial to a jury in October
1995.
In the October 1994 case of Donnelly Corporation vs. Gentex
Corporation (No. 1:94 CV 695), filed in U.S. District Court for the
Western District of Michigan, Southern Division, Donnelly alleged the
Company's rearview mirror products infringe two recently granted
Donnelly patents directed to the use of ultraviolet stabilizers to
protect electrochromic mirrors from the harmful effects of ultraviolet
radiation. Donnelly also made a motion for a preliminary injunction.
The Company responded to this suit, denying infringement and asserting
the Donnelly patents are invalid and unenforceable because Donnelly
engaged in inequitable conduct before the U.S. Patent and Trademark
Office in obtaining these patents. This case is in the early stages
of discovery and no trial date has been scheduled.
The Company also is in litigation with C-D Marketing, which filed a
complaint in February 1994, in the case of C-D Marketing, Ltd. vs.
Gentex Corporation and Chrysler Corporation (No. 94 CV 70501 DT), in
the U.S. District Court for the Eastern District of Michigan, Southern
Division, alleging that certain Gentex electrochromic rearview mirrors
infringe its U.S. Patent No. 4,690,508. The Company has denied
infringement and asserted that the C-D Marketing patent is invalid.
This case in the late stage of discovery, and a jury trial may be
scheduled for late 1995.
While the ultimate results of patent litigation cannot be predicted
with certainty, management believes that they will not have a material
adverse effect on the Company's financial statements.
-6-
7
GENTEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS:
FIRST QUARTER 1995 VERSUS FIRST QUARTER 1994
Net Sales. Net sales for the first quarter of 1995 increased by
approximately $4,884,000, or 23%, when compared with the first
quarter last year. Automatic mirror unit shipments increased from
approximately 417,000 in the first quarter of 1994 to 518,000 in
the current quarter. This increase primarily reflected increased
penetration on 1995 model year vehicles for interior and exterior
electrochromic Night Vision Safety(TM) (NVS(R)) Mirrors. Net
sales of the Company's fire protection products decreased 6%,
primarily due to reduced shipments of its strobe warning light to
a customer that has developed its own strobe product.
Cost of Goods Sold. As a percentage of net sales, cost of goods
sold increased from 56% in the first quarter of 1994 to 59% for
the comparable period in 1995. This increased percentage
primarily reflects automotive customer price reductions for the
1995 model year and changes in the Company's product mix.
Operating Expenses. Research and development expenses increased
approximately $171,000, but decreased from 6% to 5% of net sales,
when compared with the same quarter last year, primarily
reflecting additional staffing and other compensation increases.
Selling, general and administrative expenses increased
approximately $883,000, and increased from 10% to 12% of net
sales, when compared with the first quarter of 1994. This
increased expense primarily reflected higher patent litigation
activities.
Other Income - Net. Other income increased by approximately
$395,000 when compared with the first quarter of 1994, primarily
due to the higher investable fund balances and higher interest
rates.
FINANCIAL CONDITION:
Management considers the Company's working capital and long-term
investments totaling approximately $59,854,000 at March 31, 1995,
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.
TRENDS AND DEVELOPMENTS:
The Company currently supplies NVS(R) Mirrors to Chrysler
Corporation, Ford Motor Company and General Motors Corporation
under long-term contracts. The General Motors Corporation
contract is through the 1995 Model Year, the term of the Ford
contract is through December 1999, while the Chrysler contract
runs through the 1999 Model Year.
The Company continues to experience pricing pressures from its
automotive customers, but believes, based upon information
currently available, that any price reductions may, for the most
part, eventually be offset by productivity improvements and
increases in unit sales volume.
The total costs to defend the Company in the July 8, 1993, and
October 13, 1994, suits filed by Donnelly Corporation, and the
February 18, 1994, suit filed by C-D Marketing, Ltd. will be
affected by the duration and activity level, and are not
determinable at this time. However, management currently believes
that, if the current trend continues, patent litigation costs will
continue to increase with the additional suits and related
activity levels, but should peak out during the year.
-7-
8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on Page 10.
(b) No reports on Form 8-K were filed during the
three months ended March 31, 1995.
-8-
9
SIGNATURES
Pursuant to the requirements 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.
GENTEX CORPORATION
Date April 28, 1995 Fred T. Bauer
-----------------------------
Fred T. Bauer
Chairman and Chief
Executive Officer
Date April 28, 1995 Enoch C. Jen
-----------------------------
Enoch C. Jen
Vice President Finance
Principal Financial and
Accounting Officer
-9-
10
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- - ----------- -----------
3(a)(1) Registrant's Articles of Incorporation, with all amendments through April 28, 1995.
3(b) Registrant's Bylaws as amended and restated March 1, 1990, were
filed as Exhibit 3(b) to Registrant's Report on Form 10-K
dated March 1, 1990, and the same is 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 on Form S-18 (Registration No. 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) Shareholder Protection Rights Agreement, dated as of August 26,
1991, 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 8-K on August 20,
1991, and the same is hereby incorporated herein by reference.
4(b)(1) First Amendment to Shareholder Protection Rights Agreement,
effective April 1, 1994, was filed as Exhibit 4(b)(1) to
Registrant's report on Form 10-Q on April 29, 1994, 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 May 13, 1993.
10(b)(2) Gentex Corporation 1987 Incentive Stock Option Plan (as amended
through May 24, 1989), was filed as Exhibit 10(g)(3) to
Registrant's Report on Form 10-K dated March 1, 1990, and the same
is hereby incorporated herein by reference.
*10(b)(3) Gentex Corporation Restricted Stock Plan was filed as Exhibit
10(b)(3) to Registrant's Report on Form 10-K dated March
10, 1992, and the same is hereby incorporated herein by reference.
-10-
11
EXHIBIT NO. DESCRIPTION PAGE
- - ----------- ----------- ----
*10(b)(4) Gentex Corporation Non-Employee Director Stock Option Plan as
amended through March 5, 1993, was filed as Exhibit 10(b)(4)
to Registrant's Report on Form 10-K dated March 5, 1993, and the
same is incorporated herein in 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.
