Supplier Manual - Master May 2015

Transcription

1 Supplier Manual - Master May 2015 Page 1 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

2 Contents Preface... 3 Gentex Corporate Philosophy... 3 Supplier Sustainability Expecations... 3 Gentex Visitor Policy... 3 Gentex Environmental Commitment... 3 Supplier Relations... 4 Supplier Responsibilities... 4 Supplier Diversity... 5 Gentex Ethics Statement... 5 Purchase Order Terms & Conditions Offer and Acceptance Delivery, Risk of Loss and Title Warranty Tooling Price Terms and Payment Inspection of Goods and Processes Performance Delays Confidentiality and Intellectual Property Rights Changes Documentation and Customs Customer and Sub-Supplier Requirements Indemnity Termination Rights, Remedies, Compliance with Laws and Construction Taxes Assignment Environmental and Social Responsibility Conflict Minerals Dispute Resolution Non-Conformances Gentex Corrective Action Report International Shipping Requirements Commercial Invoice Requirements Instructions Consequences Supplier Contents Reporting Transportation Security Administration (TSA) Customs Trade Partnership against Terrorism (C-TPAT) Cargo Security Requirements for Shipping to the United States PURPOSE SCOPE REFERENCES DEFINITIONS SUPPLIER RESPONSIBILITY FOR SHIPPING CONTAINERS Container Security - Inspection Container Security - Seals SECURITY REQUIREMENTS FOR SUPPLIERS AND BUSINESS PARTNERS Conflict Minerals Reporting Requirements Definitions Major uses of the 3Ts and Gold References Page 2 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

3 Preface Gentex Corporation ( Gentex ) has developed this manual to give guidance and direction to all our suppliers. This manual is utilized by Gentex personnel to promote equality in the way we work with suppliers. We believe it is imperative that all suppliers to Gentex are treated equitably and that each supplier understands what is expected of them prior to producing products or contracting work with Gentex. Gentex Corporate Philosophy Gentex s stated mission is to be a smarter organization; a world-class manufacturer with superior products and service driven by a supportive work culture that encourages people to innovate, excel, and continually improve every aspect of the business. Our goal is to maximize customer satisfaction. Gentex believes this can best be achieved through an unwavering commitment to quality that is fueled by sustained continuous improvement. Gentex s long-term prosperity is ensured only when product value, service, and customer responsiveness are continually enhanced. Consequently, no part of the organization is immune from participating in the never-ending process of continuous improvement. Innovation is a Gentex hallmark. Incremental improvements ensure that each development continues to enhance customer value over the life of the product. Gentex priority is to operate in a sustainable manner committed to environmental, social, and governmental / legal best practices. Gentex understands suppliers play an integral part in maximizing our customers satisfaction. Gentex believes that through open lines of communication with the entire supply chain, we can maximize the quality of the product, while maintaining excellent delivery, cost and unparalleled service to our final customer. Supplier Sustainability Expectations At Gentex, social responsibility has been the focus of our business from the start. From fire protection warning devices to automotive products and features that protect drivers and their passengers from road hazards, Gentex has always been in the business of safety. In alignment with our Board of Directors, the Company incorporates environmental, social, and corporate governance issues into our decision-making processes and our business policies, operating in accordance with all applicable laws and seeking adherence with international human rights conventions in defiance of child labor, forced labor, and human trafficking. Suppliers are encouraged to review our corporate sustainability report ( which we update as our programs continually improve, in order to align the policies and practices that guide our environmental, social, and corporate governance requirements and industrial best practices. Furthermore, we expect our suppliers to join us in striving to adhere to the United Nations Global Compact Principles, including the defense of human rights, the implementation of protective labor policies, environmental responsibility, and anti-corruption practices. For more information, please review Additional supplier expectations related to matters of corporate sustainability are located throughout this document. Please review them carefully Gentex Visitor Policy Due to the nature of the product manufactured at Gentex, all visitors must sign in and have a visitor badge if they enter any of the facilities beyond the main lobby or the shipping and receiving areas. The lobby area has designated phones for visitors to contact Gentex personnel. Visitors are prohibited from using cameras, camera cell phones, or other photographic devices on the premises. All visitors must be accompanied by a Gentex employee while walking through any facility. Gentex Environmental Commitment Gentex Corporation places a high priority on conducting its business in a sustainable manner that places the least practical burden on the environment, while protecting the health and safety of our team members and partners. Page 3 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

4 Gentex has been working toward this vision since 1999, when we began the establishment of an environmental management system based on the ISO international environmental management standard. ISO14001 outlines a structured management system to achieve and demonstrate sound environmental performance by controlling the impact that our activities, products or services have on the environment. As our partner, it is important to us that you understand your role in helping us achieve this vision. Toward that end, Gentex has prepared an Environmental Policy that establishes the foundation for our environmental management system that communicates your responsibilities as a Gentex partner. Gentex requires all suppliers when submitting Production Part Approval Process ( PPAP ) for production material to declare that the product submitted does not contain any materials defined on the Global Automatic Declarable Substance List. A listing of hazardous materials can be found at Supplier Relations Gentex Corporation supports Best-in-Class supplier relations in meeting our needs and the needs of our customers. The focus of Best-in-Class is to work with leaders in the industry that are the most competitive in cost, quality, service and technology. Best-in-Class is characterized by objective cost targets, long-term commitments, and continual open communication between Gentex and the supplier. Supplier Responsibilities Supplier will work with Gentex to support Gentex sustainability initiatives and to apply sustainability initiatives in the supplier s operations as defined in the Gentex Sustainability Update report. Supplier will maintain Gentex confidentiality and sign a Non-Disclosure Agreement. Supplier will not allow registrations to be filed on any component, especially electronics related, that is discussed with Gentex. This would include requests for pricing, sampling and/or production components. Supplier will be third party registered to a Quality System Specification including, but not limited to: - ISO-9001: ISO / TS-16949: VDA ISO-IEC 17025: AS9100C Supplier will inform Purchasing of all activities that may affect the total product quality, delivery and cost. Supplier will inform Purchasing of changes in economic or other conditions that might affect purchasing decisions. Supplier will notify Quality and Purchasing of any issues that relate to the ability to produce acceptable quality material within the pre-determined delivery window. Examples to include: unqualified processes, capacity issues, process issues, raw material availability, etc. Supplier will notify Quality and Purchasing of any issues that relate to the ability to produce acceptable quality material which may have been sent to Gentex or is in transit to Gentex. Supplier will negotiate purchasing agreements and all sales only with the Purchasing Department or other persons with delegated purchasing authority. Supplier will conduct negotiations ethically, without attempts to influence through offering valuable personal gifts or entertainment. Supplier will make available all technical, engineering, systems, policies, services, and whatever might improve Gentex present or future use of the supplier s products or services. Supplier will utilize the AIAG approved Production Part Approval Process and execute this process as directed by Quality. Supplier will provide material certifications that demonstrate compliance with all performance specifications. Supplier will require its sub-tier suppliers to comply with ISO 9001:2008 record retention requirements (AS9100C). Supplier will package to protect the product during shipment and maintain the integrity of the product during storage. Supplier will label the product per Gentex labeling instructions. Supplier will work with Gentex to develop the means for annual cost reduction goals. Supplier is expected to maintain 100% on-time delivery. Supplier is expected to maintain a PPM of zero. Supplier will be responsible to comply with all international customs regulations. U.S. Customs requires 100% accurate shipments. In the case of over or under shipments versus the shipping documentation, Gentex will notify Customs and make the appropriate adjustments with Customs and the supplier. If you invoice Gentex in a foreign currency, Gentex will remit payment at the rate of exchange at the time of payment. Supplier will provide proof of liability insurance to the Gentex Director of Corporate Facilities before providing contractual work at a Gentex facility. Page 4 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

