The Company’s independent registered public accounting firm does not generally provide tax compliance, tax advice and tax planning services to the Company. A separate firm has been engaged by the Company to provide such services. In the above table, in accordance with the SEC’s definitions and rules, “Audit Fees” are fees that we paid to Grant Thornton LLP for the audit of our annual financial statements and review of our quarterly financial statements as well as the audit of our internal control over financial reporting with the objective of obtaining reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects; for the attestation of management’s report on the effectiveness of internal control over financial reporting; and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements. “Audit-Related Fees” are fees for assurance and related services that are reasonably related to the performance of the services described in the definition of Audit Fees. During 2011, our independent registered public accounting firm was engaged to provide an analysis of the tax implications of our acquisition of W.E.T. Automotive Systems AG and fees for such services comprise the “Tax

Fees” included in the above table. The Other Fees paid to our independent registered public accounting firm during 2012 relate to an investigation of a potential merger and during 2011 relate to due diligence in connection with the acquisition of W.E.T.

Vote Required

The affirmative vote of a majority of the votes cast at the Annual Meeting with respect to this proposal will be necessary to ratify the appointment of Grant Thornton LLP to act as our independent registered public accounting firm for the year ended December 31, 2013. Abstentions will have the same effect as a vote against the matter. Broker non-votes will have no effect on the outcome of the vote.

The Board of Directors unanimously recommends a vote FOR ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2013.

Proposal 3: Advisory Vote on Named Executive Officer Compensation

Our Board of Directors requests that shareholders provide advisory, non-binding, approval of the compensation of our named executive officers, as disclosed in this Proxy Statement in accordance with the SEC’s rules (commonly known as a “say-on-pay” proposal). We recognize the interest our shareholders have in the compensation of our executives and we are providing this advisory proposal in recognition of that interest and as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act.

As described in detail under the heading “Executive Compensation – Compensation Discussion and Analysis,” beginning on page 34, our named executive officer compensation program is designed to attract, motivate, and retain our named executive officers, who are critical to our success, and ensure alignment of the interests of such persons with our shareholders. Under this program, our named executive officers are rewarded for their service to the Company, the achievement of specific performance goals and the realization of increased shareholder value. We believe our named executive officer compensation programs also are structured appropriately to support our business objectives, as well as to support our culture. The Compensation Committee regularly reviews the compensation programs for our named executive officers to ensure the fulfillment of our compensation philosophy and goals.

Please read the “Executive Compensation – Compensation Discussion and Analysis,” beginning on page 34, and the named executive officer compensation tables, beginning on page 38, for additional details about our named executive officer compensation program, including information about the target and earned compensation of our named executive officers in 2012.

We are asking our shareholders to indicate their support for our named executive officer compensation as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2013 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board of Directors. We value the opinions of our shareholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, we will consider our

shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

Vote Required

The affirmative vote of a majority of the votes cast at the Annual Meeting with respect to this proposal will be necessary to approve, on an advisory basis, the compensation of our named executive officers. Abstentions will have the same effect as a vote against the matter. Broker non-votes will have no effect on the outcome of the vote.

The Board of Directors unanimously recommends a vote FOR the approval of the compensation of our named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.

Proposal 4: Approval of the Gentherm Incorporated 2013 Equity Incentive Plan

The stockholders are being asked to approve an amendment to our Articles which would eliminate cumulative voting in director elections, commencing with the Gentherm Incorporated 2013 Equity Incentive Plan (the “2013 Plan” or2016 annual meeting of shareholders.  See “Proposal No. 4 – Approval of an Amendment to the “Plan”). Restated Articles of Incorporation to Eliminate Cumulative Voting in Director Elections” for further information.

Is a registered list of shareholders available?

The Plan permitsnames of shareholders of record entitled to vote at the grantingannual meeting will be available to such shareholders at the annual meeting for any purpose reasonably relevant to the meeting.

Who will count the votes and where can I find the voting results?

The Inspector of Elections appointed at the 2015 annual meeting will tabulate the voting results. We intend to announce the preliminary voting results at the annual meeting and, in accordance with rules of the following types of “Awards”: (1) stock options, including both nonqualified optionsSecurities and incentive options (“Options”Exchange Commission (the “SEC”), (2) stock appreciation rights (“SARs”), (3) restricted stock and restricted stock units (“RSUs”), (4) performance-based shares (“Performance Shares”), and (5) other awards which are denominated or payablewe intend to publish the final results in valued by reference to, or otherwise baseda current report on our common stock, including rights to make an outright purchase of unrestricted or restricted stock (“Other Stock-Based Awards”). Awards may only be issued to key employees, outside directors, consultants and advisorsForm 8-K within four business days of the Company and its subsidiaries. Awards of restricted stock, RSUs, Performance Shares and Other Stock-Based Awards are referred to herein as “Full Value Awards.” Unlike Options and SARs, a recipient of a Full Value Award receives, in most cases, the entire value of the underlying shares at the time the Award is granted. Awards of Options and SARs, on the other hand, typically provide the recipient with value only upon an increase in the market price of the underlying shares.annual meeting.

PROPOSAL NO. 1—ELECTION OF DIRECTORS

The Board currently consists of Directors believes that it is in the best interest of the Company and its shareholders for the Company to be in a position to offer Awards to key employees, outside directors, consultants and advisors in accordance with the terms of the Plan. Such Awards provide incentive to such key individuals to make significant and extraordinary contributions to our long-term performance and growth. In addition, such awards align the interests of key employees, outside directors, consultants and advisors with the interests of our shareholders and help us attract and retain key individuals with exceptional ability. As of April 1, 2013, there remained 2,315,578 shares of our common stock available for Awards to be granted under the Company’s existing equity incentive plans (2,307,000 shares under the Gentherm Incorporated 2011 Equity Incentive Plan (the “2011 Plan”) and 8,578 shares under the Gentherm Incorporated 2006 Equity Incentive Plan (the “2006 Plan”)). Also as of April 1, 2013, of the 2,315,578 shares of our common stock available for Awards to be granted under the 2011 Plan and the 2006 Plan, 111,160 shares were available for issuance as Full Value Awards (110,744 shares under the 2011 Plan and 416 shares under the 2006 Plan). No shares are available for issuance under any other equity incentive plan of the Company. The Board of Directors has adopted contingent amendments to the 2011 Plan and the 2006 Plan that provide for reductions in the number of shares available for future Awards under the 2011 Plan and the 2006 Plan to zero if the 2013 Plan is approved by the stockholders. In addition, the Board of Directors adopted a resolution that prohibits any Awards under the 2011 Plan or the 2006 Plan until the stockholders vote on the proposal to approve the 2013 Plan. No Awards have been made under the 2011 Plan or the 2006 Plan since April 1, 2013 and, as noted above, if the 2013 Plan is approved, no further Awards will be made under the 2011 Plan or the 2006 Plan.

As a result, if the 2013 Plan is approved, (1) none of the 2,315,578 shares of common stock currently available for issuance under either the 2011 Plan or the 2006 Plan would be available for issuance as future awards and (2) there would be available for issuance under the 2013 Plan a number of shares of common stock

(the “Share Limit”) equal to the sum of (i) 3,500,000 shares, plus (ii) the number of shares of common stock of the Corporation that, as of the effective date of the Plan, are subject to awards granted under the 2006 Plan or the 2011 Plan and that, on or after the effective date of the Plan, expire or are terminated, surrendered or canceled without the delivery of any shares of Stock in the case of options, or are forfeited or reacquired by the Corporation, in accordance with the terms of the relevant plan, in the case of unvested restricted stock awards. Under the terms of the 2013 Plan, Full Value Awards shall count against the Share Limit as 1.58 shares of common stock for each share of common stock covered by such Awards and all Options and SARs shall count against the Share Limit as 1.00 share of common stock for each share of common stock covered by such Awards.

The Board of Directors believes that the adoption of the 2013 Plan is necessary and appropriate.

The full text of the 2013 Plan is set forth on Appendix A to this Proxy Statement. The material features of the Plan are summarized below, but each shareholder should review the Plan itself for a full understanding of its contents.

Administration; Plan Participants

The Plan authorizes a “Committee” (which will be comprised of the Compensation Committee of the Board of Directors, unless the Board of Directors determines otherwise) to interpret the Plan, to promulgate, amend and rescind rules and regulations relating to the Plan and to make all other determinations necessary or advisable for its administration. Unless otherwise determined by the Board of Directors, the Compensation Committee’s determinations and interpretations under the Plan will be binding on participants. Under the Plan, the Company has agreed to indemnify the Compensation Committee members for reasonable expenses incurred in connection with the defense of any action, suit or proceeding involving any action or failure to act with respect to the Plan (other than matters where the Compensation Committee member is determined to have acted in bad faith).

Participants are chosen by the Compensation Committee from among those individuals who are or who become key employees (including officers and directors), outside directors, consultants and advisors who, in the judgment of the Compensation Committee, are or will become responsible for the Company’s direction and financial success. The Compensation Committee determines those eligible participants or classes of participants to be granted Awards, the type of Award and the amounts, terms and conditions of the Awards.

Amendment or Termination of the Plan

The Plan may be terminated or amended at any time by the Board of Directors. Unless sooner terminated, the Plan will terminate 10 years after its approval by the shareholders, and no Awards may be awarded under the Plan thereafter. The termination of the Plan will not affect the validity of any Award outstanding on the date of termination.

For purposes of conforming to any changes in applicable law or governmental regulations, or for any other lawful purpose, the Board of Directors has the right, with or without approval of the Company’s shareholders, to amend or revise the terms of the Plan at any time; however, no such amendment or revision can (i) with respect to the Plan, increase the maximum number of shares in the aggregate which are subject to the Plan or with respect to which Awards may be made to individual participants (other than anti-dilution adjustments), materially change the class of persons eligible to be participants under the Plan or establish additional and different business criteria on which performance share goals are based without approval or ratification of the Company’s shareholders; or (ii) with respect to an Award previously granted under the Plan, except as otherwise specifically provided in the Plan, alter or impair any such Award without the consent of the holder thereof.

Maximum Awards

Subject to adjustment as described below, the Share Limit (i.e., the number of shares of common stock available for issuance under the 2013 Plan) is equal to the sum of (i) 3,500,000 shares, plus (ii) the number of shares of common stock of the Corporation that, as of the effective date of the Plan are subject to awards granted under the 2006 Plan or the 2011 Plan and that, on or after the effective date of the Plan, expire or are terminated, surrendered or canceled without the delivery of any shares of Stock in the case of options, or are forfeited or reacquired by the Corporation, in accordance with the terms of the relevant plan, in the case of unvested restricted stock awards. Under the terms of the 2013 Plan, Full Value Awards shall count against the Share Limit as 1.58 shares of common stock for each share of common stock covered by such Awards and all Options and SARs shall count against the Share Limit as 1.00 share of common stock for each share of common stock covered by such Awards.. The aggregate fair market value (determined at the time an incentive option is granted) of shares with respect to which incentive options are exercisable for the first time by any individual during any calendar year cannot exceed $100,000. The amount of cash and the value of any property paid to any individual during any calendar year in settlement of a Performance Share cannot exceed $2,000,000.

The Compensation Committee, in its discretion, may adjust the number of shares which may be made the subject of new Awards or are then subject to outstanding Awards, the option price with respect to each outstanding stock option, the grant value with respect to outstanding SARs, the aggregate number of shares available at any time under the Plan to reflect such events as a stock split, stock dividend, or other extraordinary corporate event. The total number of Awards that may be granted under the Plan cannot presently be determined. In addition, nothing in the Plan prevents the Company from adopting or continuing in effect other or additional compensation arrangements.

Awards

Awards granted under the Plan will be evidenced by a written agreement between the Company and each participant, which will be in accordance with the Plan and may contain restrictions and limitations that do not violate the terms of the Plan. Subject to the terms of the Plan, the Compensation Committee may grant a participant one or more of the following Awards and any combination thereof:

Stock Options and SARs

The Compensation Committee in its discretion may grant either incentive options meeting the definition of incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Code”) or nonqualified options not meeting such definition, or any combination of incentive and nonqualified options. The option price for incentive options may not be less than 100% (110% for a participant owning 10% or more of our voting stock) of the fair market value of the common stock on the grant date. The option price for nonqualified options may not be less than 100% of the fair market value of the common stock on the grant date. Incentive options may only be granted to an employee of the Company or any of the subsidiaries in which the Company owns directly or indirectly 50% or more of the combined voting power of all classes of its stock.

SARs may be granted in conjunction with or independent of any stock option granted under the Plan. A SAR granted in conjunction with a stock option may either be an alternative right or an additional right. The exercise of a SAR granted as an alternative right will terminate the stock option to the extent of the number of shares with respect to which the SAR is exercised and vice versa. For SARs granted as an additional right, both the SAR and the stock option may be exercised. Upon exercise of a SAR, a participant is generally entitled to receive an amount equal to the difference between the fair market value of the shares with respect to which the participant exercises the SAR at the time of grant and the fair market value of the shares with respect to which the participant exercises the SAR at the time of exercise. This amount may be payable in cash or shares of common stock or any combination thereof.