27 Financial Data Schedule
_____________________________________________________
* Indicates a compensatory plan or arrangement.
-11-
1
EXHIBIT 3(a)(1)
RESTATED
ARTICLES OF INCORPORATION
OF
GENTEX CORPORATION
These Restated Articles of Incorporation are executed pursuant to the
provisions of Sections 641 through 651, Act 284, Public Acts of 1972, as
amended. The present name, and all of the former names, of the Corporation is
Gentex Corporation. The original Articles of Incorporation were filed on
January 11, 1974.
The following Restated Articles of Incorporation supersede the original
Articles of Incorporation as amended and shall be the Articles of Incorporation
of the Corporation:
ARTICLE I
The name of the corporation is Gentex Corporation.
ARTICLE II
The purpose or purposes for which the corporation is formed is to engage
in any activity within the purposes for which corporations may be organized
under the Business Corporation Act of Michigan.
ARTICLE III
The total authorized capital stock of this corporation is 50,000,000
shares of common stock of $.01 par value per share. The authorized shares of
common stock of $.01 par value per share are all of one class with equal voting
power, and each such share shall be equal to every other such share.
ARTICLE IV
The address of the current registered office, which is the same as the
mailing address of that office, is 10985 Chicago Drive, Zeeland, Michigan
49464. The name of the current resident agent at the registered office is Dan
Bauer.
12(A)
2
ARTICLE V
The corporation shall, to the full extent permitted by the Michigan
Business Corporation Act, as amended from time to time, indemnify all persons
whom it may indemnify pursuant thereto.
These Restated Articles of Incorporation were duly adopted by the
shareholders on the 1st day of August, 1981, in accordance with the provisions
of Section 642, Act 284, Public Acts of 1972, as amended. The necessary number
of shares as required by statute were voted in favor of the Restated Articles
of Incorporation.
Signed this 12th day of August, 1981.
DAN C. BAUER
------------------
Its President
12(B)
3
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
The undersigned Corporation executes the following Certificate of
Amendment to its Articles of Incorporation pursuant to the provisions of
Section 631, Act 284, Public Acts of 1972, as amended:
1. The name of the Corporation is Gentex Corporation. The location of
the registered office is 10985 Chicago Drive, Zeeland, Michigan 49464.
2. The following amendment to the Articles of Incorporation was
adopted by the shareholders of the Corporation in accordance with Section (2) of
Section 611, Act 284, Public Acts of 1972, as amended, on the 2nd day of
November, 1981:
RESOLVED, that Article III of the Articles of Incorporation be
amended to read as follows:
ARTICLE III.
The total authorized capital stock of this corporation is
10,000,000 shares of common stock of $.06 par value per share. The
authorized shares of common stock of $.06 par value per share are
all of one class with equal voting power, and each such share shall
be equal to every other such share.
3. The necessary number of shares as required by statute were voted
in favor of the Amendment.
Signed, this 2nd day of November, 1981.
GENTEX CORPORATION
By Arlyn Jay Lanling
-----------------------
Its Vice-President
12(C)
4
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION FOR
GENTEX CORPORATION
The undersigned Corporation executes the following Certificate of
Amendment to its Articles of Incorporation pursuant to the provisions of
Section 631, Act 284, Public Acts of 1972, as amended.
1. The name of the Corporation is Gentex Corporation.
2. The location of the registered office is 10985 Chicago
Drive, Zeeland, Michigan 49464.
3. The following Amendment to the Articles of Incorporation was
adopted on the 22nd day of April, 1983:
RESOLVED, that the following articles be added to the Articles of
Incorporation for the Corporation:
ARTICLE VI
AUTHORITY OF BOARD
A. The business and affairs of the Corporation shall be managed by a
Board of Directors which shall exercise all of the powers and authority of the
Corporation (subject to delegation to committees of the Board of Directors as
permitted by law and not inconsistent with these Articles of Incorporation)
except for such matters as are reserved to shareholders of the Corporation by
law or by these Articles of Incorporation.
SIZE OF BOARD
B. The Board of Directors shall consist of at least six (6), but not
more than nine (9) members, and the specific number of directors to be elected
or appointed with such limits shall be as determined by the Board of Directors
from time to time.
CLASSIFICATION OF BOARD
C. Directors shall be divided into three classes and each class shall
be as nearly equal in number as possible to the other classes. At the annual
meeting of shareholders held in 1984, the directors shall be nominated and
elected by class to serve for terms which expire at the first, second and third
subsequent an-
12(D)
5
nual meetings of shareholders, respectively. At each annual meeting of
shareholders subsequent to 1984, directors shall be elected to serve for a term
which expires at the third annual meeting of shareholders following a meeting
at which the director is elected.
VACANCIES IN BOARD
D. Vacancies occurring in the Board of Directors by reason of death,
resignation or removal of a director may be filled by the affirmative vote of a
majority of the remaining directors, though less than a quorum of the Board,
and vacancies occurring by reason of an increase of the number of directors may
be filled by majority vote of the Board of Directors at any meeting duly called
and convened. Directors appointed by the Board of Directors to fill any
vacancies shall hold office only until the next annual meeting of shareholders.
NOMINATIONS FOR BOARD
E. Nominations for directors who are proposed as replacements for
directors appointed by the Board of Directors to fill vacancies, if any, shall
be designated in ballots and/or proxies submitted to shareholders to serve such
terms of years as will make the classes of directors as nearly equal to each
other in number as possible. Nominations by shareholders for any directorship
must be submitted to the Board of Directors by written notice not later than
thirty (30) days prior to the date of the annual meeting of shareholders at
which the election is to be held (or within seven days after the date the
Corporation mails, or otherwise gives notice of the date of such meeting, if
such notice is given less than forty (40) days prior to the meeting date),
which notice shall state the name of the nominee, the address of the nominee's
business or residence, the nominee's principal occupation and the name and
address of the nominee's employer or business if self-employed.
