2.
|
To ratify the appointment of Ernst & Young LLP as the Company’s auditors for the fiscal year ended December 31, 2015.
|
3.
|
To approve, on an advisory basis, the compensation of the Company's named executive officers.
|
4.
|
To consider a proposal to approve the Second Amendment to the Second Restricted Stock Plan.
|
5.
|
To consider a proposal to approve the Amendment to the 2013 Employee Stock Purchase Plan.
|
6.
|
To transact any other business that may properly come before the meeting, or any adjournment thereof.
|
A.
|
FOR
Item 1
|
B.
|
FOR
Item 2
|
C.
|
FOR
Item 3
|
D.
|
FOR
Item 4 and
|
E.
|
FOR
Item 5
|
•
|
Company's 2015 Proxy Statement;
|
•
|
Company's Annual Report to Shareholders for the year ended December 31, 2014;
and
|
•
|
Proxy Card or Voting Instruction Form.
|
•
|
Election of nine directors (see pages 11 - 13)
|
•
|
Ratification of the appointment of Ernst & Young LLP as the Company’s auditors for the fiscal year ending December 31, 2015 (see page 34).
|
•
|
Approval, on an advisory basis, of the compensation of the Company's named executive officers (see page 35).
|
•
|
Approval of the Second Amendment to the Second Restricted Stock Plan (see page 36 and Appendix B).
|
•
|
Approval of the Amendment to the 2013 Employee Stock Purchase Plan (see page 37 and Appendix C).
|
•
|
Voting by
Internet
(log on to
https://www.proxyvote.com
and follow the directions there). We recommend you vote this way as it is the most cost-effective method; or
|
•
|
Voting by
toll-free telephone
(instructions are on the Proxy Card or Voting Instruction Form); or
|
•
|
Filling out the enclosed
Proxy Card or Voting Instruction Form
, signing it, and mailing it in the enclosed postage-paid envelope.
|
•
|
Revoking it by written notice to the Secretary of the Company at the address on the cover of the Proxy Statement;
|
•
|
Delivering a later-dated Proxy (including a telephone or Internet vote); or
|
•
|
Voting in person at the meeting.
|
•
|
For
the approval of the director nominees to the Board of Directors listed on the card.
|
•
|
For
ratification of Ernst & Young LLP as the Company’s auditors for the fiscal year ended December 31, 2015.
|
•
|
For
the approval, on an advisory basis, of the compensation of the Company's named executive officers.
|
•
|
For
the approval of the Second Amendment to the Second Restricted Stock Plan.
|
•
|
For
the approval of the Amendment to the 2013 Employee Stock Purchase Plan.
|
•
|
Under Michigan law, the nine nominees for director will be elected by a plurality of the votes cast. Notwithstanding the foregoing, the Company's Bylaws provide that if a director is elected by less than a majority of the votes cast, then such director shall promptly tender his or her resignation by written notice to the Board of Directors.
|
•
|
Ratification of Ernst & Young LLP as the Company's auditors for the fiscal year ended December 31, 2015, is by a majority votes cast.
|
•
|
The proposal to approve the compensation of the Company's named executive officers is advisory and the Board of Directors will take such votes into account when considering future actions.
|
•
|
The proposal to approve the Second Amendment to the Second Restricted Stock Plan must be approved by a majority of votes cast.
|
•
|
The proposal to approve the Amendment to the 2013 Employee Stock Purchase Plan must be approved by a majority of votes cast.
|
•
|
as necessary to meet applicable legal requirements;
|
•
|
to allow for the tabulation of votes and certification of the vote; or
|
•
|
to facilitate successful Proxy solicitation by our Board of Directors.
|
•
|
Following the instructions provided when you vote over the Internet, or
|
•
|
Going to
https://www.icsdelivery.com/gntx
and following the instructions provided.
|
|
2014
|
2013
|
2012
|
||||||
Net Sales
|
$
|
1,375,501
|
|
$
|
1,171,864
|
|
$
|
1,099,560
|
|
Operating Income
|
$
|
398,834
|
|
$
|
304,742
|
|
$
|
234,455
|
|
Net Income
|
$
|
288,605
|
|
$
|
222,930
|
|
$
|
168,587
|
|
Earnings Per Share (Fully Diluted)
|
$
|
0.98
|
|
$
|
0.78
|
|
$
|
0.59
|
|
Cash Dividends Declared Per Common Share
|
$
|
0.31
|
|
$
|
0.28
|
|
$
|
0.26
|
|
Total Assets
|
$
|
2,022,540
|
|
$
|
1,764,088
|
|
$
|
1,265,691
|
|
Long-Term Debt Outstanding at Year End
|
$
|
258,125
|
|
$
|
265,625
|
|
$
|
—
|
|
1)
|
By Internet at https://www.proxyvote.com.
