SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Trimble Navigation Limited
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule, or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
TRIMBLE NAVIGATION LIMITED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 1999
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Trimble
Navigation Limited (the "Company") will be held at the Westin Hotel in Santa
Clara, located at 5101 Great America Parkway, Santa Clara, California 95054 in
the Magnolia Room, on Wednesday, June 2, 1999, at 1:00 p.m. local time, for the
following purposes:
1. To elect directors to serve for the ensuing year and until
their successors are elected.
2. To approve an increase of 1,200,000 shares in the number of shares
of Common Stock reserved for issuance under the Company's 1993
Stock Option Plan from 3,800,000 shares to an aggregate of
5,000,000 shares.
3. To approve an increase of 600,000 shares in the number of shares
of Common Stock available for purchase by eligible employees under
the Company's 1988 Employee Stock Purchase Plan from 2,350,000
shares to an aggregate of 2,950,000 shares.
4. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the current fiscal year ending
December 31, 1999.
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on April 9, 1999, will
be entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the meeting, you are urged to
mark, sign, date, and return the enclosed Proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if such shareholder returned a Proxy.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
ROBERT S. COOPER
Chairman of the Board
Sunnyvale, California
April 30, 1999
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU
ARE REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
POSTAGE-PREPAID ENVELOPE PROVIDED TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING.
<PAGE>
TRIMBLE NAVIGATION LIMITED
---------------
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
June 2, 1999
The enclosed Proxy is solicited on behalf of the Board of Directors of
Trimble Navigation Limited, a California corporation (the "Company"), for use at
the Company's Annual Meeting of Shareholders ("Annual Meeting") to be held at
the Westin Hotel in Santa Clara, located at 5101 Great America Parkway, Santa
Clara, California 95054 in the Magnolia Room, on Wednesday, June 2, 1999, at
1:00 p.m. local time, and at any adjournment(s) or postponement(s) thereof, for
the purposes set forth herein and in the accompanying Notice of Annual Meeting
of Shareholders.
The Company's principal executive offices are located at 645 North Mary
Avenue, Sunnyvale, California 94088. The telephone number at that address is
(408) 481-8000.
These proxy solicitation materials were mailed on or about April 30, 1999,
to all shareholders entitled to vote at the Annual Meeting. A copy of the
Company's Annual Report and Letter to Shareholders for the fiscal year ended
January 1, 1999 accompanies this Proxy Statement but does not form any part of
the proxy solicitation materials. A full copy of the Company's annual report on
Form 10-K (including all exhibits thereto,) as filed with the Securities and
Exchange Commission ("SEC") for the fiscal year ended January 1, 1999, is
available via the internet at the SEC's EDGAR web site at http://www.sec.gov. In
addition, a copy of the Company's annual report on Form 10-K as filed with the
SEC is also available via the internet at the Company's web site at
http://www.trimble.com.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date and Shares Outstanding
Shareholders of record at the close of business on April 9, 1999 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting. At
the Record Date, the Company had issued and outstanding 22,272,649 shares of
common stock ("Common Stock").
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the meeting and voting in person.
Voting
Each share of Common Stock outstanding on the Record Date is entitled to
one vote. In addition, every shareholder voting for the election of directors
may cumulate such shareholder's votes and give one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of
shares held by the shareholder as of the Record Date, or distribute such
shareholder's votes on the same principle among as many candidates as the
shareholder may select, provided that votes cannot be cast for more than the
number of directors to be elected. However, no shareholder shall be entitled to
cumulate votes unless the candidate's name has been placed in nomination prior
to the voting and the shareholder, or any other shareholder, has given notice at
the meeting prior to the voting of the intention to cumulate the shareholder's
votes. An automated system administered by the Company's transfer agent
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tabulates the votes. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting at the Annual Meeting
and the presence or absence of a quorum. The required quorum is a majority of
the shares outstanding on the Record Date. Abstentions are counted in
tabulations of the votes cast on proposals presented to shareholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
Solicitation of Proxies
The entire cost of this proxy solicitation will be borne by the Company.
The Company has retained the services of Beacon Hill Partners, Inc. ("Beacon
Hill") to solicit proxies, for which general services the Company has agreed to
pay $3,000. In addition, the Company will use Beacon Hill as part of a broker
call program which the Company expects to cost between $35,000 to $50,000 and
the Company will also reimburse certain out-of-pocket expenses in connection
with such proxy solicitation. The Company may reimburse brokerage firms and
other persons representing beneficial owners of shares for their expenses in
forwarding soliciting materials to such beneficial owners. Proxies may also be
solicited by certain of the Company's directors, officers, and regular
employees, without additional compensation, personally or by telephone, telegram
or facsimile.
Deadline for Receipt of Shareholder Proposals for 2000 Annual Meeting
Shareholders are entitled to present proposals for actions at forthcoming
shareholder meetings of the Company if they comply with the requirements of the
appropriate proxy rules and regulations promulgated by the Securities and
Exchange Commission. Proposals of shareholders which are intended to be
considered for inclusion in the Company's proxy statement and form of proxy
related to the Company's 2000 Annual Meeting of Shareholders must be received by
the Company at its principal executive offices (Attn: Corporate Secretary,
Trimble Navigation Limited at 645 North Mary Avenue, Sunnyvale, California
94088) no later than December 30, 1999. Shareholders interested in submitting
such a proposal are advised to retain knowledgeable legal counsel with regard to
the detailed requirements of the applicable securities laws. The timely
submission of a shareholder proposal to the Company does not guarantee that it
will be included in the Company's applicable proxy statement.
The Proxy card attached hereto and which is to be used in connection with
the Company's current 1999 Annual Meeting grants the proxy holders discretionary
authority to vote on any manner otherwise properly raised at such Annual
Meeting. The Company presently intends to use a similar form of proxy card for
its 2000 Annual Meeting of Shareholders. If the Company is not notified at its
principal executive offices of a shareholder proposal at least 45 days prior to
the one year anniversary of the mailing of this Proxy Statement, then the proxy
holders for the Company's 2000 Annual Meeting of Shareholders will have the
discretionary authority to vote against any such shareholder proposal if it is
properly raised at such annual meeting, even though such shareholder proposal is
not discussed in the Company's proxy statement related to that shareholder
meeting.
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PROPOSAL I--ELECTION OF DIRECTORS
Nominees
A board of six directors is to be elected at the Annual Meeting. The Board
of Directors of the Company has authorized the nomination at the Annual Meeting
of the persons named below as candidates.
The names of the nominees and certain information about them are set
forth below:
<TABLE>
<CAPTION>
Director
Name of Nominee Age Principal Occupation Since
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Steven W. Berglund 47 President and Chief Executive Officer of the Company --
Robert S. Cooper 67 President, Chief Executive Officer and Chairman of the 1989
Board of Directors of Atlantic Aerospace Electronic
Corporation, Chairman of the Board of Directors of
the Company
John B. Goodrich 57 Member of the law firm of Wilson Sonsini Goodrich & 1981
Rosati, P.C., legal counsel to the Company
William Hart 58 General Partner, Technology Partners 1984
Norman Y. Mineta 67 Vice President for Special Business Initiatives of --
Lockheed Martin Corporation
Bradford W. Parkinson 64 Professor at Stanford University, former President and 1984
Chief Executive Officer of the Company and current
consultant to the Company
</TABLE>
Steven W. Berglund joined the Company as President and Chief Executive
Officer in March 1999. Mr. Berglund has a diverse background with experience in
engineering, manufacturing, finance, and global operations. Most recently, Mr.
Berglund was President of Spectra Precision, Inc. which had global revenue of
approximately $200 million and develops and manufactures surveying instruments,
laser based construction alignment instruments, and construction machine control
systems. Spectra Precision is a subsidiary of Spectra-Physics AB. During his
fourteen years within Spectra-Physics, which was an early Silicon Valley pioneer
in the development of laser systems, Mr. Berglund held a variety of positions
that included four years based in Europe. Prior to Spectra-Physics, Mr. Berglund
spent a number of years in the early 1980's at Varian Associates in Palo Alto,
California where he held a number of planning and manufacturing roles. Varian is
a technology company specializing in microwave communications, semiconductor
manufacturing equipment, analytical instruments, and medical diagnostic
equipment. Mr. Berglund began his career as a process engineer at Eastman Kodak
in Rochester, New York. Mr. Berglund attended the University of Oslo and the
University of Minnesota where he received a B.S. degree in Chemical Engineering
in 1974 and received his M.B.A. degree from the University of Rochester in 1977.
Robert S. Cooper was appointed Chairman of the Company's Board of Directors
in August 1998. Dr. Cooper has served as a director of the Company since April
1989. Since 1985, Dr. Cooper has been President, Chief Executive Officer, and
Chairman of the Board of Directors of Atlantic Aerospace Electronics
Corporation, an aerospace company. Dr. Cooper also serves on the board of
directors of Marconi North America. From 1981 to 1985, he was Assistant
Secretary of Defense for Research and Technology and simultaneously held the
position of Director for the Defense Advanced Research Projects Agency (DARPA).
Dr. Cooper received a B.S. degree in Electrical Engineering from State
University of Iowa in 1954, an M.S. degree in Electrical Engineering from Ohio
State University in 1958, and a Doctor of Science degree in Electrical
Engineering from the Massachusetts Institute of Technology in 1963.
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John B. Goodrich has served as a director of the Company since January
1981. Mr. Goodrich is a member of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, a law firm based in Palo Alto, California. This law firm has served
as primary outside legal counsel to the Company. Mr. Goodrich received a B.A.
degree from Stanford University in 1963, a J.D. degree from the University of
Southern California in 1966, and an L.L.M. degree in Taxation from New York
University in 1970.
