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Exhibit 10.3
GARMIN LTD.
EMPLOYEE STOCK PURCHASE PLAN
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TABLE OF CONTENTS
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Page
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I. Purpose and Effective Date...................................................... 1
II. Definitions..................................................................... 1
III. Administration.................................................................. 3
IV. Number of Shares................................................................ 4
V. Eligibility Requirements........................................................ 5
VI. Enrollment...................................................................... 5
VII. Grant of Options on Enrollment.................................................. 6
VIII. Payroll Deductions.............................................................. 6
IX. Purchase of Shares.............................................................. 7
X. Withdrawal From the Plan; Termination of Employment; Leave of Absence; Death.... 9
XI. Miscellaneous................................................................... 10
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GARMIN LTD.
EMPLOYEE STOCK PURCHASE PLAN
I. Purpose and Effective Date
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1.1 The purpose of the Garmin Ltd. Employee Stock Purchase Plan is to
provide an opportunity for eligible employees to acquire a proprietary interest
in Garmin Ltd. through accumulated payroll deductions. It is the intent of the
Company to have the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Code. The provisions of the Plan shall be construed to extend
and limit participation in a manner consistent with the requirements of Section
423 of the Code.
1.2 The Plan shall be effective on the Effective Date stated below,
subject to the approval of the Company's stockholders within one year before or
one year after the date the Plan is approved by the Board of Directors of the
Company. No option shall be granted under the Plan after the date as of which
the Plan is terminated by the Board in accordance with Section 11.7 of the Plan.
II. Definitions
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The following words and phrases, when used in this Plan, unless their
context clearly indicates otherwise, shall have the following respective
meanings:
2.1 "Account" means a recordkeeping account maintained for a Participant
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to which payroll deductions are credited in accordance with Article VIII of the
Plan.
2.2 "Administrator" means the persons or committee appointed under Section
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3.1 to administer the Plan.
2.3 "Article" means an Article of this Plan.
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2.4 "Accumulation Period" means, as to the Company or a Participating
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Subsidiary: (a) the period commencing on the Effective Date and ending on
December 31, 2001; and (b) thereafter a period of 12 calendar months commencing
on each successive January 1 and ending on December 31, or such other period not
in excess of 12 months as the Administrator may specify from time to time. The
Administrator may modify or suspend Accumulation Periods at any time and from
time to time.
2.5 "Base Earnings" means base salary and wages payable by the Company or
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a Participating Subsidiary to an Eligible Employee, prior to pre-tax deductions
for contributions to qualified or non-qualified (under the Code) benefit plans
or arrangements, and excluding bonuses, incentives and overtime pay but
including commissions.
2.6 "Board" means the Board of Directors of the Company.
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2.7 "Code" means the Internal Revenue Code of 1986, as amended.
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2.8 "Company" means Garmin Ltd., a Cayman Islands corporation.
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2.9 "Cut-Off Date" means the date established by the Administrator from
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time to time by which enrollment forms must be received with respect to an
Accumulation Period.
2.10 "Effective Date" means the IPO Date.
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2.11 "Eligible Employee" means an Employee eligible to participate in the
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Plan in accordance with Article V.
2.12 "Employee" means an individual who performs services for the Company
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or a Participating Subsidiary pursuant to an employment relationship described
in Treasury Regulations Section 31.3401(c)-1 or any successor provision.
2.13 "Enrollment Date" means the Effective Date, and thereafter the first
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Trading Day of an Accumulation Period beginning after January 1, 2000.
2.14 "Exchange Act" means the Securities Exchange Act of 1934.
