GENTEX CORP

The information contained under the caption "Compensation Committee Report," "Compensation Discussion and Analysis" (including "Practices and Procedures Related to the Grant of Certain Equity Awards"), "Executive Compensation," "Director Compensation," and "Compensation Committee Interlocks and Insider Participation" contained in the definitive Proxy Statement is hereby incorporated herein by reference. The "Compensation Committee Report" shall not be deemed to be soliciting material or to be filed with the commission.

As previously disclosed, the Compensation Committee has an ongoing goal that base salaries for officers, including named executive officers, are at or near the market median for base salaries when compared to the Company's established peer group. However, at the request of Mr. Downing and the other named executive officers, based on overall market conditions, the Compensation Committee and Board of Directors approved reduced base salaries for the named executive officers in 2026.

The Board, on February 19, 2026, approved the following base salaries for the CEO and other named executive officers for 2026:

Amended and Restated Annual Incentive Performance-Based Bonus Plan

The Board previously approved the Amended and Restated Annual Incentive Performance-Based Bonus Plan (the "Annual Plan") to further emphasize performance-based compensation. In lieu of participating in the profit-sharing bonus paid to all employees, the Annual Plan provides potential cash-based bonuses for officers based on the achievement of three key performance metrics: Revenue (33.33% weighting); Operating Income (33.33% weighting); and Earnings per Diluted Share (33.33% weighting). The Annual Plan covers certain officers, including named executive officers.

At the beginning of each year, the Compensation Committee reviews and approves a cash bonus target under the Annual Plan for each officer, as a percentage of base salary for the year. Under the Annual Plan in 2026, the CEO may earn up to 220% of base salary. The non-CEO named executive officers may earn up to 0% to 160% (previously 150%) of their respective base salaries. All performance-related targets under the Annual Plan are set by, and achievement of targets are approved by, the Compensation Committee and/or the Board of Directors.

For our executive officers, the 2026 Annual Plan payout opportunities—expressed as a percentage of base salary for each performance metric—are set forth in the table below. For the named executive officers other than Mr. Downing, the target Annual Plan opportunity for 2026 was increased from 75% to 80% of base salary to increase the opportunity for performance-based compensation in light of the decrease in base salaries. We believe the threshold, target, and maximum opportunity levels are now appropriate for each of the named executive officers. For each metric (Revenue, Operating Income, and Earnings Per Diluted Share), the applicable opportunity (at threshold, target, or maximum) is multiplied by that metric’s weighting to determine the cash bonus amount earned based on actual performance. When actual performance falls between the established threshold, target, or maximum, linear interpolation is used to determine any pro rata portion of the performance bonus. The Compensation Committee and/or the Board may exercise discretion to increase or decrease performance‑based bonuses using their judgment (which may consider sustainable impact, people, and growth factors) when evaluating performance and/or establishing objectives; however, under no circumstances may any bonus exceed 250% of the applicable base salary.

Since its inception in 2019, the Annual Plan uses the same three key performance metrics and weighting: Revenue (weighted 33.33%), Operating Income (weighted 33.33%) and Earnings per Diluted Share (33.33%) because such metrics are not only appropriate measures of performance, but also align with the Company's overall business strategy.

In determining whether annual cash bonuses are paid under the Annual Plan, actual performance for the year is measured against specified target levels for each performance metric. Generally, the target for the three performance metrics reflects a level of performance, which at the time set would be anticipated to be challenging but achievable. The threshold level is set to be reflective of performance at which the Compensation Committee believed a portion of the award opportunity should be earned. The maximum level was set well above the target, requiring significant achievements and reflecting performance at which the Compensation Committee believed an additional 100% of the target award was warranted. In February 2025, the Compensation Committee and the Board approved the exclusion of incremental tariff costs and severance‑related expenses from the assessment of 2025 goal achievement, as these costs were not known at the time the goals were established.

For 2025, target performance and actual results for the performance metrics, reflecting the foregoing, are as follows:

Based on actual Revenue, Operating Income, and Earnings per Diluted Share adjusted for the exclusion of incremental tariff costs and severance expense (net of tax) compared to the targets and performance of the named executive officers, the payments for 2025 under the Annual Plan are shown in the table below:

These Annual Plan results appropriately reflect management’s efforts to improve year‑over‑year gross margins despite the impact of tariff and counter‑tariff actions, which contributed to a 29% decline in revenues from the Company’s China business and significant incremental costs in the business. Such improvement reflects continued execution of the previously announced gross margin recovery plan and ongoing business development initiatives. In addition, these results reflect execution of the acquisition of VOXX and progress made with respect to the integration.

For 2026, the Compensation Committee established Annual Plan performance targets for Revenue, Operating Income, and Earnings per Diluted Share similar to those in 2025, excluding severance‑related expenses (net of tax) due to the unpredictable timing and unknown amount of such expenses. For 2026, the Company maintained ±20% of target for determining threshold and maximum performance levels under the Annual Plan.

2019 Omnibus Incentive Plan and Long-Term Incentive Program

The Company's 2019 Omnibus Incentive Plan ("OIP") has been approved by shareholders. Pursuant to the 2019 OIP, the Company implemented the Long-Term Incentive Plan (the "Long-Term Plan"). The Long-Term Plan provides officers, including our named executive officers, with incentive awards that serve an important role by balancing other applicable short-term goals with longer term shareholder value creation, while minimizing risk-taking behaviors that could negatively affect long-term results.

