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
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Related links:
http://www.gentex.com
CONTACT:
Connie Hamblin of Gentex Corporation,
+1-616-772-1800
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