William Hart has served as a director of the Company since December 1984.
Mr. Hart is a General Partner of Technology Partners, a venture capital
management firm that he founded in 1980. Mr. Hart previously held positions with
Cresap, McCormick and Paget, a management consulting firm, and with
International Business Machines Corporation. Mr. Hart is also currently a
director of CellNet Data Systems, Inc., Silicon Gaming, Inc. and several
privately held technology companies. Mr. Hart received a Bachelor of Management
Engineering degree from Rensselaer Polytechnic Institute in 1965 and an M.B.A.
degree from the Amos Tuck School of Business Administration at Dartmouth College
in 1967.
Bradford W. Parkinson has served as a director of the Company since
1984, and as a consultant to the Company since 1982. Dr. Parkinson served as the
Company's President and Chief Executive Officer from August 1998 through March
1999. From 1980 to 1984 he was Group Vice President and General Manager for
Intermetrics, Inc. where he directed five divisions. He also served as President
of Intermetrics' industrial subsidiary, PlantStar. In 1979, Dr. Parkinson served
as Group Vice President for Rockwell International directing business
development and advanced engineering. Currently, Dr. Parkinson is the Edward C.
Wells Endowed Chair professor at Stanford University and has been a Professor of
Aeronautics and Astronautics at Stanford University since 1984. Dr. Parkinson
also directs the Gravity Probe-B spacecraft development project, sponsored by
NASA, the largest program delegated to Stanford University and has been program
manager for several Federal Aviation Administration sponsored research projects
on the use of Global Positioning Systems for navigation. Dr. Parkinson was on
leave of absence from Stanford University while serving as Trimble's President
and Chief Executive Officer. Dr. Parkinson received a B.S. degree from the U.S.
Naval Academy in 1957, a M.S. degree in Aeronautics/Astronautics Engineering
from Massachusetts Institute of Technology in 1961 and a Ph.D. degree in
Astronautics Engineering from Stanford University in 1966.
Norman Y. Mineta is Vice President for Special Business Initiatives at
Lockheed Martin Corporation. Mr. Mineta joined Lockheed Martin in 1995,
following his retirement from the United States House of Representatives where
he had represented California's Silicon Valley since 1975. Mr. Mineta joined
Mineta Insurance Agency, a general insurance brokerage, in 1956 and held various
positions within the company until he sold the company in 1992. An
internationally recognized expert in the field of transportation policy, Mr.
Mineta is a former Chair and Ranking Democratic Member of the House of
Representatives Committee on Public Works and Transportation. In total, Mr.
Mineta served on the Committee for more than twenty years, including 8 years as
Chair of its Aviation Subcommittee. Mr. Mineta's major accomplishments on the
Committee included oversight of airline deregulation during the 1980's and his
co-authorship of the Intermodal Surface Transportation Efficiency Act of 1991
(ISTEA). A native of San Jose, California, Mr. Mineta and his family were among
the 120,000 Americans of Japanese ancestry forced into internment camps by the
U. S. government during the Second World War. During the 100th Congress, Mr.
Mineta was the driving force behind passage of H.R. 442, the Civil Liberties Act
of 1988, which officially apologized for and redressed the injustices endured by
Japanese Americans during the war. In 1995, George Washington University awarded
the Martin Luther King, Jr. Commemorative Medal to Mr. Mineta for his
contributions to the field of civil rights. In 1967, Mr. Mineta became the first
non-white Member of the San Jose City Council. In 1971, he was elected as Mayor
of San Jose, California, and became the first Asian Pacific American mayor of a
major U.S. city. While serving in Congress, Mr. Mineta founded the Congressional
Asian Pacific American Caucus and served as its first Chair. In 1992, Mr. Mineta
became Chair of the House Committee on Public Works and Transportation, the
first Asian American to hold this Chair. Mr. Mineta received a B.S. degree from
the University of California, Berkeley in 1953.
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Vote Required
The six nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected as directors. Votes withheld from
any director are counted for purposes of determining the presence or absence of
a quorum, but have no other legal effect under California law. While there is no
definitive statutory or case law authority in California as to the proper
treatment of abstentions and broker non-votes in the election of directors, the
Company believes that both abstentions and broker non-votes should be counted
solely for purposes of determining whether a quorum is present at the Annual
Meeting. In the absence of controlling precedent to the contrary, the Company
intends to treat abstentions and broker non-votes with respect to the election
of directors in this manner.
Unless otherwise directed, the proxy holders will vote the proxies received
by them for the six nominees named above. In the event that any such nominee is
unable or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner as will ensure the election of as many
of the nominees listed above as possible. In such event, the specific nominees
to be voted for will be determined by the proxy holders. It is not expected that
any nominee will be unable or will decline to serve as a director. The directors
elected will hold office until the next annual meeting of shareholders and until
their successors are duly elected and qualified.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote FOR the election
of the above-named directors to the Board of Directors of the Company.
Board Meetings and Committees
The Board of Directors held fifteen meetings during the fiscal year ended
January 1, 1999. No director attended fewer than 75% of the aggregate of all the
meetings of the Board of Directors and the meetings of the committees, if any,
upon which such director also served.
The Board of Directors has a standing Audit Committee. The members of the
Audit Committee at the beginning of the 1998 fiscal year were directors Hart and
Parkinson and such committee held three meetings during fiscal year 1998. In
November 1998, the members of the Audit Committee were changed to directors Hart
and Trimble and director Hart now serves as the committee chairman. The purposes
of the Audit Committee are to make such examinations as are necessary to monitor
the corporate financial reporting and the internal and external audits of the
Company, to provide to the Board of Directors the results of its examinations
and recommendations derived therefrom, to outline to the Board of Directors
improvements made, or to be made, in internal accounting controls, to nominate
independent auditors, and to provide such additional information as the
committee may deem necessary to make the Board of Directors aware of significant
financial matters which require the Board's attention.
The Board of Directors has a standing Compensation Committee. The members
of the Compensation Committee at the beginning of the 1998 fiscal year were
directors Cooper and Goodrich. In November 1998, the members of the Compensation
Committee were changed to directors Cooper, Goodrich, Hart and director Goodrich
now serves as the committee chairman. Such Compensation Committee held one
meeting during fiscal year 1998. The purpose of the Compensation Committee is to
review and make recommendations to the full Board of Directors with respect to
all forms of compensation to be paid or provided to the Company's executive
officers.
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In November 1998, the Board of Directors formed a standing Nominating
Committee for the purpose of evaluating the size and composition of the Board of
Directors as well as considering potential additional candidates to serve as
members of the Board of Directors. The current members of the Nominating
Committee are directors Cooper, Goodrich and Parkinson and director Cooper
serves as the committee chairman. The Nominating Committee held a number of
various informal meetings during fiscal 1998. The Nominating Committee will
consider nominees proposed by shareholders of the Company. Any shareholder who
wishes to recommend a suitably qualified prospective nominee for the Company's
Board of Directors should do so in writing by providing such candidate's name,
qualifications (including a resume, if available) and appropriate contact
information to the Company at its principal executive offices, Attn: Corporate
Secretary, Trimble Navigation Limited at 645 North Mary Avenue, Sunnyvale,
California 94088.
Compensation Committee Interlocks and Insider Participation
Robert S. Cooper, John B. Goodrich and William Hart served as the members
of the Company's Compensation Committee for the one meeting that was held during
the fiscal year ended January 1, 1999. In August 1998, Dr. Cooper was appointed
to serve as the Company's Chairman of the Board of Directors and became an
employee of the Company pursuant to an agreement approved by a majority of the
disinterested members of the Board of Directors. In December 1998, Mr. Goodrich
was appointed to serve as the Company's corporate secretary; however; he is not,
and has never been an employee of the Company. In addition, Mr. Goodrich is a
member of the law firm of Wilson Sonsini Goodrich & Rosati, P.C., which was
retained by the Company during the past fiscal year as general primary outside
legal counsel and which the Company presently proposes to continue to retain
during the current fiscal year. Mr. Hart is not, and has never been, an employee
or officer of the Company. See "Compensation of Directors," "Employment
Contracts and Termination of Employment and Change-in-Control Arrangements" and
"Certain Relationships and Related Transactions."
Compensation Committee Report
The Compensation Committee of the Board of Directors (the "Committee")
establishes the general compensation policies of the Company and the
compensation plans and specific compensation levels for executive officers of
the Company. The Committee believes that the compensation of the Chief Executive
Officer should be primarily influenced by the overall financial performance of
the Company. In August of last fiscal year, Bradford W. Parkinson was appointed
as the Company's interim President and Chief Executive Officer replacing the
Company's former President and Chief Executive Officer, Charles R. Trimble. In
March of 1999, Steven W. Berglund was appointed as the Company's President and
Chief Executive Officer.
The Committee believes that the compensation of the Chief Executive Officer
should be established within a range of compensation for similarly situated
chief executive officers of comparable companies in the high technology and
related industries in the Standard & Poor's High Technology Composite Index
("peer companies") and their performance according to data obtained by the
Committee from independent outside consultants and publicly available data, such
as proxy data from peer companies as adjusted by the Committee's consideration
of the particular factors influencing the Company's performance and current
situation. A portion of the Chief Executive Officer's compensation package
should be established as base salary and the balance should be variable and
consist of an annual cash bonus and/or stock option grants.