We encourage you to vote this way.
|
2)
|
By toll-free telephone (refer to your Proxy Card or Voting Instruction Form for the correct number).
|
3)
|
By completing and mailing your Proxy Card or Voting Instruction Form.
|
4)
|
By written ballot at the Annual Meeting.
|
Name (Age) and Position
|
Business Experience
|
|
Nominees for Terms to Expire in 2016
|
Fred Bauer (72)
Director since 1981
|
Mr. Bauer is the Chairman and Chief Executive Officer of the Company, and he has held that position for more than five years. As a founder of the Company, Mr. Bauer offers a vast wealth of knowledge and experience with respect to the Company and the industries in which it operates that only comes with 35 plus years of dedicated service. Mr. Bauer thoroughly understands the Company's industries and has practical experience with the operational, engineering, administrative, and financial aspects of the Company, due to the many roles in which he has served the Company over the years. Mr. Bauer has overseen the Company's increase in market capitalization from approximately $17 million at its initial public offering in 1981 to approximately $5.2 billion as of March 1, 2015. In addition, he is also the named inventor on a number of the Company's patents.
|
Gary Goode (69)
Director since 2003
|
Mr. Goode is the Chairman of Titan Distribution LLC, an Elkhart, Indiana, company that offers consulting and distribution services related to structural adhesives, and has held that position since 2004. He was previously employed at Arthur Andersen LLP ("Andersen") for 29 years, including 11 years as the managing partner of its West Michigan practice, until his retirement in 2001. He is currently a director and Chairman of the Audit Committee at Universal Forest Products, Inc.
As an audit committee financial expert, Mr. Goode provides the Board with financial reporting and accounting expertise. His many years of public accounting experience provided Mr. Goode the opportunity to work with a great variety of small and large companies, including public companies, in a broad array of industries (including automotive and technology companies). Such experience allows Mr. Goode to provide excellent perspective to the Board. Mr. Goode has affirmatively been identified as an independent director by the Board of Directors and as an audit committee financial expert. He is the Chairman of the Company's Audit and Compensation Committees, and serves on the Company's Nominating Committee.
|
Pete Hoekstra (61)
Director since 2013
|
Mr. Hoekstra serves as a senior director at Greenberg Traurig LLP in the firm’s Government Law and Policy Group, where he provides business consulting in public policy, Congressional investigations, cyber security and data privacy solutions, government contracts, and government law and strategy. From 2011 to 2014, Mr. Hoekstra served as a senior adviser at Dickstein Shapiro LLP in that firm's Public Policy and Law Practice, providing business consulting. He served in the United States Congress for 18 years, representing Michigan’s 2nd Congressional District from 1993 to 2011, and is in rare company as a former U.S. Congressman with experience as a Fortune 500 business executive. Before his election to Congress, he worked at Herman Miller, Inc. for 15 years, becoming vice president of marketing at the Zeeland, Michigan-based office furniture manufacturer during a period when that company's revenues grew approximately 800%. At Herman Miller, Mr. Hoekstra worked in product development, product management, and dealer development as he rose through the ranks. Mr. Hoekstra provides the Board with a unique blend of expertise and perspective on the global marketplace and public policy implications. Mr. Hoekstra has affirmatively been identified as an independent director by the Board of Directors.
|
James Hollars (70)
Director since 2014
|
Mr. Hollars has, since 2010, been a member of the Advisory Board of Racemark International, a supplier of high-end floor mats to the global automotive industry with production locations in the United States, Switzerland, and Hungary. He was the Senior Vice President - Sales of the Company from 1999 to 2009. Mr. Hollars has an exceptional understanding of the sales process for suppliers to automotive OEMs, especially in Europe which continues to be an important geographic market for the Company. Mr. Hollars offers the Board unique insight into the decision-making process of automotive customers as regards sourcing. His familiarity with the Company's core business principles and what it takes to work in an entrepreneurial environment allow him to understand the Company more fully. Mr. Hollars has been affirmatively identified as an independent director by the Board.
|
John Mulder (78)
Director since 1992
|
Mr. Mulder was the Vice President-Customer Relations of the Company from February 2000 to June 2002. Before that, he was Senior Vice President-Automotive Marketing of the Company from September 1998 to February 2000. Prior to September 1998, he was Vice President- Automotive Marketing of the Company for more than five years. Mr. Mulder's overall understanding of the Company's primary industry and intimate knowledge of selling to automotive original equipment manufacturers provides valuable insight to the Board of Directors. His familiarity with the Company's core business principles and close relationship developed over the years with relevant decision makers at the Company's customers offer the Board a valuable perspective. Mr. Mulder has affirmatively been identified as an independent director by the Board of Directors.
|
Mark Newton (55)
Director since 2010
|
Mr. Newton is Senior Vice President of the Company. He joined the Company in 2004 as Advanced Lighting Developer and has held increasingly challenging management positions since then. He was promoted to: Photonics Engineering Manager in 2005; Vice President of Purchasing and Photonics in 2006; Vice President of Purchasing and Advanced Technology in 2007; Senior Vice President of Electrical Engineering and Purchasing in 2008; and he became an executive officer of the Company that year. He was further promoted to Senior Vice President of Electronics, Purchasing, and North American Sales in 2009 and to Senior Vice President in 2010. Mr. Newton knows and understands the global automotive industry and electronics technologies, in addition to the entrepreneurial culture of the Company and its importance to the past and future success of the Company. Mr. Newton also has significant experience in opto-electronics and LED/lighting. In addition, he is the named inventor on a number of the Company's patents.