Incentive options and related SARs are generally nontransferable by a participant other than by will or the laws of descent and distribution. Stock options and SARs will be exercisable, during the lifetime of the participant, only by the participant. However, the Compensation Committee in its discretion may permit the transfer of a nonqualified option or any related or independently granted SAR in limited circumstances.

At the time of exercise, the option price for the exercise of options must be paid in full in cash or, with the consent of the Compensation Committee, in common stock. In the discretion of the Compensation Committee, payment may also be made by (i) the Company retaining from the shares to be delivered upon exercise of the option that number of shares having the fair market value on the date of exercise equal to the option price, or (ii) by delivery of irrevocable instructions to a stock broker to promptly deliver to the Company full payment of the option price of the shares so purchased from the proceeds of the stock broker’s sale of, or loan against, such shares (a “Regulation T Stock Option Exercise”).

Restricted Stock Awards or RSUs

The Compensation Committee may grant restricted stock or RSUs to a participant. Restricted stock and RSUs are nontransferable and will have an established restriction period that may differ for each participant and with respect to all or any portion of the same Award. Participants are entitled to all dividend and voting rights with respect to restricted stock. A participant will have no stock ownership interest as a result of being granted RSUs, but may, in the discretion of the Compensation Committee, receive dividend equivalents on such units. The Compensation Committee may make performance-based restricted stock or RSU awards that condition release of the restrictions on the attainment of one or more performance goals during the restricted period in addition to or in lieu of conditioning the release of restrictions on the continued employment of the participant. The performance goals applicable to a performance-based restricted stock or RSU award must be based on the same criteria as are applicable to Performance Shares permitted under the Plan as described below. Upon a termination of employment or service other than due to death or disability, any restricted stock or RSUs shall be immediately forfeited; provided, however, the Committee may in its discretion accelerate any applicable time-based vesting conditions upon certain qualifying terminations. Unless otherwise determined by the Compensation Committee in the case of a participant who dies or becomes permanently disabled, the restrictions applicable to performance-based restricted stock or RSU awards will lapse only after attainment of the performance goals during the restricted period and written certification by the Compensation Committee that the performance goals and any other material term of the award have been attained or satisfied. If the performance goal has not been attained by the end of the restricted period, the performance-based restricted stock or RSUs will be forfeited. At the expiration of the restricted period, (i) with respect to restricted stock, the Company will deliver stock certificates to the participant or the legal representative of the participant’s estate or, if the shares were previously issued with a legend, the Company will reissue certificates without the legend, and (ii) with respect to RSUs, the Company will pay a participant an amount equal to the fair market value of that number of shares to which such RSU relates. In the discretion of the Compensation Committee, the amount paid with respect to an RSU may be paid in cash, common stock, other property or any combination thereof and may be paid in a lump sum or in installments, currently or on a deferred basis with provision for the payment or crediting of a dividend equivalent or a reasonable rate of interest on installment or deferred payment; provided, however, that the amount of cash and the value of any other property paid to a participant during any calendar year in settlement of a performance-based RSU may not exceed $2,000,000.

Automatic Director Restricted Stock

The Plan provides for each non-employee director (referred to herein as an “outside director”) to be automatically granted upon such director’s initial election or appointment an award of a number of shares of restricted common stock equal to (i) $4,167 (which amount may be modified from time to time by the Committee in its Discretion), multiplied by (ii) the number of full months between the date of such election or appointment and the first anniversary of the last completed annual meeting of the Corporation’s stockholders, and divided by (iii) the closing price of the Corporation’s common stock on such date. In addition, on the date of each annual

meeting of the Corporation’s stockholders each outside director then in office is automatically granted an award of a number of shares of restricted common stock equal to $50,000 (which amount may be modified from time to time by the Committee in its Discretion) divided by the closing price of the Corporation’s common stock on such date. The restricted period with respect to each share of restricted stock granted to outside directors pursuant to the foregoing (“Automatic Director Restricted Stock”) lapses on the date of the annual meeting of stockholders held during the calendar year following the date of grant or, if earlier, on the first anniversary of the date of grant, in each case so long as the applicable director remains a director through such date. Such shares of Automatic Director Restricted Stock are forfeited if the applicable director ceases to be a director prior to the date the restrictions with respect to such restricted stock are to lapse, except that if an outside director’s services as a member of the Board terminates because of (1) total disability, (2) death, (3) retirement on or after age 65 and after at least ten years of service as a member of the Board or (4) any other circumstance that the Committee, in its Discretion, deems to be applicable, then all restrictions with respect to such restricted stock immediately lapses upon the occurrence of such event.

Performance Shares

The Compensation Committee may grant to a participant the right to obtain Performance Shares. Unless otherwise determined by the Compensation Committee, rights to obtain Performance Shares are nontransferable. A participant’s right to obtain Performance Shares will be subject to the attainment of one or more pre-established performance goals over a performance period prescribed by the Compensation Committee. The performance goal will be established in writing no later than the earlier of 90 days after the start of a performance period or expiration of the first 25% of the performance period and while the outcome of the performance goal is substantially uncertain. The Compensation Committee, in its discretion, will establish the specific targets and other details of the performance goal. A performance goal must, however, be objective so that a third party with knowledge of the relevant facts could determine whether the goal has been attained. Unless otherwise determined by the Compensation Committee in the case of a participant who dies or becomes permanently disabled, the Performance Shares will be issued to a participant only after the expiration of the performance period and the Compensation Committee has certified in writing that the performance goal and any other material terms of the Award have been satisfied. No participant will have the rights of a shareholder with respect to Performance Shares until their actual issuance.

Other Stock Based Awards

The Compensation Committee may grant participants other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of common stock as are deemed by the Compensation Committee, in its discretion, to be consistent with the purpose of the Plan, provided that such grants must comply with applicable law. Additionally, the Compensation Committee may permit a participant to make a current, outright purchase of common stock, which shares may or may not be subject to any restrictions or conditions, for a price equal to, less than or greater than the then fair market value of the common stock, with the price payable by the participant in such form and manner and at such time as determined by the Compensation Committee in its discretion.

Compliance with Section 162(m) of the Code

Section 162(m) of the Code limits publicly-held companies to an annual deduction for U.S. federal income tax purposes of $1,000,000 for compensation paid to its chief executive officer, chief financial officer and the three highest compensated executive officers (other than the chief executive officer and chief financial officer) determined at the end of each year. However, performance-based compensation may be excluded from this limitation. The Plan is designed to permit the Compensation Committee to grant awards that qualify for purposes of satisfying the conditions of Section 162(m).

Federal Income Tax Consequences

The rules governing the tax treatment of Options, SARs, restricted stock awards, RSUs, Performance Shares and Other Stock-Based Awards, including treatment of stock acquired upon the exercise of an Option or SAR, and the receipt or release from restriction of Performance Shares or other shares, are quite technical. Therefore, the description of the tax consequences set forth below is necessarily general in nature and does not purport to be complete. Moreover, the statutory provisions are subject to change, as are their interpretations, and their application may vary in individual circumstances. Finally, the tax consequences under applicable state and local income tax laws may not be the same as under the federal income tax laws.

Incentive options granted pursuant to the Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code. If the participant makes no disposition of the shares acquired pursuant to exercise of an incentive option within one year after the transfer of shares to such participant and within two years from the grant of the option, the participant will realize no taxable income as a result of the grant or exercise of such option (except that the alternative minimum tax may apply), and any gain or loss that is subsequently realized upon disposition may be treated as long-term capital gain or loss, as the case may be. Under these circumstances, the Company will not be entitled to a deduction for federal income tax purposes with respect to either the issuance of such incentive options or the transfer of shares upon their exercise.

If shares subject to incentive options are disposed of prior to the expiration of the above time periods, the participant will recognize ordinary income in the year in which the disqualifying disposition occurs, the amount of which will generally be the lesser of (i) the excess of the market value of the shares on the date of exercise over the option price, or (ii) the gain recognized on such disposition. In general, such amount will be deductible by the Company for federal income tax purposes in the same year, as long as the amount constitutes reasonable compensation. In addition, the excess, if any, of the amount realized on a disqualifying disposition over the market value of the shares on the date of exercise will be treated as capital gain.

A participant who acquires shares by exercise of a nonqualified option generally realizes, as taxable ordinary income at the time of exercise, the difference between the exercise price and the fair market value of the shares. In general, such amount will be deductible by the Company in the same year, provided that the amount constitutes reasonable compensation and the Company satisfies certain federal income tax withholding requirements. Subsequent appreciation or decline in the value of the shares on the sale or other disposition of the shares will generally be treated as capital gain or loss.

A participant generally will recognize ordinary income upon the exercise of a stock appreciation right in an amount equal to the amount of cash received and the fair market value of any shares received at the time of settlement of the stock appreciation right, plus the amount of any taxes withheld. Such amount will ordinarily be deductible by the Company in the same year as long as the amounts constitute reasonable compensation and the Company satisfies certain federal income tax withholding requirements.

A participant who is granted a restricted stock award under the Plan is not required to include the value of such shares in ordinary income until the first time such participant’s rights in the shares are transferable or are not subject to substantial risk of forfeiture, whichever occurs earlier, unless such participant timely files an election under Section 83(b) of the Code to be taxed on the receipt of the shares. A participant who is granted RSUs under the Plan is not required to include the value of such RSUs in ordinary income until such time the value of the RSUs is paid to the participant in cash or stock. In the case of either restricted stock or RSUs, the amount of such income will be equal to the fair market value of the shares or RSUs at the time the income is recognized. The Company will ordinarily be entitled to a deduction, in the amount of the ordinary income recognized by the participant, at the same time the participant recognizes such income, as long as the amount constitutes reasonable compensation and the Company satisfies certain federal income tax withholding requirements.

A participant who is granted a performance share Award will generally not recognize any income upon the grant of the Award. The participant will generally recognize as ordinary income the fair market value of the shares or cash transferred upon receipt of the shares by the participant after the completion of the performance period and the attainment of the performance goal, and the Company will generally be entitled to a deduction equal to the fair market value of the shares transferred to the participant at that time as long as the amount constitutes reasonable compensation and the Company satisfies certain federal income tax withholding requirements.

A participant who is permitted to make an outright purchase of unrestricted common stock will recognize ordinary income at the time of purchase if and to the extent the purchase price is less than the fair market value of the common stock on the date of purchase. A participant who is permitted to make an outright purchase of restricted common stock, depending on the nature of the restrictions, will recognize ordinary income at the time the restrictions lapse if and to the extent the then value of the common stock exceeds the price paid by the participant, unless the participant makes an election under Section 83(b) of the Code to measure and recognize any income at the time of purchase. The Company will be entitled to a corresponding deduction equal to the amount of any ordinary income recognized by a participant who makes an outright purchase of common stock, at the time the participant recognizes the ordinary income, provided that such amount constitutes reasonable compensation and the Company satisfies certain federal income tax withholding requirements.

Section 162(m) of the Code denies a deduction to any publicly held corporation for compensation paid to certain covered employees in a taxable year to the extent such compensation exceeds $1,000,000. For this purpose, a covered employee means the Company’s principal executive officer and the Company’s three highest compensated officers (other than the principal executive officer and the principal financial officer). It is possible that compensation attributable to Awards under the Plan to a covered employee, when combined with all other types of compensation received by the covered employee from the Company, may cause this limitation to be exceeded in any particular year. Certain types of compensation, however, including so-called “performance-based compensation,” are disregarded for purposes of the deduction limitation. Compensation attributable to stock options and SARs awarded under the Plan that have an exercise price or base amount not less than the fair market value of the common stock on the grant date should qualify as performance-based compensation under the Plan. Compensation attributable to Performance Shares, performance-based restricted stock awards and performance-based RSUs has also been structured to qualify for the performance-based compensation exclusion to the $1,000,000 deduction limitation.

The foregoing general tax discussion is intended for the information of shareholders considering how to vote with respect to this proposal and not as tax guidance to participants in the Plan. Different tax rules may apply to specific participants and transactions under the Plan.