Within these established ranges and guidelines, the Committee had set the
Chief Executive Officer's base salary according to the Company's historical
performance compared to peer companies and the challenges and opportunities
available to the Company at the beginning of the fiscal year at $350,000. Due to
the unique challenges facing the Company during the year, in August 1998, a
majority of the remaining disinterested members of the Board of Directors
approved a base salary of $30,000 per month for Dr. Parkinson to serve as
interim President and Chief Executive Officer of the Company while a search took
place to find a permanent candidate and approved a base salary of $10,000 per
month for Dr. Cooper to serve as the Company's Chairman of the Board of
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Directors. The Committee and Board of Directors also carefully considered the
risks and challenges facing the Company in offering a complete compensation
package in recruiting Mr. Berglund to serve as the Company's new President and
Chief Executive Officer as well as the individual qualifications and skills that
Mr. Berglund possesses. Based on these considerations, the Committee and Board
of Directors approved a base annual salary of $400,000 for Mr. Berglund. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements"
The Committee adopted a cash bonus program for fiscal year 1998 for senior
executives of the Company (including the Chief Executive Officer) which provided
for an annual bonus based upon a fixed percentage of each executive's base
salary within a range of target incentives as reported by a professional
compensation survey. Such base bonus amount was then adjusted by factoring in an
evaluation of each individual's performance and the overall ability of the
Company to achieve targeted levels of profitability. Such bonus amounts, if any,
were calculated and paid quarterly to the eligible senior executives. The total
bonus paid and accrued to the Company's Chief Executive Officer during the first
two quarters under the bonus program adopted for fiscal 1998 was $21,022. Dr.
Parkinson did not receive any cash bonuses while serving as the Company's
interim President and Chief Executive Officer during fiscal year 1998. Pursuant
to the terms of his employment agreement, Mr. Berglund will be eligible for a
cash bonus of up to 50% of his base salary on a pro rata basis for fiscal years
1999 and 2000 and one half of this bonus amount is guaranteed for fiscal year
1999.
Based on the Board of Directors' and the Committee's evaluation of the
challenges and demands facing Dr. Parkinson as interim President and Chief
Executive Officer, he was granted an option to purchase an aggregate of 100,000
shares which vested over six months and have an exercise price equal to the then
current fair market value at the date of grant. Based on the Board of Directors'
and the Committee's evaluation of the new Chief Executive Officer's ability to
influence the long-term growth and profitability of the Company, the Board of
Directors determined that Mr. Berglund should receive an option grant to
purchase 400,000 shares of the Company's Common Stock upon starting with the
Company on March 17, 1999. Such options have an exercise price equal to the then
current fair market value at the date of grant, vest ratably over the five years
and have partial acceleration provisions in certain change of control
situations.
The Committee also adopted similar policies with respect to the overall
compensation of other senior executive officers of the Company. A portion of
each compensation package was established as base salary and the balance is
variable and consists of an annual cash bonus and stock option grants. Using
salary survey data supplied by outside consultants and other publicly available
data, such as proxy data from peer companies, the Committee established base
salaries for each senior executive within a range of salaries of similarly
situated executive officers at comparable companies. In addition, these base
salaries of senior executive officers were then adjusted by the Committee taking
into consideration factors such as the relative performance of the Company, the
performance of the business unit for which the senior executive is responsible
and the individual's past performance and future potential.
The Committee also carefully reviewed and considered its cash bonus program
for fiscal year 1999 for senior executives of the Company. Such revised program
will provide for an annual cash bonus based upon a maximum eligible percentage
of each executive's base salary within a range of target incentives as reported
by professional compensation surveys. Such maximum percentage for each employee
will then be adjusted by factoring in an evaluation of each individual's
performance. The total size of the Company's bonus pool will be determined by
the Company's performance in meeting certain goals for both revenue and income
for the fiscal year and bonuses will only be paid at the end of the fiscal year.
The size of option grants to senior executive officers, if any, was
determined by the Committee's evaluation of each executive's ability to
influence the Company's long-term growth and profitability. The Company also has
a metric measurement system in place with respect to option grants made to all
new employees under the Company's option plans in order to ensure consistency
among grants and competitiveness in the marketplace. Generally, these options
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are granted at the then current market price and because the value of an option
bears a direct relationship to the Company's stock price, it is an incentive for
managers to create value for shareholders. The Committee therefore views stock
options as an important component of its long-term, performance-based
compensation philosophy.
During the last fiscal year the Board of Directors also reviewed the
general terms of its option plans in light of the increasingly competitive
nature of employment markets in the Silicon Valley, where the Company is
headquartered. Based on a number of factors, including an assessment of the
Company's ability to attract and retain experienced and qualified employees, on
November 3, 1998 the Board of Directors approved the amendment of all the then
outstanding options granted to current employees under the Company's 1993 Stock
Option Plan to extend the term of exercise from five-years and three-months to
ten years, contingent upon remaining in continuous employment with the Company,
which is consistent with the common practice in the Silicon Valley. No other
terms of such options were changed including the exercise price and terms of
vesting. The term of exercise of options previously granted to consultants were
not similarly extended. On the date of the extension, all outstanding options
had exercise prices that were higher than the then current fair market value of
the Company's Common Stock. The Board of Directors felt that this change in
policy was necessary in order to be competitive in the marketplace and was in
the best interests of the Company and its shareholders by providing employees
with additional encouragement to stay with the Company and help it grow, thereby
increasing shareholder value.
Robert S. Cooper, Member John B. Goodrich, Member William Hart, Member
Compensation Committee Compensation Committee Compensation Committee
Bradford W. Parkinson, Member Charles R. Trimble, Member
Board of Directors Board of Directors
Compensation of Directors
Cash Compensation. Prior to the end of the last fiscal year, the Company
did not pay any cash compensation to directors for serving on the Board of
Directors or committees of the Board of Directors; however, the Company did
reimburse all non-employee directors for travel and other necessary business
expenses incurred in the performance of their services as directors.
In order to help attract additional new outside candidates to serve on the
Company's Board of Directors, the Board of Directors carefully considered and
adopted a cash compensation policy beginning January 2, 1999, the start of the
Company's new fiscal year. Under the new cash compensation plan, all
non-employee directors will receive an annual cash retainer of $15,000 to be
paid quarterly in addition to a fee of $1,500 for each board meeting attended in
person and $375 for each board meeting attended via telephone conference.
Members of designated committees of the Board of Directors will receive $750 per
meeting which is not held on the same day as a meeting of the full Board of
Directors. Non-employee directors will also continue to be reimbursed for travel
and other necessary business expenses incurred in the performance of their
services as directors of the Company. The Board of Directors did not change the
terms and conditions of option grants to be made under the 1990 Directors Stock
Option Plan, as described below.
1990 Director Stock Option Plan. The Company's 1990 Director Stock Option
Plan (the "Director Plan") was adopted by the Board of Directors on December 19,
1990 and approved by the shareholders on April 24, 1991. An aggregate of 380,000
shares of the Company's Common Stock has been previously reserved for grants
issuable pursuant to the Director Plan ("Director Options"). The Director Plan
provides for the annual granting of nonstatutory stock options to each
non-employee director of the Company (the "Outside Directors"). Pursuant to the
terms of the Director Plan, new Outside Directors are granted a one-time option
to purchase 15,000 shares of the Company's Common Stock upon initially joining
the Board of Directors. Thereafter, each year, each Outside Director receives an
8
<PAGE>
additional option grant to purchase 5,000 shares if re-elected at the annual
meeting of shareholders. All such Director Options have an exercise price equal
to the fair market value of the Company's Common Stock on the date of grant,
vest over three years, and have a ten year term of exercise. In addition, all
such grants are automatic and are not subject to the discretion of any person
upon the re-election of each such Outside Director. At the Record Date, options
to purchase an aggregate of 158,333 shares, having an average exercise price of
$13.60 per share and expiring from December 19, 2000 to May 5, 2008, were
outstanding and 145,833 shares remained available for future grant under the
Director Plan. During the fiscal year ended January 1, 1999, directors Cooper,
Goodrich, Hart and Parkinson were each granted Director Options to purchase
5,000 shares of the Company's Common Stock at an exercise price of $18.4375 per
share.
Other Arrangements. Dr. Parkinson has served as a consultant to the Company
since 1982. During the last fiscal year, Dr. Parkinson was paid $5,500 per month
for such consulting services that he rendered to the Company (before beginning
to serve as the Company's President and Chief Executive Officer in August 1998)
and, in May 1998, was granted a non-statutory stock option under the Company's
1993 Stock Option Plan to purchase 20,000 shares having an exercise price equal
to $18.4375 per share, which was the then fair market value of the Company's
Common Stock, and which vests ratably over five years and has a five-year
three-month term of exercise. In addition, in connection with his on-going
consulting services on behalf of the Company, in February 1999, Dr. Parkinson
was granted a non-statutory stock option to purchase an additional 30,000 shares
of the Company's Common Stock with an exercise price of $9.625 per share which
was set at a price above the then fair market value on the date of grant, which
vests ratably on a daily basis through June 30, 1999 and has a five year term of
exercise.
In addition to serving as directors of the Company, in August 1998, Dr.
Cooper began serving as the Company's Chairman of the Board of Directors and Dr.
Parkinson began serving as the Company's President and Chief Executive Officer.
See "Employment Contracts and Termination of Employment and Change-in-Control
Arrangements."
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the shares of Company's Common Stock
beneficially owned as of the Record Date by: (i) all persons known to the
Company to be the beneficial owners of more than 5% of the Company's outstanding
Common Stock, (ii) each director of the Company (including nominees), (iii) the
executive officers of the Company named in the Summary Compensation Table
contained in "COMPENSATION OF EXECUTIVE OFFICERS", and (iv) all directors and
executive officers of the Company, as a group:
<TABLE>
<CAPTION>
Shares
Beneficially Owned (2)
--------------------------------
5% Shareholders, Directors and Nominees, and Executive Officers (1) Number Percent (%)
------------------------------------------------------------------- --------------- -------------
<S> <C> <C>
Capital Research and Management Company and
SMALLCAP World Fund, Inc. (3).................................................. 2,540,000 11.40
333 South Hope Street
Los Angeles, California 90071
Frontier Capital Management Corp.(4)........................................... 1,219,440 5.48
99 Summer Street, 19th Floor
Boston, Massachusetts 02110
1,585,485 7.11
Charles R. Trimble(5)..........................................................