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2.15 "Fair Market Value" means, as of any applicable date:
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(a) if the security is listed on the National Association of
Securities Dealers Inc.'s NASDAQ National Market ("NASDAQ/NMS"), the
closing price, regular way, of the security on such exchange or if no such
reported sale of the security shall have occurred on such date, on the
latest preceding date on which there was such a reported sale, or
(b) if the security is not listed on the NASDAQ/NMS, but is listed on
the New York Stock Exchange, the closing price, regular way, of the
security on such exchange, or if no such reported sale of the security
shall have occurred on such date, on the latest preceding date on which
there was such a reported sale, or
(c) if the security is not listed on the New York Stock Exchange or
NASDAQ/NMS, the closing price, regular way, on such other national exchange
on which the security is listed and principally traded, or if no such
reported sale of the security shall have occurred on such date, on the
latest preceding date on which there was such a reported sale, or
(d) if the security is not listed for trading on a national
securities exchange or authorized for quotation on NASDAQ/NMS, the average
of the closing bid and asked prices as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") or, if no such
prices shall have been so reported for such date, on the latest preceding
date for which such prices were so reported, or
(e) if the security is not listed for trading on a national
securities exchange or is not authorized for quotation on NASDAQ/NMS or
NASDAQ, the fair market value of the security as determined in good faith
by the Board.
Notwithstanding the above, for purposes of determining the number of Shares
under Section 7.3 and purchase price under Section 9.4, Fair Market Value on the
Effective Date shall
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mean the price to the public pursuant to the form of final prospectus used in
connection with the IPO as indicated on the cover page of such prospectus, or
otherwise.
2.16 "IPO" means an initial public offering of Shares as contemplated in
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the registration statement on form S-1 filed by the Company with the U.S.
Securities and Exchange Commission on September 11, 2000.
2.17 "IPO Date" means the effective date of the underwriting agreement
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between the Company and the underwriters of the IPO.
2.18 "Participant" means an Eligible Employee who has enrolled in the Plan
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pursuant to Article VI. A Participant shall remain a Participant until the
applicable date set forth in Article X.
2.19 "Participating Subsidiary" means a Subsidiary incorporated under the
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laws of any state in the United States, a territory of the United States, Puerto
Rico, or the District of Columbia, or such foreign Subsidiary approved under
Section 3.3, which has adopted the Plan as a Participating Subsidiary by action
of its board of directors and which has been designated by the Board in
accordance with Section 3.3 as covered by the Plan, subject to the requirements
of Section 423 of the Code except as noted in Section 3.3.
2.20 "Plan" means the Garmin Ltd. Employee Stock Purchase Plan as set forth
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herein and as from time to time amended.
2.21 "Purchase Date" means the specific Trading Day during an Accumulation
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Period on which Shares are purchased under the Plan in accordance with Article
IX. For each Accumulation Period, the Purchase Date shall be the last Trading
Day occurring in such Accumulation Period. The Administrator may, in its
discretion, designate a different Purchase Date with respect to any Accumulation
Period.
2.22 "Section" means a section of this Plan, unless indicated otherwise.
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2.23 "Securities Act" means the Securities Act of 1933, as amended.
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2.24 "Share" means a common share, $.01 par value, of Garmin Ltd.
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2.25 "Subsidiary" means any corporation in an unbroken chain of
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corporations beginning with the Company if, as of the applicable Enrollment
Date, each of the corporations other than the last corporation in the chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.
2.26 "Trading Day" means a day the national exchange on which the Shares
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are listed for trading or, if not so listed, a day the New York Stock Exchange
is open for trading.
III. Administration
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3.1 Subject to Section 11.7, the Plan shall be administered by the Board,
or committee ("Committee") appointed by the Board. The Committee shall consist
of at least one Board member, but may additionally consist of individuals who
are not members of the Board. The Committee shall serve at the pleasure of the
Board. If the Board does not so appoint a
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Committee, the Board shall administer the Plan. Any references herein to
"Administrator" are, except as the context requires otherwise, references to the
Board or the Committee, as applicable.
3.2 If appointed under Section 3.1, the Committee may select one of its
members as chairman and may appoint a secretary. The Committee shall make such
rules and regulations for the conduct of its business as it shall deem
advisable; provided, however, that all determinations of the Committee shall be
made by a majority of its members.