5 Supplier will declare any hazardous materials that are provided to Gentex. A list of these materials can be found at Supplier will respond with accurate and timely information to solicitations regarding supply chain touch points, C- TPAT assessments, supply risks, use of conflict minerals, country of origin information and other relevant supply inquiries. Supplier Diversity It is the policy of Gentex Corporation to increase the business opportunities for certified minority, woman or veteranowned businesses. Our commitment is to maximize their participation through the development of mutually beneficial business relationships, which will ensure that quality materials and services are provided to the corporation in a timely and cost-effective manner. Gentex, at its discretion, will develop mentoring relationships with key minority, woman or veteran-owned suppliers to help develop business systems and encourage them with new technologies and future growth. We understand that the commitment to these businesses not only benefits the supplier, but it also benefits the greater business community. Gentex Ethics Statement Gentex employees will avoid the intent and appearance of unethical or compromising practices in relationships, actions, and communications. Gentex employees will refrain from any private business or professional activity that would create a conflict between personal interests and the interests of Gentex. Gentex employees will refrain from soliciting or accepting money, loans, credits, or prejudicial discounts, and the acceptance of gifts, entertainment, favors, or services from present or potential suppliers that might influence, or appear to influence, Gentex Purchasing decisions. All such actions are strictly prohibited. Gentex employees will promote positive supplier relationships through courtesy and impartiality in all phases of the purchasing cycle. Gentex employees, directors, and officers will abide by the Gentex Corporation Code of Business Conduct and Ethics adopted by the Board of Directors on February 26, 2004 and located on the Gentex website at Page 5 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

6 Purchase Order Terms & Conditions Effective January, 2013 Gentex Corporation PURCHASE ORDER TERMS AND CONDITIONS OF SALE 1. Offer and Acceptance. The Purchase Order ( Order ) is an offer to Seller by Gentex Corporation ( Buyer ) to enter into a purchase/supply agreement. The offer is to purchase the products ( Products ) and/or services ( Services ) identified in the Order. This document ( Terms and Conditions ) and documents incorporated herein, terms and conditions appearing on the Order and documents incorporated therein, and any other terms mutually agreed to in writing shall constitute the entire agreement ( Agreement ) between the parties. No course of dealing or usage of trade shall be applicable unless expressly incorporated by these terms and conditions. This Agreement supersedes any and all previous oral and/or written provisions in Seller s quotations, proposals, acknowledgments or other documents relating to the sale of Products and Services, but shall not supersede any agreements between Buyer and Seller relating to confidentiality and/or proprietary information. Seller will be deemed to have accepted these terms and conditions upon 1) written acknowledgment by Seller within 10 business days of the date of order, 2) commencement of work on the Products or performance of the Services subject to this Order or 3) shipment of Products, whichever occurs first. Acceptance is limited to the express terms of these terms and conditions. These Purchase Order Terms and Conditions shall be deemed accepted by Seller, and any attempt by Seller to vary in any degree any of the terms is not binding unless such terms are specifically agreed to in a separate written instrument signed by and authorized representative of Buyer. Specific terms and conditions of the Order shall take priority over any inconsistent provision in these Terms and Conditions. 2. Delivery, Risk of Loss and Title. Buyer shall specify in the Order the method of transportation of each shipment. Seller shall pack and ship Products in accordance with Buyer s Packaging and Shipping Requirements as found in Buyer s Supplier Manual (available at including, but not limited to, labeling and hazardous materials instructions. Delivery must be made within the time specified in Buyer s Order. If delivery is not made within the time specified in Buyer s Order, Buyer may direct Seller to expedite delivery at Seller s expense. Shipment shall be routed in accordance with Buyer s instructions, and Seller agrees to reimburse Buyer for all expense incurred by Buyer as a result of improper packing, marking, or routing. Unless otherwise expressly agreed to in writing by Buyer, no charge shall be made by Seller for containers, crating, boxing, bundling, dunnage, drayage or storage. Shipments in excess of those authorized may be returned to Seller, and Seller shall pay the transportation charges both ways for such shipments. With reasonable notice, Buyer may, from time to time, change shipping schedules previously furnished to Seller, or direct temporary suspension of scheduled shipments or Seller s performance under these Terms and Conditions. The quantity shipped pursuant to the Order shall not exceed the specified quantity without the prior written consent of Buyer. Unless otherwise agreed to in writing, Products will be delivered F.C.A. Seller s plant according to section A4 in Incoterms Title will transfer upon receipt of the Products by the Buyer. Seller shall, at its expense, maintain insurance for Products in amounts acceptable to Buyer, naming Buyer as an additional insured and covering general liability, public liability, product liability, product recall, completed operations, contractor s liability, automobile liability insurance, Worker s Compensation, and employer s liability insurance as will adequately protect Buyer against such damages, liabilities, claims, losses and expenses (including attorney s fees). Seller agrees to submit certificates of insurance, evidencing its insurance coverage when requested by Buyer. 3. Warranty. Seller warrants that the material or articles covered by the Order, together with all related packaging and labeling and other material furnished by Seller, (a) will conform to all of the specifications furnished by Buyer and will be fit and sufficient for their intended purpose, (b) will function properly and be free of any defects in design, material and workmanship, (c) will conform in all respects with all applicable federal, state and local laws, orders and regulation, including, without limitation, those regarding occupational health, and (d) will not infringe or encroach upon Buyer s or any third party s personal, contractual or proprietary rights, including, without limitation, patents, trademarks, copyrights or trade secrets. Such warranty shall be in addition to those available at law and shall survive any acceptance by Buyer of all or part of the material or articles covered by the Order. This warranty shall run to Buyer, its customers and users of its products. Upon Buyer s written notification and authorization, Seller shall promptly replace or correct defects of any goods or services not conforming to the foregoing warranty, without expense to Buyer. In the event Seller fails to promptly correct defects in or replace nonconforming goods, Buyer may make such corrections or replace such goods and services and charge Seller for costs of materials, Page 6 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