|
Richard Schaum (68)
Director since 2011
|
Mr. Schaum has been General Manager of 3rd Horizon Associates LLC, a technology assessment and development company, since May 2003. From October 2003 until June 2005, he was Vice President and General Manager of Vehicle Systems for WaveCrest Laboratories, Inc., a startup company involved in the commercialization of proprietary electric propulsion systems. Prior to that, for more than thirty years, he was with DaimlerChrysler Corporation, and its predecessor, Chrysler Corporation, including as Executive Vice President, Product Development, and General Manager of Powertrain Operations. His responsibilities over those years included product development, manufacturing, program management and quality. Mr. Schaum is a fellow of the Society of Automotive Engineers and served as its President from 2007 to 2008. He is currently a director and a member of the Corporate Governance Committee of BorgWarner, Inc., a publicly-traded company that manufactures and sells technologies for engines and drive trains. He is also on the Board of Directors and is a member of the Audit and Compensation Committees of Sterling Construction, Inc., a heavy civil construction company. Mr. Schaum has extensive executive and management experience at all levels in a Fortune 100 company, and more recent experience with an entrepreneurial start-up company, as well as knowledge of, and interest in, corporate governance matters, gained on the board of a Fortune 500 company. In addition, his technical background and operating experience contribute to the breadth and depth of the Board's interactions and deliberations. Mr. Schaum has been affirmatively identified as an independent director by the Board of Directors. Mr. Schaum serves on the Company's Audit and Compensation Committees.
|
Frederick Sotok (80)
Director since 2000
|
Mr. Sotok was Executive Vice President and Chief Operating Officer of Prince Corporation (manufacturer of automotive interior parts that was acquired by Johnson Controls in 1996) in the last five years of his employment which began in October 1977 and ended in October 1996. By virtue of Mr. Sotok's former position at a large automotive interior and electronic parts supplier, Mr. Sotok has a thorough understanding of the global automotive industry and the unique challenges faced by automotive suppliers, including both organizational and administrative issues. Mr. Sotok's 17 years of experience in manufacturing management at General Electric also provides the Board of Directors with manufacturing experience to draw upon. Mr. Sotok has affirmatively been identified as an independent director by the Board of Directors and serves on the Company's Audit Committee.
|
James Wallace (72)
Director since 2007
|
Mr. Wallace is Chairman of the Board of Cranel, Inc., a Columbus, Ohio, company that provides storage, imaging, and information technology services; data storage solutions; document imaging, storage, publishing, and duplication services; and support, to the storage and imaging industry. Previously, he served as President and Chief Executive Officer of Cranel, Inc. for more than five years. His experience in the information technology services industry offers the Board of Directors an understanding of evolving technologies, in addition to manufacturing expertise, especially while operating in an entrepreneurial environment. Mr. Wallace has affirmatively been identified as an independent director by the Board of Directors. Mr. Wallace is the Chairman of the Company’s Nominating Committee and serves on the Company's Compensation Committee. He has been elected Lead Independent Director under the Company's Lead Independent Director Policy.
|
Name of Beneficial Owner
|
Amount and Nature of Ownership
|
Percent
of Class
|
|||
Shares Beneficially Owned (1)
|
Exercisable Options (2)
|
||||
Fred Bauer
|
8,103,248
|
|
937,520
|
|
2.8%
|
Steve Downing
|
47,646
|
|
20,514
|
|
*
|
Gary Goode
|
138,000
|
|
122,000
|
|
*
|
Pete Hoekstra
|
34,000
(3)
|
|
26,000
|
|
*
|
James Hollars
|
24,504
|
|
14,000
|
|
*
|
Arlyn Lanting
|
(4
|
)
|
—
|
|
*
|
Bruce Los
|
(5
|
)
|
—
|
|
*
|
Joseph Matthews
|
23,100
|
|
6,300
|
|
*
|
John Mulder
|
178,104
(6)
|
|
38,000
|
|
*
|
Mark Newton
|
99,924
|
|
34,204
|
|
*
|
Kevin Nash
|
33,910
|
|
11,560
|
|
*
|
Richard Schaum
|
54,000
|
|
50,000
|
|
*
|
Frederick Sotok
|
72,696
(7)
|
|
45,000
|
|
*
|
James Wallace
|
91,400
|
|
74,000
|
|
*
|
All directors and executive officers as a group (14 persons)
|
8,900,532
|
|
1,379,098
|
|
3.0%
|
(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 500 shares held by Mr. Hoekstra’s wife in an individual retirement account.
|
(4)
|
Mr. Lanting's term as a director expired at the 2014 Annual Meeting of Shareholders.
|
(5)
|
Mr. Los was no longer an executive officer as of June 16, 2014.
|
(6)
|
Includes 60,000 shares held in a trust established by Mr. Mulder's spouse, and Mr. Mulder disclaims beneficial ownership of these shares.
|
(7)
|
Includes 348 shares owned by Mr. Sotok’s spouse through a partnership, and Mr. Sotok disclaims beneficial ownership of these shares.
|
Name and Address of Beneficial Owner
|
Amount and Nature of Beneficial Ownership
|
Percent of Class
|
|
||
Black Rock Inc.
