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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934 FOR FISCAL YEAR ENDED DECEMBER 31, 2002.
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934.
For the transition period from to .

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Commission File No.: 0-10235

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GENTEX CORPORATION

(Exact name of registrant as specified in its charter)
MICHIGAN 38-2030505

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

600 N. CENTENNIAL STREET, ZEELAND, MICHIGAN 49464

(Address of principal executive offices) (Zip Code)

(616) 772-1800

(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which registered
NONE ---------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.06 PER SHARE

(Title of Class)
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:

----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405

of Regulation S-K (Paragraph 229.405 of this chapter) is not contained herein,

and will not be contained, to the best of registrant's knowledge, in definitive

proxy or information statements incorporated by reference in Part III of this

Form 10-K or any amendment to this Form 10-K. (X)
Indicate by check mark whether the registrant is an accelerated filer as defined

in Rule 12b-2 of the Act.

Yes X No:

----- -----
As of June 30, 2002 (the last business day of the registrant's most recently

completed second fiscal quarter), 75,818,503 shares of the registrant's common

stock, par value $.06 per share, were outstanding. The aggregate market value of

the common stock held by non-affiliates of the registrant (i.e., excluding

shares held by executive officers, directors, and control persons as defined in

Rule 405, 17 CFR 203.405) on that date was $1,968,286,758 computed at the

closing price on that date.
Portions of the Company's Proxy Statement for its 2003 Annual Meeting of

Shareholders are incorporated by reference into Part III.

Exhibit Index located at Page 35


-1-

Statements in this Annual Report on Form 10-K which express "belief",

"anticipation" or "expectation" as well as other statements which are not

historical fact, such as availability and the impact of new technology,

penetration of the automotive market, and foreign exchange rates, are

forward-looking statements and involve risks and uncertainties described below

under the headings "Business" and "Management's Discussion and Analysis of

Results of Operations and Financial Condition" that could cause actual results

to differ materially from those projected. All forward-looking statements in

this Annual Report are based on information available to the Company on the date

hereof, and the Company assumes no obligation to update any such forward-looking

statements.
PART I
ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
Gentex Corporation (the "Company") designs, develops, manufactures and

markets proprietary products employing electro-optic technology:

automatic-dimming rearview mirrors and fire protection products.
The Company was organized in 1974 to manufacture residential smoke

detectors, a product line that has since evolved into a more sophisticated group

of fire protection products for commercial applications. In 1982, the Company

introduced an automatic interior rearview mirror that was the first commercially

successful glare-control product offered as an alternative to the conventional,

manual day/night mirror. In 1987, the Company introduced its interior Night

Vision Safety(TM) (NVS(R)) Mirror, an electrochromic (EC) automatic-dimming

interior rearview mirror, providing the first successful commercial application

of electrochromic technology in the automotive industry and world. Through the

use of electrochromic technology, this mirror is continually variable and

automatically darkens to the degree required to eliminate rearview headlight

glare. In 1991, the Company introduced its exterior Night Vision Safety Mirror

Sub-Assembly, which works as a complete glare-control system with the interior

NVS Mirror. In 1997, the Company began making volume shipments of three new

exterior mirror sub-assembly products: thin glass flat, convex and aspheric.
During 2001 and 2002, the Company began making shipments of its NVS

mirrors for a number of mid-sized, medium-priced vehicles, including the Toyota

Camry, Matrix and Corolla; Ford Taurus and Mercury Sable; Volkswagen Passat,

Jetta, Golf GTI and Beetle; Nissan Altima; Opel Cross Car Line; Chrysler Sebring

Coupe; Hyundai Santa Fe and Sonata; and Kia Optima and Sorento.
The Company's annual report on Form 10-K, quarterly reports on Form