7 labor, transportation or other costs incurred by Buyer. In addition to any other remedies it may have, Buyer may reject nonconforming goods and return them to Seller at Seller s expense. ANY ATTEMPT BY SELLER TO LIMIT, DISCLAIM OR RESTRICT ANY OF THE WARRANTIES HEREIN, BY ACKNOWLEDGEMENT OR OTHERWISE, IN ACCEPTING OR PERFORMING THE ORDER, SHALL BE NULL AND VOID WITHOUT THE PRIOR WRITTEN CONSENT OF BUYER S VICE PRESIDENT OF PURCHASING AND LOGISTICS. 4. Tooling. Unless otherwise agreed to in writing, all tooling, dies, special dies, patterns, jigs, gauges, fixtures, drawings, designs, samples, tooling aids, molds and/or any other property that is paid for by Buyer and/or furnished to Seller by Buyer and/or made available to Seller by Buyer for use by Seller in producing any goods or parts covered by any Order (the Tooling ) is the property of Buyer and shall (i) be used exclusively for the benefit of Buyer; (ii) be used only in filling Orders for Buyer; (iii) remain and be conspicuously identified as Buyer s property; (iv) be removed only upon Buyer s instructions, unless such removal is for normal repair and maintenance, in which case Seller shall notify Buyer of removal; (v) be held at Seller s risk and insured at its expense in a replacement cost amount with loss payable to Buyer (evidence of insurance to be furnished upon request); (vi) be maintained in good condition, at Seller s expense, and not be modified without Buyer s written consent. All replacement parts, additions, improvements, and accessories to Buyer s property will become part of Buyer s property unless they can be removed without damaging Buyer s property. Seller shall bear the risk of loss of, and damage to the tooling. Seller grants to Buyer a purchase money security interest in the tooling, and any portion thereof, as well as work in progress, raw materials, drawings and other items dedicated to constructing the tooling and agrees to perform any act and execute any document reasonably necessary to perfect Buyer s security interest in the tooling. Seller will indemnify and defend Buyer against claims or liens adverse to Buyer s ownership of Buyer s property except those that result from the acts of Buyer. Seller agrees to immediately return the Tooling to Buyer as Buyer may direct, acknowledge it does not have title in the Tooling, will not encumber it in any manner whatsoever and hereby expressly waives any lien claims it may have in the Tooling. The Tooling shall be delivered promptly and in accordance with Buyer s instructions, free and clear of any liens and without payment of any amount by Buyer. Seller acknowledges that its failure to return the Tooling on demand will cause Buyer to sustain irreparable harm warranting immediate and injunctive relief. Seller shall be responsible for all legal fees and costs associated with Buyer s enforcement of this section and recovery of the Tooling. 5. Price Terms and Payment. The goods and/or services will be furnished at the price set forth on the face side of the Order in U.S. Dollars or other currency if expressly stated on the Order. Seller warrants that the price for the goods and services is no less favorable than those currently extended to any other customer for the same or similar goods in similar quantities. Buyer shall also receive the full benefit of all discounts, premiums, and other favorable terms of payment customarily offered by Seller to its customers. In the event Seller reduces its price for the Products and/or Services to others during the term of the Order, Seller agrees to reduce the prices to Buyer correspondingly. Seller warrants that the prices in the Order shall be complete, and no additional charges of any type shall be added without Buyer s express written consent. Seller shall promptly submit correct and complete invoices or other agreed billing communications with appropriate supporting documentation and other information reasonably required by Buyer after delivery of Products and/or performance of Services, and Buyer may withhold payment until a correct and complete invoice or other required information is received and verified. Seller shall accept payment by check or other cash equivalent, including electronic funds transfer. Buyer may setoff or deduct from sums owed to Seller under this Agreement those sums owed by Seller to Buyer. Unless Seller consents in writing, Buyer may not setoff or deduct amounts owed to Buyer by Seller s affiliates or others who are not parties to the Agreement. 6. Inspection of Goods and Processes. All goods and/or work supplied under the Order shall be subject to Buyer s rights of inspection and rejection. Buyer shall have a reasonable time, but not less than fourteen (14) business days after delivery, to inspect delivered goods or products prior to accepting or rejecting the same. Buyer reserves the right, upon reasonable notice, for Buyer, Buyer s customers and Buyer s designated agents to inspect the material on Seller s premises and Seller agrees to provide access and facilities suitable for such inspection. After Buyer inspects delivered goods, rejected goods will be held for Seller s instruction and at Seller s risk for a reasonable time. If requested by Seller, or after a lapse of reasonable time, the rejected goods may be returned to Seller at Seller s expense for credit or refund or setoff at Buyer s option. No returned material shall be replaced without prior authorization from Buyer. Buyer shall have the right to make use of defective material in such manner as it deems advisable where necessary to meet Buyer s contractual obligations to its customers, without waiving any right or remedy Page 7 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

