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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 1, 2005
GENTEX CORPORATION
(Exact name of Registrant as specified in its charter)
Michigan 0-10235 38-2030505
(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
600 North Centennial Street, Zeeland, Michigan 49464
(Address of Principal Executive Offices) (Zip Code)
616-772-1800
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On March 30, 2005, the Compensation Committee of the Board of Directors of
Gentex Corporation (the "Company") approved the acceleration of vesting of
"under-water" stock options held by current employees, including executive
officers. A stock option was considered "under-water" if the option exercise
price was greater than $31.76 per share as of March 29, 2005. In addition to the
approval of the Compensation Committee of the Board of Directors of the Company,
the entire Board of Directors approved the acceleration of vesting of
"under-water" stock options. Such actions were taken in accordance with the
provisions of the Gentex Corporation Qualified Stock Option Plan (As Amended and
Restated Effective February 26, 2004.
After the Company examined a number of alternatives, the decision to accelerate
the vesting of "under-water" stock options was made primarily to avoid
recognizing compensation expense associated with these stock options in future
financial statements upon the adoption of Statement of Financial Accounting
Standards (SFAS) No. 123 (R), "Share-Based Payment". The news release announcing
the acceleration of vesting of "under-water" stock options is attached as
Exhibit 99.1 to this Form 8-K. Approximately 2.3 million shares became
immediately exercisable as a result of the vesting acceleration. Vesting was
accelerated on every unexercised option that was granted to any Gentex employee
(including executive officers) that had an exercise price above the March 29,
2005, closing price of $31.76.
ITEM 7.01 REGULATION FD DISCLOSURE.
On April 1, 2005, the Company issued a news release announcing a 2-for-1
stock split effected in the form of a 100 percent common stock dividend to be
issued on May 6, 2005, to shareholders of record on April 22, 2005. Each
shareholder of record will receive an additional share of common stock of the
Company for each share held as of the record date. The news release announcing
the 2-for-1 stock split effected in the form of a 100 percent common stock
dividend is attached as Exhibit 99.1 to this Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 News Release dated April 1, 2005.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
GENTEX CORPORATION
Dated: April 1, 2005 By /s/ Enoch Jen
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Enoch Jen
Vice President - Finance
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EXHIBIT INDEX
99.1 News Release Dated April 1, 2005
4
Exhibit 99.1
GENTEX CORPORATION DECLARES 100% STOCK DIVIDEND AND ACCELERATES VESTING
OF 'UNDER-WATER' STOCK OPTIONS
ZEELAND, Mich., April 1 /PRNewswire-FirstCall/ -- Gentex Corporation, the
leader in auto-dimming mirrors for the worldwide automotive industry, today
announced a two-for-one stock split effected in the form of a 100 percent common
stock dividend for each outstanding share of the Company's common stock, par
value $0.06 per share. This stock dividend will be issued on May 6, 2005, to
shareholders of record at the close of business on April 22, 2005. The Company
also announced it has accelerated the vesting of "under- water" stock options --
those stock options previously granted to employees at prices that are higher
than the current price of the Company's stock.
"We are pleased that our Board of Directors has approved this stock split,
and believe that it is indicative of their confidence in the Company's prospects
over the long term," said Garth Deur, Gentex Executive Vice President. "There
continue to be opportunities for growth in our core auto- dimming mirror
business, as only an estimated 18 percent of the world's light vehicles were
equipped with an interior auto-dimming mirror in calendar year 2004.
"In addition, the successful launch over the past nine months of the
Company's proprietary new SmartBeam(TM) technology provides the Company with
another potentially significant growth opportunity," said Deur.
SmartBeam is the intelligent, high-beam headlamp control technology
developed by Gentex that was launched on the 2005 Jeep Grand Cherokee and
Cadillac STS models. Deur said that the technology has received very favorable
reviews from customers and automotive writers alike. SmartBeam will be available
on additional models in North America in the 2006 and 2007 model years, and the
Company is working under a production purchase order to develop SmartBeam for a
European automaker, with shipments to begin early in 2006. There is also
significant interest from other automakers around the globe, according to Deur.