Withholding Payments

If, upon the grant, exercise, release of restrictions or settlement of or in respect of an Award, or upon any other event or transaction under or relating to the Plan, the Company must pay amounts for federal income or employment tax withholding, in the Compensation Committee’s discretion, either the Company will appropriately reduce the amount of stock, cash or other property to be paid to the participant or the participant must pay such amount to the Company to enable the Company to pay, or reimburse the Company for paying, such income or employment tax withholding. The Compensation Committee may, in its discretion, permit the participant to satisfy such withholding obligations (i) by, in whole or in part, electing to reduce the number of shares of common stock delivered or deliverable by the Company in respect of an Award, (ii) by electing to tender common stock back to the Company subsequent to receipt of such shares in respect of an Award, or (iii) in the case of a Regulation T Stock Option Exercise, by irrevocably instructing the stock broker to promptly deliver (in addition to the option price) an amount equal to such withholding tax from the proceeds of the stock broker’s sale of or loan against some or all of the shares. The Company also may withhold the amount of such taxes from any other sums or property due or to become due to the participant. The Company may also defer issuance of shares under the Plan until payment by the participant to the Company of the amount of any such tax. The

Compensation Committee may make such other arrangements with respect to income or employment tax withholding as it may determine.

Market Value

The market value of the 3,500,000 shares of common stock that would be available for issuance under the Plan is, as of April 1, 2013, $54,705,000. However, the market value of the 2,315,578 shares of common stock that would no longer be available for issuance under the 2011 Plan or the 2006 Plan if the 2013 Plan is adopted is, as of April 1, 2013, $36,192,484. The net of the above amounts is $18,512,516.

Existing Compensation Plan Information

The following table provides information as of December 31, 2012, with respect to our shares of common stock that may be issued under our existing equity compensation plans:

As of April 1, 2013, there were 136,445 shares of unvested, restricted stock awards outstanding. The number of shares issued during 2012, 2011 and 2010 in the form of Restricted Stock were 155,280, 39,729 and 2,806, respectively.

Interests of Directors and Executive Officers; New Benefits Under the Plan

All executive officers, non-executive directors, non-executive officers and employees who are deemed to be “key employees” under the Plan will be eligible for Awards under the Plan if the Plan is approved by the shareholders. In addition, each current outside director will be eligible to receive Automatic Director Restricted Stock under the Plan. Consequently, each current director and each current executive officer has a personal interest in the approval of the Plan. However, the actual benefit and number of shares to be issued to the directors, executive officers, non-executive officers and other employees as a result of the Plan cannot be determined at this time because Awards to be made under the Plan have not been determined or granted and are not determinable using an objective formula. Similarly, the benefits or amounts that would have been awarded to directors, executive officers, non-executive officers and employees during the fiscal year ending December 31, 2012, if the Plan had been in effect during such period, are also not determinable.

Vote Required

The affirmative vote of a majority of the votes cast at the Annual Meeting with respect to this proposal will be necessary to approve the Gentherm Incorporated 2013 Equity Incentive Plan. Abstentions will have the same effect as a vote against the proposal. Broker non-votes will have no effect on the outcome of the vote.

The Board of Directors unanimously recommends a vote FOR the approval of the proposed Gentherm Incorporated 2013 Equity Incentive Plan.

BOARD OF DIRECTORS

nine directors.  All directors are elected annually and serve one-year terms.  Each director will serve until a one-year termsuccessor is duly elected and qualified or until the next annual meeting. Eachsuch director’s earlier resignation, retirement or death.  The Board has re-nominated all of the nomineescurrent directors.  As discussed below, the Board has affirmatively determined that seven of our nine current directors are independent under the applicable rules of the NASDAQ Global Select Market (“Nasdaq”).

Each nominee has consented to be listed in this proxy statement and agreed to serve as a director if elected; however, ifelected by the shareholders. If any nominee isbecomes unable or declinesunwilling to serve between the date of this proxy statement and the annual meeting, which we do not expect to happen, proxy holders shall voteanticipate, the proxies in accordance with their best judgment for another qualified nominee. If any of the nominees become unavailable to stand for re-election at the Annual Meeting, the Board of Directors may designate a new nominee and the persons named as proxies in the attached proxy card will vote for that substitute andnominee (unless the proxies not withholdingwere previously instructed to withhold votes for the original nominee will be cast for the substitute. Proxies may not be voted for a greater number of personswho has become unable or unwilling to serve). Alternatively, the Board may reduce the size of Directors than the number of nominees named herein.Board.

The following table sets forth certain information regardingBoard recommends that you vote FOR the nine nominees for election toof each of the director nominees.

Board of Directors for one-year terms.

Nominees for Election toThe directors and director nominees of the Board of DirectorsCompany are as follows:

Name		Age		Biographical Information		Director Since
Sophie Desormière   –Compensation Committee   –Nominating Committee		46		Currently the Group Vice-President-Strategic Marketing and Sales at Solvay, a Belgium-based company and a developer of specialty chemicals. Previously, Ms. Desormière spent 17 years in increasingly responsible positions at Valeo, an independent industrial group focused on the design, production and sale of components, integrated systems and modules for the automotive industry, including Research & Development Product Line Director, Branch Marketing Innovation Director, Group Product Marketing Director and Comfort Enhancement Domain Director. Ms. Desormière is a graduate of the Ecole Nationale Supérieure de Chimie de Paris, the Institut de Formation du Caoutchouc and the Program for Management Development at Harvard Business School.			2012
Maurice E.P. Gunderson   –Compensation Committee   –Nominating Committee		61		Managing Member of the consulting firm Shingebiss, LLC. Previously, Mr. Gunderson spent 15 years as the co-founder and Managing Director of Nth Power, a venture capital firm specializing in investments emerging from the global restructuring of the energy industry and four years at CMEA Capital, a San Francisco based venture capital firm. Mr. Gunderson received a B.A. and M.S. in mechanical engineering from Oregon State University and an M.B.A. from Stanford University. Mr. Gunderson is a director of the following privately-held companies: Contour Energy, Inc., Scion-Sprays Ltd., Runway Capital Management, Radiant Capital Management and DPGC, Inc.			2007
Oscar B. Marx, III		74		Chairman of the Board of Directors since 1999 and Interim Chief Executive Officer of the Company from October 2001 through March 2003. Mr. Marx served as President and CEO of TMW Enterprises, Inc., a private investment firm located in Troy, Michigan, from 1995 to 2001. In 1994, Mr. Marx was President and Chief Executive Officer of Electro-Wire Products (predecessor to TMW Enterprises, Inc.), a major supplier of electrical distribution systems to the automotive industry. After 32 years of service, Mr. Marx retired from Ford Motor Company in 1994 as Vice President of its Automotive Components Group (currently known as Visteon Corporation).			1999
Carlos Mazzorin   –Compensation Committee   –Nominating Committee		71		Retired Magna International, Inc and Ford Motor Company senior executive. Until his retirement in 2010, Mr. Mazzorin served as President and Chief Operating Officer of Magna Electronics, Inc. When Mr. Mazzorin’s concluded his 30 years of service at Ford in 2002, he was Group Vice President of South America and Asia Pacific and Global Purchasing. Mr. Mazzorin currently serves on the Board of Directors of privately-held Bombardier Recreational Products and Management Engineers Consulting. Mr. Mazzorin also serves on the International Advisory Board of Komatsu Ltd. in Japan.			2011

Specific Qualifications, Attributes, Skills and Experience to be Represented on the Board

The Nominating Committee is responsible for reviewing and assessing with the Board the appropriate skills, experience and background sought of Directors

Below is a brief discussionBoard members in the context of our business and the then-current membership on the Board.  The Committee and the Board review and assess the continued relevance of and emphasis on these factors as part of the specific experience, qualifications, attributes or skillsBoard’s self-assessment process and in connection with candidate searches to determine if they are effective in helping to satisfy the Board’s goal of creating and sustaining a Board that led tocan appropriately support and oversee the conclusion that each of our directors should be nominated for election or re-election at this time. Company’s activities.

We believe that our directors as a whole, have an appropriate balance of knowledge, experience, attributes, skills and expertise requiredas a group to ensure that the Board appropriately fulfills its oversight responsibilities and acts in the best interests of shareholders. Although specific qualifications for Board membership may vary from time to time, desired qualities include (A) the highest ethical character, integrity and shared values with the Company, (B) loyalty to the Company and concern for its success and welfare, (C) sound business judgment, and (D) sufficient commitment and availability to effectively carry out a director’s duties. Listed below are additional key skills and experience that we consider important for our Boarddirectors to have in light of Directors. We believeour current business and structure. Thereafter, the biographies of the directors and nominees set forth their business experience during at least the past five years, as well as the specific experience, qualifications, attributes and skills that our directorsled to the Nominating Committee’s conclusion that each director and nominee should continue to serve on the Board.

Director Background and Qualifications

Lewis Booth has served as a broad rangedirector of personal characteristics, including leadership, management, technological and financial experience, and the ability to act with integrity using sound judgment. We also believe that our directors provide leadership to management and are willing to commit the requisite time for preparation and attendance at Board and committee meetings.

Company since 2013.  Mr. Booth served as the Executive Vice PresidentVice-President and Chief Financial Officer (CFO) of Ford Motor Company from 2008 until his retirement in 2012.  Prior to 2012. his appointment to CFO, Mr. Booth held the positions of Chairman and CEO of Ford of Europe as well as President of Ford’s Asia Pacific and Africa Operations. He currently serves on the Board of Directors of Rolls-Royce Holdings, where he is the Senior Independent Director, Chairman of the Audit Committee, a member of the Nominations and Governance Committee and a member of the Science and Technology Committee, and Mondelez International, where he is a member of the Finance Committee and a member of the Human Resources and Compensation Committee. Mr. Booth also serves as a director of the University of Liverpool in America Inc. Mr. Booth, a qualified chartered management accountant, received his Bachelor’s engineering degree from Liverpool University.

As Executive Vice-President and CFO of Ford CFO,Motor Company, Mr. Booth was responsible for all of the company’s financial operations, including the Controller’s office, Treasurytreasury and investor relations. Mr. Booth’s 34-year decorated career at Ford illustrates his financial expertise and knowledge of manufacturing, operations and the investment community. His strategic expertise in the worldwide automotive industry is very importantcritical to Genthermus as we continue to expand globally. Based on the foregoing, the Board has determined that Mr. Booth is an “audit committee financial expert” in accordance with SEC rules.

Francois J. Castaing has served as a director of the Company since 2001.  Mr. Castaing retired in 2000 as technical advisor to the Chairman of Chrysler Corporation. Prior to his retirement, Mr. Castaing spent 13 years with Chrysler Corporation, where he held various positions, including Vice-President of Vehicle Engineering from 1988 to 1996 and President of Chrysler International from 1996 to 1997. Mr. Castaing was Vice-President of Engineering and Group Vice-President Product and Quality of American Motors, from 1980 until Chrysler acquired that company in 1987. Mr. Castaing began his career with Renault as Technical Director for Renault Motorsport Programs. He currently serves as a director of publicly-traded TRW Automotive Holdings Corp., where he is a member of the Audit Committee and the Chairman of the Compensation Committee.  Mr. Castaing also serves on the board of FIRST in Michigan: For Inspiration and Recognition of Science and Technology, a not-for-profit foundation. 

Mr. Castaing’s distinguished career in the automotive industry has given him extensive experience in our most important customer market. During his tenure at some of the world’s largest automobile manufacturers, Mr. Castaing developed leadership, strategic planning and organizational skills that greatly benefit the Company. In addition, his technical background allowscontributes to his deep understanding of our operations and enables him to understand the Company’s operations and assist in problem solving.

Mr.Daniel R. Coker has served as our President and Chief Executive Officer since 2003, after first joiningand as a director since 2007.  Mr. Coker joined Gentherm in 1996 as Vice PresidentVice-President of Sales and Marketing in 1996. As a result, Marketing. Prior to such time, from 1986 to 1995, Mr. Coker served as Vice-President and General Manager of North American Operations for Arvin, Inc.  Mr. Coker received his Bachelor’s degree from Tennessee Technological University.

Mr. Coker has extensive knowledge of the day to day operations of our business. Mr. Coker’s engineeringHis product development background allows him to fully understand and manage our business. HisIn addition, Mr. Coker’s experience as our highest ranked officer, coupled with the managerial positions he previously held inwith other automotive-related companies, has givengives Mr. Coker industry insight and leadership skills and executive management skills key to our Company’s performance.

Sophie Desormière has served as a director of the Company since 2012.  Ms. Desormiére has served as General Manager Marketing and Sales, Senior Executive Vice-President at Solvay, a Belgium-based company and a developer of specialty chemicals, since November 2010. Previously, Ms. Desormière spent 17 years in increasingly responsible positions at Valeo, an independent industrial group focused on the design, production and sale of components, integrated systems and modules for the automotive industry, including Research & Development Product Line Director, Branch Marketing Innovation Director, Group Product Marketing Director and Comfort Enhancement Domain Director. Ms. Desormière is a graduate of the Ecole Nationale Supérieure de Chimie de Paris, the Institut de Formation du Caoutchouc and the Program for Management Development at Harvard Business School.

Ms. Desormière has broad experience in product planning, product development and market analysis. Her background in these areas will helpassists the Company developin its development of long-term product strategies. In addition, the skills Ms. Desormière has developed while working at global companies with significant European operations will be quite importantenables her to provide key insight with respect to the Company’s integration of its worldwide operations.