3.3 The Administrator shall have the power, in addition to the powers set
forth elsewhere in the Plan, and subject to and within the limits of the express
provisions of the Plan, to construe and interpret the Plan and options granted
under it; to establish, amend and revoke rules and regulations for
administration of the Plan; to determine all questions of policy and expediency
that may arise in the administration of the Plan; to allocate and delegate such
of its powers as it deems desirable to facilitate the administration and
operation of the Plan; and, generally, to exercise such powers and perform such
acts as it deems necessary or expedient to promote the best interests of the
Company. The Administrator's determinations as to the interpretation and
operation of this Plan shall be final and conclusive.
The Board may designate from time to time which Subsidiaries of the Company
shall be Participating Subsidiaries. Without amending the Plan, the Board may
adopt special or different rules for the operation of the Plan which allow
employees of any foreign Subsidiary to participate in the purposes of the Plan.
In furtherance of such purposes, the Board may approve such modifications,
procedures, rules or sub-plans as it deems necessary or desirable, including
those deemed necessary or desirable to comply with any foreign laws or to
realize tax benefits under foreign law. Any such different or special rules for
employees of any foreign Subsidiary shall not be subject to Code Section 423 and
for purposes of the Code shall be treated as separate and apart from the balance
of the Plan.
3.4 This Article III relating to the administration of the Plan may be
amended by the Board from time to time as may be desirable to satisfy any
requirements of or under the federal securities and/or other applicable laws of
the United States, or to obtain any exemption under such laws.
IV. Number of Shares
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4.1 One million (1,000,000) Shares are reserved for sales and authorized
for issuance pursuant to the Plan. Shares sold under the Plan may be newly-
issued Shares, outstanding Shares reacquired in private transactions or open
market purchases, or any combination of the foregoing. If any option granted
under the Plan shall for any reason terminate without having been exercised, the
Shares not purchased under such option shall again become available for the
Plan.
4.2 In the event of any reorganization, recapitalization, stock split,
reverse stock split, stock dividend, combination of shares, merger,
consolidation, acquisition of property or shares, separation, asset spin-off,
stock rights offering, liquidation or other similar change in the capital
structure of the Company which occurs after the IPO Date, the Board shall make
such adjustment, if any, as it deems appropriate in the number, kind and
purchase price of the Shares available for purchase under the Plan. In the event
that, at a time when options are outstanding hereunder, there occurs a
dissolution or liquidation of the Company, except pursuant to a
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transaction to which Section 424(a) of the Code applies, each option to purchase
Shares shall terminate, but the Participant holding such option shall have the
right to exercise his or her option prior to such termination of the option upon
the dissolution or liquidation. The Company reserves the right to reduce the
number of Shares which Employees may purchase pursuant to their enrollment in
the Plan.
V. Eligibility Requirements
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5.1 Except as provided in Section 5.2, each individual who is an Eligible
Employee of the Company or a Participating Subsidiary on the applicable Cut-Off
Date shall become eligible to participate in the Plan in accordance with Article
VI as of the first Enrollment Date following the date the individual becomes an
Employee of the Company or a Participating Subsidiary, provided that the
individual remains an Eligible Employee on the first day of the Accumulation
Period associated with such Enrollment Date. Participation in the Plan is
entirely voluntary.
5.2 Employees meeting any of the following restrictions are not eligible
to participate in the Plan:
(a) Employees who, immediately upon enrollment in the Plan or upon
grant of an Option would own directly or indirectly, or hold options or
rights to acquire, an aggregate of 5% or more of the total combined voting
power or value of all outstanding shares of all classes of stock of the
Company or any Subsidiary (and for purposes of this paragraph, the rules of
Code Section 424(d) shall apply, and stock which the Employee may purchase
under outstanding options shall be treated as stock owned by the Employee);
(b) Employees who are customarily employed by the Company or a
Participating Subsidiary for less than 20 hours per week; or
(c) Employees who are customarily employed by the Company or a
Participating Subsidiary for not more than five (5) months in any calendar
year.