Steven W. Berglund(6).......................................................... 10 *
Robert S. Cooper(7)............................................................ 123,139 *
John B. Goodrich(8)............................................................ 40,154 *
William Hart(9)................................................................ 79,375 *
Bradford W. Parkinson(10)...................................................... 170,354 *
Norman Y. Mineta (11).......................................................... 0 --
Michael P. Gagliardi(12)....................................................... 34,776 *
David M. Hall(13).............................................................. 40,827 *
Joseph Paiva(14)............................................................... 3,182 *
Charles E. Armiger, Jr.(15).................................................... 30,138 *
James L. Sorden(16)............................................................ 224,380 1.01
Dennis R. Ing(17).............................................................. 1,658 *
All Directors and Executive Officers, as a group
(14 persons)(5)-(18)...................................................... 2,598,896 11.41
<FN>
- ----------------------------
* Indicates less than 1%
(1) Except as otherwise noted in the table, the business address of each of the persons named in this table is:
c/o Trimble Navigation Limited, 645 North Mary Avenue, Sunnyvale, California 94088.
(2) Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons
named in the table have sole voting and investment power with respect to all shares of stock shown as beneficially
owned by them.
(3) The information presented with respect to Capital Research and Management Company ("CRMC") and SMALLCAP World Fund,
Inc. ("SWFI") is as reported pursuant to a Schedule 13G as jointly filed with the Securities and
Exchange Commission on February 9, 1999 by CRMC and SWFI and with additional information supplied directly by CRMC.
CRMC has confirmed that it is deemed to be the beneficial owner of all such shares listed above at
the end of March 1999. As reported on such joint Schedule 13G, CRMC is an investment adviser registered under Section 203
of the Investment Advisers Act of 1940 and was deemed to be the beneficial owner of 2,265,800 shares
as of the filing date due to its sole dispositive power over such shares and as a result of acting as investment adviser
to various investment companies registered under Section 8 of the Investment Company Act of
1940. CRMC disclaims beneficial ownership of all such shares pursuant to Rule 13d-4 of the Exchange Act of 1934, as amended.
SWFI is an investment company registered under the Investment Company Act of 1940, which is
advised by CRMC, was the beneficial owner of 1,450,000 shares as of the filing date due to its sole voting power over
such shares; however, all such shares beneficially owned by SWFI are included within the shares shown for CRMC.
10
<PAGE>
(4) The information presented with respect to Frontier Capital Management Corp. ("Frontier") is as reported directly to the
Company by Frontier. The Company has confirmed certain of the information with respect to the
holdings of Frontier with the Company's transfer agent, ChaseMellon
Shareholder Services, L.L.C.
(5) Includes 1,552,341 shares held in a family limited partnership, 6,478 shares held pursuant to the Company's 401(k) Plan,
and 16,027 shares subject to options exercisable within 60 days of the Record Date.
(6) New nominee for the Company's Board of Directors and currently serving as the Company's President and Chief Executive
Officer since March 1999. Mr. Berglund previously acquired such shares a number of years prior to
joining the Company.
(7) Includes 90,139 shares subject to stock options exercisable within 60 days of the Record Date.
(8) Includes 21,666 shares subject to stock options exercisable within 60 days of the Record Date.
(9) Includes 1,106 shares held by TPW Management III, L.P., a venture capital fund of which Mr. Hart is a general partner.
Also includes 48,333 shares subject to stock options exercisable within 60 days of the Record Date.
(10) Includes 3 shares held by Dr. Parkinson's spouse, 2,515 shares held in a charitable remainder trust and 166,370 shares
subject to stock options exercisable within 60 days of the Record Date.
(11) New nominee for the Company's Board of Directors.
(12) Includes 30,667 shares subject to stock options exercisable within 60 days of the Record Date and 1,428 shares currently
held pursuant to the Company's 401(k) Plan. Subsequent to fiscal year end, Mr. Gagliardi resigned from the Company
effective March 1999. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary Compensation Table," footnote #12.
(13) Includes 35,481 shares subject to stock options exercisable within 60 days of the Record Date.
(14) Includes 1,781 shares subject to stock options exercisable within 60 days of the Record Date and 295 shares held pursuant to
the Company's 401(k) Plan.
(15) Includes 13,574 shares subject to stock options exercisable within 60 days of the Record Date.
(16) Includes 5,306 shares currently held pursuant to the Company's 401(k) Plan. Mr. Sorden resigned from the Company
effective August 1998. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary Compensation Table," footnote #22. In connection
with Mr. Sorden's resignation from the Company's and the payment of a severance package to him, Mr. Sorden has agreed to
vote all shares of the Company's Common Stock then held by him in favor of management's designated proxies at the Annual
Meeting of Shareholders. See also "Certain Relationships and Related Transactions."
(17) Mr. Ing resigned from the Company effective October 1998. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table," footnote #23.
(18) Includes 501,498 shares subject to stock options exercisable within 60 days of the Record Date.
</FN>
</TABLE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities during fiscal year 1998
to file reports of initial ownership on Form 3 and changes in ownership on Form
4 or 5 with the Securities and Exchange Commission (the "SEC"). Such officers,
directors and 10% shareholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such forms received by it and
on written representations from its officers and directors and certain other
reporting persons that no Forms 5 were required for such persons, the Company
believes that, during the fiscal year ended January 1, 1999, all Section 16(a)
filing requirements applicable to its officers, directors and 10% shareholders
were complied with on a timely basis.
11
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation, including bonuses, for
each of the Company's last three fiscal years ending January 1, 1999 paid to (i)
all persons who served as the Company's Chief Executive Officer during last
completed fiscal year, (ii) the four other most highly compensated executive
officers of the Company serving at the end of the last completed fiscal year,
and (iii) two former executive officers of the Company who would have been one
of the four other most highly compensated executive officers at year end, except
for the fact that each was no longer serving as an executive officer of the
Company at the end of the last completed fiscal year:
<TABLE>
<CAPTION>
Summary Compensation Table
Long-term
Annual Compensation(1) Compensation(2)
------------------------ -------------------
Securities
Underlying All Other
Salary Bonus Options Compensation(3)
Name and Principal Position Year ($) ($) (#) ($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Bradford W. Parkinson(4) 1998 123,231 -- 125,000(5) 64,061(6)
President and Chief Executive Officer 1997 -- -- 5,000(5) 57,000(7)
(at fiscal year end) 1996 -- -- 5,000(5) 57,000(7)
Charles R. Trimble(8) 1998 389,584 21,022 0 23,600(9)
Former President and Chief Executive 1997 358,376 95,779 20,000 12,200(10)
Officer, Consultant 1996 320,942 0 20,000 16,600(11)
Michael P. Gagliardi(12) 1998 222,043 10,690 0 12,561(13)
Vice President, Aerospace 1997 186,418 80,142(14) 70,000(15) 139,581(16)
(at fiscal year end) 1996 -- -- -- --
David M. Hall 1998 213,858 7,928 0 7,700(17)
Group Vice President, Mobile and 1997 179,518 40,893 20,000 7,700(17)
Timing Technologies 1996 152,447 0 20,000 7,200(18)
Joseph Paiva 1998 193,497 8,390 2,000 31,501(19)
Vice President and General Manager, 1997 111,831 4,120 750 1,200
Land Survey 1996 103,404 0 5,500 1,200
Charles E. Armiger, Jr. 1998 176,090 9,431 0 7,050(20)
Vice President, Worldwide Sales 1997 147,505 39,598 10,000 7,050(20)
1996 127,670 0 12,000 115,107(21)
James L. Sorden(22) 1998 278,278 10,772 0 1,200
Former Executive Vice President, 1997 246,513 45,501 20,000 1,200
Commercial Products 1996 221,583 0 20,000 1,200
Dennis R. Ing(23) 1998 203,335 8,893 45,000 1,200
Former Executive Vice President and 1997 181,425 33,134 100,000(24) 1,200
Chief Financial Officer 1996 90,880 0 45,000 800
<FN>
- ----------------------------
(1) Compensation deferred at the election of executive is included in the category and in the year earned.
(2) The Company has not issued stock appreciation rights or restricted stock awards. The Company has no "long-term
incentive plan" as the term is defined in the applicable rules.
(3) Includes amounts contributed by the Company pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended,
for the periods in which they accrued. All full-time employees are eligible to participate in the Company's 401(k) plan.
12
<PAGE>
(4) Dr. Parkinson served as the Company's President and Chief Executive Officer from August 1998 through March 1999 and is
included in the Summary Compensation Table pursuant to Item 402(a)(3)(i) of Regulation S-K of the Securities Act of 1993,
as amended (the "Securities Act"). Dr. Parkinson continues to serve as a director and consultant to the Company subsequent
to March 1999.
(5) Includes 5,000 options automatically granted to Dr. Parkinson for serving as an outside member of the Company's Board of
Directors pursuant to the terms of the Company's 1990 Director Stock Option Plan.
(6) Includes $49,500 paid by the Company for consulting services provided by Dr. Parkinson for the portion of the fiscal
year before he became the Company's President and Chief Executive Officer and $14,261 paid by the Company to retain
certain medical and dental benefits for Dr. Parkinson while he was on leave of absence from Stanford University and
serving as the Company's President and Chief Executive Officer.