Maurice E.P. Gunderson has served as a director of the Company works to harness synergies created by the acquisition of a majority interest in W.E.T. Automotive Systems AG.

since 2007.  Mr. Gunderson has significant financialserved as Managing Member of the consulting firm Shingebiss, LLC since 1999. Previously, Mr. Gunderson spent 15 years as the co-founder and managerial experience stemmingManaging Director of Nth Power, a venture capital firm specializing in investments emerging from histhe global restructuring of the energy industry, and four years at CMEA Capital, a San Francisco based venture capital firm. Mr. Gunderson also serves as an advisor to Auto Tech Ventures, as well as a director of Contour Energy, Inc., Runway Capital Management and Radiant Capital Management, all privately-held companies. Mr. Gunderson received a Bachelor of Arts degree and Master of Science degree in mechanical engineering from Oregon State University and an M.B.A. from Stanford University.

Mr. Gunderson’s background as a venture capitalist. He has significant experience investing in growth industries, similarcapitalist enables him to provide key insight with respect to the Company’s investmentinvestments in new thermoelectric technologies. Mr. Gunderson sitsalso has strong leadership and governance skills, as a directorresult of his board service for several energy and materials-related companies and brings important leadership and governance skills to the Board. He also has ancompanies. His engineering background which helpsgives him better understand the Company’sa deep understanding of our business and operations.

Mr.Oscar B. Marx, ourIII has served as Chairman of the Board since he joined the Board in 1999.  Mr. Marx also served as Interim Chief Executive Officer of the Company from October 2001 through March 2003. He previously served as President and CEO of TMW Enterprises, Inc., a private investment firm located in Troy, Michigan, from 1995 to 2001. In 1994, Mr. Marx was President and Chief Executive Officer of Electro-Wire Products (predecessor to TMW Enterprises, Inc.), a major supplier of electrical distribution systems to the automotive industry. After 32 years of service, Mr. Marx retired from Ford Motor Company in 1994 as Vice-President of its Automotive Components Group (currently known as Visteon Corporation). 

Mr. Marx has a unique perspective and understanding of the Company’s business, given his prior service as our Interim Chief Executive Officer.  As a result, he is very familiar with the Company’s business.In addition, Mr. Marx’s experience as a senior executive at other automotive-related companies, including Ford Motor Company, givegives him relevant industry, managerial and strategic planning expertise key to our Company’s success.  He also has financial experience and skills that make himsignificant knowledge of the Company based on his 16 years of service on the Board.

Carlos E. Mazzorin has served as a valuable memberdirector of our Audit Committee.

the Company since 2011.  Mr. Mazzorin hasserved as senior executive of Magna International, Inc. from 2002 until his retirement in 2010, and Ford Motor Company from 1972 to 2002. At Magna, Mr. Mazzorin held the position of President and COO for Magna Mirrors and then President and COO of Magna Electronics. When Mr. Mazzorin concluded his 30 years of service at Ford Motor Company in 2002, he had held the positions of Group Vice-President South America Operations and Asia Pacific Operations and Global Purchasing. Mr. Mazzorin currently serves on the Board of Directors of publicly-traded Bombardier Recreational Products, where he serves on the Audit and Investment and Risk Committees.

Having over 40 years of experience working in progressively responsible supply chain and operations management positions within the automotive industry. He served as President and Chief Operating Officer of Magna Mirrors from 2002 to 2007 and Magna Electronics from 2007 to 2010.industry, Mr. Mazzorin brings critical supply-chain management skills to the Board.  His experience working for companies with significant international operations enables him to provide critical insight with respect to the Company’s integration of its worldwide operations.

Franz Scherer has served as a director of the Company since 2013.  Dr. Scherer is currently theserved as Chairman of the Supervisory Board of W.E.T. Automotive Systems AG a majority-owned subsidiary of the Company. He has servedfrom 2004 until it was merged into Gentherm GmbH in 2014. Prior to such position for almost nine years. In addition, Dr. Scherer hastime, he served as Chief Executive Officer of FTE Automotive Group and SIRONA Group.  Dr. Scherer currently serves on the Supervisory Boards of Mannheimer Versicherungs AG and Seeburger AG. He studied economics and business at the Free University Berlin and the London School of Economics, and holds a numbermaster’s degree from the University of companiesTexas and a doctorate degree from the Free University Berlin.

Dr. Scherer has extensivea unique perspective and broadunderstanding of the Company’s business experiences. Dr. Scherer’s longand history, given his 10 years of service as Chairman of the Supervisory Board of W.E.T. Automotive Systems AG before its acquisition and merger into Gentherm GmbH.  His experience at W.E.T.,as Chairman gives him a deep understanding of the entityrelated business units that generatesgenerate a majority of our revenues, will be invaluablewhich has been critical to our worldwide integration efforts.  Based on Dr. Scherer’s experience as we work to integrate W.E.T. into Gentherm.the Chief Executive Officer and Chief Financial Officer of multinational companies, the Board has determined that Dr. Scherer is an “audit committee financial expert” in accordance with SEC rules.

Byron T. Shaw II has served as a director of the Company since 2013.  Dr. Shaw has been the President of Byron Shaw LLC, a consulting firm providing diligence, strategy and execution advisory services focusing on automotive technology and related services, since 2012. From 2006 to 2012, Dr. Shaw worked at General Motors in various positions, most recently as Managing Director of the Silicon Valley Office for General Motors and General Motors Ventures LLC.  From 1998 to 2003, he worked at BMW in various positions, including Principal Technology Engineer and Manager of Advanced Technology. Dr. Shaw currently serves on the Board of Directors or Advisory Board of several privately-held companies, including Smalltech LLC, Project Renovo, Qualia Networks, Auto Tech Ventures, Up Shift Cars and Rotary Wing Engine. Dr. Shaw received Bachelor of Science degrees and a Master of Science in Mechanical Engineering from the Massachusetts Institute of Technology and a Ph.D. in mechanical engineering/controls from University of California, Berkeley.

Dr. Shaw’s extensive experience in the automotive industry and in advanced technologies. His automotive experience will be very helpful as we continuetechnologies enables him to makeprovide key insight with respect to improvements in our seat comfortexisting products.  In addition, as we workHis technical expertise has also been critical to developthe Company’s development of new products infor other markets, Dr. Shaw’s technical expertise and guidance willmarkets.

Director Independence

The Board believes that there should be extremely valuable.

EXECUTIVE OFFICERS

Daniel R. Coker, 60, was appointed President and Chief Executive Officer in March 2003. He was appointed to the Boardat least a majority of Directors in February, 2007. Mr. Coker also servedindependent directors on the Company’sBoard. The Board recently undertook its annual review of Directors from 2003 to 2004. Additional information concerning Mr. Coker can be found above under the heading “Board of Directors.”

James L. Mertes, 60, has served as Vice President of Quality and Operations since 1994. He joined the Company in 1993 as Vice President of Quality. Prior to 1993, Mr. Mertes was Director of Quality at TRW Sensor Operations, a unit of TRW Inc.

Daniel J. Pace, 61, has served as Vice President of Sales and Marketing since 2003. He joined the Company in 1996 as National Sales Manager. Prior to 1996, Mr. Pace was Program Manager at Leckie & Associates, a Michigan based manufacturers’ representative agency.

Stephen C. Davis, 59, was appointed Vice-President of Engineering and Product Development in May, 2010 and Chief Technology Officer in February, 2012. He joined the Company in 2009 as the Senior Vice President, Operations of BSST. Prior to that date, he worked for Visteon Corporation from 2005 as Director of Climate Control Systems. Prior to 2005, Mr. Davis held other senior engineering positions at Visteon Corporation and Ford Motor Company.

Barry G. Steele, 42, was appointed Vice President Finance and Chief Financial Officer in 2004 and Treasurer in 2005. Prior to joining Gentherm, Mr. Steele worked since 1997 in a number of senior financial management positions, including Chief Financial Officer for Advanced Accessory Systems, LLC, a global supplier of specialty accessories to the automotive industry. Prior to 1997, Mr. Steele worked in the public accounting profession. Mr. Steele received a bachelor’s degree from Hillsdale College in 1992.

David J. Bomzer, 51, was appointed Vice-President of Human Resources in March, 2012. Mr. Bomzer has worked for more than 25 years in global industrial manufacturing, pharmaceutical and high technology industries. Before joining Gentherm, Mr. Bomzer served as a Management Consultant at The Executive Edge, Inc. Prior to that, Mr. Bomzer was Vice President of Human Resources at CertainTeed Corporation. Mr. Bomzer also worked at Ingersoll-Rand, Pfizer and Abbott Laboratories in a number of different senior management positions.

Kenneth J. Phillips, 39, was appointed Vice-President and General Counsel and Secretary in June, 2012. Prior to joining Gentherm, Mr. Phillips was a Partner in the Detroit, Michigan office of the law firm Honigman Miller Schwartz and Cohn LLP. Mr. Phillips graduated with a J.D. from Wayne State University and a bachelor’s degree in Accounting and Finance from Oakland University. Mr. Phillips is also a Certified Public Accountant.

The following individuals are executive officers of W.E.T., a subsidiary of the Company; however, in light of W.E.T.’s significant contribution to Gentherm’s consolidated revenues and earnings, these individuals are treated as executive officers for purposes of this Proxy Statement:

Caspar Baumhauer,50, has served as the Chief Executive Officer of W.E.T. since 2005. Prior to his association with W.E.T., he was a member of the executive board of Faurecia from 2002 to 2005 and Managing Director of Faurecia Interior Systems from 2000 to 2002.

Thomas Liedl, 45, has served as the Chief Financial Officer of W.E.T. since 2008. From 1999 to 2008, he held the position of Vice-President Finance at W.E.T. He worked in public accounting for KPMG from 1994 to 1999 and holds an MBA from the University of Augsburg and a M.A. from Wayne State University.

Frithjof Oldorff,46, has served as the Chief Operating Officer of W.E.T. since 2008. He previously was the Director of Operations for Freudenberg from 2005 to 2007 and held various positions at Faurecia from 1995 to 2005.

Officers of the Company serve at the pleasure of the Board of Directors. Officers of W.E.T. serve at the pleasure of the Supervisory Board of W.E.T. and otherwisedirector independence in accordance with the termsapplicable rules of their individual Service AgreementsNasdaq. The independence rules include a series of objective tests, including that the director is not employed by us and has not engaged in various types of business dealings with W.E.T.

CORPORATE GOVERNANCE INFORMATION

us. In addition, the Board Meetings and Attendance by Directors

During 2012, four regular meetings and six special meetingsis required to make a subjective determination as to each independent director that no relationship exists which, in the opinion of the Board, would interfere with the exercise of Directors were held. Theindependent judgment in carrying out the responsibilities of a director.

Consistent with these considerations, the Board has affirmatively determined that Ms. Desormière and Messrs. Booth, Castaing, Gunderson, Mazzorin, Scherer and Shaw are independent directors under the applicable rules of Directors also actedNasdaq.  Mr. Coker is employed by unanimous written consent from time to time. Eachus and therefore is not an independent director.  Mr. Marx is not an independent director attended 75% or moreas a result of the total number of Board of Directors’ meetings and 75% or moreannual compensation received by his son as our employee, which is described in further detail under “Related Person Transactions.”

Each member of the total number of meetings held by all committees on which he served.

Annual Meeting of ShareholdersAudit Committee, Compensation Committee, Nominating Committee, Corporate Governance Committee and Attendance by Directors

The Board of Directors has adopted the following policy with regard to director attendance at annual meetings:

Members ofTechnology Committee is independent under Nasdaq rules. In addition, the Board of Directors are strongly encouraged to attend the Company’s annual meeting of shareholders in person. If attendance in person is not possible, members of the Board of Directors are strongly encouraged to attend the Company’s annual meeting of shareholders via telephone or similar communication equipment. The Board of Directors will use reasonable efforts to schedule the annual meeting of shareholders on such a date so as to maximize the attendance of its members.

At the 2012 Annual Meeting of Shareholders, all eight then-current Board members were in attendance either in person or by telephone.

Independence of the Board of Directors

Upon consideration of the criteria and requirements regarding director independence set forth in rules promulgated by Nasdaq, the Board of Directors has affirmatively determined that upon election of the above nominees for director, a majority of the members of the Audit Committee and Compensation Committee qualify as independent in accordance with the additional independence rules established by the SEC and Nasdaq.