REMOVAL FROM BOARD
F. Any director may be removed from office as a director at any time,
with or without cause, by the affirmative vote of the holders of a majority of
the then issued and outstanding shares of the Corporation's stock entitled to
vote thereon at a meeting duly called and convened for that purpose.
AMENDMENT
G. This article may not be amended or repealed, in whole or in part,
except by affirmative vote of the holders of at least four-fifths (4/5ths) of
the issued and outstanding shares of the Corporation's capital stock entitled
to vote in the election of directors; provided, however, that such amendment or
repeal may be made by majority vote of such shareholders at any meeting of
shareholders duly called and convened where such amendment has
12(E)
6
been recommended for approval by two-thirds (2/3rds) of all directors then
holding office.
ARTICLE VII
SPECIAL REQUIREMENTS REGARDING CERTAIN TRANSACTIONS WITH
INTERESTED PARTIES
A. Unless the conditions set forth in subparagraphs 1 through 4 of
this Paragraph A are satisfied or the approval specified in subparagraph 1 of
Paragraph B of this Article has been made, the affirmative vote of the holders
of that fraction of the outstanding shares of the capital stock of the
Corporation entitled to vote in the election of directors, but in no event less
than four-fifths (4/5ths), determined by using as the numerator a number equal
to the sum of (i) the outstanding shares of such stock beneficially owned by
all Interested Parties, plus (ii) four-fifths (4/5ths) of the remaining number
of such outstanding shares, and using as the denominator a number equal to the
total number of the outstanding shares entitled to vote in the election of
directors, shall be required for the adoption or authorization of a Combination
or Reorganization (as hereinafter defined) with any Interested Party (as
hereinafter defined) if, as of the record date for the determination of
shareholders entitled to vote thereon, the Interested Party is (or has been at
any time within the preceding twelve (12) months the beneficial owner, directly
or indirectly, of five percent (5%) or more of the issued and outstanding
shares of the Corporation's capital stock entitled to vote in the election of
Directors. The four-fifths (4/5) vote requirement specified in the preceding
sentence shall not be applicable if:
1. The cash and fair market value of any other consideration to
be received per share by holders of the common stock of the Corporation
(including shareholders who do not vote in favor of the transaction) in
exchange or substitution for their shares in the Combination or
Reorganization is at least equal in amount to: (a) the highest per share
amount paid by the Interested Party in acquiring any of its holdings of
the common stock of the Corporation; plus (b) the amount, if any, by
which six percent (6%) per annum of that per share price exceeds the
aggregate of per share amounts paid as cash dividends, in each case
computed from the date the Interested Party became an Interested Party;
2. Subsequent to becoming an Interested Party: (a) the
Interested Party shall have taken steps to ensure that the Corporation's
Board of Directors included at all times representation by Continuing
Directors (as hereinafter defined) proportionate to the shareholdings
of the shareholders not affiliated with the Interested Party (with a
Continuing Director to occupy any resulting fractional Board position);
(b) the Interested Party shall not have acquired any newly issued
securities of the Corporation, including securities conver-
12(F)
7
tible into common stock, from the Corporation, directly or indirectly,
except with respect to pro rata stock dividends or stock splits; (c) the
Interested Party shall not have acquired any additional shares of the
outstanding common stock of the Corporation or securities convertible
into common stock, except as a part of the transaction which resulted in
the Interested Party becoming an Interested Party; and (d) the Interested
Party shall not have received a benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances, guarantees,
pledges, tax credits or other financial assistance provided by the
Corporation;
3. Subsequent to the date the Interested Party became an
Interested Party there shall have been no major change in the
Corporation's business or equity capital structure without, in each case,
approval by at least two-thirds (2/3rds) of the Continuing Directors, as
well as a majority of all Directors; and
4. A proxy statement conforming to the requirements of the
Securities Exchange Act of 1934 shall have been mailed to the
shareholders of the Corporation for the purpose of soliciting shareholder
approval of the Combination or Reorganization containing at the front
thereof, in a prominent place, any recommendations as to the advisability
(or inadvisability) of the Combination or Reorganization that the
Continuing Directors, or any of them, may choose to state and, if deemed
advisable by majority of the Continuing Directors, an opinion of a
reputable investment banking firm as to the fairness (or lack thereof) of
the terms of the Combination or Reorganization from the point of view of
the remaining public shareholders of the Corporation, which investment
banking firm shall be selected by a majority of the Continuing Directors
and shall be paid a reasonable fee for its services by the Corporation
upon receipt of the opinion.
EXCEPTIONS
B. The provisions of Paragraph A of this Article shall not apply, and
the otherwise applicable provisions of Michigan law shall apply to:
1. Any Combination or Reorganization as to which a memorandum of
understanding with the Interested Party setting forth the principal terms
of the transaction has been approved by two-thirds (2/3rds) of the
Continuing Directors and a majority of all directors (provided the
transaction is consummated in substantial conformity therewith); or
2. Any Combination or Reorganization with an Interested Party
where this Corporation then holds more than 50% of the issued and
outstanding shares of the capital stock in such Interested Party which
are entitled to vote in election of Directors.
12(G)
8
DEFINITIONS
C. As used in this Article, the following words and phrases shall have
the following meanings:
1. "Interested Party" means every person or entity which is the
beneficial owner of five percent (5%) or more of the Corporation's issued
and outstanding shares of capital stock entitled to vote in the election
or directors, as elsewhere specified in this Article. In addition, an
Interested Party includes (and an Interested Party shall be deemed to be
the beneficial owner of all of the shares held directly or indirectly by)
all "Affiliates" and "Associates" (as hereinafter defined) of such person
or entity and any person or entity with which the Interested Party, or
the Affiliates or Associates thereof, has any agreement, arrangement or
understanding with respect to the acquisition, holding, disposition or
voting of shares of the capital stock of this Corporation, together with
the successors and assigns of such persons or entities in any transaction
or series of transaction not involving a public offering of the
Corporation's shares within the meaning of the Securities Act of 1933.