10-Q, current reports on Form 8-K, and all amendments to those reports will be

made available free of charge through the Investor Information section of the

Company's Internet website (http://www.gentex.com) as soon as practicable after

such material is electronically filed with or furnished to the Securities and

Exchange Commission.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
See Note 8 to the Consolidated Financial Statements filed with this

report.
(c) NARRATIVE DESCRIPTION OF BUSINESS
The Company currently manufactures electro-optic products, including

automatic-dimming rearview mirrors for the automotive industry and fire

protection products primarily for the commercial building industry.
AUTOMATIC-DIMMING REARVIEW MIRRORS
Interior NVS Mirrors. In 1987, the Company achieved a significant

technological breakthrough by applying electrochromic technology to the

glare-sensing capabilities of its Motorized Mirror. Through the use of this

technology, the mirror gradually darkens to the degree necessary to eliminate

rearview glare from following vehicle headlights. The NVS Mirror offers all of

the continuous reflectance levels between its approximate 85% full-reflectance

state and its 7% least-reflectance state, taking just a few seconds to span the

entire range. Special electro-optic sensors in the mirror detect glare and

electronic circuitry supplies electricity to darken the mirror to only the

precise level required to eliminate glare, allowing the driver to maintain

maximum vision. This is accomplished by the utilization of two layers of

precision glass with special conductive coatings that are separated by the

Company's proprietary electrochromic materials. When the appropriate light

differential is detected, an electric current causes the electrochromic material

to darken, decreasing the mirror's reflectance, thereby eliminating glare.
-2-
During 1991, the Company began shipping the first advanced-feature

interior NVS Mirror, the NVS Headlamp Control Mirror, an automatic-dimming

mirror that automatically turns car head- and taillamps "on" and "off" at dusk

and dawn in response to the level of light observed. During 1993, the Company

began shipping its NVS Compass Mirror, with an electronic compass that

automatically compensates for changes in the earth's magnetic field. During

1997, the Company began shipping a new interior NVS Mirror that digitally

displays either a compass or outside temperature reading. During 1998, the

Company began shipping new compass mirrors with its proprietary light-emitting

diode (LED) map lamps, a major improvement over mirrors with standard

incandescent map lamps. At the beginning of 2000, the Company began shipping to

General Motors interior NVS Mirrors that serve as the driver interface for the

OnStar(R) System, an in-vehicle safety, security and information service using

Global Positioning System (GPS) satellite technology.
The Company shipped approximately 4,609,000 interior NVS Mirrors in

2000, approximately 5,000,000 in 2001, and approximately 6,305,000 in 2002.
During 2001 and 2002, the Company began making shipments of its NVS

Mirrors for a number of mid-sized, medium-priced vehicles, including the Toyota

Camry, Matrix and Corolla; Ford Taurus and Mercury Sable; Volkswagen Passat,

Jetta, Golf GTI and Beetle; Nissan Altima; Opel Cross Car Line; Chrysler Sebring

Coupe; Hyundai Santa Fe and Sonata; and Kia Optima and Sorento.
During 2002, the growth in unit shipments resulted from increased

penetration of light vehicles manufactured worldwide. The Company's interior

NVS(R) Mirrors are standard equipment or factory-or distributor/dealer-installed

options on certain trim levels of the following 2003 and 2003-1/2 vehicle

models:
TABLE 1. INTERIOR NVS(R) MIRROR AVAILABILITY BY VEHICLE LINE (NORTH AMERICAN

MANUFACTURERS)
GM/Cadillac Deville DaimlerChrysler / Dakota Pickup

Seville Dodge Durango

CTS Grand Caravan

Escalade Intrepid

GM/Buick LeSabre Custom Ram Pickup

Park Avenue DaimlerChrysler / Grand Cherokee

GM/Hummer H2 Jeep Liberty

GM/Oldsmobile Aurora Wrangler

GM/Pontiac Bonneville DaimlerChrysler/ M Class

GM/Chevrolet Blazer Mercedes-Benz

Corvette BMW X5

Express Van Volkswagen Beetle

Silverado Pickup Nissan Altima

Suburban Maxima

Avalanche Toyota Avalon

Tahoe Camry Solara

GM/GMC Jimmy Camry

Savana Van Corolla / Matrix

Sierra Pickup Sequoia

Yukon Sienna

Ford Crown Victoria Volkswagen Jetta

Taurus Southeast Toyota / 4-Runner Limited / SR5

Expedition Gulf State Toyota / Avalon

Explorer Sport Trac Toyota Motor Sales Camry

F150 Pickup Celica

Windstar Tundra

Ford/Lincoln LS RAV4

Navigator Sienna

Town Car Solara

Ford/Mercury Grand Marquis Highlander

Marauder Sequoia

Sable Corolla / Matrix

DaimlerChrysler 300M Subaru / Forester

/ Chrysler Concorde New England Dist. Impreza

Sebring Convertible Legacy

Town & Country Limited Outback

-3-
TABLE 1. INTERIOR NVS(R)MIRROR AVAILABILITY BY VEHICLE LINE - CONTINUED

(MANUFACTURERS OUTSIDE OF NORTH AMERICA)