BOARD MATTERS

The Board of Directors will be “independent directors” as such term is defined

General

The Board has general oversight responsibility for our affairs and, in Nasdaq listing requirements. Specifically,exercising its fiduciary duties, the Board represents and acts on behalf of Directors has determined that Booth, Castaing, Desormière, Gundersonthe shareholders. Although the Board does not have responsibility for our day-to-day management, it stays regularly informed about our business and Mazzorin,provides oversight and director nominees Schererguidance to our management through periodic meetings and Shaw, each meet such criteriaother communications. The Board provides critical oversight in, among other things, our strategic planning process, leadership development and requirements. The foregoing directors are sometimes referred to hereinsuccession planning, risk management, as well as other functions carried out through the “Independent Directors.” Directors Coker and Marx are not treatedBoard committees as Independent Directors by the Board.described below.

Board Leadership

The Independent Directors meet in a separate executive session immediately following each regular meeting of theCompany’s current Board of Directors or, if such a meetingleadership is not possible, then within a reasonable period of time thereafter. In addition, the Independent Directors hold additional meetings periodically as deemed necessary or appropriate.follows:

Lead Independent Director

The Independent Directors have appointed Francois Castaing to act asBoard believes that, by separating the Lead Independent Director. In such position, Mr. Castaing acts as the chairmanpositions of all meetings of the Independent Directors and has the authority to call for additional meetings of the Independent Directors at any time. The Lead Independent Director also acts as a liaison between the Independent Directors, on the one hand, and the Chairman of the Board and Chief Executive Officer, on the other hand.

Corporate Governance Guidelines

Our Board of Directors has adopted Corporate Governance Guidelines that provide a structure within which our directors and management can effectively pursue Gentherm’s objectives for the benefit of our stockholders. The Corporate Governance Guidelines provide guidance in the areas of duties of the Board of Directors, procedures to be followed by the Board of Directors, committees, compensation and continuing education of members of the Board and communications from shareholders. A current copy of Gentherm’s Corporate Governance Guidelines is available to shareholders at the Company’s website, at www.gentherm.com under the link “About Us”; a copy may also be obtained free of charge by delivering written request to: Kenneth J. Phillips, Secretary of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, Michigan 48167.

Director and Chief Executive Officer Stock Ownership Requirements

Our Board of Directors has adopted stock ownership requirements that apply to all of our directors as well as our Chief Executive Officer. The Board of Directors believes that directors and the Chief Executive Officer should own and hold common stock of the Company to further align their interest with the interests of the Company’s stockholders. The stock ownership requirements call for each of our directors and our Chief Executive Officer to hold a minimum amount of Company common stock by the later of (1) December 31, 2015, for our directors and our Chief Executive Officer who held such positions as of December 31, 2011, or (2) four years after such individual was first appointed or elected to such position. The stock ownership requirements call for our directors and our Chief Executive to hold at least that number of shares of the Company’s common stock having a combined market value of $100,000, computed as of each regularly scheduled meeting of the Board of Directors, based on the average closing price as of the last day of the then-most recently completed twelve full calendar months. For purposes of such calculation, shares held by directors individually, by their spouse or other family member residing in the same household, in trust for their economic benefit or the economic benefit of their spouse or family member residing in the same household or in a retirement plan or deferred compensation plan for their benefit, will be included. The value of “in-the-money” vested options will be also included, but the value of unvested options or restricted stock grants will not. The Compensation Committee of the Board will review any non-compliance with the stock ownership requirements and recommend to the Board any actions necessary to remedy such non-compliance.

Policy for Securities Trading by Company Personnel

Our Board of Directors has adopted a Statement of Policy for Securities Trading by Company Personnel. Such policy requires Company employees to adhere to trading restrictions with respect to the Company stock under various circumstances. The policy is intended to ensure compliance with the Insider Trading and Securities Fraud Enforcement Act and other relevant laws, rules and regulations governing trading by insiders. Among the activities concerning the Company’s common stock that are prohibited by the policy are: making trades while in possession of material, non-public information, trading on a short-term basis of less than 6 months, short sales, hedging transactions, margin accounts and pledges. A current copy of such policy is available to shareholders at the Company’s website, at www.gentherm.com under the link “About Us”; a copy may also be obtained free of charge by delivering written request to: Kenneth J. Phillips, Secretary of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, Michigan 48167.

Nominating Committee

The Board of Directors has established a Nominating Committee, which consists of all of the current Independent Directors, including Ms. Desormiere and Messrs. Booth, Castaing, Gunderson and Mazzorin. The two new director nominees, Messrs. Scherer and Shaw, will also be members of the Nominating Committee. All members of the Nominating Committee participated in determining this year’s nominees for election to the Board of Directors. Three meetings of the Nominating Committee were held during the year. The two new nominees to the Board of Directors were recommended by existing directors and management.

The Board of Directors has adopted a written charter for the Nominating Committee, a current copy of which is available to shareholders at the Company’s website, at www.gentherm.com under the link “About Us”; a copy may also be obtained free of charge by delivering written request to: Kenneth J. Phillips, Secretary of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, Michigan 48167.

The Board of Directors has determined it is important that the Company have, as directors, individuals that have significant experience in the industries in which the Company operates or the technologies the Company utilizes. The formal policy with regard to the consideration of any director candidates recommended by shareholders is set forth in the Corporate Governance Guidelines adopted by the Board of Directors and the next paragraph describes the resolution adopted by the Board with respect to the qualification process. The Board of Directors is willing to accept recommendations from shareholders of director candidates. Shareholders interested

in nominating director candidates must comply with the procedures outlined in the section below entitled “Security Holder Communication to the Board of Directors,” which summarizes the procedures outlined in the Company’s Corporate Governance Guildelines.

The Nominating Committee will consider all nominees for director positions proposed by shareholders, management or other directors in the same manner. The Nominating Committee will select from the list of such proposed candidates for additional review those candidates it considers to be qualified. A person’s automotive industry experience, contacts in the automobile industry, judgment, technical expertise, financial expertise, independence and understanding of Gentherm’s business are all qualifications considered to be desirable by the Nominating Committee. The Nominating Committee may, if they so choose, discuss such candidates with the full Board of Directors for additional input. The Nominating Committee then will decide whether to invite the candidate to be a nominee for election to the Board of Directors.

The Nominating Committee considers the needs for the Board of Directors as a whole when identifying and evaluating nominees and, among other things, considers diversity in background, age, experience, qualifications, attributes and skills in identifying nominees, although it does not have a formal policy regarding the consideration of diversity. See “Qualifications of Directors” above for a description of the diverse qualifications of our current directors.

Security Holder Communication to the Board of Directors

Shareholders wishing to send communications directly to the Board of Directors or to a specific member of the Board of Directors are asked to send such communications via U.S. Mail to the attention of Kenneth J. Phillips, Secretary of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, Michigan 48167. Shareholders sending such communications should clearly mark the item as intended for delivery to the Board of Directors or to a specific member of the Board of Directors of Gentherm. Mr. Phillips has been instructed by the Board of Directors to screen each communication so received only for the limited purposes of ascertaining (1) whether such communication is indeed from a shareholder and (2) whether such communication relates to Gentherm. Mr. Phillips will promptly forward copies of all such communications that pass his limited screening to each member of the Board of Directors, in the case of communications to the entire Board of Directors, or to the particular member addressee. Delivery by Mr. Phillips will be completed by mail, facsimile or e-mail, as Mr. Phillips determines appropriate.

If a shareholder’s communication to the Board of Directors involves or concerns Mr. Phillips, or if a shareholder has another appropriate reason for communicating to the Board of Directors through a means other than through Mr. Phillips, such shareholders are asked to send such communications via U.S. Mail to the attention of either Daniel R. Coker, President of Gentherm Incorporated, or Oscar B. Marx, III, Chairman of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, Michigan 48167. Any such communication to Mr. Coker or Mr. Marx should clearly state that it is a shareholder communication and should clearly state the reason it was not delivered to Mr. Phillips for further delivery to the Board of Directors.

Board Leadership Structure and Role in Risk Oversight

The Board of Directors has concluded that the role of Chairman of the Board should be separate from that of Chief Executive Officer. The Chairman of the Board presides at all Board and shareholder meetings and the Chief Executive Officer reports to the entire Board of Directors. We believe that, by separating these positions, the Board of Directors can provide better oversight of risks, including credit, liquidity and operational risks, faced by the Company.  The Board of Directors establishes policy, adopts financial plans, approves significant changes to operational activities and provides general oversightSince neither the Chairman of the business. TheBoard nor the Chief Executive Officer is responsible for day-to-day operationsconsidered to be independent, the Board has designated a Lead Independent Director to act as a liaison both between the Chairman of the Board and implementing the strategiesChief Executive Officer and between these individuals, on the one hand, and the independent directors, on the other hand.

Board Oversight of Risk Management

The Board oversees the Company’s risk management primarily through the following:

Meetings

The Board and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as appropriate. The independent directors hold regularly scheduled executive sessions to meet without management present. These executive sessions generally occur around regularly scheduled meetings of the Board. The independent directors also hold additional meetings periodically as deemed necessary or appropriate.

All directors are expected to attend all meetings of the Board and of the Board committees on which they serve. In 2014, the Board met five times, and each director attended significantly more than 75% of the aggregate of all meetings of the Board and the committees of which he or she was a member.

The Board has adopted a policy strongly encouraging directors to attend the Company’s annual meeting of shareholders in person or, if necessary, by telephone or similar communication equipment.  All directors attended the 2014 annual meeting of shareholders.

Committees of the Board

The Board has delegated various responsibilities and authority to Board committees. Each committee has regularly scheduled meetings and reports on its activities to the full Board. Each committee operates under a written charter approved by the Board, of Directors. Other key executive officers, includingwhich is reviewed annually by the Chief Financial Officer, report either regularly or periodically torespective committee and the Board and is available on our website, www.gentherm.com, under the “About Us” tab. The table below sets forth the current membership for the five Board committees and the number of Directors.

The Board of Directors’ risk oversight is administered primarily though the following:meetings held for each in 2014.

Audit Committee

An Audit Committee has been established by the Board of Directors in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit Committee is currently comprised of Independent Directors Lewis Booth, Francois Castaing, John Devine and James Donlon. If elected Mr. Scherer will join the Audit Committee. Mr. Devine is the current Chairman of the Audit Committee. Upon Mr. Devine’s retirement as of the Annual Meeting, Mr. Booth will become Chairman of the Audit Committee. The Audit Committee held four meetings during 2012.

The Audit Committee represents the BoardCommittee’s responsibilities include:

The responsibilities and financial practices of the Company and has general responsibility for surveillance of internal controls and accounting and audit activities of the Company. Committee are described in greater detail in “Audit Committee Report” and “Audit Committee Matters,” as well as in its charter.

The Board has determined that each Audit Committee member has sufficient knowledge in reading and understanding financial statements to serve on the Committee.

The Board of Directors has adopted a written charter for the Audit Committee, a current copy of which is available to shareholders on the Company’s website at www.Gentherm.com under the link “About Us”; a copy may also be obtained free of charge by delivering written request to: Kenneth J. Phillips, Secretary of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, Michigan 48167.

Under Nasdaq listing requirements, listed companies must have audit committees comprised of at least three members who meet a heightened standard of independence. Upon consideration of the criteria and requirements regarding such heightened standard of independence, the Board of Directors hasfurther determined that all four currenttwo Committee members, of the Audit Committee do currently meet such criteriaMessrs. Booth and requirements and are or were “independent” for such purposes.

The Board of Directors has also reviewed the experience, qualifications and skills of each member of the Audit Committee and determined that Mr. Devine, (who,Scherer, qualify as noted above, meets the Nasdaq heightened standard of independence for audit committee purposes and who is currently the Chairman of the Audit Committee) is an “audit committee financial expert,” as such term is usedexperts” in Item 401 of Regulation S-K promulgated under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Mr. Devine’s experience that qualifies him as an audit committee financial expert includes his previous experience as the Vice Chairman and Chief Financial Officer of General Motors and as the Executive Vice President and Chief Financial Officer of Ford Motor Company.accordance with SEC rules. The designation of an “audit committee financial expert” does not impose upon such persons any duties, obligations or liabilityliabilities that are greater than those which are generally imposed on each of them as a member of the Committee and the Board, and such designation does not affect the duties, obligations or liabilityliabilities of any other member of the Committee or the Board.

Compensation Committee

The Compensation Committee’s responsibilities include:

The Board of Directors has also determined that Mr. Booth is an “audit committee financial expert,”the current members of the Compensation Committee qualify as such term is used“non-employee directors” as defined in Item 407Rule 16b-3 of Regulation S-K promulgated under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Mr. Booth’s experience that qualifies himamended (the “Exchange Act”), and “outside directors” under Section 162(m) of the Internal Revenue Code of 1986, as an audit committee financial expert includes his previous experience as the Executive Vice President and Chief Financial Officer for Ford Motor Company.

Compensation Committeeamended (the “Code”).

The Company’s Compensation Committee is responsible for evaluatinghas the Chief Executive Officer’ssole authority to engage outside advisors and allestablish the terms of such engagement, including compensatory fees. In connection with any such engagement, the Committee reviews the independence of such outside advisor, based on the factors specified by Nasdaq as well as any other executive officers’ performance, includingfactors it deems appropriate, and any conflicts of interest raised by the work of such outside advisor.