40 East 52nd Street,
New York, NY 10022
|
18,012,406
|
|
6.2
|
%
|
|
The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355
|
17,256,160
|
|
5.9
|
%
|
|
•
|
The fact that the Company has declassified its Board of Directors and implemented majority voting for directors (in the form of a director resignation Bylaw) in response to shareholder proposals, as well as allowing its shareholder rights plan (poison pill) to expire, demonstrates recent responsiveness to expressed shareholder concerns. In fact, implementation of majority voting for directors (in the form of a director resignation Bylaw) was done with the input and concurrence of the shareholder proponent as to form of adoption of the same.
|
•
|
The fact that the Company has implemented a Lead Independent Director Policy (*) also demonstrates its commitment to good corporate governance and ongoing engagement with shareholders.
|
•
|
The Company has added a Sustainability section to its website and additional diversity considerations to its director nominating policies in response to suggestions from shareholders.
|
•
|
In addition to demonstrating recent responsiveness to shareholder concerns, the Company has historically "put its money where its mouth is" in terms of good corporate governance as demonstrated by its long-term compensation system applicable to executives and employees alike, which ensures that all team members share in financial opportunities and sacrifices by emphasizing stock-based compensation so employees win when shareholders win. The Company does not have any employment agreements as all employees (including executive officers) are at-will and there are no "golden parachutes" or other excessive perquisites.
|
•
|
Under the Company's Lead Independent Director Policy, Mr. Wallace has been elected Lead Independent Director by the Board of Directors independent directors.
|
•
|
In addition to acting as a liaison between the independent directors and the Chairman, the Lead Independent Director has such duties and responsibilities as the Board of Directors may assign to him or her, including: presiding at all meetings of the Board at which the Chairman is not present; presiding at all executive sessions of independent directors and the ability to call such meetings; approving all information being sent to the Board, including meeting agendas and board meeting schedules (to ensure enough time for discussion of all agenda items); being available for meetings with major shareholders upon request; and retaining advisors, among others.
|
•
|
In accordance with the NASDAQ Stock Market Rules, in order for a director to qualify as "independent," the Board of Directors must affirmatively determine that the director has no material relationship with the Company that would impair the director’s independence. The Board has affirmatively determined a majority of its members are independent, and they include Messrs. Goode, Hoekstra, Hollars, Mulder, Schaum, Sotok, and Wallace. Given the foregoing, a majority of the Board is comprised of independent directors as defined in the NASDAQ Stock Market Rules. In fact, a super majority of Board members are independent.
|
•
|
A meeting of the independent directors, separate from management, is an agenda item at each Board of Directors meeting. During 2014, the independent directors met on 5 occasions.
|
•
|
Fred Bauer has served as Chairman of the Board of Directors and Chief Executive Officer (CEO) of the Company for 35 plus years. The Company’s market capitalization has increased from approximately $17 million at the initial public offering in 1981 to approximately $5.2 billion as of March 1, 2015. As a founder of the Company, Mr. Bauer is uniquely situated to serve as Chairman and CEO, which has been demonstrated by the Company's historical performance.
|
•
|
As noted above, the Board also has a Lead Independent Director and the independent members of the Board have as an agenda item, in connection with each Board meeting, the opportunity to meet (and have met on other occasions as well). The Company acknowledges that independent board leadership is important and believes that it is already getting such leadership from its independent directors, which has been bolstered by election of a Lead Independent Director. As such, there is no need at this time to separate the Chairman and CEO roles as a matter of policy (although it could be appropriate to do so in the future).
|
•
|
The Company continues to believe it is important that the Board have flexibility to determine the most qualified person to serve as Board Chairman rather than unduly impairing such flexibility with any policy requiring an independent Board Chairman.
|
•
|
The Board continues to believe that the Company is fortunate to have Mr. Bauer, a founder of the Company, serve as Chairman of the Board and Chief Executive Officer of the Company, as his 35 plus years of experience makes him the best choice for each of these roles.
|
•
|
The Board has also determined that having Mr. Bauer serve in each of these roles has allowed the Company to speak with one voice, avoid the dilution of leadership, and empowered Mr. Bauer to act with determination, all of which have benefited the Company and its shareholders. The Board believes that having the flexibility to choose the Chairman best suited to serve in the future is important as well.
|
•
|
The Company’s Audit Committee currently includes Messrs. Goode (Chairman), Schaum, and Sotok.
|
•
|
The Audit Committee met 10 times during the fiscal year ended December 31, 2014. Information regarding the functions performed by the Committee is set forth in the following "Report of the Audit Committee."
|
•
|
The Board of Directors has affirmatively determined that all members of the Audit Committee meet the appropriate tests for independence, including those set forth in the NASDAQ Stock Market Rules.
|
•
|
All Audit Committee members possess the required level of financial literacy and the Board of Directors has determined that at least one member of the Audit Committee, Mr. Goode, meets the current standard of audit committee financial expert as required by the Sarbanes-Oxley Act.
|
•
|
The Audit Committee operates pursuant to the Gentex Corporation Audit Committee Charter (*).
|
•
|
The Company’s independent auditors report directly to the Audit Committee.
|
•
|
The Audit Committee, consistent with the Sarbanes-Oxley Act and the rules adopted thereunder, meets with management and the auditors prior to the filing of officer certifications with the SEC to receive information concerning, among other things, any significant deficiencies or material weaknesses in the design or operation of internal controls.