(7) Includes $57,000 paid by the Company for consulting services provided by Dr. Parkinson during the fiscal year.
(8) Mr. Trimble served as the Company's President and Chief Executive Officer until August 1998 and is included in the
Summary Compensation Table pursuant to Item 402(a)(3)(i) of Regulation S-K of the Securities Act. Mr. Trimble continued
to serve as a consultant to the Company throughout the remainder of the fiscal year end and collected his
full regular salary.
(9) Includes $22,400 paid by the Company for tax planning services provided to Mr. Trimble.
(10) Includes $11,000 paid by the Company for tax planning services provided to Mr. Trimble.
(11) Includes $15,400 paid by the Company for tax planning services provided to Mr. Trimble.
(12) Mr. Gagliardi served as the Company's Vice President, Aerospace and is included in the Summary Compensation Table
pursuant to Item 402(a)(3)(ii) of Regulation S-K of the Securities Act of 1993, as amended; however; he has subsequently
resigned from the Company effective March 1999.
(13) Includes $11,361 of relocation costs paid by the Company in connection with the hiring of Mr. Gagliardi.
(14) Includes a one-time signing bonus of $40,000 in connection with the hiring of Mr. Gagliardi.
(15) Includes a one-time grant of an option to purchase 50,000 shares in connection with the hiring of Mr. Gagliardi.
(16) Includes $138,382 of relocation costs paid by the Company in connection with the hiring of Mr. Gagliardi.
(17) Includes $6,500 paid by the Company to Mr. Hall as an automobile allowance.
(18) Includes $6,000 paid by the Company to Mr. Hall as an automobile allowance.
(19) Includes $30,301 of temporary living costs paid by the Company in connection with Mr. Paiva's assignment to Sunnyvale
California.
(20) Includes $5,850 paid by the Company to Mr. Armiger as an automobile allowance.
(21) Includes $69,577 paid by the Company to Mr. Armiger as a goods and services allowance in conjunction with his
overseas assignment in the United Kingdom, $26,202 of relocation expenses paid by the Company in connection with
Mr. Armiger's subsequent return to the United States and $5,400 paid by the Company to Mr. Armiger as an
automobile allowance.
(22) Mr. Sorden resigned from the Company effective August 1998 and is included in the Summary Compensation Table solely pursuant
to Item 402(a)(3)(iii) of Regulation S-K of the Securities Act.
(23) Mr. Ing resigned from the Company effective October 1998 and is included in the Summary Compensation Table solely pursuant
to Item 402(a)(3)(iii) of Regulation S-K of the Securities Act.
(24) Includes a one-time grant of an option to purchase 80,000 shares in connection with Mr. Ing's promotion to Executive
Vice President during the fiscal year.
</FN>
</TABLE>
13
<PAGE>
The following table sets forth the number and terms of options granted to
the persons named in the Summary Compensation Table during the fiscal year ended
January 1, 1999:
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
- ---------------------------------------------------------------------------------------------
Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rates of Stock
Underlying Options Price Appreciation
Options Granted to Exercise for Option Term (4)
Granted Employees in Price Expiration ------------------------
Name (#) Fiscal Year (1) ($/Share) (2) Date(3) 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bradford W. Parkinson.......... 5,000 0.45 18.44 5/5/08 57,994 146,967
20,000 1.79 18.44 8/5/03 107,690 239,351
100,000 8.95 10.13 9/1/03 295,796 657,437
Charles R. Trimble............. 0 -- -- -- 0 0
Michael P. Gagliardi(5)........ 0 -- -- -- 0 0
David M. Hall.................. 0 -- -- -- 0 0
Joseph Paiva................... 2,000 0.18 8.66 11/3/08 10,894 27,608
Charles E. Armiger, Jr......... 0 -- -- -- 0 0
James L. Sorden(6)............. 0 -- -- -- -- --
Dennis R. Ing(7)............... 45,000 4.03 -- -- -- --
- ----------------------
<FN>
(1) The Company granted options to purchase an aggregate of 1,117,311 shares of the Company's Common Stock to employees,
consultants and non-employee directors during fiscal year 1998 pursuant to the Company's 1993 Stock Option Plan,
the 1992 Management Discount Plan and the 1990 Director Stock Option Plan.
(2) All options presented in this table were granted at an exercise price equal to the then fair market value of a
share of the Company's Common Stock on the date of grant, as quoted on the Nasdaq National Market System.
(3) All options presented in this table may terminate before the stated expiration upon the termination of
optionee's status as an employee, consultant or director, including upon the optionee's death or disability.
(4) The assumed 5% and 10% compound rates of annual stock appreciation are mandated by the rules of the Securities and
Exchange Commission and do not represent the Company's estimate or projection of future Common Stock prices.
All grants made to persons serving as employees and directors of the Company listed in the table have a ten-year
term of exercise which, assuming the specified rates of annual compounding, results in total appreciation of 62.9%
(at 5% per year) and 159.4% (at 10% per year). All grants made to persons serving as consultants to the Company listed
in the table have a five-year three-month term of exercise which, assuming the specified rates of annual compounding,
results in total appreciation of 29.2% (at 5% per year) and 64.9% (at 10% per year). Thus, only the 20,000
share and 100,000 share option grants listed in the table and made to Dr. Parkinson during the last fiscal year have a
five-year three-month option term. All option grants presented in the table vest over five years, with the exception
of the 100,000 share grant to made to Dr. Parkinson in connection with his serving as the Company's interim President
and Chief Executive Officer which vests ratably over six months and the 5,000 share Director Option automatically
granted to Dr. Parkinson under the 1990 Director Option Plan for serving as a member of the Company's Board of
Directors which vests ratably over three years.
(5) Subsequent to fiscal year end, Mr. Gagliardi resigned from the Company effective March 1999. See "COMPENSATION
OF EXECUTIVE OFFICERS-Summary Compensation Table," footnote #12.
(6) Mr. Sorden resigned from the Company effective August 1998. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table," footnote #22.
(7) Mr. Ing resigned from the Company effective October 1998 prior to any shares vesting under the option grant made
to him during the fiscal year and all such shares were returned to the Company's 1993 Option Plan; therefore,
there is no applicable potential realizable value. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary Compensation
Table," footnote #23.
</FN>
</TABLE>
14
<PAGE>
The following table provides information on option exercises by the persons
named in the Summary Compensation Table during the fiscal year ended January 1,
1999:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Shares Value Fiscal Year-End (#) at Fiscal Year-End ($)(1)
Acquired on Realized --------------------------- ---------------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bradford W. Parkinson..... -- -- 142,812 42,188 0 0
Charles R. Trimble........ -- -- 13,147 26,853 0 0
Michael P. Gagliardi(2)... -- -- 24,500 45,500 0 0
David M. Hall............. -- -- 30,432 29,568 0 0
Joseph Paiva.............. 1,245 4,358 1,155 5,850 0 0
Charles E. Armiger, Jr.... -- -- 11,016 15,984 0 0
James L. Sorden(3)........ 42,295 373,165 0 0 0 0
Dennis R. Ing(4).......... -- -- 0 0 0 0
- ---------------------------
<FN>
(1) Represents the market value of the Common Stock underlying the options at fiscal year end, less the exercise price
of "in-the-money" options. The closing price of the Company's Common Stock on January 1, 1999 as quoted
on the Nasdaq National Market System was $7.625.
(2) Subsequent to fiscal year end, Mr. Gagliardi resigned from the Company effective March 1999. See "COMPENSATION
OF EXECUTIVE OFFICERS-Summary Compensation Table," footnote #12.
(3) Mr. Sorden resigned from the Company effective August 1998. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table," footnote #22.
(4) Mr. Ing resigned from the Company effective October 1998. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table," footnote #23.
</FN>
</TABLE>
Changes to Compensation Plans
The Company has proposed amendments to increase the number of shares
reserved for issuance and sale under the Company's 1993 Stock Option Plan and
its 1988 Employee Stock Purchase Plan. Because all grants under the 1993 Stock
Option Plan are made at the discretion of the Board of Directors, future grants
under the 1993 Stock Option Plan are not yet determinable. Similarly, because
each employee's participation in the Company's 1988 Employee Stock Purchase Plan
is purely voluntary, the future benefits under such plan are also not yet
determinable. Accordingly, the following table summarizes the number of stock
options granted under the 1993 Stock Option Plan and the number of shares
purchased under the 1988 Employee Stock Purchase Plan during the last fiscal
year ended January 1, 1999 by (i) the persons named in the Summary Compensation
Table, (ii) all current executive officers as a group, (iii) all current
directors who are not executive officers as a group, and (iv) all employees
(excluding executive officers) as a group.
15
<PAGE>
New Plan Benefits
<TABLE>
<CAPTION>
1988 Employee Stock Purchase
1993 Stock Option Plan (1) Purchase Plan (3)
--------------------------------------------------------------------
Exercise Price Number of Purchase Price Number of
($ per Share) Options ($ per Share) Shares
Name and Position (2) Granted (4) Purchased
- ---------------------------------------------------- ----------------- --------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Bradford W. Parkinson
President and Chief Executive Officer 18.44 20,000 0 0
(at fiscal year end)(5).................... 10.13 100,000
Charles R. Trimble
Former President and Chief Executive Officer, -- 0 -- 0(6)
Consultant.................................
Michael P. Gagliardi(7)
Vice President, Aerospace.................. -- 0 9.26 1,263
David M. Hall
Group Vice President, Mobile and Timing -- 0 11.12 1,257
Technologies...............................
Joseph Paiva
Vice President and General Manager, Land 8.66 2,000 7.99 594
Survey.....................................