5.3 The Plan is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the options shall be granted and may be exercised, only in
such a manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and the options granted hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
VI. Enrollment
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6.1 Eligible Employees will be automatically enrolled in the Plan on the
first day of each Accumulation Period. Any Eligible Employee may consent to
enrollment in the Plan for an Accumulation Period by completing and signing an
enrollment form (which authorizes payroll deductions during such Accumulation
Period in accordance with Section 8.1) and submitting such enrollment form to
the Company or the Participating Subsidiary on or before the Cut-Off Date
specified by the Administrator. Payroll deductions pursuant to the enrollment
form shall be effective as of the first payroll period with a pay day after the
Enrollment Date for the
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Accumulation Period to which the enrollment form relates, and shall continue in
effect until the earliest of:
(a) the end of the last payroll period with a payday in the
Accumulation Period;
(b) the date during the Accumulation Period as of which the Employee
elects to cease his or her enrollment in accordance with Section 8.3; and
(c) the date during the Accumulation Period as of which the Employee
withdraws from the Plan or has a termination of employment in accordance
with Article X.
Notwithstanding anything in the Plan to the contrary, for the initial
Accumulation Period the Administrator may upon notice to Eligible Employees give
effect to payroll deductions as of a payroll period with a pay date after the
Cut-Off Date for the Accumulation Period, with such deductions effective as to
all or a portion of Base Earnings either payable or earned on or after the
Effective Date.
VII. Grant of Options on Enrollment
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7.1 The automatic enrollment by an Eligible Employee in the Plan as of an
Enrollment Date will constitute the grant as of such Enrollment Date by the
Company to such Participant of an option to purchase Shares from the Company
pursuant to the Plan.
7.2 An option granted to a Participant pursuant to this Plan shall expire,
if not terminated earlier for any reason, on the earliest to occur of: (a) the
end of the Purchase Date with respect to the Accumulation Period in which such
option was granted; (b) the completion of the purchase of Shares under the
option under Article IX; or (c) the date on which participation of such
Participant in the Plan terminates for any reason.
7.3 As of each Enrollment Date, each Participant shall automatically be
granted an option to purchase, subject to the terms of the Plan, the number of
whole Shares equal to the quotient of $25,000 divided by the Fair Market Value
of a Share on the Enrollment Date.
Notwithstanding any other provision of this Plan, no Employee may be
granted an option which permits his or her rights to purchase Shares under the
Plan and any other Code Section 423 employee stock purchase plan of the Company
or any of its Subsidiaries or parent companies to accrue (when the option first
becomes exercisable) at a rate which exceeds $25,000 of Fair Market Value of
such Shares (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
VIII. Payroll Deductions
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8.1 An Employee who files an enrollment form pursuant to Article VI shall
elect and authorize in such form to have deductions made from his or her pay on
each payday he or she receives a paycheck during the Accumulation Period to
which the enrollment form relates, and he or she shall designate in such form
the percentage (in whole percentages) of Base Earnings to be deducted each
payday during such Accumulation Period. The minimum an Employee may
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elect and authorize to have deducted is 1% of his or her Base Earnings paid per
pay period in such Accumulation Period, and the maximum is 10% of his or her
Base Earnings paid per pay period in such Accumulation Period (or such larger or
smaller percentage as the Administrator may designate from time to time).
8.2 Except as provided in the last paragraph of Section 6.1, deductions
from a Participant's Base Earnings shall commence upon the first payday on or
after the commencement of the Accumulation Period, and shall continue until the
date on which such authorization ceases to be effective in accordance with
Article VI. The amount of each deduction made for a Participant shall be
credited to the Participant's Account. All payroll deductions received or held
by the Company or a Participating Subsidiary may be, but are not required to be,
used by the Company or Participating Subsidiary for any corporate purpose, and
the Company or Participating Subsidiary shall not be obligated to segregate such
payroll deductions, but may do so at the discretion of the Board.