Audi A4 Lexus IS300

A6 ES300

A8 GS300

S8 GS430

Bentley Bentley LS430

Continental RX330

BMW 700 Series SC300

500 Series SC430

300 Series GX470

Daewoo/Ssangyong Chairman LX470

Korando MG Rover 75R40

Musso Mazda Mazda 6

Rexton Daimler/Chrysler / A Class

Istana Mercedes-Benz C Class

Fiat Alfa Romeo CL Class

Lancia Thesis CLK Class

Lancia Lybra E Class

Fiat (Brazil) Marea S Class

Ford (Europe) Mondeo SL Class

Ford (Taiwan) Mondeo SLK Class

Ford / Jaguar XK Mitsubishi Montero Sport

XJ Magna Verada

S-Type Outlander

Ford / Land Rover Discovery Nissan Cedric

Range Rover Cima

GM (Brazil) Vectra Gloria

Astra Opel Corsa

Hyundai Dynasty Meriva

Grandeur XG Astra

EF Sonata Zafira

Santa Fe Vectra

Avante XD Omega

Equus Rolls Royce Arnage

Tuscani Samsung SM5

Terracan Toyota Land Cruiser

Starex Camry

Infiniti Q45 Cynus

I35 Celsior

G35 Windom

M45 Century

Isuzu Axiom 4-Runner

Kia Motors Corp. Enterprise Toyota (Europe) Avensis

Sorento Toyota (Taiwan) Camry

Optima Volkswagen Polo

Carens Golf

Passat

-4-

Exterior NVS(R) Mirror Sub-Assemblies. The Company has devoted

substantial research and development efforts to the development of its

electrochromic technology to permit its use in exterior rearview mirrors.

Exterior NVS(R) mirrors are controlled by the sensors and electronic circuitry

in the interior NVS(R) Mirror, and both the interior and exterior mirrors dim

simultaneously. During 1991, the Company's efforts culminated in a design that

is intended to provide acceptable long-term performance in all environments

likely to be encountered. In 1994, the Company began shipments of its complete

three-mirror system, including the convex (curved glass) wide-angle NVS(R)

Mirror to BMW. During 1997, the Company began making volume shipments of three

new exterior mirror products - - thin glass flat, convex and aspheric. During

2001 and 2002, the Company began making shipments of the world's first exterior

automatic-dimming mirrors with built-in turn-signal indicators to Southeast

Toyota and General Motors. The Company currently sells its exterior NVS(R)

Mirror Sub-Assemblies to exterior mirror suppliers of General Motors,

DaimlerChrysler, Ford, Audi, BMW, Bentley, Fiat, Jaguar, Land Rover, Opel, Rolls

Royce, Infiniti, Mitsubishi, Nissan and Toyota, who assemble the exterior NVS

Mirror Sub-Assemblies into full mirror units for subsequent resale to the

automakers.
The Company shipped approximately 2,148,000 exterior NVS Mirror

Sub-Assemblies during 2000, approximately 2,181,000 in 2001, and approximately

2,500,000 in 2002. During 2002, unit shipment growth primarily resulted from the

increased penetration of light vehicles in North America and Europe.
The exterior NVS Mirror is standard equipment or a factory- or

distributor/dealer-installed option on certain trim levels of the following 2003

and 2003-1/2 vehicle models:
TABLE 2. EXTERIOR NVS(R)MIRROR AVAILABILITY BY VEHICLE LINE
GM/Cadillac Deville Bentley Bentley