|
•
|
The Audit Committee’s policy regarding the pre-approval of audit and non-audit services provided by the Company’s independent auditors is outlined in a document called "Revised Audit Committee Procedures for Approval of Audit and Non-Audit Services by Independent Auditors," which is attached as Appendix A to this Proxy Statement.
|
•
|
The Audit Committee has adopted a policy titled "Complaint Procedures for Accounting and Auditing Matters" (*) to enable confidential and anonymous reporting to the Audit Committee.
|
•
|
The Audit Committee reviews and approves all related-party transactions in accordance with its Charter. This review and approval covers all manners of related-party transactions, which are viewed in light of applicable disclosure requirements, independence standards for directors, and applicable Company codes and policies.
|
•
|
The Company’s Compensation Committee currently includes Messrs. Goode (Chairman), Schaum, and Wallace.
|
•
|
The Compensation Committee met 6 times during the fiscal year ended December 31, 2014. 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. Information regarding functions performed by the Committee is set forth in the following "Compensation Committee Report."
|
•
|
The Board of Directors has affirmatively determined that all members of the Compensation Committee meet the appropriate tests for independence, including those set forth in the NASDAQ Stock Market Rules.
|
•
|
The Compensation Committee operates pursuant to the Gentex Corporation Compensation Committee Charter (*).
|
•
|
More information regarding the scope of authority of the Compensation Committee, any delegation of its authority, and the role of executive officers is set forth in the "Compensation Discussion and Analysis" below.
|
•
|
Although the Compensation Committee has authority under its Charter to hire consultants, it has not done so to date and, as such, compensation consultants and other advisors have played no role in determining or recommending the amounts or form of executive officer and director compensation.
|
•
|
The Compensation Committee does not believe that the Company's compensation policies and practices are reasonably likely to have a material adverse effect on the Company.
|
•
|
The Company’s Nominating and Corporate Governance Committee currently includes Messrs. Wallace (Chairman) and Goode.
|
•
|
The Nominating and Corporate Governance Committee met one time during the fiscal year ended December 31, 2014 (holding other discussions at regularly scheduled Board of Directors meetings, including consideration of potential candidates for nomination to the Board). The Nominating and Corporate Governance Committee is responsible for identifying and recommending qualified individuals to serve as members of the Company’s Board and met in February 2015 in accordance with such responsibilities. This Committee added corporate governance responsibilities as of February 2015.
|
•
|
The Board of Directors has affirmatively determined that all members of the Nominating and Corporate Governance Committee meet the appropriate tests for independence, including those set forth in the NASDAQ Stock Market Rules.
|
•
|
The Nominating and Corporate Governance Committee operates pursuant to the Gentex Corporation Nominating and Corporate Governance Committee Charter (*).
|
•
|
The Nominating and Corporate Governance Committee has adopted certain procedures contained in a document called "Selection Process for Board Candidates" (*) to consider candidates for director nominations. Generally, for each election of directors the Chair of the Nominating and Corporate Governance Committee identifies candidates with support of the other committee member(s), other board members, and management, as needed. Candidates that meet the established criteria are identified and presented to the entire Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will then conduct interviews and reviews, as appropriate and necessary. The Nominating and Corporate Governance Committee then meets to consider and approve the most qualified candidates so it can make its recommendation to the full Board of Directors.
|
•
|
The Nominating and Corporate Governance Committee has established the minimum qualifications for candidates, which are contained in a document called "Position Profile: Member of the Board of Directors" (*). Those required qualifications include: working and/or experience with an entrepreneurial company; high level of personal and professional integrity; successful and distinguished business management career (using the Company's core principles); understanding of the Company's markets; and ability to work effectively with current Board members. The Position Profile also sets forth other desirable experience and qualifications, including gender, race, ethnic, and country of origin diversity.
|
•
|
The Nominating and Corporate Governance Committee has not, to date, paid any third party a fee to assist in identifying and evaluating nominees, but has the authority to do so.
|
•
|
The Nominating and Corporate Governance Committee has not, to date, received any potential director candidates for nomination from any shareholder that beneficially owns more than five percent of the Company's common stock.
|
•
|
The Nominating and Corporate Governance Committee will consider nominees for the Board of Directors from a variety of sources, including current directors, management, retained third-party search firms, and shareholders. If you want to recommend a director candidate, you may do so in accordance with the Company’s procedures or the Company’s Restated Articles of Incorporation. If a shareholder desires to recommend a candidate for consideration by the Nominating and Corporate Governance Committee for inclusion in the Company’s 2016 Proxy Statement as a Board nominee, that recommendation should be submitted in writing, together with appropriate biographical information, to the Chairman of the Nominating and Corporate Governance Committee, c/o Corporate Secretary’s Office, Gentex Corporation, 600 North Centennial Street, Zeeland, Michigan 49464. Any such nominations should be received by the Chairman of the Nominating and Corporate Governance Committee by no later than December 11, 2015, to allow adequate time for consideration of the nominee. Other nominations by shareholders for any directorship may be submitted to the Board of Directors by written notice as set forth in the Company’s Restated Articles of Incorporation and Bylaws, or pursuant to the rules and regulations promulgated under the Securities Exchange Act of 1934.
|
•
|
In accordance with the above-referenced Selection Process for Board Candidates and the Position Profile, the independent directors approved the slate of nominees standing for election at the 2015 Annual Meeting of Shareholders, and recommended the same to the entire Board of Directors.