2. "Combination or Reorganization" means any merger involving
this Corporation (or a subsidiary of this Corporation) and an Interested
Party (irrespective of the identity of the surviving corporation), any
consolidation involving this Corporation (or a subsidiary of this
Corporation) and an Interested Party, any sale, exchange, lease,
mortgage, transfer or other disposition by this Corporation (or a
subsidiary of this Corporation) of all, or substantially all, of its
assets or business, directly or indirectly, to an Interested Party, and
any transaction whereby voting securities of this Corporation (or any
subsidiary) are issued or transferred by this Corporation (or any
subsidiary) in exchange or payment for the securities or assets of an
Interested Party.
3. "Continuing Director" means a director of the Corporation
holding office as of the time this Article becomes effective, a director
elected by shareholders subsequent to the time this Article becomes
effective, but prior to the time an Interested Party acquired the status
of Interested Party, and any director who succeeded a Continuing Director
pursuant to an affirmative recommendation by a majority of Continuing
Directors.
4. "Affiliate" means with respect to any person or entity that
such person or entity directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control
with, such person or entity.
5. "Associate" means with respect to any person or entity:
(1) any corporation or organization of which such
12(H)
9
person or entity is an officer, director or partner, or is directly or
indirectly the beneficial owner of ten percent (10%) or more of any class
of equity securities; (2) any trust or other estate in which such person
or entity has a substantial beneficial interest or as to which such
person or entity serves as trustee or any similar capacity; and (3) any
relative or spouse of such person, or any relative of such spouse, who
has the same home as such person.
INTERPRETATIONS
D. A majority of the Continuing Directors shall have the authority to
determine for purposes of this Article, on the basis of information known to
them:
1. Whether any person or entity owns beneficially five percent
(5%) or more of the issued and outstanding shares of the common stock of
this Corporation.
2. Whether a person or entity is an Affiliate or Associate of
another, and
3. Whether a person or entity has an agreement, arrangement or
understanding with another.
Any determination pursuant to this subparagraph made in good faith by the
Continuing Directors shall be conclusive and binding for the purposes specified
in this Article.
AMENDMENT
E. This Article may not be amended or repealed, in whole or in part,
except by affirmative vote of that fraction of the outstanding shares of the
capital stock of the Corporation entitled to vote in the election of directors,
but in no event less than four-fifths (4/5ths), determined by using as the
numerator a number equal to the sum of (i) the outstanding shares of such stock
beneficially owned by all Interested Parties, plus (ii) four-fifths (4/5ths) of
the remaining number of such outstanding shares, and using as the denominator a
number equal to the total number of the outstanding shares of stock of the
Corporation entitled to vote in the election of directors.
ARTICLE VIII
EVALUATION OF CERTAIN OFFERS
The Board of Directors of this Corporation shall not approve, adopt or
recommend any offer of any person or entity, other than the Corporation, to
make a tender or exchange offer for any capital stock of the Corporation, to
merge or consolidate the Corporation with any other entity or to purchase or
otherwise acquire all or substantially all of the assets or business of the
Corporation unless and until the Board of Directors shall have first evaluated
12(I)
10
the offer and determined that the offer would be in compliance with all
applicable laws and that the offer is in the best interests of the Corporation
and its shareholders. In connection with its evaluation as to compliance with
laws, the Board of Directors may seek and rely upon an opinion of legal counsel
independent from the offeror and it may test such compliance with laws in any
state or federal court or before any state or federal administrative agency
which may have appropriate jurisdiction. In connection with its evaluation as
to the best interests of the Corporation and its shareholders, the Board of
Directors shall consider all factors which it deems relevant, including without
limitation: (1) the adequacy and fairness of the consideration to be received
by the Corporation and/or its shareholders under the offer considering
historical trading prices of the Corporation's stock, the price that might be
achieved in a negotiated sale of the Corporation as a whole, premiums over
trading prices which have been proposed or offered with respect to the
securities of other companies in the past in connection with similar offers,
and the future prospects for this Corporation and its business; (2) the
potential social and economic impact of the offer and its consummation on this
Corporation, its employees, customers and vendors; and (3) the potential social
and economic impact of the offer and its consummation on the communities in
which the Corporation and any subsidiaries operate or are located.
AMENDMENT
This Article may not be amended or repealed, in whole or in part, except
by affirmative vote of the holders of at least four-fifths (4/5ths) of the
issued and outstanding shares of the Corporation's capital stock entitled to
vote in the election of directors; provided, however, that such amendment or
repeal may be made by majority vote of such shareholders at any meeting of
shareholders duly called and convened where such amendment or repeal has been
recommended for approval by two-thirds (2/3rds) of all directors then holding
office.
4. The foregoing Amendment was adopted by the Shareholders of the
Corporation in accordance with Section 611(2), Act 284, Public Acts of 1972, as
amended, and the necessary number of shares as required by statute were voted
in favor of the Amendment.
Signed this 22nd day of April, 1983.
/s/ DAN BAUER
Dan Bauer, President
Gentex Corporation
12(J)
11
CERTIFICATE OF AMENDMENT TO
THE ARTICLES OF INCORPORATION OF
GENTEX CORPORATION
The undersigned Corporation executes the following Certificate of Amendment
to its Articles of Incorporation pursuant to Section 631, Act 284, Public Acts
of 1972, as amended.
1. The name of the Corporation is Gentex Corporation.
2 . The Corporation identification number (CID) assigned by the Bureau is
085-536.
3. The location of the registered office is 10985 Chicago Drive, Zeeland,
Michigan 49464.
RESOLVED, that the following articles be added to the Articles of
Incorporation of the Corporation:
ARTICLE VI
AUTHORITY OF BOARD
A. The business and affairs of the Corporation shall be managed by a Board
of Directors which shall exercise all of the powers and authority of the
Corporation (subject to delegation to committees of the Board of Directors as
permitted by law and not inconsistent with these Articles of Incorporation)
except for such matters as are reserved to shareholders of the Corporation by
law or by these Articles of Incorporation.
SIZE OF BOARD
B. The Board of Directors shall consist of at least six (6), but not more
than nine (9) members, and the specific number of directors to be elected or
appointed within such limits shall be as determined by the Board of Directors
from time to time.