Escalade Continental

Seville DaimlerChrysler /

GM / Buick Century Limited Mercedes- Benz C Class

Regal CL Class

LeSabre CLK Class

Park Avenue E Class

GM / Chevrolet Blazer ML Class

Corvette S Class

Silverado SL Class

Suburban SLK Class

Tahoe Fiat Lancia Thesis

Avalanche Ford / Jaguar XJ

GM / GMC Sierra XK

Yukon S Type

GM / Hummer H2 Ford / Land Rover Range Rover

Ford/Lincoln Town Car Infiniti Q45

DaimlerChrysler/ Town & Country Limited M45

Chrysler 300 M Lexus RX330

DaimlerChrysler/Dodge Durango Mitsubishi Magna Verada

Grand Caravan Nissan Cima

DaimlerChrysler/Jeep Grand Cherokee Opel Vectra

Liberty Rolls Royce Arnage

Audi A6 Toyota Avalon

A8 Sienna

S8 Toyota Motor Sales Sequoia

BMW 700 Series

500 Series

X5

Product Development. The Company plans to continue introducing

additional advanced-feature NVS(R) Mirrors. Advanced-feature NVS(R) Mirrors

currently being offered by the Company include the NVS Headlamp Control Mirror,

the NVS(R) Lighted Mirror with LED map lamps, the NVS Compass Mirror, the NVS

Mirror with Remote Keyless Entry, the NVS Compass/Temperature Mirror, the NVS

Dual Display Compass/Temperature Mirror, the NVS telematics mirrors and the NVS

HomeLink(R) Mirror. During 2001, the Company announced a revolutionary new

technology, called SmartBeam, that uses a custom, active-pixel, CMOS

(complementary

-5-
metal oxide semiconductor) sensor, that maximizes a driver's forward vision by

significantly improving utilization of the vehicle's highbeam headlamps during

nighttime driving. The Company has received product planning commitments from

two major automotive OEM customers for certain 2005 model year vehicles. In

addition, the Company announced a new ALS (Active Light Sensor) technology as a

cost-effective, improved-performance, intelligent CMOS light sensor to control

the dimming of its rearview mirrors, and the Company began making volume

shipments of mirrors incorporating ALS in 2002.
Also during 2001, the Company developed a new microphone designed

specifically for use in the automotive environment for telematics applications.

The first volume Gentex microphone application will be part of DaimlerChrysler's

"U-Connect(R)" telematics system, beginning in 2003.
Of particular importance to the Company has been the development of its

electrochromic technology for use in complete 3-mirror systems. In these

systems, both the driver- and passenger-side exterior NVS(R) Mirrors are

controlled by the sensors and electronic circuitry in the interior rearview

mirror, and the interior and both exterior mirrors dim simultaneously.
In 1999, the Company announced the development of the second generation

of its LED technology, which represents the first time that white light for

illumination purposes can be achieved using high intensity Orca power LEDs on a

cost-effective basis. LEDs as illuminators could have significant automotive and

non-automotive lighting applications as they have many advantages over

incandescent lamps, including extremely long life, low heat generation, lower

current draw, more resistance to shock, and lower total cost of ownership. In

the fourth quarter of 2001, the Company installed a new prototype

microelectronics line to produce pilot production LED samples, as well as

limited production quantities of Orca LED's, and SmartBeam(TM) sensors. During

2002, the Company announced a high-feature EC mirror including BCW Orca(TM)

LED's for the Chrysler Sebring Coupe. Strategic discussions with potential

alliance partners in the lighting industry, LED component industry and LED chip

industry are continuing although discussions are taking longer than anticipated,

primarily due to changing business conditions in the LED industry.
The Company's success with electrochromic technology provides an

opportunity for other potential commercial applications, which the Company

expects to explore in the future as resources permit. Examples of possible

applications of electrochromic technology include windows for both the

automotive and architectural markets, sunroofs and sunglasses. Progress in

adapting electrochromic technology to the specialized requirements of the window

market continued in 2002. However, we believe that a commercial product will

require several years of additional engineering and intellectual property

development work.
Markets and Marketing. The Company markets its automatic rearview

mirrors to domestic and foreign automotive manufacturers under the trademarks

"Night Vision Safety" or NVS Mirrors. In North America, the Company markets

these products primarily through a direct sales force. The Company generally

supplies NVS Mirrors to its customers worldwide under annual blanket purchase

orders. The Company currently supplies NVS Mirrors to General Motors Corporation

and DaimlerChrysler AG (North America) under long-term agreements. During 2000,

the Company negotiated a contract extension for inside mirrors with General

Motors through the 2004 model year. The long-term supply agreement with

DaimlerChrysler AG extends through the 2003 model year. The Company's exterior

NVS Mirror Sub-Assemblies are supplied to General Motors, Ford and

DaimlerChrysler AG by means of sales to exterior mirror suppliers.
During 1993, the Company established a sales and engineering office in