Charles E. Armiger, Jr.
Vice President, Worldwide Sales............ -- 0 8.30 1,045
James L. Sorden(8)
Former Executive Vice President, Commercial -- 0 13.76 1,146
Products...................................
Dennis R. Ing(9)
Former Executive Vice President and 19.56 45,000 13.76 410
Chief Financial Officer....................
Current Executive Officers, as a group.......... 10.21 301,000 8.89 9,741
Non-Executive Officer Directors, as a group..... -- 0 -- 0(10)
Non-Executive Officer Employees, as a group..... 11.21 751,311 8.47 319,594
- -----------------------
<FN>
(1) Only employees and consultants (including officers and directors) of the Company are eligible to participate in
the 1993 Stock Option Plan.
(2) Exercise prices for the options granted during the fiscal year ended January 1, 1999 under the 1993 Stock
Option Plan are shown on a weighted-average basis for the groups presented. Future benefits under the 1993 Stock
Option Plan are not determinable, as grants of options are at the discretion of the Company's Board of Directors and
are dependent upon the price of the Company stock in the future.
(3) Only Company employees (including officers) whose customary employment with the Company is at least 20 hours per
week and more than five months in any calendar year are eligible to participate in the 1988 Employee Stock Purchase
Plan.
(4) Under the terms of the 1988 Employee Stock Purchase Plan, eligible employees may purchase shares of the
Company's Common Stock through payroll deductions at a purchase price not less than 85% of the fair
market value of the Company's Common Stock on the first or last day of each applicable six-month offering period.
See "Proposal III-Amendment to the 1988 Employee Stock Purchase Plan." All Purchase prices for shares acquired
during the fiscal year ended January 1, 1999 under the 1988 Employee Stock Purchase Plan are shown on a
weighted-average basis. There were two open offering periods during the last fiscal year and the
applicable per share purchase prices were $13.7594 and $6.1625.
(5) Includes a 20,000 share option grant to Dr. Parkinson in May 1998 for serving as a consultant to the Company and a
100,000 share option grant in August 1998 for serving as the Company's interim President and Chief Executive Officer.
(6) As a holder of more than 5% of the Company's voting stock, Mr. Trimble is not eligible to purchase shares under
the 1988 Employee Purchase Plan pursuant to its terms. See "Proposal III-Amendment to the 1988 Employee Stock Purchase
Plan."
(7) Subsequent to fiscal year end, Mr. Gagliardi resigned from the Company effective March 1999. See "COMPENSATION OF
EXECUTIVE OFFICERS-Summary Compensation Table," footnote #12.
16
<PAGE>
(8) Mr. Sorden resigned from the Company effective August 1998. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table," footnote #22.
(9) Mr. Ing resigned from the Company effective October 1998. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table," footnote #23.
(10) Non-employee directors are not eligible to participate in the 1998 Employee Stock Purchase Plan.
</FN>
</TABLE>
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Bradford W. Parkinson
In connection with agreeing to serve as the Company's interim President and
Chief Executive Officer effective beginning August 19, 1998, Dr. Parkinson
entered into employment and consulting agreements with the Company which
provided for his employment and/or consulting services though May 31, 1999, at a
base salary of $30,000 per month. In the event of Dr. Parkinson's involuntary
termination or termination for other than defined cause, he will receive
severance payments equal to the specified salary through the end of such
agreements. As a condition of entering into such employment agreement, Dr.
Parkinson was required to take a leave of absence from his position as a
Professor at Stanford University and such agreements provide reimbursement to
him in order to retain certain medical and dental benefits that he receives from
the university at a base cost not to exceed $1,000 per month together with a
gross-up payment for all applicable taxes; however, Dr. Parkinson is not
eligible for any similar benefits available to the Company's employees. Such
consulting agreement entered into concurrently also provides Dr. Parkinson with
a payment of $6,000 per month commencing June 1, 1999 through June 1, 2002,
unless terminated earlier.
In addition, upon beginning service as the Company's President and Chief
Executive Officer in August 1998, Dr. Parkinson was granted an option to
purchase 100,000 shares of the Company's Common Stock with an exercise price of
$10.125 per share which was the fair market value on the date of grant in
accordance with the terms of such agreements. Such options vested ratably over
six months from the original date of grant and have a five year term of exercise
contingent upon his remaining as an employee, consultant or director to the
Company.
Robert S. Cooper
In connection with agreeing to serve as the Company's Chairman of the Board
of Directors effective beginning August 19, 1998, Dr. Cooper entered into
employment and consulting agreements with the Company which provided for his
employment and/or consulting services though August 31, 1999, at a base salary
of $10,000 per month. In the event of Dr. Cooper's involuntary termination or
termination for other than defined cause, he will receive severance payments
equal to the specified salary through the end of such agreements. Dr. Cooper is
eligible for other benefits and programs available to the Company's employees.
In addition, upon beginning service as the Company's Chairman of the Board,
Dr. Cooper was granted an option to purchase 60,000 shares of the Company's
Common Stock with an exercise price of $10.125 per share which was the fair
market value on the date of grant in accordance with the terms of such
agreements. Such options vest ratably over 12 months from the original date of
grant and have a five year term of exercise contingent upon remaining as an
employee, consultant or director to the Company.
Steven W. Berglund
On March 17, 1999, Mr. Berglund entered into an employment agreement with
the Company to serve as the Company's new President and Chief Executive Officer.
Such agreement provides that Mr. Berglund's base compensation will be $33,333
per month and that he will be eligible for a bonus of up to 50% of his base
compensation pro rata for fiscal years 1999 and 2000. The employment agreement
17
<PAGE>
guarantees one half of this bonus amount for fiscal year 1999 and specifies that
the other terms and conditions of such bonus payments will be as negotiated with
the Company's Board of Directors. In the event of Mr. Berglund's involuntary
termination or termination for other than defined cause, he will receive 12
months of severance based upon his last annual base salary plus accrued bonus to
date.
In addition, upon joining the Company, Mr. Berglund was granted options to
purchase an aggregate of 400,000 shares of the Company's Common Stock with an
exercise price of $8.00 per share which was the fair market value on the date of
grant in accordance with the terms of such agreement. Such options vest 20% at
the first anniversary and monthly thereafter for five years from the original
date of grant and have a ten year term of exercise. In the event of a
change-of-control of the Company, Mr. Berglund will receive an additional 12
months of vesting with respect to such options; however, if such event occurs
during his first year of service, he will receive ratable vesting for his first
year in addition to the 12 months of additional vesting.
In connection with Mr. Berglund's relocation to California, the Company has
promised him six months of interim housing and the reimbursement of certain
moving costs and expenses as well as optional loan assistance of up to $400,000
on a new primary residence (at the lending rate that the Company is able to
borrow at) which such loan would be forgiven by the Company ratably over five
years.
Pursuant to the employment agreement, Mr. Berglund is also eligible for
other benefits and programs available to the Company's employees, including paid
vacation, medical, dental, life and disability insurance, and a 401(k)
Retirement Plan with a Company match and he will also be eligible to participate
in the Company's Executive Nonqualified Deferred Compensation Plan.
Certain Relationships and Related Transactions
During fiscal year 1996, the Company invested $80,000 in the Series A
Preferred Stock of IntegriNautics, a privately held California corporation. In
addition, the Company has granted IntegriNautics a licence to internally use
certain of the Company's software technologies to create derivatives of such
technologies, under which the Company retains all rights to such software
technologies and derivatives developed but which the Company may from time to
time permit IntegriNautics to sublicense to IntegriNautics' customers, subject
to the Company's approval in each instance. In developing and producing its
products for sales to others, IntegriNautics purchases the Company's products
and uses them as component parts. During fiscal year 1998, IntegriNautics
purchased and paid for approximately $299,000 worth of the Company's products
for use as component parts. In addition, during fiscal year 1998, the Company
purchased and paid for approximately $84,000 of products from IntegriNautics.
Bradford W. Parkinson, who is a member of the Company's Board of Directors, is
also a member of the board of directors and a significant shareholder of
IntegriNautics. As one of the factors that was considered in approving the
Company's initial equity investment in IntegriNautics, the Company's Board of
Directors specifically reviewed the fairness of the transaction to the Company
in light of Dr. Parkinson's investment and participation in IntegriNautics.
During fiscal year 1995, the Company approved an equity investment of
approximately $800,000 in the Series A Preferred Stock of ProShot Golf, Inc.
("ProShot"), a privately held California corporation. During fiscal year 1997,
the Company invested approximately an additional $200,000 in the Series B
Preferred Stock of ProShot and separately loaned ProShot $1,500,000 which was
fully secured by a letter of credit. Such Series B Preferred Stock was
subsequently converted into shares of Series D Preferred Stock of ProShot and
approximately $1,044,000 of the outstanding balance on the loan from the
Company, including accrued interest, was converted into shares of common stock
of ProShot. During fiscal year 1998, all such shares of ProShot Preferred Stock
held by the Company were converted into shares of common stock of ProShot. In
addition, the Company also converted approximately $497,000 of an outstanding
loan balance owed to the Company into shares of common stock of ProShot. In
18
<PAGE>
developing and producing its products for sales to others, ProShot purchases the
Company's products and uses them as component parts. During fiscal year 1998,
ProShot purchased approximately $385,000 worth of the Company's products for use
in its products and development processes. At fiscal year end, ProShot had an
outstanding long-term note of approximately $258,000 owed to the Company related
to prior accounts payable balances. Ralph F. Eschenbach, the Company's current
Chief Technical Officer, serves as the Company's designated member on the board
of directors of ProShot in connection with the Company's equity investment in
ProShot. John B. Goodrich, a director and current corporate secretary of the
Company also serves on ProShot's board of directors. In addition, Mr. Eschenbach
is an individual shareholder of ProShot and during fiscal 1998 he served as a
member of ProShot's Compensation Committee. During fiscal year 1997, Mr.