CLASSIFICATION OF BOARD
C. Directors shall be divided into three classes and each class shall be as
nearly equal in number as possible to the other classes. At the first
election of directors subsequent to the adoption of this Article, the directors
shall be elected by class to serve for terms which expire at the first, second
and third subsequent annual meetings of shareholders, respectively. At each
annual meeting of shareholders thereafter, directors shall be
12(K)
12
elected to serve for a term which expires at the third annual meeting of
shareholders following a meeting at which the director is elected.
VACANCIES IN BOARD
D. Vacancies occurring in the Board of Directors by reason of death,
resignation or removal of a director may be filled by the affirmative vote of
a majority of the remaining directors, though less than a quorum of the Board,
and vacancies occurring by reason of an increase of the number of directors may
be filled by majority vote of the Board of Directors at any meeting duly called
and convened. Directors appointed by the Board of Directors to fill any
vacancies shall hold office only until the next annual meeting of shareholders.
NOMINATION FOR BOARD
E. Nomination for directors who are proposed as replacements for directors
appointed by the Board of Directors to fill vacancies, if any, shall be
designated in ballots and/or proxies submitted to shareholders to serve such
terms of years as will make the classes of directors as nearly equal to each
other in number as possible. Nominations by shareholders for any directorship
must be submitted to the Board of Directors by written notice not later than
thirty (30) days prior to the date of the annual meeting of shareholders at
which the election is to be held (or within seven days after the date the
Corporation mails, or otherwise gives notice of the date of such meeting, if
such notice is given less than forty (40) days prior to the meeting date),
which notice shall state the name of the nominee, the address of the nominee's
business or residence, the nominee's principal occupation and the name and
address of the nominee's employer or business if self-employed.
REMOVAL FROM BOARD
F. A director may be removed from office as a director, with or without
cause, only by the affirmative vote of the holders of two-thirds (2/3) of the
then issued and outstanding shares of the Corporation's stock entitled to vote
thereon at a meeting duly called and convened for that purpose.
AMENDMENT
G. This Article may not be amended or repealed, in whole or in part, except
by affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation's capital stock entitled to vote in
the election of directors; provided, however, that such amendment or repeal may
be made by majority vote of such shareholders at any meeting of shareholders
duly called and convened where such amendment has been recommended for approval
by two-thirds (2/3) of all directors then holding office.
12(L)
13
ARTICLE VII
SPECIAL REQUIREMENTS REGARDING CERTAIN TRANSACTIONS WITH
INTERESTED PARTIES
A. Unless the conditions set forth in subparagraphs 1 through 4 of this
Paragraph A are satisfied or the approval specified in subparagraph 1 of
Paragraph B of this Article has been made, the affirmative vote of the holders
of that fraction of the outstanding shares of the capital stock of the
Corporation entitled to vote in the election of directors, but in no event
less than two-thirds (2/3), determined by using as the numerator a number equal
to the sum of (i) the outstanding shares of such stock beneficially owned by
all Interested Parties, plus (ii) two-thirds (2/3) of the remaining number of
such outstanding shares, and using as the denominator a number equal to the
total number of the outstanding shares entitled to vote in the election of
directors, shall be required for the adoption or authorization of a Combination
or Reorganization (as hereinafter defined) with any Interested Party (as
hereinafter defined) if, as of the record date for the determination of
shareholders entitled to vote thereon, the Interested Party is (or has been
at any time within the preceding twelve (12) months) the beneficial owner,
directly or indirectly, of five percent (5%) or more of the issued and
outstanding shares of the Corporation's capital stock entitled to vote in the
election of directors. The two-thirds (2/3) vote requirement specified in
the preceding sentence shall not be applicable if:
1. The cash and fair market value of any other consideration to be
received per share by holders of the common stock of the Corporation
(including shareholders who do not vote in favor of the transaction) in
exchange or substitution for their shares in the Combination or
Reorganization is at least equal in amount to: (a) the highest per share
amount paid by the Interested Party in acquiring any of its holdings of the
common stock of the Corporation; plus (b) the amount, if any, by which six
percent (6%) per annum of that per share price exceeds the aggregate of per
share amounts paid as cash dividends, in each case computed from the date
the Interested Party became an Interested Party;
2. Subsequent to becoming an Interested Party: (a) the Interested Party
shall have taken steps to ensure that the Corporation's Board of Directors
included at all times representation by Continuing Directors (as hereinafter
defined) proportionate to the shareholdings of the shareholders not
affiliated with the Interested Party (with a Continuing Director to occupy
any resulting fractional Board position); (b) the Interested Party shall not
have acquired any newly issued securities of the Corporation, including
securities convertible into common stock, from the Corporation, directly or
indirectly, except with respect to pro rata stock dividends or
12(M)
14
stock splits; (c) the Interested Party shall not have acquired any
additional shares of the outstanding common stock of the Corporation or
securities convertible into common stock, except as a part of the
transaction which resulted in the Interested Party becoming an Interested
Party; and (d) the Interested Party shall not have received a benefit,
directly or indirectly (except proportionately as a shareholder), of any
loans, advances, guarantees, pledges, tax credits or other financial
assistance provided by the Corporation;
3. Subsequent to the date the Interested Party became an Interested
Party there shall have been no major change in the Corporation's business or
equity capital structure without, in each case, approval by at least
two-thirds (2/3) of the Continuing Directors, as well as a majority of all
Directors; and
4. A proxy statement conforming to the requirements of the Securities
Exchange Act of 1934 shall have been mailed to the shareholders of the
Corporation for the purpose of soliciting shareholder approval of the
Combination or Reorganization containing at the front thereof, in a
prominent place, any recommendations as to the advisibility (or
inadvisability) of the Combination or Reorganization that the Continuing
Directors, or any of them, may choose to state and, if deemed advisable by
majority of the Continuing Directors, an opinion of a reputable investment
banking firm as to the fairness (or lack thereof) of the terms of the
Combination or Reorganization from the point of view of the remaining public
shareholders of the Corporation, which investment banking firm shall be
selected by a majority of the Continuing Directors and shall be paid a
reasonable fee for its services by the Corporation upon receipt of the
opinion.