The Long-Term Plan uses three-year performance periods and selected performance objectives to determine equity incentive awards so as to balance short-term goals under the Annual Plan, with performance objectives associated with longer-term shareholder value creation under the Long-Term Plan. Under the Long-Term Plan, the Board and/or the Compensation Committee determines the amount of the long-term incentive awards. Each officer's award opportunity is based on a target dollar value (determined toward the very beginning of the performance period) as a percentage of base salary assigned to his or her position based on market comparisons for similar positions, using both a peer group and general industry market data. The following target opportunities apply for the 2026-2028 performance period under the Long-Term Incentive Plan:

The Long-Term Plan target opportunity percentages of base salary for 2026–2028 for the named executive officers have been updated from the levels applicable to the 2025–2027 cycle. The Compensation Committee recommended, and the Board of Directors approved, these increases to the 2026 Long-Term Plan target opportunities to further align executive compensation with the interests and goals of shareholders and to increase the opportunity for performance-based compensation in light of the decreases in base salaries. Despite these adjustments, all Long-Term Plan target opportunities continue to fall within the market median range for long-term incentives relative to each officer’s respective role and responsibilities.

Achievement at threshold performance yields 50% of the target award and achievement of the maximum performance yields another 100% of the target award. Actual performance is compared to the established threshold, target, or maximum, as applicable, for an applicable performance objective, and linear interpolation is used to determine any pro rata portion of such award.

Seventy percent (70%) of the total value of the target long-term incentive opportunity is delivered through performance share awards ("PSAs") and the other thirty percent (30%) through restricted stock ("RS"). Both PSAs and RS are forms of performance-based incentive compensation because PSAs involve performance objectives that provide direct alignment with shareholder interests and the value of RS fluctuates based on stock price performance.

In addition to requiring achievement of performance objectives in respect of PSAs, PSAs and RS require the executive officers to remain employed with the Company for three years from the grant date (unless the executive officer attains retirement age, departs for good reason, dies, or becomes disabled or a change in control occurs whereby an award may be paid or partially paid).

Performance Shares for 2026-2028 Performance Period

The Long-Term Plan is designed to provide PSAs for officers, including our named executive officers. PSAs are tied to the achievement of two performance objectives, each weighted equally: earnings before interest, taxes, depreciation and amortization (EBITDA) and return on invested capital (ROIC), in each case adjusted and calculated as determined by the Compensation Committee. Each performance objective is based on a three-year performance period (2026-2028) with a performance range that can result in PSAs of 50% of target for achieving threshold and 200% of the target opportunity for achieving maximum. The targets for EBITDA and ROIC for 2026-2028 were established by the Compensation Committee as it has done in the past. For the 2026-2028 performance period, ± 20% of target is being used for determining thresholds and maximums, which is consistent with performance periods that began in 2021 and prior, for similar reasons as noted with respect to the Annual Plan.

EBITDA drives the ability to commit resources to continued growth, but is also a measure of ability to provide shareholder return. It also drives profitable sales growth and optimizes the Company's cost structure. ROIC ensures management uses the Company's capital in an effective manner that drives shareholder value. Since the value of PSAs is tied to the Company's actual performance in financial objectives, it aligns the officers' interests with those of shareholders. The target opportunities of PSAs awarded in 2026 for the named executive officers are shown in the table below:

Restricted Stock Awards for 2026-2028 Performance Period

The other 30% of the total value of the long-term incentive opportunity consists of RS awards. RS incentivizes and rewards executives for improving long-term stock value and serves as a retention tool. Under the Long-Term Plan, RS will generally be granted in February to officers, including our named executive officers, and cliff vest on the third anniversary of the grant. The RS awarded in 2026, based on the target opportunities, for the named executive officers are shown in the table below:

2023-2025 Long-Term Plan Performance (three-year performance period ending December 31, 2025)

December 31, 2025, marked the end of the three-year performance period for PSA and RS Long-Term Plan awards made in February 2023.

Performance Share Awards

The performance metrics, targets and performance payout ranges for these awards were set and approved by the Compensation Committee and the Board in February 2023. Consistent with the Long-Term Plan, incentive could be earned by the officers based on performance associated with two equally weighted metrics, EBITDA and ROIC, in each case adjusted as determined by the Compensation Committee, both measured cumulatively over the three-year performance period. The target levels of achievement for the EBITDA and the ROIC were established to align with financial goals set at the beginning of the three-year performance period for the years 2023 through 2025. The table below summarizes the results of the 2023-2025 performance period relative to target and the achievement level of the 2023-2025 PSAs:

The PSAs awarded in February 2023, based on target opportunity, along with the actual payout of PSAs to the executive officers, for the 2023-2025 performance period are reflected in the table below and include additional shares awarded for dividend equivalents assuming reinvestment of dividends.

Restricted Stock

The RS awarded in February 2023, based on target opportunities, along with the actual payment of RS to executive officers, awarded for the 2023-2025 period are reflected in the table below:

Since each executive officer awarded restricted stock in 2023 remained employed by the Company for three years from the grant date, each restricted stock awarded vested with such executive officers.