Eschenbach served as an executive officer of ProShot, including as co-Chief
Executive Officer for a number of months. As one of the factors that it
considered in approving the Company's equity investments in, and loans to,
ProShot, the Company's Board of Directors reviewed the fairness of the
contemplated transactions to the Company in light of such investment and
participation in ProShot.
The following table sets forth information with regard to loans made to
executive officers of the Company who had outstanding amounts of more than
$60,000 at any time since the beginning of the Company's last fiscal year. Each
of these loans was made by the Company for the purpose of assisting such
executive officer in the acquisition of his primary residence in an exceptional
housing market in a location for the benefit of the Company in accordance with
the Company's Bylaws. Each of these loans is secured by a second deed of trust
on such residence, has a term of five years and requires that the interest on
such principal amounts be paid currently each year. The principal balance is due
in full at the end of such five year term, but such executive officers may
pre-pay all or any portion of such balance without a prepayment penalty. The
interest rate for each of these loans was set with reference to the then
applicable mid-term annual federal rate.
<TABLE>
<CAPTION>
Principal Amount Largest Amount
Annual Outstanding at Outstanding During
Name and Position Date of Loan Interest Rate Record Date ($) Fiscal Year 1998 ($)
- -------------------------------------- ------------- --------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
Charles E. Armiger, Jr. 7/6/98 5.69% 150,000 150,000
Vice President, Worldwide Sales
Patrick J. Hehir 2/26/99 4.75% 200,000 --
Senior Vice President, Chief
Manufacturing Officer
</TABLE>
In connection with the resignation of David E. Vaughn, the Company's former
Executive Vice President, Business Development, from the Company in July 1998,
the Company paid Mr. Vaughn a special one-time bonus payment of approximately
$133,000 as part of his final separation package.
In connection with the resignation of James L. Sorden, the Company's former
Executive Vice President, Commercial Products, and the payment of a severance
package to him, Mr. Sorden has agreed to vote all shares of the Company's Common
Stock then held by him in favor of management's designated proxies at the
Company's Annual Meeting of Shareholders.
See also "Compensation of Directors," "Compensation Committee Interlocks
and Insider Participation" and "Employment Contracts and Termination of
Employment and Change-in-Control Arrangements."
19
<PAGE>
Company Performance
The following graph shows a five year comparison of the cumulative total
return for the Company's Common Stock, the Nasdaq Composite Total Return Index
(U.S.), and the Standard & Poor's Technology Sector Index: (1)
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS*
AMONG TRIMBLE NAVIGATION LIMITED,
NASDAQ COMPOSITE TOTAL RETURN INDEX (U.S.)
SOURCE: CRSP, AND THE STANDARD & POOR'S
TECHNOLOGY SECTOR INDEX
[The performance graph has been omitted. Performance Graph. The performance
graph required by Item 402(l) of Regulation S-K is set forth in the paper copy
of the Proxy Statement immediately following the caption "COMPARISON OF
FIVEYEAR CUMULATIVE TOTAL RETURN".
The performance graph plots the data points listed below the graph for the
data sets (i) Trimble Navigation Limtied, (ii) Nasdaq Composite Total Return
Index (US) and (iii) the Standard & Poor's Technology Sector Index. The graph
has a horizontal axis at its bottom which lists from left to right the dates 94,
95, 96, 97, and 98. The graph has a vertical axis at its left which lists from
bottom to top the numbers 0, 100, 200, 300, and 400. The data points for each
data set are plotted on the graph and are connected by a line. The line
connecting the data points in the Trimble Navigation Limited data set is bold
with square to mark data points, while the lines connecting the data points in
the Nasdaq Composite Total Return Index (US) data set and the S&P Technology
Sector Index data set are dashed with triangle to mark data point and small
sqaure dashes with circle to mark data points, respectively.]
DATA POINTS FOR PERFORMANCE GRAPH
12/93 12/94 12/95 12/96 12/97 12/98
----------------------------------------------
TRIMBLE NAVIGATION
LIMITED TRMB 100 186 210 130 246 82
NASDAQ STOCK MARKET
(U.S.) INAS 100 98 138 170 208 294
S & P TECHNOLOGY
SECTOR ITES 100 117 168 238 300 519
- -----------------------------
(1) The data in the above graph is presented on a calendar year basis through
December 31, 1998 which is the most currently available data from the
indicated sources. However, the Company adopted a 52-53 week fiscal year
effective upon the end of fiscal year 1997 such that the actual date of
the Company's fiscal year end for 1998 was January 1, 1999. Any variations
due to the differences between the actual date of the fiscal year end and
the calendar year end are not expected to be material.
* Assumes an investment of $100 on December 31, 1993 in the Company's Common
Stock, the Nasdaq Composite Total Return Index (U.S.), and the Standard &
Poor's Technology Sector Index. Total returns assume the reinvestment of
dividends for the indexes. The Company has never paid dividends on its
Common Stock and has no present plans to do so.
20
<PAGE>
PROPOSAL II--AMENDMENT OF THE 1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "Option Plan") was adopted by the
Board of Directors in October 1992 and approved by the shareholders in April
1993. Since then, the Board of Directors and the shareholders of the Company
have approved amendments to the Option Plan increasing the shares reserved for
issuance thereunder to an aggregate of 3,800,000 shares of the Company's Common
Stock. At the Record Date, options to purchase an aggregate of 3,156,532 shares,
having an average exercise price of $12.73 per share and expiring from December
2001 to March 2009, were outstanding and only 85,337 shares remained available
for future grant under the Option Plan.
On January 15, 1999, the Board of Directors approved an additional
amendment to the Option Plan increasing the number of shares of the Company's
Common Stock reserved thereunder by an additional 1,200,000 shares to an
aggregate of 5,000,000 shares. Prior to the Record Date, the Company has
previously repurchased an aggregate of 1,469,500 shares of its Common Stock
(1,080,000 shares in 1998, 139,500 shares in 1997, and 250,000 shares in 1996,)
to partially offset the dilution to existing shareholders resulting from the
Company's option plans.
Given the low number of shares currently remaining for grant in the Option
Plan and the Company's present anticipated executive, managerial and technical
hiring needs and expectations, the Board of Directors believes that the increase
in the number of shares under the Option Plan is necessary in order for the
Company to be competitive in the marketplace. Over the years, the Silicon
Valley, where the Company is headquartered, has continued to become more
intensely competitive and attracting and recruiting highly skilled employees has
become increasingly difficult for the Company. Another challenge in the
Company's current employment market is to ensure that its experienced and
qualified employees, the Company's most significant asset, are appropriately
recognized, rewarded, and are encouraged to stay with the Company and help it
grow, thereby increasing shareholder value.
The use of stock options as equity incentives in hiring, retaining and
motivating the most talented people within the available human resource pool has
been critical to the Company's past overall growth and success by encouraging
and motiving high levels of performance from its employees and consultants. The
proposed amendment to the Option Plan reflects the Company's philosophy that
stock incentives are an important and meaningful component of employee
compensation, which enables the Company to attract the best available candidates
and to retain a talented employee base. The Board of Directors believes that the
proposed amendment is in the best interests of the Company, its shareholders,
and its employees and at the Annual Meeting, the shareholders are being asked to
approve an increase of 1,200,000 shares of Common Stock available for issuance
under the Option Plan.
The essential features of the Option Plan are outlined below:
Purpose
The purposes of the Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility and to provide
additional incentives to employees and consultants of the Company to promote the
success of the Company's business.
Administration
The Option Plan provides for administration by the Board of Directors of
the Company or by a Committee of the Board of Directors. The Option Plan is
currently being administered by the Board of Directors. The interpretation and
construction of any provision of the Option Plan by the Board of Directors or
its designated Committee is final and binding. Members of the Board of Directors
or its Committee receive no additional compensation for their services in
connection with the administration of the Option Plan.
21
<PAGE>
Eligibility
The Option Plan provides for grants to employees (including officers of the
Company) of "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, and for grants of nonstatutory stock
options to employees and consultants. The Board of Directors or its Committee
selects the optionees and determines the number of shares to be subject to each
option. Currently, under the terms of the Option Plan, no employee may be
granted, in any fiscal year, options under the plan to acquire more than 150,000
shares of the Common Stock of the Company. Notwithstanding such limitation,
however, an additional one-time grant to purchase up to 250,000 shares may be
made to any newly-hired officer or employee. These limits are subject to
appropriate adjustments in the case of stock splits, reverse stock splits and
the like. In addition, in accordance with the applicable federal tax laws, there
is a limit of $100,000 on the aggregate fair market value of shares which
constitute incentive stock options which become exercisable for the first time
in any one calendar year; and options in excess of this limit are deemed to be
nonstatutory stock options.
Terms of Options
Each option is evidenced by a written stock option agreement between the
Company and the optionee and is generally subject to the terms and conditions
listed below, but specific terms may vary:
(a) Exercise of the Option. The Board of Directors or its designated
Committee determines when options granted under the Option Plan may be
exercised. The current forms of option agreements generally used under the
Option Plan provide that options vest over five years and are exercisable
cumulatively to the extent of 20% of the option shares on the date 12 months
after the vesting commencement date of the option and an additional 1.67% of the
option shares are exercisable at the end of each month thereafter. An option is
exercised by giving written notice of exercise to the Company, specifying the
number of shares of Common Stock to be purchased and tendering payment to the
Company of the purchase price. The Option Plan specifies that the permissible
form of payment for shares issued upon exercise of an option shall be set forth
in the option agreement and may consist of cash, check, promissory note,
exchange of shares of the Company's Common Stock held for more than six months
or such other consideration as determined by the Board of Directors or its
Committee and as permitted by the California Corporations Code. The current
forms of option agreements only permit payment by cash, check or exchange of
shares.