EXCEPTIONS
B. The provisions of Paragraph A of this Article shall not apply, and the
otherwise applicable provisions of Michigan law shall apply to:
1. Any Combination or Reorganization as to which a memorandum of
understanding with the Interested Party setting forth the principal
terms of the transaction has been approved by two-thirds (2/3) of the
Continuing Directors and a majority of all directors (provided the
transaction is consummated in substantial conformity therewith); or
2. Any Combination or Reorganization with an Interested Party where this
Corporation then holds more than 50% of the issued and outstanding
shares of the capital stock in such Interested Party which are entitled to
vote in elections of directors.
12(N)
15
DEFINITIONS
C. As used in this Article, the following words and phrases shall have the
following meanings:
1. "Interested Party" means every person or entity which first
becomes the beneficial owner of five percent (5%) or more of the
Corporation's issued and outstanding shares of capital stock entitled to
vote in the election of directors after the date this Article becomes
effective. In addition, an Interested Party includes (and an Interested
Party shall be deemed to be the beneficial owner of all of the shares held
directly or indirectly by) all "Affiliates" and "Associates" (as hereinafter
defined) of such person or entity and any person or entity with which the
Interested Party, or the Affiliates or Associates thereof, has any
agreement, arrangement or understanding with respect to the acquisition,
holding, disposition or voting of shares of the capital stock of this
Corporation, together with the successors and assigns of such persons or
entities in any transaction or series of transactions not involving a
public offering of the Corporation's shares within the meaning of the
Securities Act of 1933.
2. "Combination or Reorganization" means any merger involving this
Corporation (or a subsidiary of this Corporation) and an Interested Party
(irrespective of the identity of the surviving corporation), any
consolidation involving this Corporation (or a subsidiary of this
Corporation) and an Interested Party, any sale, exchange, lease, mortgage,
transfer or other disposition by this Corporation (or a subsidiary of this
Corporation) of all, or substantially all, of its assets or business,
directly or indirectly, to an Interested Party, and any transaction whereby
voting securities of this Corporation (or any subsidiary) are issued or
transferred by this Corporation (or any subsidiary) in exchange or payment
for the securities or assets of an Interested Party.
3. "Continuing Director" means a director of the Corporation holding office
as of the time this Article becomes effective, a director elected by
shareholders subsequent to the time this Article becomes effective, but
prior to the time an Interested Party acquired the status of interested
Party, and any director who succeeded a Continuing Director pursuant to an
affirmative recommendation by a majority of Continuing Directors.
4. "Affiliate" means with respect to any person or entity that such
person or entity directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such person
or entity.
12(O)
16
5 . "Associate" means with respect to any person or entity: (1) any
corporation or organization of which such person or entity is an officer,
director or partner, or is directly or indirectly the beneficial owner of
ten percent (10%) or more of any class of equity securities; (2) any trust
or other estate in which such person or entity has a substantial beneficial
interest or as to which such person or entity serves as trustee or any
similar capacity; and (3) any relative or spouse of such person, or any
relative of such spouse, who has the same home as such person.
INTERPRETATIONS
D. A majority of the Continuing Directors shall have the authority to
determine for purposes of this Article, on the basis of information known to
them:
1. Whether any person or entity owns beneficially five percent (5%) or
more of the issued and outstanding shares of the common stock of the
Corporation.
2. Whether a person or entity is an Affiliate or Associate of another, and
3. Whether a person or entity has an agreement, arrangement or
understanding with another.
Any determination pursuant to this subparagraph made in good faith by the
Continuing Directors shall be conclusive and binding for the purposes specified
in this Article.
AMENDMENT
E. This Article may not be amended or repealed, in whole or in part, except
by affirmative vote of that fraction of the outstanding shares of the capital
stock of the Corporation entitled to vote in the election of directors, but in
no event less than two-thirds (2/3) determined by using as the numerator a
number equal to the sum of (i) the outstanding shares of such stock
beneficially owned by all Interested Parties, plus (ii) two-thirds (2/3) of
the remaining number of such outstanding shares, and using as the denominator a
number equal to the total number of the outstanding shares of stock of the
Corporation entitled to vote in the election of directors.
ARTICLE VIII
EVALUATION OF CERTAIN OFFERS
The Board of Directors of the Corporation shall not approve, adopt or
recommend any offer of any person or entity, other than
12(P)
17
the Corporation, to make a tender or exchange offer for any capital stock of
the Corporation, to merge or consolidate the Corporation with any other entity
or to purchase or otherwise acquire all or substantially all of the assets or
business of the Corporation unless and until the Board of Directors shall have
first evaluated the offer and determined that the offer would be in compliance
with all applicable laws and that the offer is in the best interests of the
Corporation and its shareholders. In connection with its evaluation as to
compliance with laws, the Board of Directors may seek and rely upon an opinion
of legal counsel independent from the offeror and it may test such compliance
with laws in any state or federal court or before any state or federal
administrative agency which may have appropriate jurisdiction. In connection
with its evaluation as to the best interests of the Corporation and its
shareholders, the Board of Directors shall consider all factors which it deems
relevant, including without limitation: (1) the adequacy and fairness of the
consideration to be received by the Corporation and/or its shareholders under
the offer considering historical trading prices of the Corporation's stock, the
price that might be achieved in a negotiated sale of the Corporation as a
whole, premiums over trading prices which have been proposed or offered with
respect to the securities of other companies in the past in connection with
similar offers, and the future prospects for the Corporation and its business;
(2) the potential social and economic impact of the offer and its consummation
on the Corporation, its employees, customers and vendors; and (3) the potential
social and economic impact of the offer and its consummation on the
communities in which the Corporation and any subsidiaries operate or are
located.