8.3 As of the last day of any month during an Accumulation Period, a
Participant may elect to cease (but not to increase or decrease) payroll
deductions made on his or her behalf for the remainder of such Accumulation
Period by filing the applicable election with the Company or Participating
Subsidiary in such form and manner and at such time as may be permitted by the
Administrator. A Participant who has ceased payroll deductions may have the
amount which was credited to his or her Account prior to such cessation applied
to the purchase of Shares as of the Purchase Date, in accordance with Section
9.1, and receive the balance of the Account with respect to which the enrollment
is ceased, if any, in cash. A Participant who has ceased payroll deductions may
also voluntarily withdraw from the Plan pursuant to Section 10.1. Any
Participant who ceases payroll deductions for an Accumulation Period may re-
enroll in the Plan on the next subsequent Enrollment Date following the
cessation in accordance with the provisions of Article VI. A Participant who
ceases to be employed by the Company or any Participating Subsidiary will cease
to be a Participant in accordance with Section 10.2.
8.4 A Participant may not make any separate or additional contributions to
his Account under the Plan. Neither the Company nor any Participating Subsidiary
shall make separate or additional contributions to any Participant's Account
under the Plan.
IX. Purchase of Shares
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9.1 Subject to Section 9.2, any option held by the Participant which was
granted under this Plan and which remains outstanding as of a Purchase Date
shall be deemed to have been exercised on such Purchase Date for the purchase of
the number of whole Shares which the funds accumulated in his or her Account as
of the Purchase Date will purchase at the applicable purchase price (but not in
excess of the number of Shares for which options have been granted to the
Participant pursuant to Section 7.3). No Shares will be purchased on behalf of
any Participant who fails to file an enrollment form authorizing payroll
deductions for an Accumulation Period.
9.2 A Participant who holds an outstanding option as of a Purchase Date
shall not be deemed to have exercised such option if the Participant elected not
to exercise the option by withdrawing from the Plan in accordance with Section
10.1.
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9.3 If, after a Participant's exercise of an option under Section 9.1, an
amount remains credited to the Participant's Account as of a Purchase Date, then
the remaining amount shall be distributed to the Participant in cash as soon as
administratively practical after such Purchase Date.
9.4 Except as otherwise set forth in this Section 9.4, the purchase price
for each Share purchased under any option shall be 85% of the lower of:
(a) the Fair Market Value of a Share on the Enrollment Date on which
such option is granted; or
(b) the Fair Market Value of a Share on the Purchase Date.
Notwithstanding the above, the Board may establish a different purchase price
for each Share purchased under any option provided that such purchase price is
determined at least thirty (30) days prior to the Accumulation Period for which
it is applicable and provided that such purchase price may not be less than the
purchase price set forth above.
9.5 If Shares are purchased by a Participant pursuant to Section 9.1, then
such Shares shall be held in non-certificated form at a bank or other
appropriate institution selected by the Administrator until the earlier of the
Participant's termination of employment or the time a Participant requests
delivery of certificates representing such shares. If any law governing
corporate or securities matters, or any applicable regulation of the Securities
and Exchange Commission or other body having jurisdiction with respect to such
matters, shall require that the Company or the Participant take any action in
connection with the Shares being purchased under the option, delivery of the
certificate or certificates for such Shares shall be postponed until the
necessary action shall have been completed, which action shall be taken by the
Company at its own expense, without unreasonable delay.
Certificates delivered pursuant to this Section 9.5 shall be registered
in the name of the Participant or, if the Participant so elects, in the names of
the Participant and one or more such other persons as may be designated by the
Participant in joint tenancy with rights of survivorship or in tenancy by the
entireties or as spousal community property, or in such forms of trust as may be
approved by the Administrator, to the extent permitted by law.
9.6 In the case of Participants employed by a Participating Subsidiary,
the Board may provide for Shares to be sold through the Subsidiary to such
Participants, to the extent consistent with and governed by Section 423 of the
Code.