|
•
|
The Nominating and Corporate Governance Committee now has corporate responsibilities as delegated by the Board of Directors.
|
•
|
The Board of Directors has adopted a "Code of Ethics for Certain Senior Officers" (*) that applies to the Company’s chief executive officer, principal financial officer and principal accounting officer. Information concerning any alleged violations is to be reported to the Audit Committee.
|
•
|
The Company has also adopted a "Code of Business Conduct and Ethics" (*). This Code applies to all directors, officers and employees of the Company.
|
•
|
No waivers of either of the foregoing codes have occurred to date.
|
•
|
You may contact any of our directors by writing them: Board of Directors, c/o Corporate Secretary’s Office, Gentex Corporation, 600 North Centennial, Zeeland, Michigan 49464. Employees and others who wish to contact the Board or any member of the Audit Committee may do so anonymously, if they wish, by using this address. Such correspondence will not be screened and will be forwarded in its entirety.
|
•
|
The Company complies with and will operate in a manner consistent with an act of legislation outlawing extensions of credit in the form of personal loans to or for its directors and executive officers.
|
•
|
Under the regulations of the Securities and Exchange Commission (SEC), directors and executive officers are required to file notice with the SEC within two (2) business days of any purchase or sale of the Company’s stock. Information on filings made by any of our directors or executive officers can be found on the Company’s web site under "SEC Filings" at
http://ir.gentex.com
.
|
•
|
While the Board of Directors oversees risk management, management of the Company is charged with managing risk through appropriate internal processes and internal controls. On behalf of the Board, the Audit Committee oversees Company risk policies and procedures relating to its financial statements and financial reporting processes, cyber risks, credit risks, and liquidity risks. Further, in accordance with the Audit Committee Charter, the Audit Committee periodically discusses with management the Company's risk assessment and risk management and steps taken by management to control and mitigate risk exposure (other than risks arising from the Company’s compensation policies and practices, which are overseen by the Compensation Committee on behalf of the Board). Such discussions with management and the independent auditors address significant risks, exposures, and judgments as well as steps taken by management to address them. The Audit Committee and the Compensation Committee, respectively, report to the Board periodically with respect to such topics. This oversight does not necessarily have any material effect on the Company's leadership structure. The Board also annually reviews the Company’s various insurance coverages.
|
•
|
emphasize stock-based incentives, essentially tying pay to performance as significant amounts of potential pay are not guaranteed
|
•
|
encourage and reward individual achievement as well as overall Company performance; and
|
Summary Compensation Table for 2014
|
|||||||||||||||||
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
(1)
Stock Awards
($)
|
(2)
Option Awards
($)
|
Non-Equity Incentive Plan Compensation
|
Change in Pension Value and Non-qualified Deferred Compensation Earnings
($)
|
(3)
All Other Compensation ($)
|
Total ($)
|
||||||||
Fred Bauer, Chairman and CEO
|
2014
|
496,513
|
|
119,097
|
|
—
|
|
1,224,080
|
|
—
|
|
—
|
|
93,902
|
|
1,933,592
|
|
2013
|
479,960
|
|
103,368
|
|
—
|
|
1,081,769
|
|
—
|
|
—
|
|
43,672
|
|
1,708,769
|
|
|
2012
|
464,031
|
|
80,727
|
|
—
|
|
830,675
|
|
—
|
|
—
|
|
213,095
|
|
1,588,528
|
|
|
Mark Newton,
Senior Vice President
|
2014
|
362,592
|
|
150,539
|
|
—
|
|
171,721
|
|
—
|
|
—
|
|
30,820
|
|
715,672
|
|
2013
|
296,861
|
|
132,426
|
|
127,300
|
|
165,059
|
|
—
|
|
—
|
|
19,953
|
|
741,599
|
|
|
2012
|
257,040
|
|
94,661
|
|
229,000
|
|
94,531
|
|
—
|
|
—
|
|
13,051
|
|
688,283
|
|
|
Steve Downing,
Vice President – Finance and CFO
|
2014
|
193,209
|
|
116,569
|
|
—
|
|
80,933
|
|
—
|
|
—
|
|
28,140
|
|
418,851
|
|
2013
|
134,057
|
|
96,817
|
|
229,140
|
|
68,458
|
|
—
|
|
—
|
|
8,207
|
|
536,679
|
|
|
Kevin Nash,
Vice President – Accounting and CAO
|
2014
|
149,827
|
|
68,953
|
|
160,620
|
|
52,732
|
|
—
|
|
—
|
|
28,513
|
|
460,645
|
|
Joseph Matthews,
Vice President – Purchasing
|
2014
|
133,121
|
|
51,883
|
|
107,080
|
|
40,205
|
|
—
|
|
—
|
|
14,428
|
|
346,717
|
|
Bruce Los,- Former Senior Vice President
|
2014
|
154,498
|
|
28,807
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19,120
|
|
202,425
|
|
2013
|
210,028
|
|
58,156
|
|
—
|
|
129,576
|
|
—
|
|
—
|
|
18,934
|
|
416,694
|
|
|
2012
|
198,347
|
|
44,477
|
|
138,375
|
|
74,501
|
|
—
|
|
—
|
|
13,404
|
|
469,104
|
|
Grants of Plan-Based Awards for 2014
|
|||||||||||||||||||||
Name
|
(1)
Grant Date
|
Estimated Future Payouts Under Non-Equity Incentive
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)
|
(2)
All Other Option Awards: Number of Securities Underlying Options