Germany and the following year, the Company formed a German limited liability

company, Gentex GmbH, to expand its sales and engineering support activities in

Europe. During 1999, the Company established Gentex Mirrors, Ltd., as a sales

and engineering office in the United Kingdom. During 2000, the Company

established Gentex France, SAS, as a sales and engineering office in France. The

Company's marketing efforts in Europe are conducted through Gentex GmbH, Gentex

Mirrors, Ltd., and Gentex France SAS, with limited assistance from independent

manufacturers' representatives. The Company is currently supplying mirrors for

Audi, Bavarian Motor Works, A.G. (BMW), Bentley, Fiat, Jaguar, Land Rover, MG

Rover, Mercedes-Benz, Opel, Rolls Royce, and Volkswagen.


-6-
Since 1991, the Company has been shipping electrochromic mirror

assemblies for Nissan Motor Co., Ltd. under a reciprocal distribution agreement

with Ichikoh Industries, Ltd. (Ichikoh), a major Japanese supplier of automotive

products. Under this agreement, Ichikoh markets the Company's automatic mirrors

to certain Japanese automakers and their subsidiaries with manufacturing

facilities in Asia. The arrangement involves very limited technology transfer by

the Company and does not include the Company's proprietary electrochromic gel

formulation.
During 1993, the Company hired a sales agent to market NVS Mirrors to

other Japanese automakers beyond Nissan. Subsequently in 1998, the Company

established Gentex Japan, Inc., as a sales and engineering office to expand its

sales and engineering support in Japan. During 1999, the Company signed an

agreement with Murakami Corporation, a major Japanese mirror manufacturer, to

cooperate in expanding sales of automatic-dimming mirrors using the Gentex

electrochromic technology. During 2002, the Company established Gentex

Technologies Korea Co., Ltd. as a sales and engineering office in Seoul, Korea.

The Company is currently supplying mirrors for Daewoo/Ssangyong, Ford (Taiwan),

GM (China), Hyundai, Infiniti, Kia Motors, Lexus, Mazda, Mitsubishi, Nissan,

Samsung, and Toyota.
Historically, new safety and comfort options have entered the original

equipment automotive market at relatively low rates on "top of the line" or

luxury model automobiles. As the selection rates for the options on the luxury

models increase, they generally become available on more models throughout the

product line and may become standard equipment. The recent trend of domestic and

foreign automakers is to offer several options as a package. As consumer demand

increases for a particular option, the mirror tends to be offered on more

vehicles and in higher option rate packages. The Company anticipates that its

NVS Mirrors will be offered as standard equipment, in higher option rate

packages, and on more models as consumer awareness of the safety and comfort

features becomes more well-known and acceptance grows.
Since 1998, Gentex Corporation has contracted with MITO Corporation to

sell several of its most popular automatic-dimming mirrors directly to consumers

in the automotive aftermarket; in addition, the Company currently sells some NVS

Mirrors to automotive distributors. It is management's belief that these sales

have limited potential until the Company achieves a significantly higher

penetration of the original equipment manufacturing market.
Competition. Gentex is the leading producer of automatic rearview

mirrors in the world and currently is the dominant supplier to the automotive

industry with an approximate 78% market share worldwide. While the Company

believes it will retain a dominant position, one other U.S. manufacturer (Magna

Donnelly) is competing for sales to domestic and foreign vehicle manufacturers

and is supplying a number of domestic and foreign vehicle models with its hybrid

or solid polymer matrix versions of electrochromic mirrors. In addition, two

Japanese manufacturers are currently supplying a number of vehicle models in

Japan with solid-state electrochromic mirrors.
On October 1, 2002, Magna International acquired Donnelly Corporation

which is the Company's major competitor for sales of automatic-dimming rearview

mirrors to domestic and foreign vehicle manufacturers and their mirror

suppliers. The Company also sells certain automatic-dimming rearview mirror

sub-assemblies to Magna Donnelly.
The Company believes its electrochromic automatic mirrors offer

significant performance advantages over competing products. However, Gentex

recognizes that Magna Donnelly, a competitor and wholly-owned subsidiary of

Magna International, is considerably larger than the Company and presents a more

formidable competitive threat after the acquisition.
There are numerous other companies in the world conducting research on

various technologies, including electrochromics, for controlling light

transmission and reflection. Gentex believes that the electrochromic materials

and manufacturing process it uses for automotive mirrors remains the most

efficient and cost-effective way to produce such products. While

automatic-dimming mirrors using other technologies may eliminate glare, each of

these technologies have inherent cost or performance limitations.