9.7 If the total number of Shares for which an option is exercised on any
Purchase Date in accordance with this Article IX, when aggregated with all
Shares previously granted under this Plan, exceeds the maximum number of Shares
reserved in Section 4.1, the Administrator shall make a pro rata allocation of
the Shares available for delivery and distribution in as nearly a uniform manner
as shall be practicable and as it shall determine to be equitable, and the
balance of the cash amount credited to the Account of each Participant under the
Plan shall be returned to him or her as promptly as administratively practical.
9.8 If a Participant or former Participant sells, transfers, or otherwise
makes a disposition of Shares purchased pursuant to an option granted under the
Plan within two years
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after the date such option is granted or within one year after the Purchase Date
to which such option relates, or if the Participant or former Participant
otherwise has a taxable event relating to Shares purchased under the Plan, and
if such Participant or former Participant is subject to U.S. federal income tax,
then such Participant or former Participant shall notify the Company or
Participating Subsidiary in writing of any such sale, transfer or other
disposition within 10 days of the consummation of such sale, transfer or other
disposition, and shall remit to the Company or Participating Subsidiary or
authorize the Company or Participating Subsidiary to withhold from other sources
such amount as the Company may determine to be necessary to satisfy any federal,
state or local tax withholding obligations of the Company or Participating
Subsidiary. A Participant must reply to a written request, within 10 days of the
receipt of such written request, from the Company, Participating Subsidiary, or
Administrator regarding whether such a sale, transfer or other disposition has
occurred.
The Administrator may from time to time establish rules and procedures
(including but not limited to postponing delivery of Shares until the earlier of
the expiration of the two-year or one-year period or the disposition of such
Shares by the Participant) to cause the withholding requirements to be
satisfied.
X. Withdrawal From the Plan; Termination of Employment; Leave of Absence;
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Death
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10.1 Withdrawal from the Plan. A Participant may withdraw from the Plan
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in full (but not in part) during any Accumulation Period by delivering a notice
of withdrawal to the Company (in a manner prescribed by the Administrator) at
any time up to the December 1 immediately preceding the Purchase Date for such
Accumulation Period, or at such shorter time in advance of the Purchase Date as
the Administrator may permit. If notice of withdrawal is timely received, all
funds then accumulated in the Participant's Account shall not be used to
purchase Shares, but shall instead be distributed to the Participant as soon as
administratively practical, and the Participant's payroll deductions shall
cease as soon as administratively practical. An Employee who has withdrawn
during an Accumulation Period may not return funds to the Company or a
Participating Subsidiary during the same Accumulation Period and require the
Company or Participating Subsidiary to apply those funds to the purchase of
Shares, nor may such Participant's payroll deductions continue, in accordance
with Article VI. Any Eligible Employee who has withdrawn from the Plan may,
however, re-enroll in the Plan on the next subsequent Enrollment Date following
withdrawal in accordance with the provisions of Article VI.
10.2 Termination of Employment. Participation in the Plan terminates
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immediately when a Participant ceases to be employed by the Company or any
Participating Subsidiary for any reason whatsoever, including but not limited to
termination of employment, whether voluntary or involuntary, or on account of
disability, or retirement, but not including death, or if the participating
Subsidiary employing the Participant ceases for any reason to be a Participating
Subsidiary. Participation in the Plan also terminates immediately when a
Participant ceases to be an Eligible Employee under Article V or withdraws from
the Plan. Upon termination of participation such terminated Participant's
outstanding options shall thereupon terminate. As soon as administratively
practical after termination of participation, the Company shall pay to the
Participant or legal representative all amounts accumulated in the Participant's
Account and held by the Company at the time of termination of participation, and
any Participating Subsidiary
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shall pay to the Participant or legal representative all amounts accumulated in
the Participant's Account and held by the Participating Subsidiary at the time
of termination of participation.