AMENDMENT
This Article may not be amended or repealed, in whole or in part, except by
affirmative vote of the holders of at least two-thirds (2/3) of the issued
and outstanding shares of the Corporation's capital stock entitled to vote in
the election of directors; provided, however, that such amendment or repeal may
be made by majority vote of shareholders at any meeting of shareholders duly
called and convened where such amendment or repeal has been recommended for
approval by two-thirds (2/3) of all directors then holding office.
4. The foregoing Amendment to the Articles of Incorporation was duly
adopted on the 29th day of May, 1985. The Amendment was duly adopted in
accordance with Section 611(2) of the Act by vote
12(Q)
18
of the shareholders. The necessary votes were cast in favor of the Amendment.
Signed as of this 29th day of May, 1985.
Fred Bauer
--------------------
Fred Bauer, Chairman
Gentex Corporation
12(R)
19
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
FOR GENTEX CORPORATION
Article III
"The total number of shares of all classes of stock
which the Corporation shall have the authority to issue is
15,000,000 shares, consisting of 10,000,000 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."
12(S)
20
Article VI
Section F of the Articles of Incorporation is hereby
amended to read as follows:
"F. A director may be removed from office as a director, with
or without cause, only by the affirmative vote of the holders of
two-thirds (2/3rds) of the then issued and outstanding shares of the
Corporation's stock entitled to vote thereon at a meeting duly called
and convened for that purpose; provided, however, that the term of
office of any director who is first elected to the Board of Directors
after May 13, 1987, and who is then or thereafter becomes an employee
of the Corporation, or any of its subsidiaries, shall automatically
terminate simultaneously with the termination of that director's
employment by the Corporation or subsidiary, with or without cause."
Article IX
A director of the Corporation shall not be personally liable to
the Corporation or its shareholders for monetary damages for a breach
of fiduciary duty as a director, except for liability: (a) for any
breach of the director's duty of loyalty to the Corporation or its
shareholders; (b) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (c)
resulting from a violation of Section 551(1) of the Michigan Business
Corporation Act; (d) for any transaction from which the director
derived an improper personal benefit; or (e) for any act or omission
occurring prior to March 1, 1987.
Signed this 13th day of May, 1987
By Fred T. Bauer
---------------------------------
(Signature)
Fred Bauer, Chairman
(Type or Print Name) (Type or Print Title)
12T
21
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
FOR GENTEX CORPORATION
ARTICLE III
The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is 20,000,000 shares, consisting of
15,000,000 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.
SIGNED THIS 19TH DAY OF JUNE, 1991
/s/ FRED BAUER
FRED BAUER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
12(U)
22
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
FOR GENTEX CORPORATION
ARTICLE III
The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is 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.
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.
SIGNED THIS 13TH DAY OF MAY, 1993
/s/ FRED BAUER
FRED BAUER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
12(V)
23
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
FOR GENTEX CORPORATION
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 $.06 per share are
all of one class with equal voting power, and each such share shall be equal to
every other such share.
The shares of Preferred Stock may be divided into and issued in one or more
series. The Board of Directors is hereby authorized to cause the Preferred
Stock to be issued from time to time in one or more series with such
designations and such relative voting, dividend, liquidation and other rights,
preferences and limitations as shall be stated and expressed in the resolution
providing for the issue of such Preferred Stock adopted by the Board of
Directors. The Board of Directors by vote of a majority of the whole Board is
expressly authorized to adopt such resolution or resolutions and issue such
stock from time to time as it may deem desirable.
SIGNED THIS 18TH DAY OF MAY, 1994
/s/ FRED BAUER
FRED BAUER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
12(W)
1
EXHIBIT 10(b)(1)
GENTEX CORPORATION
QUALIFIED STOCK OPTION PLAN
(AS AMENDED AND RESTATED, EFFECTIVE MAY 13, 1993)
PART I: PLAN ADMINISTRATION AND ELIGIBILITY
1. Purpose.
The purpose of this Plan is to provide an opportunity for certain employees
of Gentex Corporation (the "Corporation") to purchase shares of capital stock of
the Corporation and thereby have an additional incentive to contribute to the
prosperity of the Corporation.
2. Definitions.
The following terms are defined for use herein as follows:
a. "Board" means the Board of Directors of the Corporation.
b. "Common Stock" means the common stock (par value ($.06 per share)
of the Corporation.
c. "Committee" means the committee appointed pursuant to Paragraph 4
to administer the Plan.
d. "Corporation" means Gentex Corporation.
e. "Effective Date" means the effective date of this Amended and
Restated Plan, May 13, 1993.
f. "Market Value" means the closing sale price of Common Stock
reported in the NASD National Market System for the day on which the
particular option is granted, or, if prices of shares of Common Stock are
not so published for that date, then a fair market value determined by the
Committee by any reasonable method selected by it in good faith.
g. "Optionee" means any employee to whom an option has been granted
under Paragraph 4 of the Plan.
h. "Option Agreement" means an agreement evidencing options as
provided in Paragraph 7 of the Plan.
i. "Plan" means this Qualified Stock Option Plan of the Corporation as
in effect from time to time.
j. "Option Price" means the purchase price for Common Stock under an
option, as determined under Paragraph 7 of this Plan.
3. Shares.
a. The total number of shares of the Common Stock which may be sold
under the Plan shall not exceed 1,125,000 shares, except that the total
number of shares which may be sold under the Plan may be increased to the
extent of adjustments authorized by Paragraph 10. Such shares shall be
authorized shares and may be either unissued shares or treasury shares.
b. If an option granted under the Plan shall expire or terminate for
any reason without having been exercised in full, the shares not delivered
under such option shall be available for options subsequently granted.
4. Administration.
a. The Plan shall be administered by a Committee appointed by the
Board, which shall consist of three (3) or more members. All members of the
Committee shall be directors who are "disinterested
13
2
persons" within the meaning of Rule 16b-3 promulgated by the Securities and
Exchange Commission. The Committee shall determine the employees to be
granted options, the amount of stock to be optioned to each employee, and
the terms of the options to be granted. The Committee shall have full power
and authority to interpret the provisions of the Plan, to supervise the
administration of the Plan and to adopt forms and procedures for the
administration of the Plan. All determinations made by the Committee shall
be final and conclusive.
b. The granting of any option pursuant to this Plan shall be entirely
within the discretion of the Committee. Nothing herein contained shall be
construed to give any officer or employee any right to participate under
this Plan.
c. Each person who is or shall have been a member of the Committee
shall be indemnified and held harmless by the Corporation from and against
any cost, liability or expense imposed or incurred in connection with such
person's or the Committee's taking or failing to take any action under the
Plan. Each such person may rely on information furnished in connection with
the Plan's administration by any appropriate person or persons.