8 which Buyer may have with respect to such material. Payment prior to inspection shall not be deemed a waiver of Buyer s rights to inspect and reject, and neither inspection, testing, acceptance nor use of normal material (or the absence thereof) shall be deemed a waiver of Buyer s right to revoke acceptance. In addition, payment prior to inspection shall not release Seller s responsibility for latent defects, non-conformities, and/or warranty claims. 7. Performance Delays. Timely delivery is essential; however, neither party shall be liable to the other for any delay or failure to perform where such delay or failure is caused by events beyond the control of the affected party, subject to reasonable notice by the affected party to the other party. If Seller is unable to perform for any reason, Buyer may, without waiving its right to seek damages caused by delay, purchase Products and/or Services from other sources and reduce its purchases from Seller accordingly. Whenever Seller has knowledge of any actual or potential cause or event which delays or threatens to delay the timely performance of any Order, Seller shall immediately give Buyer written notice thereof, including all relevant information. Seller shall notify Buyer in writing of any actual or potential labor dispute delaying or threatening to delay timely performance of this Order. Seller shall notify Buyer in writing six (6) months in advance of the expiration of any current labor contracts. Buyer may thereafter direct Seller in writing to manufacture up to thirty (30) days of additional inventory of Products, specifying the quantities of Products required and any packaging and storage requirements. Seller will use commercially reasonable efforts to comply with Buyer s written directions prior to expiration of the current labor contract and until the current labor contract has been extended or a new contract completed. Shipment of such orders shall be FCA Seller s Plant (Incoterms 2010). 8. Confidentiality and Intellectual Property Rights. Trade secrets, specifications, drawings, notes, instructions, engineering data and analyses, compositions of matter, financial data, and other technical and business data which are supplied or disclosed by Buyer to Seller ( Confidential Information ) will be deemed confidential and proprietary to, and remain the sole property of Buyer. Without Buyer s written approval, Seller agrees not to disclose to third parties any information regarding Buyer or its business or customers, including the existence and terms of any Order, or use such information for any purpose other than performing the Order. Seller shall not disclose Confidential Information or use Confidential Information for any purpose other than as contemplated under the Agreement without the written consent of Buyer. Confidential Information shall not include information which (a) has been or is hereafter publicly disclosed without a violation of this Agreement, (b) is already in the public domain as is established by reference to published text books, articles, issued patents and the like, or (c) is known to Seller prior to disclosure from Buyer as is established by reference to Seller s business records in existence prior to such disclosure. Buyer does not transfer to Seller any patent, trade secret, trademark, service mark, copyright, mask work, or other intellectual property right (collectively Intellectual Property Right ) of Buyer in information, documents, or property that Buyer makes available to Seller other than the right to use Buyer s Intellectual Property Rights to produce and supply Products and Services to Buyer. If the Agreement is terminated, Seller shall grant to Buyer a nonexclusive right and license to use Seller s Intellectual Property Rights to obtain from alternate sources products and services similar to the Products and Services covered by the terminated Agreement for the balance of the Agreement term at the termination effective date. There will be no fee for this license if (a) Buyer terminates the Agreement for Seller s default or (b) Seller terminates the Agreement other than for Buyer s default. Otherwise, the parties shall negotiate a reasonable fee for use of Seller s Intellectual Property Rights. 9. Changes. Upon notice to Seller, Buyer may, at any time, make changes to the drawings, specifications, materials, packaging, testing, quantity, time or method of delivery or shipment, or similar requirements prescribed by the Agreement. The parties will undertake to negotiate an appropriate adjustment price and terms where the Seller s direct costs are materially affected by such change. Any request by Seller for an adjustment in price or terms must be made within thirty (30) days of any such change made by Buyer. All changes and adjustments in price, if any, must be in writing and signed by a duly authorized representative of Buyer. 10. Documentation and Customs. All documentation must be in English. Seller shall pack and ship Products in accordance with Buyer s Packaging and Shipping Requirements as found in Buyer s Supplier Manual (available at Shipping documents shall be sent on shipment date. For each international shipment, Seller shall adhere to the International Shipping Requirements as found in Buyer s Supplier Manual (available at Page 8 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