10.3 Leave of Absence. If a Participant takes a leave of absence without
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terminating employment, such Participant will be deemed to have discontinued
contributions to the Plan in accordance with Section 8.3, but will remain a
Participant in the Plan through the balance of the Accumulation Period in which
his or her leave of absence begins, so long as such leave of absence does not
exceed 90 days. If a Participant takes a leave of absence without terminating
employment, such Participant will be deemed to have withdrawn from the Plan in
accordance with Section 10.1 if such leave of absence exceeds 90 days.
10.4 Death. As soon as administratively feasible after the death of a
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Participant, amounts accumulated in his or her Account shall be paid in cash to
the beneficiary or beneficiaries designated by the Participant on a beneficiary
designation form approved by the Board, but if the Participant does not make an
effective beneficiary designation then such amounts shall be paid in cash to the
Participant's spouse if the Participant has a spouse, or, if the Participant
does not have a spouse, to the executor, administrator or other legal
representative of the Participant's estate. Such payment shall relieve the
Company and the Participating Subsidiary of further liability with respect to
the Plan on account of the deceased Participant. If more than one beneficiary is
designated, each beneficiary shall receive an equal portion of the Account
unless the Participant has given express contrary instructions. None of the
Participant's beneficiary, spouse, executor, administrator or other legal
representative of the Participant's estate shall, prior to the death of the
Participant by whom he has been designated, acquire any interest in the amounts
credited to the Participant's Account under the Plan.
XI. Miscellaneous
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11.1 Interest. Interest or earnings will not be paid on any Employee
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Accounts.
11.2 Restrictions on Transfer. The rights of a Participant under the Plan
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shall not be assignable or transferable by such Participant, and an option
granted under the Plan may not be exercised during a Participant's lifetime
other than by the Participant. Any such attempt at assignment, transfer, pledge
or other disposition shall be without effect, except that the Company may treat
such act as an election to withdraw from the Plan in accordance with Section
10.1.
11.3 Administrative Assistance. If the Administrator in its discretion so
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elects, it may retain a brokerage firm, bank, other financial institution or
other appropriate agent to assist in the purchase of Shares, delivery of reports
or other administrative aspects of the Plan. If the Administrator so elects,
each Participant shall (unless prohibited by applicable law) be deemed upon
enrollment in the Plan to have authorized the establishment of an account on his
or her behalf at such institution. Shares purchased by a Participant under the
Plan shall be held in the account in the Participant's name, or if the
Participant so indicates in the enrollment form, in the Participant's name
together with the name of one or more other persons in joint tenancy with right
of survivorship or in tenancy by the entireties or as spousal community
property, or in such forms of trust as may be approved by the Administrator, to
the extent permitted by law.
11.4 Costs. All costs and expenses incurred in administering the Plan shall
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be paid by the Company or Participating Subsidiaries, including any brokerage
fees on the purchased Shares; excepting that any stamp duties, transfer taxes,
fees to issue stock certificates, and any
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brokerage fees on the sale price applicable to participation in the Plan after
the initial purchase of the Shares on the Purchase Date shall be charged to the
Account or brokerage account of such Participant.
11.5 Equal Rights and Privileges. All Eligible Employees shall have equal
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rights and privileges with respect to the Plan so that the Plan qualifies as an
"employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Notwithstanding the
express terms of the Plan, any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall without further act or
amendment by the Company or the Board be reformed to comply with the
requirements of Code Section 423. This Section 11.5 shall take precedence over
all other provisions in the Plan.
11.6 Applicable Law. The Plan shall be governed by the substantive laws
--------------
(excluding the conflict of laws rules) of the State of Kansas.
11.7 Amendment and Termination. The Board may amend, alter or terminate
-------------------------
the Plan at any time; provided, however, that no amendment which would amend or
modify the Plan in a manner requiring stockholder approval under Code Section
423 or the requirements of any securities exchange on which the Shares are
traded shall be effective unless, within one year after it is adopted by the
Board, it is approved by the holders of a majority of the voting power of the
Company's outstanding shares. In addition, the Board (if appointed under Section
3.1) may amend the Plan as provided in Section 3.3, subject to the conditions
set forth therein and in this Section 11.7.