The Compensation Committee may form and delegate its authority to subcommittees as appropriate.  The responsibilities and activities of the Committee are described further in “Compensation Discussion and Analysis,” as well as in its charter.

Role of Management.  Similar to prior years, in 2014 the Compensation Committee received significant input from management with respect to established goalsthe Company’s executive compensation program.  See “Compensation Discussion and objectives,Analysis” for further information.

Role of Compensation Consultant.  The Compensation Committee did not engage a compensation consultant to perform a comprehensive review with respect to the Company’s 2014 non-employee director or executive compensation programs.  However, for 2015, a comprehensive executive compensation review was completed and makingwill be used in determining 2015 compensation.

Nominating Committee

The Nominating Committee’s responsibilities include:

The responsibilities and activities of the Committee are described in greater detail in its charter.

The Nominating Committee reviews and makes recommendations to the Board, from time to time, regarding the appropriate skills and characteristics required of Directors concerning all directBoard members in the context of the current make-up of the Board, the operations of the Company and indirect compensation, benefitsthe long-term interests of shareholders. See “Proposal No. 1—Election of Directors—Specific Qualifications, Attributes, Skills and perquisites (cashExperience to be Represented on the Board” and non-cash)“Proposal No. 1—Election of Directors—Director Background and Qualifications.” The Committee does not have a specific diversity policy underlying its nomination process, although it seeks to ensure the Board includes directors with diverse backgrounds, qualifications, skills and experience relevant to the Company’s business.

Generally, the Nominating Committee will re-nominate incumbent directors who continue to satisfy the Committee’s criteria for membership on the Board, continue to make important contributions to the Board and consent to continue their service on the Board. If a vacancy on the Board occurs or the Board increases in size, the Committee will actively seek individuals that satisfy the Committee’s criteria for membership on the Board and the Committee may rely on multiple sources for identifying and evaluating potential nominees, including referrals from our current directors and management. In 2014, the Committee did not employ a search firm or pay fees to other third parties in connection with identifying or evaluating Board nominee candidates.

The Nominating Committee will consider recommendations from shareholders of director candidates that are sent on a timely basis and otherwise in accordance with our Bylaws and other applicable law and regulations. The Committee will evaluate nominees recommended by shareholders against the same criteria that it uses to evaluate other potential nominees. We did not receive any recommendations for director nominations from shareholders for the executive officers based on such evaluation. The Company’s Compensationannual meeting.  See “–Shareholder Communication with the Board” and “Additional Information—Requirements for Submission of Shareholder Proposals and Nominations for 2016 Annual Meeting” for additional information.

Corporate Governance Committee is currently comprised of three Independent Directors, Ms. Desormière and Messrs. Gunderson and Mazzorin. The Compensation Committee held 4 meetings during 2012.

Subsequent to its formation in February 2015, the Corporate Governance Committee’s responsibilities include:

The compensation of the executive officers of our majority-owned subsidiary, W.E.T., is set by written agreement previously entered into by and between W.E.T. and such executive officers. The Compensation Committee has no influence on the compensation of such individuals. Furthermore, during 2012 as W.E.T. was operated as a separate entity from Gentherm, decisions concerning compensation of W.E.T.-employed executive officersforegoing matters were made by the W.E.T. Supervisory Board and nothandled by the Board in 2014.  See “—Corporate Governance” for further information.

The Corporate Governance Committee may form and delegate its authority to subcommittees as appropriate. The responsibilities and activities of Directorsthe Committee are described in greater detail in its charter.

Technology Committee

The Technology Committee evaluates and advises management with respect to the development and use of Gentherm.technology by the Company for use in its current and potential future products, including the long-term strategic goals of the Company’s research and development initiatives.  The Technology Committee also advises management on its policies and procedures surrounding cyber security.  The responsibilities and activities of the Committee are described in greater detail in its charter.

Corporate Governance

The Board, of Directors has adopted a written charteras well as management, is committed to responsible corporate governance to ensure that we are managed for the Compensation Committee, a currentbenefit of our shareholders. To that end, the Board and management periodically review and update, as appropriate, our corporate governance policies and practices, and, when required, make changes to such policies and practices as are mandated by the Sarbanes-Oxley Act, the Dodd-Frank Act, other SEC rules and regulations and the listing standards of Nasdaq.

A copy of which is available on the Company’s website at www.gentherm.com underBoard’s committee charters, the link “About Us”; a copy may alsoCode of Conduct and the Corporate Governance Guidelines will be obtained free ofsent to any shareholder, without charge, by deliveringupon written request to: Kenneth J. Phillips,to Corporate Secretary, of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, MichiganMI 48167.

Corporate Governance Guidelines

The CompensationBoard has adopted Corporate Governance Guidelines, which are available on our website, www.gentherm.com, under the “About Us” tab.  These guidelines provide a structure within which our directors and management can effectively pursue the Company’s objectives for the benefit of our shareholders. The Corporate Governance Guidelines address, among other things, Board and committee structure, composition and procedures, director responsibilities, compensation and continuing education, as well as shareholder communications with the Board.

Majority Voting Policy.  Included in our Corporate Governance Guidelines is a policy approved by the Board in early-2014 to be followed if any nominee for director receives a greater number of votes “withheld” from his or her election than votes “for” such election.  In such event, the applicable director must promptly tender his or her resignation, conditioned on Board acceptance, following certification of the shareholder vote; provided, however, that this does not apply when the number of individuals nominated for election exceeds the number of directors to be elected, including as a result of a proxy contest, or if any shareholder exercises cumulative voting rights with respect to that particular election. The Nominating Committee will consider the resignation offer and, within 60 days following certification of the shareholder vote, recommend to the Board whether to accept such resignation. The Board will act on the Committee’s recommendation within 90 days following certification of the shareholder vote. The Board will promptly disclose in reasonable detail its decision and rationale regarding the acceptance or rejection of the resignation, as applicable, in a widely disseminated press release, in a filing with the SEC or by other widely disseminated public announcement.  If a director’s resignation is accepted by the Board, the Board may delegateeither fill the resulting vacancy or decrease the size of the Board pursuant to our Bylaws.

Annual Performance Evaluations.  The Corporate Governance Committee oversees the annual performance evaluation process.  The Board and its committees conduct self-evaluations at least annually to determine whether the Board and its committees are functioning effectively.  The Board also reviews the Corporate Governance Committee’s periodic recommendations concerning the performance and effectiveness of the Board and its committees.

Code of Conduct

The Board has adopted a Code of Business Conduct and Ethics (“Code of Conduct”), which sets out the basic principles to guide the actions and decisions of our employees, directors and officers, including our principal executive officer, principal financial officer and principal accounting officer. The Code of Conduct addresses, among other things, ethical principles, insider trading, conflicts of interest, compliance with laws and confidentiality. The Code of Conduct is available on our website, www.gentherm.com, under the “About Us” tab.  Any amendments to the Code of Conduct, or any waivers that are required to be disclosed by the rules of itseither the SEC or Nasdaq, will be posted on our website, www.gentherm.com, under the “About Us” tab within four business days of any such amendment or waiver.

Committee Charters

See “—Committees of the Board” for a description of the Board’s delegation of authority and responsibilities to subcommittees as the five standing committees.

Director Compensation

Non-employee directors of the Board receive both cash and equity compensation. Such compensation is intended to encourage non-employee directors to continue Board service, further align the interests of the Board and shareholders, and attract new non-employee directors with outstanding qualifications. Directors who are employees or officers of the Company do not receive any additional compensation for Board service.

2014 Compensation Committee deems appropriate. Program

The Committee has the authority to retain independent compensation consultants to assistprogram for non-employee directors in the evaluation of2014 did not change from 2013.  No compensation and has the sole authority to retain and terminate such firms and to approve their fees and other retention terms. The Compensation Committee also has authority to retain other advisors. Compensation consultants were retained by the Compensation Committee in January, 2012 for the purpose of supplying compensation survey data for use in setting 2012 base compensation, but not for the purpose of determining or recommending the amount or form of director compensation for 2014.

The following table sets forth the compensation program for non-employee directors in 2014.

Consistent with historical practice, the annual cash retainers were paid in advance of the 2014 annual meeting of shareholders.   Consistent with the terms of the Company’s 2013 Equity Incentive Plan, on the date of such meeting, each non-employee director received a restricted stock award having a fair market value of approximately $50,000, or 1,323 shares.

The restricted stock vests in full on the first anniversary of the grant date.  The restricted stock will be forfeited in the event of termination of service as a non-employee director of the Company prior to the first anniversary of the grant date, subject to acceleration of vesting upon retirement (as defined under the 2013 Equity Incentive Plan), and subject to the Compensation Committee’s right to accelerate the vesting of all or a portion of the restricted stock at any time. During the restricted period, the restricted stock entitles the participant to all of the rights of a shareholder, including the right to vote the shares and the right to receive any dividends thereon. Prior to the end of the restricted period, restricted stock generally may not be sold, assigned, pledged, or otherwise disposed of or hypothecated by participants.

The Company does not provide any perquisites to directors, but does reimburse directors for out-of-pocket expenses incurred in attending Board and committee meetings.

2014 Compensation Table

The table below sets forth the compensation of each non-employee director in 2014.

At December 31, 2014, each non-employee director had the following number of shares underlying unexercised stock option awards (all of which were fully vested at December 31, 2014) and unvested restricted stock awards, respectively:  Mr. Booth, 0 and 1,323; Mr. Castaing, 5,000 and 1,323; Ms. Desormière, 0 and 1,323; Mr. Gunderson, 50,000 and 1,323; Mr. Marx, 0 and 1,323; Mr. Mazzorin, 10,000 and 1,323; Dr. Scherer, 0 and 1,323; and Dr. Shaw, 0 and 1,323.

Director Stock Ownership Requirements

The Board has adopted stock ownership requirements for the directors of the Company to further the alignment of shareholders and directors.  Directors are required to own common stock having a value of at least $100,000, computed as of each regularly scheduled Board meeting, based on the average closing price of our common stock as of the last day of the then-most recently completed 12 full calendar months. For purposes of such calculation, the following shares are included: shares held by directors individually, shares held by their spouses or other family members residing in their same households, shares held in trust for their economic benefit or the economic benefit of their spouses or family members residing in their same households, and shares held in a retirement plan or deferred compensation plan for their benefit. The value of “in-the-money” vested stock options is also included, but the value of unvested stock options and unvested restricted stock is not.

The minimum ownership level must be achieved by the later of (A) December 31, 2015, for any director who held such position as of December 31, 2011, or (B) four years after such individual was first appointed or elected.  The Compensation Committee is responsible for reviewing any non-compliance with the stock ownership requirements and recommending to the Board any actions necessary to remedy such non-compliance.  As of the date hereof, all directors held common stock having a value in excess of $100,000.

Our Chief Executive Officer is subject to the same stock ownership requirements as our non-employee directors.  See “Compensation Discussion and Analysis – Other Equity-Related Policies – Executive Stock Ownership Requirements” for further information.

Shareholder Communication with the Board

Shareholders wishing to send communications directly to the Board or to a specific director are asked to send such communications to Corporate Secretary, Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, MI 48167.  Shareholders sending such communications should clearly mark them as intended for delivery to the Board or to a specific director.  Our corporate secretary has been instructed by the Board to screen each communication so received only for the limited purposes of ascertaining (A) whether such communication is indeed from a shareholder and (B) whether such communication relates to the Company.  Our corporate secretary will promptly forward copies of all such communications that pass such limited screening to each director, in the case of communications to the entire Board, or to the particular director addressee. Delivery by our corporate secretary will be completed by mail, facsimile or e-mail, as our corporate secretary determines appropriate.

If a shareholder’s communication to the Board involves or concerns our corporate secretary, or if a shareholder has another appropriate reason for communicating to the Board through a means other than through our corporate secretary, such shareholder is asked to send such communication to the attention of either the Company’s President or the Chairman of the Board, in either case at the address above.  Any such communication should clearly state that it is a shareholder communication and should clearly state the reason it was not delivered to our corporate secretary for further delivery to the Board.

COMPENSATION DISCUSSION AND ANALYSIS

This section of the proxy statement explains our compensation philosophy, objectives and design, our compensation-setting process and our executive compensation program components, as well as the decisions made for 2014 with respect to each of our named executive officers.  This section also provides certain other information as additional context for the “Named Executive Officer Compensation Tables” that follow.