9 Transferable credits or benefits associated with Products purchased, including trade credits, export credits or rights to the refund of duties, taxes or fees belong to Buyer unless otherwise prohibited by applicable law. Seller will provide Buyer with all information and records relating to the Products necessary for Buyer to (a) receive these benefits, credits and rights, (b) fulfill any customs obligations, origin marking or labeling requirements, and certification or local content reporting requirements, (c) claim preferential duty treatment under applicable trade preference regimes, and (d) participate in any duty deferral or free trade zone programs of the country of import. Seller will obtain all export licenses and authorizations and pay all export taxes, duties and fees unless otherwise explicitly stated in the Order, in which case Seller will provide all information and records necessary to enable Buyer to obtain those export licenses or authorizations. Seller shall execute all required documentation as defined in the Incoterm 2010 specified in the Order. Seller warrants that the contents of such documents shall be true and accurate. Seller shall indemnify Buyer for any damages, including but not limited to duties, interest and penalties, arising from a false or inaccurate statement. 11. Customer and Sub-Supplier Requirements. Where the Products or Services under the Order are or will be sold, or incorporated into goods or services that are or will be sold, by Buyer to an original equipment manufacturer, whether directly or indirectly through an upper tier supplier, or any other third party customer (collectively, the Customer ), Seller shall take such steps, provide such disclosure, comply with such requirements and do all other things as Buyer deems necessary or desirable and within Seller s control to enable Buyer to meet Buyer s obligations under the terms and conditions of any contract or purchase order or other document (the Customer Terms ) that may be applicable to Buyer from time to time in respect of its direct or indirect supply of such goods or services to the Customer, including: delivery, packaging and labeling, requirements; warranties and warranty periods; intellectual property rights and indemnification; confidentiality; access to facilities and records; and replacement and service parts. Buyer may, from time to time, in its sole discretion, provide Seller with information regarding the applicable Customer Terms, but, in any event, Seller shall be responsible for ascertaining the Customer Terms that may affect Seller s obligations hereunder. If there is any conflict between the provisions of the Customer Terms and any provisions of this Order, Buyer shall have the right to have the provisions of the Customer Terms prevail to the extent necessary or desirable to resolve such conflict. Seller shall ensure that its suppliers and sub-suppliers are bound to all of Buyer s requirements, including this Agreement. If requested by Buyer, Seller shall provide Buyer with proof of such agreement and compliance to this section. 12. Indemnity. Seller warrants that the Products sold hereunder will not infringe any U.S. or foreign patent and/or any third party Intellectual Property Right. Seller agrees to reimburse, indemnify, hold harmless and defend at its expense (or to pay attorneys fees incurred by Buyer) Buyer and its affiliates from and against any and all loss, discharge or expense or claim which Buyer may suffer or sustain or be in any way subjected to on account of any claim or infringement of patents, copyrights, trademarks or unfair competition, provided the material or articles are used for their intended purpose. Seller shall notify Buyer of any infringement that Seller reasonably expects to result from the combination of Buyer s products with Seller s Products. Should any of the Products hereunder become the subject of an alleged infringement of a U.S. and/or foreign patent and/or any other third party Intellectual Property Right, Seller shall, at its expense, either procure for Buyer the right to continue using the Products, replace or modify the same so that they become non-infringing, or refund to Buyer the full purchase price of the alleged infringing Products. Seller shall indemnify and defend against third-party claims or demands for injury or death to persons, property damage, economic loss, and any resulting damages, losses, costs and expenses, regardless of whether the claim or demand arises under tort, contract, strict liability or other legal theories, if and to the extent caused by Seller s defective design or manufacture of Products or provision of Services, or its negligent acts or omissions in its performance under the Agreement. Buyer will notify Seller promptly after Buyer becomes aware of the basis for a claim under this section. The parties will cooperate with each other to determine the root cause of a defect in or failure of the Products (and related systems and components) and an equitable allocation of responsibility among all responsible parties. Buyer will endeavor to include Seller in settlement discussions where indemnity has been or will be sought from Seller. 13. Termination. Buyer may terminate the Order, or any term or condition under the Order, for cause. The following occurrences constitute for cause under this section: (a) late deliveries; (b) deliveries of Products and Services that are defective or that do not conform to this Order; (c) breach by Seller of the terms and conditions of the Order; (d) failure upon request to provide Buyer with reasonable assurances of future performance; (e) insolvency of Seller; (f) the filing of an involuntary petition of bankruptcy against Seller or a voluntary petition by Seller; (g) the execution by Seller of an assignment for the benefit of creditors; (h) the commencement of any receivership or like proceedings relating to Seller s assets; or (i) if the Seller is a party to a merger, consolidation or other extraordinary corporate transaction in which it is not the surviving entity. In the event of termination of this Order by Buyer for cause, Buyer shall not be liable to Seller for any amount, and Seller shall be liable to Buyer for all damages, direct or indirect, consequential and incidental, sustained by reason of the default Page 9 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

10 which gave rise to the termination, including, but not limited to, excess costs incurred by Buyer as a result of obtaining the goods and services from another source. Buyer reserves the right to terminate the Order, in whole or in part, at any time or from time to time, for its sole convenience. In the event of such termination, Seller shall immediately stop all work and cause all of its Contractors and subcontractors to cease work on the portion of the Order so terminated. If Buyer terminates the Order before it is fully performed (other than for cause), Buyer will (a) purchase the completed Products and/or Services at the price agreed upon per the Order and work in progress and raw materials related to the uncompleted work as Seller s actual cost, and (b) reimburse Seller for reasonable costs actually incurred by Seller as a result of the early termination, including the cost to store the items to be purchased and to relocate the work to an alternate source. Within thirty (30) days after the receipt of termination notice, Seller shall submit its claim. Buyer will have no obligation to Seller upon termination without cause to pay for goods, work in progress or raw materials which are in Seller s standard stock or inventory or which are readily marketable. In no event shall Buyer be liable for loss of profits, overhead, general and administrative charges, product development and engineering costs, interest, finance or hedging costs, unamortized depreciation costs, or any other direct or indirect cancellation charges. Seller shall transfer title and deliver to Buyer, if so requested by Buyer, all undelivered Products, work in progress or raw material paid for by Buyer as provided above. If Seller does not release or deliver Products or other property of Buyer or its customers, Buyer may, at Seller s cost, (a) obtain an immediate court order for possession without notice and without posting a bond, and (b) enter Seller s premises, with or without legal process, and take immediate possession of Products and other property. 14. Rights, Remedies, Compliance with Laws and Construction. Buyer and Seller are independent contractors, and nothing in this Agreement makes either party the agent or legal representative of the other party for any purpose. Neither party has authority to assume or to create any obligation on behalf of the other party. The failure of either party to enforce any right or remedy provided in this Agreement or by law on a particular occasion will not be deemed a waiver of that right or remedy on a subsequent occasion or a waiver of any other right or remedy. Any attempt on the part of Seller to limit Buyer s remedies and the amount and types of damages it may seek shall be null and void. A finding that any provision of this Agreement is invalid or unenforceable in any jurisdiction will not affect the validity or enforceability of any other provision of this Agreement or the validity or enforceability of that provision in any other jurisdiction. Any provision that is found to be invalid shall be amended to the limited extent to make valid while still accomplishing the intent of the original provision. Seller shall comply with all applicable industry, federal, state and local laws, rules, regulations or ordinances and standards as to the Products covered by the Order and otherwise in its performance of the Order. The Order and this Agreement shall be governed and construed under the laws of the state of Michigan without regard to its conflicts of laws provisions. THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (CISG) SHALL NOT APPLY TO TRANSACTIONS OR AGREEMENTS BETWEEN BUYER AND SELLER. 15. Taxes. Unless prohibited by law or otherwise stated on the Order by the use of an Incoterm 2010, the Seller shall pay all federal, state or local tax, transportation or other tax, including but not limited to customs duties and tariffs, which is required to be imposed on the goods and services ordered, or by reason of their sale or delivery. 16. Assignment. The Order is issued to the Seller in reliance upon the Seller s personal performance of the duties imposed. The Seller agrees not to, in whole or in part, assign this Order or delegate the performance of its duties without the written consent of the Buyer. Any such assignment or delegation without the prior written consent of the Buyer, at the option of the Buyer, shall effect a cancellation of this Order. Any consent by the Buyer to an assignment shall not be deemed to waive Buyer s right to recoup from Seller and/or its assigns for any claim arising out of this Order. 17. Environmental and Social Responsibility. Buyer recognizes the importance of environmental responsibility and Buyer s goal is to protect the environment by meeting legal and other requirements and to strive for continual improvement in its environmental performance. During the process of product development, the overall requirements of environmental responsibility are to be implemented in a manner appropriate to each specific component. To achieve high process environmental performance, Seller shall introduce and maintain an effective environmental system including such elements as using raw materials which are suitable for recycling (when available), designing Goods according to weight saving principles with a view to reducing fuel consumption and emission in the use phase and minimizing exhaust, noise and solids emissions during the production, use and recycling phases according to state-of-the-art technologies. Buyer s and Seller s corporate activities shall take account of the social responsibility to employees and society as a whole by following principles such as: Page 10 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