Any shareholder who owns Gentex shares as of the close of business on May 6,
2005, will receive the 100 percent common stock dividend. However, any
shareholder who sells Gentex shares from the record date (April 22, 2005) to the
close of business on the issue date (May 6, 2005) should check with his/her
broker to determine their eligibility for this stock dividend. Shareholders
should not discard existing stock certificates. Certificates for the new shares
will be mailed after May 9, 2005, and should be retained with other stock
certificates. The accounts of "street name" shareholders (those who hold their
stock in a brokerage account) will be credited with the new shares on May 12,
2005. The last time the Company declared a stock dividend was in June of 1998.
The decision to accelerate the vesting of the "under-water" stock options
was made primarily to avoid recognizing compensation expense associated with
these options in future financial statements, upon the Company's adoption of the
Financial Accounting Standards Board Statement of Financial Accounting Standards
(SFAS) No. 123(R), "Share-Based Payment." When effective, SFAS 123(R) will
require share-based payments to employees, including grants of stock options, to
be recognized on the Company's financial statements based on their fair values.
Currently, the Company accounts for its share-based payments under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
its related interpretations, which does not necessarily require the recognition
of compensation expense in the financial statements. The charge to the income
statement that will be avoided amounts to approximately $15 million over the
course of the original vesting periods, of which approximately $5 million would
have been expensed in the last six months of calendar 2005. Approximately 2.3
million shares became immediately exercisable as a result of the vesting
acceleration. Vesting was accelerated on every unexercised option that was
granted to any Gentex employee (including executive officers) that had an
exercise price above the March 29, 2005, closing price of $31.76.
Gentex has a very broad-based stock option plan (virtually every full-time
salaried employee is eligible for the options that are awarded annually based on
individual employee performance), and the unvested, "under-water" stock options
were awarded to employees over the past several years, under the Company's stock
option plans. Typically, employee stock options granted by the Company vest
equally over a four- to five-year period. Vesting is the period during which an
employee's stock options become exercisable.
"The Company examined many alternatives in response to SFAS No. 123(R),
which requires that Gentex begin reporting expenses associated with stock
options beginning in July 2005 (the Company's third quarter). We believe that
this action is in the best interests of employees and shareholders of the
Company in the long term," said Gentex Executive Vice President Garth Deur.
"In addition, because these options have exercise prices in excess of
current market values of our stock, we believe they are not fully achieving
their original objectives of aligning employee interests with those of the
shareholders and employee retention, and thus the acceleration may have a
positive effect on employee morale, retention and perception of option value."
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act, as amended, that are based on management's belief,
assumptions, current expectations, estimates and projections about the global
automotive industry, the economy and the Company itself. Words like
"anticipates," "believes," "confident," "estimates," "expects," "forecast,"
"likely," "plans," "projects," and "should," and variations of such words and
similar expressions identify forward-looking statements. These statements do not
guarantee future performance and involve certain risks, uncertainties, and
assumptions that are difficult to predict with regard to timing, expense,
likelihood and degree of occurrence. These risks include, without limitation,
employment and general economic conditions, the pace of economic recovery in the
U.S. and in international markets, the pace of automotive production worldwide,
the types of products purchased by customers, competitive pricing pressures,
currency fluctuations, the financial strength of the Company's customers, the
mix of products purchased by customers, the ability to continue to make product
innovations, the success of newly introduced products (e.g. SmartBeam), and
other risks identified in the Company's filings with the Securities and Exchange
Commission. Therefore actual results and outcomes may materially differ from
what is expressed or forecasted. Furthermore, the Company undertakes no
obligation to update, amend, or clarify forward-looking statements, whether as a
result of new information, future events, or otherwise.
Founded in 1974, Gentex Corporation (Nasdaq: GNTX) is an international
company that provides high-quality products to the worldwide automotive industry
and North American fire protection market. Based in Zeeland, Michigan, the
Company develops, manufactures and markets interior and exterior
automatic-dimming automotive rearview mirrors that utilize proprietary
electrochromic technology to dim in proportion to the amount of headlight glare
from trailing vehicle headlamps. Many of the mirrors are sold with advanced
electronic features, and more than 96 percent of the Company's revenues are
derived from the sales of auto-dimming mirrors to nearly every major automaker
in the world.
SOURCE Gentex Corporation
-0- 04/01/2005
/CONTACT: Connie Hamblin of Gentex Corporation, +1-616-772-1800/
/Web site: http://www.gentex.com /