(#)
|
(3)
Exercise or Base Price of Option Awards ($/Sh)
|
(4) Grant Date Fair Value of Stock and Option Awards
($)
|
||||||||||||||
Thres-hold
($)
|
Target
($)
|
Maxi-mum ($)
|
Thres-hold
(#)
|
Target (#)
|
Maxi-mum
(#)
|
||||||||||||||||
Fred Bauer
|
8/20/2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
260,000
|
|
14.69
|
|
1,224,080
|
|
Mark Newton
|
9/30/2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
47,740
|
|
13.39
|
|
171,721
|
|
Steve Downing
|
9/30/2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22,500
|
|
13.39
|
|
80,933
|
|
Kevin Nash
|
9/30/2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,000
|
|
14,660
|
|
13.39
|
|
213,352
|
|
Joseph Matthews
|
3/28/2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,420
|
|
15.41
|
|
40,205
|
|
Joseph Matthews
|
9/30/2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,000
|
|
—
|
|
—
|
|
107,080
|
|
Bruce Los
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Outstanding Equity Awards at Fiscal Year-End at December 31, 2014
|
|||||||||||||||||
|
Option Awards
|
Stock Awards
|
|||||||||||||||
Name
|
(1)
Number
of
Securities Underlying Unexercised Options
(#)
Exercisable
|
(1)
Number of Securities Underlying Unexercised Options
(#)
Unexercis-able
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
(2)
Option Exercise Price ($)
|
Option Expiration Date
|
(3)
Number of Shares or Units of Stock That Have Not Vested
(#)
|
(4)
Market Value of Shares or Units of Stock That Have Not Vested
($)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
|
||||||||
Fred Bauer
|
216,000
|
|
—
|
|
—
|
|
8.05
|
|
8/14/2015
|
—
|
|
—
|
|
—
|
|
—
|
|
228,000
|
|
—
|
|
—
|
|
7.25
|
|
8/13/2016
|
—
|
|
—
|
|
—
|
|
—
|
|
|
191,520
|
|
47,880
|
|
—
|
|
9.12
|
|
8/12/2017
|
—
|
|
—
|
|
—
|
|
—
|
|
|
150,000
|
|
100,000
|
|
—
|
|
12.35
|
|
8/11/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
|
100,000
|
|
150,000
|
|
—
|
|
9.12
|
|
8/16/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
|
52,000
|
|
208,000
|
|
—
|
|
11.28
|
|
8/15/2020
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
260,000
|
|
—
|
|
14.69
|
|
9/20/2021
|
—
|
|
—
|
|
—
|
|
—
|
|
|
937,520
|
|
765,880
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Mark Newton
|
5,568
|
|
—
|
|
—
|
|
7.13
|
|
9/28/2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9/27/2017
|
26,520
|
|
479,216
|
|
—
|
|
—
|
|
|
6,144
|
|
6,144
|
|
—
|
|
9.76
|
|
9/30/2017
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9/27/2018
|
10,000
|
|
180,700
|
|
—
|
|
—
|
|
|
6,576
|
|
13,152
|
|
—
|
|
12.48
|
|
9/29/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
|
7,236
|
|
21,708
|
|
—
|
|
8.64
|
|
9/27/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
|
8,680
|
|
34,720
|
|
—
|
|
12.80
|
|
9/30/2020
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
47,740
|
|
—
|
|
13.39
|
|
9/30/2021
|
—
|
|
—
|
|
—
|
|
—
|
|
|
34,204
|
|
123,464
|
|
—
|
|
|
|
36,520
|
|
659,916
|
|
—
|
|
—
|
|
||
Steve Downing
|
6,300
|
|
—
|
|
—
|
|
9.76
|
|
9/30/2015
|
—
|
|
—
|
|
—
|
|
—
|
|
6,614
|
|
2,206
|
|
—
|
|
12.48
|
|
9/29/2016
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9/27/2017
|
8,000
|
|
144,560
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9/27/2018
|
18,000
|
|
325,260
|
|
—
|
|
—
|
|
|
4,000
|
|
6,000
|
|
—
|
|
8.64
|
|
9/27/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
|
3,600
|
|
14,400
|
|
—
|
|
12.80
|
|
9/30/2020
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
22,500
|
|
—
|
|
13.39
|
|
9/30/2021
|
—
|
|
—
|
|
—
|
|
—
|
|
|
20,514
|
|
45,106
|
|
—
|
|
|
|
26,000
|
|
469,820
|
|
—
|
|
—
|
|
||
Kevin Nash
|
2,610
|
|
—
|
|
—
|
|
9.76
|
|
9/30/2015
|
—
|
|
—
|
|
—
|
|
—
|
|
2,740
|
|
2,740
|
|
—
|
|
12.48
|
|
9/29/2016
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,880
|
|
5,760
|
|
—
|
|
8.64
|
|
9/27/2017
|
4,320
|
|
78,062
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9/27/2018
|
6,000
|
|
108,420
|
|
—
|
|
—
|
|
|
3,330
|
|
9,990
|
|
—
|
|
12.80
|
|
9/30/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9/30/2019
|
12,000
|
|
216,840
|
|
—
|
|
—
|
|
|
—
|
|
14,660
|
|
—
|
|
13.39
|
|
9/30/2021
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11,560
|
|
33,150
|
|
—
|
|
|
|
22,320
|
|
403,322
|
|
—
|
|
—
|
|
||
Joseph Matthews
|
—
|
|
—
|
|
—
|
|
—
|
|
3/31/2015
|
4,000
|
|
72,280
|
|
—
|
|
—
|
|
6,300
|
|
2,100
|
|
—
|
|
15.13
|
|
3/31/2016
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
4,280
|
|
—
|
|
12.23
|
|
3/29/2017
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
6,736
|
|
—
|
|
10.12
|
|
3/27/2018
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3/27/2018
|
4,800
|
|
86,736
|
|
—
|
|
—
|
|
|
—
|
|
9,420
|
|
—
|
|
15.41
|
|
3/28/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9/30/2019
|
8,000
|
|
144,560
|
|
—
|
|
—
|
|
|
6,300
|
|
22,536
|
|
—
|
|
|
|
16,800
|
|
303,576
|
|
—
|
|
—
|
|
||
Bruce Los
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4)
|
Represents the aggregate market value as of December 31, 2014, for shares of common stock awarded under the Company's Second Restricted Stock Plan.