If the Plan is terminated, the Board may elect to terminate all outstanding
options either prior to their expiration or upon completion of the purchase of
Shares on the next Purchase Date, or may elect to permit options to expire in
accordance with the terms of this Plan (and participation to continue through
such expiration dates). If the options are terminated prior to expiration, all
funds accumulated in Participants' Accounts as of the date the options are
terminated shall be returned to the Participants as soon as administratively
feasible.
11.8 No Right of Employment. Neither the grant nor the exercise of any
----------------------
rights to purchase Shares under this Plan nor anything in this Plan shall impose
upon the Company or Participating Subsidiary any obligation to employ or
continue to employ any employee. The right of the Company or Participating
Subsidiary to terminate any employee shall not be diminished or affected because
any rights to purchase Shares have been granted to such employee.
11.9 Requirements of Law. The Company shall not be required to sell,
-------------------
issue, or deliver any Shares under this Plan if such sale, issuance, or delivery
might constitute a violation by the Company or the Participant of any provision
of law. Unless a registration statement under the Securities Act is in effect
with respect to the Shares proposed to be delivered under the Plan, the Company
shall not be required to issue such Shares if, in the opinion of the Company or
its counsel, such issuance would violate the Securities Act. Regardless of
whether such Shares have been registered under the Securities Act or registered
or qualified under the securities laws of any state, the Company may impose
restrictions upon the hypothecation or further sale or transfer of such shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company or its counsel, such restrictions are necessary or
desirable to achieve compliance with the provisions of the Securities Act, the
securities laws of any state, or
11
<PAGE>
any other law or are otherwise in the best interests of the Company. Any
determination by the Company or its counsel in connection with any of the
foregoing shall be final and binding on all parties.
If, in the opinion of the Company and its counsel, any legend placed on a
stock certificate representing Shares issued under the Plan is no longer
required in order to comply with applicable securities or other laws, the holder
of such certificate shall be entitled to exchange such certificate for a
certificate representing a like number of shares lacking such legend.
The Company may, but shall not be obligated to, register or qualify any
securities covered by the Plan. The Company shall not be obligated to take any
other affirmative action in order to cause the grant or exercise of any right or
the issuance, sale, or deliver of Shares pursuant to the exercise of any right
to comply with any law.
11.10 Gender. When used herein, masculine terms shall be deemed to include
------
the feminine, except when the context indicates to the contrary.
11.11 Withholding of Taxes. The Company or Participating Subsidiary may
--------------------
withhold from any purchase of Shares under this Plan or any sale, transfer or
other disposition thereof any local, state, federal or foreign taxes, employment
taxes, or other taxes at such times and from such other amounts as it deems
appropriate. The Company or Participating Subsidiary may require the Participant
to remit an amount in cash sufficient to satisfy any required withholding
amounts to the Company or Participating Subsidiary, as the case may be.
Executed this 30th day of October, 2000.
GARMIN LTD.
By: /s/ Min H. Kao
------------------------
Min H. Kao
Co-Chairman and Co-CEO
12
<PAGE>
GARMIN LTD.
EMPLOYEE STOCK PURCHASE PLAN
ADDENDUM FOR GARMIN (EUROPE) LTD. - UNITED KINGDOM
This Addendum to the Garmin Ltd. Employee Stock Purchase Plan (the "Plan")
applies solely with respect to Garmin (Europe) Ltd. as a Participating
Subsidiary in the Plan. To the extent the provisions of this Addendum are
inconsistent with the provisions of the Plan, the provisions of this Addendum
shall be deemed to constitute an amendment to the Plan solely as it applies to
Garmin (Europe) Ltd. and its employees.
The provisions of this Addendum are as follows:
1. Eligibility to Participate. The exclusion provided in Section 5.2(b)
shall not apply.
2. Exchange Rate. The amounts held in a Participant's account shall be
converted from the British pound to United States dollars for the purpose of
purchasing Common Stock pursuant to the exchange rate published in the Wall
Street Journal on the Purchase Date.