Our named executive officers for 2014 were Daniel R. Coker, President and no additional services, unrelatedChief Executive Officer; Barry G. Steele, Vice-President of Finance, Chief Financial Officer and Treasurer; Frithjof R. Oldorff, President of the Automotive Business Unit; Thomas H. Liedl, former President of the Gentherm Technologies Business Unit; Darren Schumacher, Vice-President of Product Development; and Kenneth J. Phillips, Vice-President, General Counsel and Secretary (collectively, the “named executive officers” or the “NEOs”).  Messrs. Coker, Steele, Schumacher and Phillips are referred to as our “U.S. NEOs.”  During 2014, Mr. Oldorff and Mr. Liedl were compensated by Gentherm GmbH (successor by merger to W.E.T. Automotive Systems AG) (our “German Subsidiary”) and are referred to as our “non-U.S. NEOs.”  Mr. Liedl separated from the Company effective August 31, 2014.  In 2014 the Company and its German Subsidiary were operated as essentially one company, so the compensation arrangements of the non-U.S. NEOs were substantially similar to those of the U.S. NEOs, except as noted below.  Key differences between such arrangements are explained in greater detail throughout this section of the proxy statement, as well as in the “Named Executive Officer Compensation Tables” that follow:

Executive Compensation and Governance Practices

Say-On-Pay Vote at 2014 Annual Meeting of Shareholders

The Company’s say-on-pay proposal was approved by approximately 94% of the votes cast at the 2014 annual meeting. Given the high level of shareholder support, the Committee did not revise the Company’s compensation policies and decisions relating to the purposenamed executive officers directly as a result of such consultation, were provided by any such consultantsvote.  The Committee will continue to consider the outcome of shareholder votes and other shareholder feedback in making future compensation decisions for the named executive officers.

Compensation Philosophy, Program Objectives, and Key Features

The compensation program for named executive officers is designed to attract, motivate and retain qualified executives and to provide them incentives to achieve or advisorsexceed the Company’s annual operational and financial goals and increase long-term shareholder value.  Under this program, our named executive officers are rewarded for their service to the Company, during 2012.the achievement of performance goals and the realization of increased shareholder value. We believe our NEO compensation program is structured appropriately to support our business objectives, as well as our culture. The Committee regularly reviews the Company’s NEO compensation program to ensure the fulfillment of our compensation philosophy and goals.

The following table sets forth the primary purpose and key features of each component of our NEO compensation program in 2014.

Proposals regarding

Process for Making Compensation Determinations

Advisors Utilized in Determination of Executive Compensation

Management.    In determining the compensation of executive officers, the Committee receives significant input from Mr. Coker, who has more than 10 years’ experience in his executive officer role with the Company and Board directors (including recommending bonus formulashas the most involvement in, and plans,knowledge of, the Company’s business goals, strategies and performance, measures,the overall effectiveness of the management team and each person’s individual contribution to the Company’s performance. For each named executive officer, Mr. Coker makes a compensation and award levels, and payout amounts) are generally made by management after reviewrecommendation, which is reviewed by the Chairman of the Board.Board before it is presented to the Committee.  Mr. Coker does not provide input with respect to his own compensation.  Management also provides the Committee with information regarding the individual’s experience, current performance, potential for advancement and other subjective factors. The Company’s Vice PresidentCommittee retains the discretion to modify the recommendations of Human Resources generally prepares materialsMr. Coker and agendasreviews such recommendations for Compensationtheir reasonableness based on individual and Company performance as well as market information.

The Committee works with management to set the agenda for Committee meetings, attends the meetings and keeps the minutes of the meetings, butMr. Coker is excused from the meetings when his presence is deemed inappropriate by the Compensation Committee. The Chief Executive Officer is also invited regularly to attend such meetings. The Committee meetings but isalso meets regularly in executive session to discuss compensation issues generally outside the presence of management, as well as to review the performance and determine the compensation of Mr. Coker.

Third-Party Consultants. The Committee did not present during voting or deliberations regarding his compensation.engage a compensation consultant to perform a comprehensive executive compensation review with respect to the Company’s 2014 executive compensation program.

Comparability

In evaluating proposalsmanagement’s recommendations regarding the compensation of executive officers, the Compensation Committee relies primarilyconsiders the compensation offered by other similarly-situated companies, based on its members’ review of information from various publications, and hired consultants, theirits extensive experience with compensation practices in other businesses, information included in proxy statements of similar companies with comparable market capitalization and comparable revenues, its engagement of compensation consultants in prior years, and its members’ subjective review of the reasonableness and fairness of proposed compensation in light of all relevant circumstances.

Compensation  The companies which the Committee Interlocks and Insider Participation

No memberconsiders to be comparable for purposes of the above analysis (based on revenue, market capitalization and industry), and for which the Committee has been provided data, include: American Axle & Manufacturing Holdings, Inc., CTS Corporation, Dorman Products, Inc., Drew Industries Incorporated, Gentex Corp., Leggett & Platt, Inc., Littlefuse, Inc., Measurement Specialties, Inc., Methode Electronics, Inc., Modine Manufacturing Company, Remy International, Inc., Shiloh Industries, Inc., Standard Motor Products, Inc. and Stoneridge, Inc.

2014 Compensation Committee is or was a former or currentDeterminations

Base Salary

In 2014, each named executive officer or employeereceived an annual base salary paid in cash.  The initial base salaries of the Company or any of its subsidiaries. No memberU.S. NEOs were negotiated in connection with their hiring, and the initial base salaries of the Compensationnon-U.S. NEOs were set forth in their respective Service Agreements.

The Committee has or had any relationship requiring disclosure by us pursuant to Securities and Exchange Commission rules regarding disclosure of related party transactions. In addition, during 2012, nonereviews the base salaries of the Company’snamed executive officers served on an annual basis and generally grants salary increases following such reviews.  Historically, base salary increases have been between 3-6% and represented a combination of a cost of living / inflation adjustment and a merit raise.

Consistent with prior years, in determining base salaries for 2014, the boardCommittee considered an individual’s performance, position, experience and current salary, as well as the Company’s financial resources, the salaries of directors or compensation committee (or committee performing equivalent functions) of any other company that had one or more executive officers serving on the Board or Compensation Committee.

Code of Ethics

The Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all directors, officers and employees of the Company, includingand the base salaries paid by similarly-situated companies to individuals having similar job responsibilities as further discussed under “–Process for Making Compensation Determinations – Comparability.”  In determining Mr. Coker’s base salary for 2014, the Committee also considered his demonstration of leadership and ability to manage the Company’s principalgrowing business.

For 2014, the Committee concluded that a market rate adjustment in base salaries for the named executive officers of 3% to 6% was appropriate based on a review of the factors described above.

Bonus

Prior Bonus Plan.  In prior years, the U.S. NEOs participated in a bonus plan (the “Prior Bonus Plan”), pursuant to which eligible employees earned cash bonuses up to pre-determined amounts (as percentages of their respective base salaries), based on the Committee’s evaluation of individual performance against individual performance goals approved by the Committee, together with management, in advance of the applicable performance period.  The goals are aligned with overall Company objectives and were broad-ranging, depended on the individual’s position, and included items such as eliminating or reducing specific expenses, completing engineering objectives, developing new business, streamlining operations, completing other specific projects and other similar types of goals. The performance goals were intended to be subjective, or have overriding subjective elements to them, and the Committee had full discretion to determine whether the performance goals had been met.

In addition, in prior years, the non-U.S. NEOs had a separate bonus plan that provided for annual bonuses in amounts dependent on the achievement of the target enterprise value of our German Subsidiary (the “W.E.T. Bonus Plan”).  For further information regarding the W.E.T. Bonus Plan, see “Named Executive Officer Compensation Tables – Summary Compensation Table for 2014 – Narrative Discussion of Summary Compensation Table.”

2014 Bonus Plan.  Following the February 2013 actions that enabled us to operate the Company and its German Subsidiary essentially as one company, the Committee undertook a detailed review of the Prior Bonus Plan.  Following such review, the Committee adopted the 2014 bonus plan (the “2014 Bonus Plan”).  The 2014 Bonus Plan is similar to the Prior Bonus Plan, except that bonus payouts are conditioned on the satisfaction of minimum threshold Company financial metrics (the “Minimum Metrics”).  Regardless of the Committee’s subjective evaluation of individual performance, if the Minimum Metrics are not met no bonuses are payable under the 2014 Bonus Plan.  In addition, in 2014 the non-U.S. NEOs participated in the 2014 Bonus Plan on the same basis as the U.S. NEOs for the first time.  For 2014, the Committee used the Company’s earnings before interest, taxes, depreciation and amortization, deferred financing cost amortization, transaction expenses, debt retirement expenses, unrealized currency gain or loss and unrealized revaluation of derivatives (“Adjusted EBITDA”) as the sole Minimum Metric and set such metric at $84 million (Adjusted EBITDA for 2013 was $81.5 million).  The Committee considers Adjusted EBITDA as an appropriate measure of the Company’s overall operational performance.

The 2014 Bonus Plan also provides that if certain Company financial metrics are exceeded for the full calendar year (the “Stretch Metrics”), then the total amount of discretionary bonus earned by each participant for the year will be increased ratably by an amount determined by the Committee, up to 20% (the “Formula Performance Adjustment”).  For 2014, the Committee used Adjusted EBITDA as the sole Stretch Metric and set such metric at $126 million.  Actual Adjusted EBITDA for 2014 was $131.4 million.  For each reporting period in 2014, the Committee determined that each named executive officer principal financial officer, principal accounting officerachieved most or controller,all of his performance goals and, in several cases, substantially surpassed expectations.  For the calendar year 2014, the Committee approved a Formula Performance Adjustment of 20% for all employees of the Company eligible to receive a bonus, including each named executive officer.

Similar to the Prior Bonus Plan, the 2014 Bonus Plan was divided into two distinct performance periods, the first half of the year (January 1^st through June 30^th), and the second half of the year (July 1^st through December 31^st); however, the Company must be on track (based on estimated projections for the full year) to meet the full year Minimum Metrics for the first half bonus to be paid, and the Formula Performance Adjustment is only computed after the end of the full calendar year and any related adjustment paid with the bonus for the second half of the year.  The achievement or persons performing similar functions. Such code mayfailure to achieve the applicable individual criteria for the first performance period did not impact the achievement or failure to achieve the applicable individual criteria for the second performance period.  If earned, bonuses are paid within two months of the end of the applicable performance period.

Unless an exception is granted by the Committee, a participant must be viewedemployed on the Company’s website, www.Gentherm.combonus payment date to be eligible to receive a bonus under the link “About Us”; a copy may also be obtained free of charge by delivering written request to: Kenneth J. Phillips, Secretary of Gentherm Incorporated, 21680 Haggerty Road, Suite 101, Northville, Michigan 48167.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or a waiver from, a provision in our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element2014 Bonus Plan.  Mr. Liedl was an employee as of the code definition enumerated in SEC, Regulation S-K, Item 406(b) by posting such information on our website at www.Gentherm.com within four business days followingdate the first half 2014 bonus payment was made, but had separated from the Company prior to the date of the amendmentsecond half 2014 bonus payment and no exception was granted.

The Committee does not have a formal written policy regarding adjustment of bonus payments if the relevant performance measures or waiver.underlying facts upon which they are based are restated or otherwise adjusted in a manner that would materially increase or reduce the size of the incentive payment.

Equity Awards

Certain Transactions

Review, Approval or RatificationEquity awards in the form of Transactions with Related Persons

Our Boardrestricted stock, stock options and cash-settled SARs represented a significant portion of Directors has adopted, by written board resolution, a policy with respectNEO compensation in 2014, as the Committee continues to proposed related party transactions.regard increasing long-term shareholder value as senior management’s primary objective.  In general, it is Gentherm’s policy to submit all proposed related party transactions (those that may require disclosure under Regulation S-K, Item 404)February 2014, the Committee granted equity awards to the Independent Directors for approval. Only those related party transactions approvednamed executive officers pursuant to the 2013 Equity Incentive Plan.  Consistent with prior years, the size of the awards depended on the executive’s position and current salary, as well as management’s recommendations, competitiveness in the market, and other subjective factors deemed relevant by the Independent Directors will be consummated.Committee. The policy instructsCommittee fixed the Independent Directorsexercise price of stock options and the base price of cash-settled SARs at the fair market value of the underlying shares on the grant date, such that grantees only to approve those transactions that are on terms comparable to, or more beneficial to us than, those that could be obtained in arm’s length dealings with an unrelated third party. If an Independent Director has any interest in a related party transaction presentedbenefit to the Independent Directors for approval, such director is required to abstain fromextent the vote to approve or not approve the transaction. Examples of related party transactions covered by our policy are transactions in which any of the following individuals has or will have a direct or indirect material interest: any of our directors or executive officers, any person who is known to us to be the beneficial owner of more than five percentprice of our common stock increases over time.

U.S. NEOs. The U.S. NEOs received restricted stock and any immediate family memberstock options in 2014.  The Committee believes restricted stock aligns interests with shareholders in a manner similar to stock options and cash-settled SARs, as described above, but also has underlying value on the grant date that might otherwise be paid in cash as an additional bonus.