-7-

FIRE PROTECTION PRODUCTS
The Company manufactures approximately 60 different models of smoke

alarms and smoke detectors, combined with over 160 different models of signaling

appliances. All of the smoke detectors/alarms operate on a photoelectric

principle to detect smoke. While the use of photoelectric technology entails

greater manufacturing costs, the Company believes that these detectors/alarms

are superior in performance to competitive devices that operate through an

ionization process, and are preferred in most commercial residential

occupancies. Photoelectric detectors/alarms feature low light-level detection,

while ionization detectors utilize an ionized atmosphere, the electrical

conductivity of which varies with changes in the composition of the atmosphere.

Photoelectric detectors/alarms are widely recognized to respond more quickly to

slow, smoldering fires, a common form of dwelling unit fire and a frequent cause

of fire-related deaths. In addition, photoelectric detectors are less prone to

nuisance alarms and do not require the use of radioactive materials necessary

for ionization detectors. Photoelectric smoke detectors/alarms are now being

required by an increasing number of city and state laws, and national codes.
The Company's fire protection products provide the flexibility to be

wired as part of multiple-function systems and consequently are generally used

in fire detection systems common to large office buildings, hotels, motels,

military bases, college dormitories and other commercial establishments.

However, the Company also offers single-station alarms for both commercial and

residential applications. While the Company does not emphasize the residential

market, some of its fire protection products are used in single-family

residences that utilize fire protection and security systems. The Company's

detectors emit audible and/or visual signals in the immediate location of the

device, and certain models are able to communicate with monitored remote

stations.
In recent years, the Company introduced seven new signaling products.

These new product series contain over 68 variations of signals.
In 2002, the Company introduced the new "selectable" candela

audible/visual evacuation signal. This new signal is the only one in the fire

alarm industry which will notify the control panel if its light intensity is

being changed without authorization.
Also in 2002, due to changes in government regulations, the Company

introduced a new "selectable" ceiling horn/strobe and strobe product. This new

product offering gives the Company both wall- and ceiling-mounted product

offerings.
In 2001, the Company introduced a new, high efficiency speaker and

speaker/strobe series. Voice intelligibility is critical in life safety

applications, and certain distributors throughout the United States prefer the

quality of the Company's new speaker series.
To meet new international requirements for visual signals, the Company

developed a red-lens for the popular general evacuation signals. The new markets

are all in Asia and the Company has actively pursued these new markets.
Also, to meet the industry requirements for audible and visual

synchronization in 2001, the Company introduced a new line of remote signals to

be used in any occupancy that requires individual or supplemental notification.
Markets and Marketing. The Company's fire protection products are sold

directly to fire protection and security product distributors under the

Company's brand name, electrical wholesale houses, and to original equipment

manufacturers of fire protection systems under both the Company's brand name and

private labels. The fire protection and security industries have experienced a

tremendous number of mergers and consolidations during the past few years. The

Company markets its fire protection products throughout the United States

through regional sales managers and manufacturer representative organizations.
Competition. The fire protection products industry is highly

competitive in terms of both the smoke detectors and signaling appliance

markets. The Company estimates that it competes principally with eleven

manufacturers of smoke detection products for commercial use and approximately

four manufacturers within the residential market, three of which produce

photoelectric smoke detectors. In the signaling appliance markets, the Company

estimates it competes with approximately eight manufacturers. While the Company

faces significant competition in the sale of smoke detectors and signaling

appliances, it believes that the recent introduction

-8-
of new products, improvements to its existing products, its diversified product

line, and the availability of special features will permit the Company to

maintain its competitive position.
TRADEMARKS AND PATENTS
The Company owns 6 U.S. trademarks and 151 U.S. patents, 145 of which

relate to electrochromic technology and/or automotive rearview mirrors. These

patents expire between 2003 and 2021. The Company believes that these patents

provide the Company a significant competitive advantage in the automotive

rearview mirror market; however, none of these patents is required for the

success of any of the Company's products.
The Company also owns 1 foreign trademark and 34 foreign patents, 33 of

which relate to automotive rearview mirrors. These patents expire at various

times between 2003 and 2018. The Company believes that the competitive advantage

derived in the relevant foreign markets for these patents is comparable to that

experienced in the U.S. market.
The remaining 6 U.S. patents and 1 foreign patent relate to the