11 Preservation of human dignity, ban on child and forced labor, Implementation of equal opportunities and family-friendly policies, No discrimination on the basis of religion, origin, nationality, age, handicap, or gender, Maintenance of adequate social working conditions, Positive and negative freedom of association, Maintenance of employability by basic and advanced training, Responsible action by all personnel in relation to the environment, and Compliance with current laws and regulations. 18. Conflict Minerals. Seller acknowledges there is a regulatory focus in mining of Conflict Minerals in the Democratic Republic of the Congo (DRC) and adjoining countries. The United States, as part of the Dodd-Frank Act (Section 1502) (the Act ), passed legislation relating to these Conflict Metals. Seller shall comply with all rules, regulations and obligations as provided for in the Act and other applicable Law and shall indemnify, defend and hold Buyer from any and all claims (including reasonable attorney s fees) which arise out of Seller s non-compliance with such Laws and the Act. Seller shall further assist Buyer with any request for information, certifications, or other similar documents as Buyer may reasonably request to ensure Seller s compliance with such Act. 19. Dispute Resolution. Buyer and Seller will first endeavor to resolve through good faith negotiations any dispute arising under or relating to the Order and/or this Agreement or the relationship of the parties. If a dispute cannot be resolved within a reasonable time through good faith negotiations, the parties agree that any claim or dispute between them or against any agent, employee, successor, or assign of the other, whether related to this agreement or otherwise, and any claim or dispute related to this agreement or the relationship or duties contemplated under this contract, including the validity of this arbitration clause, shall be resolved by binding arbitration administered by the National Arbitration Forum under the Code of Procedure then in effect. All arbitration proceedings shall take place in Michigan. Any award of the arbitrator(s) may be entered as a judgment in any court having jurisdiction. Information may be obtained and claims may be filed at any office of the National Arbitration Forum, or by mail at P.O. Box 50191, Minneapolis, MN Notwithstanding the choice of law provision in this Agreement, this section eighteen (18) shall be governed by and interpreted under the Federal Arbitration Act, 9 U.S.C. Sections Page 11 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

12 Non-Conformances Gentex may create a non-conformance (NC) notification when supplier provided material or components are suspect and need to be quarantined. The NC notification will be sent with a red, yellow, or green response level see below. Gentex will determine if the product is defective. Material and components are defective when: Material is out of specification Material is packaged improperly Material is labeled improperly Material has exceeded the predetermined shelf life Material does not meet form, fit, function, or appearance intent Material is damaged upon receipt at Gentex Material deviates from approved PPAP submission Material arrives with improper documentation from offshore suppliers This includes a.pdf of the following: Packing list, Bill of Lading, Invoice. Material does not meet design intent When defective material is found, Gentex reserves the right to apply financial ramifications. When defective material is found, if Gentex production schedules and material availability do not allow, Gentex will not give the supplier the opportunity to replace suspect material or sort on site. Gentex will complete the sort or rework operation at a cost to the supplier of $50/man-hour, plus any additional expense incurred due to the sort or rework. These expenses could include, but are not limited to, additional component damage, increased cycle time, downtime, or expedited freight costs during the sort or rework operation. If suspect parts do not fall into the previously defined categories, a joint meeting will be held with Gentex Supplier Quality, the Gentex Buyer, and supplier to determine proper PPM and financial ramifications. When material does not meet specification, packaging requirements, or design intent, Gentex requires the supplier to follow the 8D process and provide corrective action(s). The NC notification will provide specific due dates for initial containment response and root cause/permanent corrective action. Initial response is typically required within 1 day. All 8D reports must be submitted to the requestor. In the event that Gentex does not receive the initial response and shortterm corrective action/containment within the specified time, Gentex has the option of initiating a third party sort of all incoming suspect material. These costs will be billed to the supplier by the third party sorting company. The containment will be lifted only after the short-term corrective action and containment plans have been submitted and accepted by Gentex, and Gentex is receiving certified material. Similarly, if the final corrective action is not submitted by the problem solving response due date listed in the NC notification, Gentex has the option to initiate third party sort and bill the supplier until the corrective action(s) has been submitted and approved. When necessary, suppliers may file for extensions to corrective action deadlines with Gentex Supplier Quality. If the supplier has issues or concerns with the NC notification, the designated Gentex supplier quality engineer should be contacted. All corrective actions shall include any updated documentation such as control plans, FMEAs, work instructions, process flow diagrams or any documents specified in the 8D. Include pictures of corrective action evidence if applicable. Typical containment activities include 100% sorting and rework activities. When containment activities occur, all products flowing into Gentex must be marked with a 2 x 2 or larger green label. The label must state 100% CERTIFIED PRODUCT. INITIAL, DATE, NC#. The label must be placed next to the shipping label and it must be visible and easily readable. This label must be applied to finished product until the NC and appropriate corrective actions are closed. Gentex Corrective Action Report A template for 8D is included with each NC notification and may be used to document the steps taken to address the NC. The supplier may use their own 8D document if the required information is included. D3 should list containment actions. These must be in place to ensure that product in transit, at Gentex and at the supplier s facility will meet the quality criteria. D4 should describe the root cause(s) of occurrence and detection causing the defective material. D5 should define permanent corrective action(s) that will be put in place to ensure the problem and root cause(s) are addressed. D6 should describe the plan to implement and execute the items listed in D5. D7 should describe the preventative action(s) that have been implemented in the process, procedures, or systems to prevent recurrence. D8 should list the peripheral items that D6 and D7 should and will also be applied to. Any questions regarding the corrective action report should be directed to the designated Gentex supplier quality engineer. Page 12 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