|
Option Exercises and Stock Vested for 2014
|
||||||||
|
Option Awards
|
Stock Awards
|
||||||
Name
|
Number of
Shares
Acquired on
Exercise (#)
|
Value Realized
on Exercise
($)
|
Number of
Shares
Acquired on
Vesting (#)
|
Value Realized
on Vesting
($)
|
||||
Fred Bauer
|
206,000
|
|
808,550
|
|
—
|
|
—
|
|
Mark Newton
|
69,348
|
|
369,952
|
|
20,400
|
|
282,703
|
|
Steve Downing
|
3,500
|
|
27,006
|
|
4,000
|
|
55,432
|
|
Kevin Nash
|
13,456
|
|
63,422
|
|
3,600
|
|
49,889
|
|
Joseph Matthews
|
6,384
|
|
30,178
|
|
—
|
|
—
|
|
Bruce Los
|
88,320
|
|
478,964
|
|
—
|
|
—
|
|
Director Compensation for 2014
|
||||||||||||||
Name
|
(1)
Fees Earned or
Paid in
Cash
($)
|
Stock
Awards
($)
|
(2)
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compen-sation
($)
|
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
(3)
All Other
Compensation
($)
|
Total
($)
|
|||||||
Gary Goode
|
54,000
|
|
—
|
|
67,662
|
|
—
|
|
—
|
|
—
|
|
121,662
|
|
Pete Hoekstra
|
21,500
|
|
—
|
|
67,662
|
|
—
|
|
—
|
|
—
|
|
89,162
|
|
Jim Hollars
|
12,500
|
|
—
|
|
67,662
|
|
—
|
|
—
|
|
—
|
|
80,162
|
|
Arlyn Lanting
|
12,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,000
|
|
John Mulder
|
20,250
|
|
—
|
|
67,662
|
|
—
|
|
—
|
|
—
|
|
87,912
|
|
Richard Schaum
|
41,500
|
|
—
|
|
67,662
|
|
—
|
|
—
|
|
—
|
|
109,162
|
|
Fred Sotok
|
31,000
|
|
—
|
|
67,662
|
|
—
|
|
—
|
|
—
|
|
98,662
|
|
Jim Wallace
|
46,500
|
|
—
|
|
67,662
|
|
—
|
|
—
|
|
—
|
|
114,162
|
|
Executive Compensation Plan Summary
|
||||||
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
|
|||
Equity compensation Plans approved by Shareholders
|
19,787,372
|
|
11.95
|
|
21,744,464
|
|
Equity Compensation Plans not approved by Shareholders
|
—
|
|
—
|
|
—
|
|
Total
|
19,787,372
|
|
11.95
|
|
21,744,464
|
|
|
2014
|
2013
|
||||
Audit Fees
|
$
|
342,700
|
|
$
|
348,700
|
|
Audit-Related
|
$
|
—
|
|
69,600
|
|
|
Tax Fees
|
$
|
15,200
|
|
263,867
|
|
|
All Other
|
$
|
—
|
|
—
|
|
|
Total
|
$
|
357,900
|
|
$
|
682,167
|
|
1.
|
The Committee has reviewed and approved work to be performed by the independent auditors in the areas of tax, audit and advisory services and subcategories within each category as designated on the attached schedule.
|
2.
|
Any additional audit and non-audit work performed by the independent auditors that is not included on the attached schedule must be specifically pre-approved as follows:
|
a.
|
If the proposed independent auditors’ engagement is equal to or less than $50,000, the Chairman of the Audit Committee must pre-approve the work and will communicate his approval to the full Audit Committee at the next regularly scheduled meeting of the Audit Committee.
|
b.
|
If the proposed independent auditors’ engagement is greater than $50,000, the full Audit Committee must pre-approve the work.
|
3.
|
The independent auditors may not conduct any work that is prohibited by applicable SEC rules or regulations.
|