Company's fire protection products, and the Company believes that the

competitive advantage provided by these patents is relatively small.
The Company also has in process 141 U.S. patent applications, 208

foreign patent applications, and 7 trademark applications. The Company

continuously seeks to improve its core technologies and apply those technologies

to new and existing products. As those efforts produce patentable inventions,

the Company expects to file appropriate patent applications.
MISCELLANEOUS
The Company considers itself to be engaged in the manufacture and sale

of automatic rearview mirrors for the automotive industry and fire protection

products for the commercial building industry. The Company has several important

customers within the automotive industry, three of which each account for 10% or

more of the Company's annual sales: General Motors Corporation, DaimlerChrysler

AG, and Toyota Motor Corporation. The loss of any of these customers could have

a material adverse effect on the Company. The Company's backlog of unshipped

orders was $110,359,000 and $83,856,000 at February 1, 2003, and March 1, 2002,

respectively.
At February 1, 2003, the Company had 1,897 full-time employees. None of

the Company's employees are represented by a labor union or other collective

bargaining representative. The Company believes that its relations with its

employees are good.
ITEM 2. PROPERTIES.
The Company operates out of four office/manufacturing facilities in

Zeeland, Michigan, approximately 25 miles southwest of Grand Rapids. The office

and production facility for the Fire Protection Products Group is a

25,000-square-foot, one-story building leased by the Company since 1978 from

related parties (see Part III, Item 13, of this report).
The corporate office and production facility for the Company's

Automotive Products Group is a modern, two-story, 150,000-square-foot building

of steel and masonry construction situated on a 40-acre site in a well-kept

industrial park. An additional 128,000-square-foot office/manufacturing facility

on this site was opened during 1996. The Company expanded its automotive

production facilities by constructing a third 170,000 square-foot facility on

its current site which opened in the second quarter of 2000.
In November 2002, the Company announced plans to expand its

manufacturing operations in Zeeland, Michigan, with the construction of another

automotive mirror manufacturing facility which is scheduled to open in 2005. The

Company plans to invest approximately $100 million over a 5-year period for

land, the facility and manufacturing equipment to meet the Company's future

automotive production needs.
The Company also plans to construct a 40,000 square-foot office,

distribution and light manufacturing facility near Neckarsulm, Germany, at a

cost of approximately $4-5 million, which is scheduled to be completed by the

end of 2003.
ITEM 3. LEGAL PROCEEDINGS
None that are significant.

-9-

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table lists the names, ages, and positions of all of the

Company's executive officers. Officers are elected at the first meeting of the

Board of Directors following the annual meeting of shareholders.
NAME AGE POSITION POSITION HELD SINCE

-----------------------------------------------------------------------------------------------------------------------
Fred Bauer 60 Chief Executive Officer May 1986

Kenneth La Grand 62 Executive Vice President September 1987

Garth Deur 46 Executive Vice President May 2001

Dennis Alexejun 51 Vice President, North American Automotive Marketing September 1998

John Carter 55 Vice President, Mechanical Engineering June 1997

Enoch Jen 51 Vice President-Finance February 1991

-------------------------------------------------------------------------------------------------------------------
There are no family relationships among the officers listed in the

preceding table.
Kenneth La Grand retired from the Company, effective January 6, 2003.

Garth Deur has served as Executive Vice President of the Company since

September 2002, as Senior Vice President of the Company since May 2001, and

joined the Company as Vice President - Business Development and Planning in

November 2000. Prior to joining the Company, Mr. Deur served as a Principal of

Landmark Group, an investment management company, from March 1999 through

November 2000. Prior to that time, Mr. Deur served as Vice President, Chrysler

Business Operations, from March 1995 through March 1999 at the Automotive

Interiors division of Johnson Controls, Inc. (formerly Prince Corporation, which

was acquired by Johnson Controls in 1996).
Dennis Alexejun has served as Vice President, North American Automotive

Marketing, of the Company since September 1998. Prior to that time, Mr. Alexejun

served as Vice President, General Motors Business Operations, from February 1995

through September 1998 at the Automotive Interiors division of Johnson Controls,

Inc. (formerly Prince Corporation, which was acquired by Johnson Controls in

1996).
-10-




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