13 International Shipping Requirements International Contracts Minimum Requirements Contracts for international trade are essential documents that outline Gentex s responsibilities and obligations to our customers and our customer s obligations to Gentex. These documents are part of our record keeping responsibilities and may be reviewed by U.S. Customs in an audit. When shipping product internationally there are different requirements and considerations than when shipping product domestically. Often, there is not a contract that has been approved by our legal group but rather two or three key documents that outline our agreements with foreign suppliers. These documents may include commercial invoices, s, purchase orders, etc. The quote and the commercial invoice must outline all the key information necessary to the transaction. Key requirements include the following: The quote and commercial invoice should include, at a minimum: - Full description of the merchandise ( spare parts is not acceptable) - Quantity and quality - Warranty provisions - Price - International Commercial Terms - Sold-to and ship-to party, if they are not the same. List the currency in which Gentex is to pay. Many countries including Canada and Australia use the dollar sign, therefore to avoid risk, indicate USD in front of the dollar sign to confirm Gentex is making payment in U.S. dollars. Indicate the Incoterm 2010 on the commercial invoice. The Incoterm 2010 and named place noted on the Gentex purchase order must be used. Any deviations from the noted Incoterm or named place must be requested and approved by Gentex personnel in advance of the shipment's departure. For more information on Incoterms, consult the Incoterms 2010 book available from the International Chamber of Commerce, or contact Gentex Supply Chain Management. Include information on legal documents required for international trade. Many products and/or countries have different documentation requirements and they should be reviewed to ensure freight is not held in Customs for needed information. Include a termination date on any quotes; international trade contracts do not expire unless a date is clearly indicated. Gentex makes every effort to be in compliance with all import and export regulations. If you have any questions on information required for shipments, please contact the Gentex Supply Chain Management Department at Upon shipment of product to Gentex, all international suppliers must send a pre-alert to the responsible Gentex Buyer or Material Planner. Commercial Invoice Requirements A commercial invoice must be produced for each entry submitted to U.S. Customs, and must meet the following general conditions: Documents must be in English List the full legal name and address of the company (or person if not a company) selling the goods. Avoid abbreviations. List Sold to and Ship to parties Detailed description of merchandise. Include common nouns and adjectives in the description to aid in HTS classification verification. List the value of the merchandise and type of currency Purchase order number (as specified on purchase order) Shipment number (as specified on purchase order) List quantity and weight Country of origin of merchandise Country of export, if different from country of origin Itemized separately, if applicable: - Rebates or discounts - Freight and insurance - Commissions - Cost of packing Page 13 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

14 - Addition to Value/Assist Declaration When multiple invoices are included in a shipment, number the bottom of each page of the invoice beginning with invoice 1. If an invoice consists of multiple pages, number the bottom of each page beginning with page 1. If the shipment contains multiple invoices with multiple pages per invoice, number the bottom of each page with the number of invoices and the page number of the invoice. For example, if a shipment covers one invoice with one page and a second invoice with 2 pages, the numbering shall be as follows: inv. 1 page 1 inv. 2 page 2 inv. 2 page 3 List the name of a responsible person from the exporting company with knowledge of the transaction Instructions Coordination between Gentex Buyers and Suppliers will ensure that all information required on the commercial invoice will be available from the time the order is placed until documents are received in-house at Gentex. In addition, all parties involved must communicate any changes to the commercial invoice that impacts the information to be submitted to U.S. Customs. Consequences Accurate and detailed information on the commercial invoice allows an importer to properly classify and value imported merchandise. Incorrect information may result in an incorrect duty rate or improperly valued merchandise resulting in delays in delivery and possible penalties. Supplier Contents Reporting Gentex s valued customers require us to submit certificates of origin to take advantage of preferential duty programs. When Gentex provides this information we are legally required to maintain documentation regarding material (harmonized tariff classification and country of origin) used to make Gentex products. In order to maintain that data, Gentex will send its production material suppliers solicitation requests on a regular basis. These requests may include any of the following: NAFTA Certificate of Origin, American Automotive Labeling Act Report, Manufacturer s Affidavit, Certificate of Origin, or Traced Value Reporting. As a Gentex supplier you must respond and provide the appropriate information. Failure to do so will impact your supplier performance rating. Transportation Security Administration (TSA) Beginning on December 3, 2012, TSA mandates all U.S. inbound cargo on passenger flights will need to be 100% screened. This is a result of the 9/11 Commission Act signed by President George Bush. This 100% screening rule is based on the piece level of the shipment. Suppliers are obliged to pack the goods for a long journey utilizing master cartons. Customs Trade Partnership against Terrorism (C-TPAT) All Gentex partners including customs brokers, freight forwarders and international suppliers are strongly encouraged to become members of C-TPAT (or other credible security program), but at a minimum must comply with the security measures outlined in C-TPAT. A complete summary of this information is available at Some key aspects of the program for suppliers to focus on are the topics addressing container security, container seal security, physical building security, access control security, procedural security, personnel security, training security and information technology security. The following procedure outlines the minimum requirements of C-TPAT and cargo security. Cargo Security Requirements for Shipping to the United States 1.0 PURPOSE To ensure compliance with U.S. Customs cargo security programs by adhering to the fundamentals of C-TPAT; expedite the clearance of imported items; lower the potential for fines, penalties, forfeitures, and the seizure of inbound shipments. 2.0 SCOPE This procedure applies to any supplier preparing a shipment to the United States destined for any Gentex location or alternate consigned locations within the United States defined by Gentex. 3.0 REFERENCES C-TPAT Guidelines, as outlined on the Customs website at Page 14 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