5. Eligibility. Only employees of the Corporation shall be eligible to
participate in the Plan. The Committee shall determine whether or not an
individual is eligible to participate in the Plan. An employee who has been
granted an option under this Plan or any other stock option plan of the
Corporation may be granted additional options. Any individual owning shares
possessing more than five percent (5%) of the total combined voting power of all
classes of stock of this Corporation shall not be eligible for the grant of an
option under the Plan.
6. Exercise Price. The per share exercise price of each option granted
under the Plan shall be at least 100% of the Market Value of a share of Common
Stock.
7. Terms of Options. Each option shall be evidenced by a written agreement
containing such terms and conditions as are set by the Board or the Committee,
including without limitation the following:
a. Number of Shares. Each Option Agreement shall state the number of
shares to which it pertains. No option grant shall permit options becoming
exercisable, for the first time in any one calendar year, for shares
exceeding $100,000 in Market Value, where Market Value is established at
the date of the grant.
b. Exercise Price. Each Option Agreement shall state the exercise
price.
c. Medium and Time of Payment. The exercise price for each share
purchased pursuant to an option granted under the Plan shall be payable in
full upon exercise, and may be paid in cash or, in full or in part, by the
surrender of Common Stock owned by the Optionee valued at fair market value
or by the surrender of Option rights hereunder that are then exercisable,
valued at the difference between the Option Price and the fair market value
of the underlying Common Stock. Promptly after the exercise of an Option
and the payment of the full Option Price, the Optionee shall be entitled to
the issuance of a stock certificate evidencing ownership of such Common
Stock. However, an Optionee shall have none of the rights of a shareholder
until a certificate for those Shares is issued to the Optionee, and no
adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued, except as
provided in Paragraph 10 of this Plan.
d. Term and Exercise of Options. Each option shall be exercisable in
whole or in part in such amounts and at or after such dates as may be
specified in the option agreement. In no event, however, shall any option
be exercisable less than one (1) year from the date of grant.
e. Administrative Discretion. The Committee may in its discretion
vary, among employees and among options granted to the same employee, any
and all of the terms and conditions of options granted under the Plan,
including the term during which and the amounts in which and dates at or
after which such options may be exercised.
8. Transferability of Options and Common Stock. Options under this Plan may
not be transferred except by will or according to the laws of descent and
distribution. During the lifetime of the Optionee, an option may
14
3
be exercised only by the Optionee or his guardian or legal representative. The
Corporation may, in the event it deems the same desirable to assure compliance
with applicable federal and state securities laws, legend any certificate
representing shares issued pursuant to the exercise of an option with an
appropriate restrictive legend, and may also issue appropriate stop transfer
instructions to its transfer agent with respect to such shares.
9. Termination of Options. Each option agreement shall contain such
provisions as the Committee may deem advisable for termination of the option in
the event of, and/or exercise of the option after the Optionee's death,
disability, or termination of employment by the Corporation. In no event may an
option be exercised more than three (3) months after the termination of the
Optionee's employment by the Corporation, nor more than twelve (12) months after
the Optionee shall have died or become disabled; provided, however, no option
may be exercised after termination of employment, death or disability unless the
Optionee was continuously in the employment of the Corporation during the period
from date of grant until the date of termination of employment, death or
disability.
Option agreements may also contain, in the discretion of the Committee,
provisions for termination of options and/or acceleration of exercise rights in
the event of any merger or consolidation of the Corporation with, or acquisition
of the Corporation or substantially all of its assets by, any other corporation
or entity.
Nothing in the Plan or in any option shall limit or affect in any way the
right of the Corporation to terminate an Optionee's employment at any time nor
be deemed to confer upon any Optionee any right to continue in the employ of the
Corporation.
10. Adjustment Provision. If the number of shares of Common Stock
outstanding changes by reason of a stock dividend, stock split,
recapitalization, merger, consolidation, split-up, combination or exchange of
shares, the aggregate number and class of shares available under this Plan and
the number of shares subject to each outstanding option, together with the
option prices, shall be appropriately adjusted by the Board or Committee to
prevent dilution of the interests of Optionees and of the Plan.
11. Effective Date of Plan, Termination and Amendment. The May 13, 1993
Plan Restatement shall take effect only upon and as of the date of approval of
the Plan by the Corporation's stockholders. Unless earlier terminated by the
Board, the Plan shall terminate on the date ten (10) years subsequent to the
date of the adoption of the Plan Restatement by the Board, after which date no
options may be granted under this Plan. The Board may terminate the Plan at any
time, or may from time to time amend the Plan as it deems proper and in the best
interest of the Corporation, provided that no such amendment may (a) alter the
aggregate number of shares that may be issued under the Plan, (b) decrease the
price at which options may be granted, or (c) modify the eligibility
requirements set forth in Paragraph 5.
CERTIFICATION
The foregoing Plan Restatement was duly adopted by the Board of Directors
on the 5th day of March, 1993, subject to the approval of the Company's
shareholders.
/s/ TRUDI SLENK
----------------------------
Trudi Slenk, Secretary
Gentex Corporation
15
5
1
3-MOS
DEC-31-1995
MAR-31-1995
16,969,763
12,334,862
11,183,471
(187,560)
5,132,065
45,958,014
27,497,669
(10,072,407)
88,820,868
10,909,138
0
997,216
0
0
76,500,060
88,820,868
26,042,968
26,042,968
15,426,405
19,883,839
(689,053)
13,500
0
6,848,182
2,261,000
4,587,182
0
0
0
4,587,182
0.27
0.27