In 2014, the restricted stock awards granted vest in three equal annual installments and the stock option awards granted vest in four equal annual installments, in each case commencing on the first anniversary of onethe date of grant.  See “Named Executive Officer Compensation Tables – Grants of Plan-Based Awards in 2014” for further information.

Non-U.S. NEOs. In 2014, the non-U.S. NEOs received cash-settled SARs in lieu of stock options, and received no full-value shares such as restricted stock or phantom stock, due in part to complex and disadvantageous tax and securities law implications of stock-settled awards for employees of a foreign subsidiary.  The Committee believes cash-settled SARs offer economic benefits, incentivize retention and align interests with shareholders, in a manner comparable to stock-settled awards, such as restricted stock and stock options, because they provide no realizable value in the absence of stock price appreciation after the grant date.

In 2014, cash-settled SARs granted vest in four equal annual installments commencing on the first anniversary of the date of grant.  See “Named Executive Officer Compensation Tables – Grants of Plan-Based Awards in 2014” for further information.

Defined Benefit Plans

U.S. NEOs

During 2008, in recognition of the Company’s need for stability and competence at the executive level, the Committee recommended, and the independent directors at such time subsequently approved, The Executive Nonqualified Defined Benefit Plan of Gentherm Incorporated effective April 1, 2008 (the “U.S. Defined Benefit Plan”).  Mr. Coker has been the only participant in the U.S. Defined Benefit Plan.

The U.S. Defined Benefit Plan, more fully described in Note 12 to the audited financial statements included in our directors orannual report on Form 10-K for the year ended December 31, 2014, has a six-year vesting period that began on April 1, 2011.  Once fully vested, the U.S. Defined Benefit Plan provides for 15 annual benefit payments to Mr. Coker, each in the amount of $300,000, beginning January 1, 2018.  The Committee has reviewed the benefits offered to presidents and chief executive officers or person knownof similarly situated companies, and continues to usbelieve that the U.S. Defined Benefit Plan is fair and reasonable.

The Company has also established a corporate-owned life insurance policy (“COLI”) on the life of Mr. Marx, Chairman of the Board.  The COLI is held by a trust established for payment of benefits under the U.S. Defined Benefit Plan.

Non U.S. NEOs

Our German Subsidiary maintains a defined benefit plan for former and current members of its management team (the “German Defined Benefit Plan”).  The German Defined Benefit Plan is expected to be funded exclusively by participants’ pre-tax contributions and the earnings on those contributions.  However, the amount of future benefits to which a participant is entitled, while based on the amount of such participant’s contributions to the plan, is subject to minimum future guaranteed returns on those contributions.  As a result, the German Subsidiary records a liability for the amount that projected future benefit payments exceed projected future defined benefit plan assets.  For the year ended December 31, 2014, both Mr. Liedl and Mr. Oldorff both participated in the German Defined Benefit Plan; however, as required by the plan all of the voluntary contributions they made came from their personal funds; furthermore, the projected future benefits on such contributions did not exceed the related projected future assets and so no service cost was recognized.  Mr. Oldorff is expected to be the beneficial owneronly NEO participant in the German Defined Benefit Plan in future years.  Mr. Liedl, as well as other former members of morethe Gentherm Subsidiary’s management, will continue to be eligible to receive benefits under the German Defined Benefit Plan but are no longer permitted to make additional contributions.

The German Defined Benefit Plan is further described in Note 12 to the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2014.

Other Benefits and Perquisites

U.S. NEOs

Non-U.S. NEOs

Severance and Change in Control Benefits

U.S. NEOs. Other than five percentthe U.S. Defined Benefit Plan and the 401(k) plan described above, the Company does not provide or maintain any post-retirement medical benefits, non-qualified deferred compensation plans or retirement or pension plans for U.S. employees, including the U.S. NEOs.  However, certain of the Company’s equity compensation plans contemplate acceleration of vesting upon, and exercisability of awards following, a termination of employment.  See “Named Executive Officer Compensation Tables – Potential Payments Upon Termination or Change in Control” for further information.

Non-U.S. NEOs. Other than the German Defined Benefit Plan and the German Defined Contribution Plan described above, the non-U.S. NEOs were not eligible to receive or participate in any post-retirement medical benefits, non-qualified deferred compensation plans or retirement or pension plans.  See “Named Executive Officer Compensation Tables – Potential Payments Upon Termination or Change in Control” for information regarding the potential payments and benefits payable to Mr. Oldorff following a termination of employment under the terms of his Service Agreement and certain of the Company’s equity compensation plans, as well as information regarding the payments and benefits paid to Mr. Liedl following his separation from the Company in 2014.

Other Equity-Related Policies

Executive Stock Ownership Requirements

Our Chief Executive Officer is subject to the same stock ownership requirements as our non-employee directors.  Our Chief Executive Officer must own common stock having a value of at least $100,000 by December 31, 2015.  See “Board Matters – Director Compensation – Director Stock Ownership Requirements” for further information.  The other named executive officers are not subject to stock ownership requirements.

Timing and Pricing of Equity Grants

The Committee does not coordinate the timing of equity grants with the release of material non-public information. The Committee usually considers equity awards for executive officers on an annual basis at regularly scheduled meetings of the Committee, which are generally scheduled a year in advance, and for new hires as applicable.

In accordance with the 2013 Equity Incentive Plan, the exercise or base price of stock option or SAR awards is at least 100% of the fair market value of our common stock. Transactionsstock on the date of grant (which date is not earlier than the date the Committee approves such award).  The Committee is authorized to modify, extend or renew outstanding stock options or SARs or accept the cancellation or surrender of such awards.  However, except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the Committee may not take actions that involvewould constitute a repricing of stock options or SARs without satisfying the applicable shareholder approval requirements of Nasdaq.  In particular, the 2013 Equity Incentive Plan prohibits direct repricings (lowering the exercise price of a stock option or the base price of a SAR) and indirect repricings (cancelling an outstanding stock option or SAR and granting a replacement or substitute stock option or SAR with a lower exercise or base price, or otherwise exchanging such awards for cash, stock options, SARs or other awards).

Policy on Pledging and Hedging Company Securities

In addition to the restrictions set forth in SEC regulations, the Board has adopted a Statement of Policy for Securities Trading by Company Personnel which prohibits the hedging of Company securities and significantly limits any salariedpledging of Company securities.  In particular, the policy prohibits employees, generallyofficers and directors from making trades while in possession of material, non-public information.  Specified restricted persons, including our officers and directors, are not coveredalso prohibited from trading on a short-term basis of less than six months, short sales and derivative trading generally.  In addition, the policy prohibits pledging of Company securities or holding Company securities in a margin account, except in situations and on conditions pre-approved by our approval policy. Our policy also requires that all related party transactions be disclosed in our filings withChief Financial Officer.  At a minimum, such person must demonstrate the SECfinancial capacity to repay the applicable loan without resort to the extent requiredmargin or pledged securities.  No Company securities beneficially owned by a director or executive officer were pledged or subject to a margin account at any time during 2014.

Tax and Accounting Implications

Deductibility of Executive Compensation

Section 162(m) of the Code provides that annual compensation in excess of $1 million paid to a company’s chief executive officer and the three other highest compensated executive officers (excluding the chief financial officer) is not deductible by the SEC’s rules, and that they be disclosedcompany for federal income tax purposes, subject to specified exemptions (the most significant of which is certain performance-based compensation).  The Committee intends to continue to review the full Boardapplication of Directors.

TransactionsSection 162(m) of the Code with Related Persons During 2012

During 2009, the following transaction was specifically approvedrespect to any future compensation arrangements considered by the Independent Directors pursuantCompany. However, to maintain flexibility in compensating the above-described related party transaction approval policy but was exempt from disclosure under Regulation S-K, Item 404 because it did notCompany’s executive officers to meet a variety of objectives, the dollar threshold set forth therein: Director Oscar B. Marx’s son, John Marx, was hired as an employeeCommittee reserves the right to compensate Company executes in amounts deemed appropriate, regardless of whether such compensation is deductible for federal income tax purposes.  Section 162(m) of the Code may prevent the Company infrom deducting a sales position. The Independent Directors, excluding Oscar B. Marx, reviewed and approved the engagementportion of John Marx and the promotion of John Marx during 2012 to Vice President of Business Planning and Advanced Product Commercialization. The Independent Directors have also reviewed and approved the compensation paid to John Marx each calendar year since 2009. In 2012, totalMr. Coker, the Company’s President and Chief Executive Officer, in 2014.

Nonqualified Deferred Compensation

Section 409A of the Code provides that amounts deferred under nonqualified deferred compensation paidarrangements will be included in an employee’s income when vested, as well as be subject to John Marx was approximately $340,000penalties and interest, unless certain requirements are complied with. The  Company believes that its compensation arrangements satisfy, or are exempt from, the requirements of Section 409A.

Change in cash compensation and 17,500 sharesControl Payments

Section 280G of restricted stock awards.the Code disallows a company’s tax deduction for “excess parachute payments.” For this purpose, parachute payments generally are defined as payments to specified persons that are contingent upon a change in control in an amount equal to or greater than three times the person’s base amount (i.e. the five-year average Form W-2 compensation). The employment arrangement with John Marx is hereby disclosed asexcess parachute payments, which are nondeductible, equal the amount of the parachute payments less the base amount. Additionally, Section 4999 of the Code imposes a transaction20% excise tax on any person who receives excess parachute payments.

The Company’s equity incentive plans may entitle participants to receive payments in connection with a relatedchange in control that may result in excess parachute payments.  The Company does not pay tax gross-ups, including with respect to the excise tax imposed on any person under Regulation S-K, Item 404.who receives excess parachute payments.

There were no other transactions with related persons during 2012.

COMPENSATION COMMITTEE REPORT

Report of the Compensation Committee on Executive Compensation

OurThe Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth below under the caption “Executive Compensation – Compensation Discussion(CD&A) in this proxy statement with management, including Messrs. Coker and Analysis” with our management.Steele. Based on thissuch review and discussion, our Compensationthe Committee recommended to ourthe Board of Directors that the Compensation Discussion and AnalysisCD&A be included in this Proxy Statement.the Company’s annual report on Form 10-K for the year ended December 31, 2014 and the proxy statement for the 2015 annual meeting.

By theThe Compensation Committee

Maurice Gunderson, Chairman

Sophie Desormière

Carlos Mazzorin

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

AUDIT COMMITTEE REPORT

The AuditDuring 2014, the Compensation Committee has reviewed,consisted of Messrs. Gunderson and discussed with management our financial statements as of December 31, 2011Mazzorin and 2012 and for eachMs. Desormière.  All members of the three years in the period ended December 31, 2012. The Audit Committee during 2014 were independent directors and none of them is or has discussed with the Company’s independent accountants, Grant Thornton LLP, the above-described financial statements. In addition, we have discussed with Grant Thornton LLP the matters required to be discussed by Statement on Auditing Standards No. 61 (Codificationbeen an employee or officer of Statements on Auditing Standards), as amended and as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

The Audit Committee also has received and reviewed the written disclosures and the letter from Grant Thornton LLP required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as adopted by the Public Company Accounting Oversight Board in Rule 3600T and we have discussed with that firm its independence. We have considered whether the provision of permissible non-audit services is compatible with maintaining the accountant’s independence. We also have discussed with management and the auditing firm such other matters and received such assurances from them as we deemed appropriate.

Management is responsible for internal controls and the financial reporting process. The independent accountants engaged by the Company are responsible for performing an independent auditours. During 2014, none of our financial statements in accordance with generally accepted auditing standards and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

Basedexecutive officers served on the foregoing review and discussions and a reviewcompensation committee (or equivalent) or the board of directors of another entity whose executive officer(s) served on the reports of Grant Thornton LLP with respect toCommittee or the audited financial statements, and relying thereon, we have recommended to the Board of Directors the inclusion of the audited financial statements in the Annual Report on Form 10-KBoard.

NAMED EXECUTIVE OFFICER COMPENSATION TABLES

Summary Compensation Table for the year ended December 31, 2012 for filing with the SEC.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Beneficial Ownership of Significant Shareholders2014

The table below sets forth certain information regardingsummarizes the beneficial ownership of the Company’s Common Stock as of April 1, 2013 (except that, as noted below, certain information is based on Schedule 13G reports filedtotal compensation paid or earned by the beneficial owner as of a date prior to such date) by each person known to us to be a beneficial owner of more than 5% of the outstanding Common Stock. Beneficial ownership includes any shares which a person has the right to acquire within 60 days after the date of calculation, including shares that may be purchased by the exercise of stock options or the exercise of warrants to purchase stock. The “percent of class” calculation for each person is based on this inclusive definition of beneficial ownership. Except as expressly noted, each person listed has sole voting powernamed executive officers in 2014, 2013 and investment power with respect to all shares of capital stock listed as beneficially owned by such person.2012.