15 4.0 DEFINITIONS Business Partners: Any company, individual, or entity doing business with Gentex Corporation and its affiliates providing services or products. This includes all Foreign and U.S., based Suppliers, Customs Brokers, Consolidators, Freight Forwarders, Carriers, and other service providers. 5.0 SUPPLIER RESPONSIBILITY FOR SHIPPING CONTAINERS 5.1 Container Security - Inspection Prior to stuffing a container, the supplier will verify the physical integrity of the container structure by reviewing the following: Check integrity of front wall. Check integrity of left side. Check integrity of right side. Check integrity of floor. Check integrity of ceiling / roof. Check integrity of inside / outside doors. Check integrity of outside / under carriage. All locking mechanisms must be checked for integrity. 5.2 Container Security - Seals Secure all containers by review of the following: Attach a high security seal to all loaded containers bound for the U.S.. Ensure the seal meets or exceeds current PAS ISO standards for high security seals. Outline written procedures for: - Controlling seals and how they are to be affixed to loaded containers. - Recognizing AND reporting compromised seals and / or containers to Gentex Corporation s receiving department. Confirm only designated employees can distribute container seals for integrity purposes. 6.0 SECURITY REQUIREMENTS FOR SUPPLIERS AND BUSINESS PARTNERS Suppliers to Gentex Corporation will develop and implement a sound plan to enhance security procedures. These are general recommendations that should be followed on a case by case basis depending on the Company s size and structure. The Supplier should have a written plan in place that addresses the following: Physical Security: All buildings should be constructed of materials which resist unlawful entry and protect against outside intrusion. Physical security should include: Adequate locking devises for external and internal doors, windows, gates, and fences. Segregation and marking of international, domestic, high-value and dangerous goods cargo within the warehouse by a safe, caged or otherwise fenced-in area. Adequate lighting provided inside and outside the facility to include parking areas. Separate parking area for private vehicles separate from the shipping, loading dock, and cargo areas. Having internal and external communications systems in place to contact internal security personnel or local law enforcement. Access Controls: Unauthorized access to the shipping, loading dock and cargo areas should be prohibited. Controls should include: The positive identification of all employees, visitors and vendors. Procedures for challenging unauthorized / unidentified persons. Procedural Security: Measures for the handling of incoming and outgoing goods should include the protection against the introduction, exchange, or loss of any legal or illegal material. Security controls should include: Having a designated security officer to supervise the introduction / removal of cargo. Properly marked, weighted, counted and documented products. Procedures for verifying seals on containers, trailers, and railcars. Procedures for detecting and reporting shortages and overages. Procedures for tracking the timely movement of incoming and outgoing goods. Proper storage of empty and full containers to prevent unauthorized access. Procedures to notify Customs and other law enforcement agencies in cases where anomalies or illegal activities are detected or suspected by the company. Page 15 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

16 Personnel Security: Companies should conduct employment screening and interviewing of prospective employees to include periodic background checks and application verifications. Education and Training Awareness: A security awareness program should be provided to employees including the recognition of internal conspiracies, maintaining cargo integrity, and determining and addressing unauthorized access. These programs should offer incentives for active employee participation in security controls. IT Security: There should be procedures in place to protect the internal system of the company. They should include: Access to system requires a password that periodically changes. Having a locked/secure server room with limited access. Anti-virus software is used to protect computer systems. A process for denying system access to terminated employees. Conflict Minerals Reporting Requirements The exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo (DRC) or adjoining countries is helping finance extreme violence, poverty, and human rights abuse. The DRC and adjoining countries are collectively referred to as Covered Countries. The Securities and Exchange Commission (SEC) conflict minerals reporting requirement is an effort to ensure that required companies are exercising reasonable inquiry and due diligence within their supply chain to ensure that financial support is not being funneled to these conflicts. The reporting requirement will also enhance transparency and help American consumers and investors make more informed decisions. The SEC has issued a final rule on conflict minerals pursuant to Dodd-Frank Section The rule requires any issuer that files reports with the Commission under Section 13(a) or Section 15(d) of the Exchange Act to annually disclose whether any defined conflict minerals necessary for the functionality of a product or necessary for the production of a product manufactured has originated in the Covered Countries. The issuer must make the disclosure publically available on their internet website and also must provide the disclosures on Form SD. If any conflict minerals originated in those countries, they are required to submit a Conflict Minerals Report to the Commission that includes a description of the measures taken to exercise due diligence on the conflict minerals source and chain of custody. Gentex and our customers are required to provide this annual disclosure. Gentex solicits a reasonable country of origin inquiry regarding conflict mineral information from our supply base. This inquiry obtains reasonably reliable representations indicating the facility at which its conflict minerals were processed and that the minerals did not originate at conflicted sources in the Covered Countries. Suppliers will be required to cascade conflict minerals inquiries to the previous level/tier in the supply chain, back to the smelter, and report back to Gentex, the required information regarding conflict minerals. Definitions Conflict Minerals are known as the 3Ts and Gold and are defined as: Columbite-tantalite (known throughout The Congo as Coltan): The ore from which Tantalum (Ta) is extracted Cassiterite: The ore that is the most common source of Tin (Sn) Wolframite: The ore from which Tungsten (W) is extracted Gold (Au) Other minerals may be added by the Secretary of State Major uses of the 3Ts and Gold The below list is not all inclusive. Tantalum is used in the electronics industry, mainly for capacitors as well as in the manufacture of state of the art semiconductors, using the physical vapor deposition (PVD) process. Tantalum can be found in consumer products such as tablets, smart phones, digital cameras, magnetic storage media, inkjet printer heads, flat panel displays, and electronic systems for vehicles. Tantalum is also used for liners in vessels, piping, values and heat exchangers in the chemical and pharmaceutical industries, medical devices, cemented carbides for cutting tools, and more. Tin is used in solder paste and glass manufacturing. Tungsten is used in electronics including liquid crystal displays. Gold is used in the electronics industry in conductive contacts and bond wire. References Page 16 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014

17 CFR 17 parts 240 and 249 b: SEC Final Rule release number (August 22, 2012): Certified Conflict Free Smelters: The Electronics Industry Citizenship Coalition Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Page 17 of 17 Gentex Corporation Supplier Manual - Master, Effective June 2014