(b) Option Price. The exercise price of the options granted under the
Option Plan is determined by the Board of Directors or its Committee in
accordance with the Option Plan, but the option price of incentive stock options
and nonstatutory stock options may not be less than 100% and 85%, respectively,
of the fair market value of the Company's Common Stock. The Option Plan provides
that, because the Company's Common Stock is currently traded on the Nasdaq
National Market, the fair market value per share shall be the closing price on
such system on the date of the grant of the option. With respect to any
participant who owns stock representing more than 10% of the voting power of the
Company's capital stock, the exercise price of any incentive or nonstatutory
stock option must equal at least 110% of the fair market value per share on the
date of the grant.
(c) Termination of Employment. The Option Plan provides that if the
optionee's employment by the Company is terminated for any reason, other than
death or disability, options may be exercised not later than 30 days after the
date of such termination and may be exercised only to the extent the options
were exercisable on the date of termination.
(d) Disability. If the optionee terminates his employment with the Company
as a result of his total or permanent disability, options may be exercised
within six months after the date of such termination and may be exercised only
to the extent the options were exercisable on the date of termination.
22
<PAGE>
(e) Death. If an optionee should die while an employee or a consultant of
the Company or during the 30 day period following termination of the optionee's
employment or consultancy, the optionee's estate may exercise the options at any
time within 12 months after the date of death but only to the extent that the
options were exercisable on the date of death or termination of employment.
(f) Termination of Options. The terms of options granted under the Option
Plan may not exceed ten years from the date of grant. However, any option
granted to any optionee who, immediately before the grant of such option, owned
more than 10% of the total combined voting power of all classes of stock of the
Company or a parent or subsidiary corporation, may not have a term of more than
five years. Under the current form of option agreements, options granted to
employees have a term of ten years from the date of grant while options granted
to consultants and independent contractors have a term of five-years and
three-months from the date of grant. No option may be exercised by any person
after such expiration.
(g) Nontransferability of Options. All options are nontransferable by the
optionee, other than by will or the laws of descent and distribution, and,
during the lifetime of the optionee, may be exercised only by the optionee.
Adjustment Upon Changes in Capitalization
In the event any change, such as a stock split or dividend, is made in the
Company's capitalization which results in an increase or decrease in the number
of outstanding shares of Common Stock without receipt of consideration by the
Company, an appropriate adjustment shall be made in the option price and in the
number of shares subject to each option. In the event of the proposed
dissolution or liquidation of the Company, all outstanding options automatically
terminate. In the event of a merger of the Company with or into another
corporation where the Company is not the successor entity, options outstanding
shall be assumed or an equivalent option shall be substituted by the successor
entity, unless the Board of Directors accelerates the exercisability of the
options such that the optionee shall have the right to exercise his or her
option on or before the effective date of such merger. Should an option be
assumed or substituted upon a merger, the exercisability of the option will also
be accelerated if the successor entity terminates the employment of the optionee
within one year of the merger.
Amendment and Termination
The Board of Directors may, at any time, amend or terminate the Option
Plan, but no amendment or termination may be made which would impair the rights
of any participant under any grant theretofore made, without his or her consent.
In addition, in any event, the Option Plan will terminate in 2003.
Certain Federal Income Tax Information
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also an officer,
director, or 10% shareholder of the Company. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Any gain recognized on such a premature disposition of the shares in excess of
the amount treated as ordinary income will be characterized as long-term or
short-term capital gain, depending on the holding period.
23
<PAGE>
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he is granted a nonstatutory option. However, upon its
exercise, the optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option exercise by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the Optionee with respect to shares acquired upon
exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Option Plan and does not purport to be complete. Reference
should be made to the applicable provisions of the Code. In addition, this
summary does not discuss the tax consequences of the optionee's death or the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
Vote Required
Approval of the increase of 1,200,000 shares of Common Stock to be reserved
for issuance under the Option Plan requires the affirmative vote of the holders
of a majority of the shares present at the Annual Meeting in person or by proxy
and entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR an increase of
1,200,000 shares in the number of shares of Common Stock reserved for issuance
under the Option Plan from 3,800,000 shares to an aggregate of 5,000,000 shares.
24
<PAGE>
PROPOSAL III--AMENDMENT OF THE 1988 EMPLOYEE STOCK PURCHASE PLAN
The Company's 1988 Employee Stock Purchase Plan (the "Purchase Plan"), was
adopted by the Board of Directors in September 1988 and approved by the
shareholders in April 1989, initially reserving 400,000 shares for purchase
thereunder by eligible employees. Since then, the Board of Directors and the
shareholders of the Company have approved amendments to the Purchase Plan
increasing the shares available for purchase thereunder to 2,350,000 shares of
the Company's Common Stock. As of the Record Date, eligible employees have
purchased an aggregate of 1,947,158 shares of the Company's Common Stock under
the Purchase Plan and 402,842 shares remained available for future sales under
the Purchase Plan. During fiscal year 1998, eligible employees of the Company
purchased an aggregate of 332,154 shares at an average price of $8.51 per share
under the Purchase Plan and, during the prior fiscal year 1997, eligible
employees purchased an aggregate of 223,009 shares at an average price of $11.95
per share under the Purchase Plan.
On January 15, 1999, the Board of Directors approved an additional
amendment to the Purchase Plan to increase the number of shares of Common Stock
available for future purchase by Company's eligible employees by 600,000 shares
to an aggregate of 2,950,000 shares. The Company believes that maintaining a
competitive employee stock purchase program is an important element in both
recruiting and retaining employees in its current employment environment. The
Company's Purchase Plan is designed to more closely align the interests of the
Company's employees and shareholders by encouraging employees to invest their
own money in the Company's equity securities. By allowing eligible employees to
purchase shares of the Company's Common Stock at a slight discount, as described
below under "Purchase Price," the Company's Purchase Plan actually encourages
employees to become shareholders of the Company, thereby providing them with a
direct incentive in the long-term growth and overall success of the Company.
The Company is also requesting the authorization of additional shares under
the Purchase Plan in order to preserve the current benefits of the Purchase Plan
for employees and favorable accounting treatment for the Company. The Purchase
Plan currently provides for six month enrollment periods, as described below
under "Offering Periods." Under current accounting rules, if at the start of an
enrollment period, the shares reserved for issuance under an employee stock
purchase plan are insufficient to cover all shares issuable throughout that
period, and (i) any shares sold during an enrollment period are authorized after
the commencement of the enrollment period, and (ii) on such subsequent
authorization date, the fair market value ("FMV") of the shares is higher than
the FMV of the shares at the beginning of the enrollment period, then the
Company would be required to record a charge to earnings for each subsequent
quarter in which the FMV of shares on a semi-annual purchase date was higher
than the FMV of the shares on the enrollment date, to reflect the perceived
compensatory element of the difference in FMV. Such an accounting charge could
be significant to the Company depending upon the size of the shortfall in the
number of shares and the change in FMV in such shares.
The Company believes that the amendment increasing the number of shares
under the Purchase Plan will enable the Company to continue its policy of
encouraging widespread employee stock ownership as a means of motiving high
levels of employee performance and encouraging employees to stay with the
Company and help it grow, thereby increasing shareholder value. The Board of
Directors believes that the proposed amendment is in the best interests of the
Company, its shareholders, and its employees and at the Annual Meeting, the
shareholders are being asked to approve an increase of 600,000 shares Common
Stock available for future purchase by eligible employees under the Purchase
Plan.
The essential features of the Purchase Plan are outlined below:
25
<PAGE>
Purpose
The purpose of the Purchase Plan is to provide employees with an
opportunity to purchase Common Stock of the Company through payroll deductions
in a manner that qualifies under Section 423 of the Internal Revenue Code of
1986, as amended.
Administration
The Purchase Plan is administered by the Board of Directors or a designated
Committee of the Board of Directors (collectively, the "Administrator").
Eligibility
Only employees employed by the Company or its subsidiaries on the first day
of an offering period may participate in the Purchase Plan. For this purpose, an
"employee" is any person who has been continually employed for at least two
consecutive months and is regularly employed at least twenty hours per week and
at least five months per calendar year by the Company or any of its
subsidiaries. No employee may be granted an option under the Purchase Plan if:
(i) immediately after the grant of the option, the employee (or any other person
whose stock would be attributed to the employee pursuant to Section 424(d) of
the Code) would own five percent or more of the total combined voting power or
value of the stock of the Company or any of its subsidiaries; or (ii) which
permits such participant's rights to purchase stock under all employee stock
purchase plans of the Company and its subsidiaries to accrue at a rate which
exceeds $25,000 worth of stock (determined with reference to the fair market
value of the Common Stock at the time of grant) in a calendar year. Subject to
these eligibility criteria, the Purchase Plan permits eligible employees to
purchase Common Stock through payroll deductions subject to certain limitations
described below. See "Payment of Purchase Price; Payroll Deductions."
Offering Periods
The Purchase Plan is implemented by offering periods lasting six months
with a new offering period commencing every six months, on or about January 1st
and July 1st of each year. Normally, a participant's payroll deductions are
accumulated throughout an offering period and, at the end of the offering
period, shares of the Company's Common Stock are purchased with the accumulated
payroll deductions.
Purchase Price
The purchase price per share at which shares will be sold in an offering
under the Purchase Plan is the lower of (i) 85% of the fair market value of a
share of Common Stock on the first day of an offering period or (ii) 85% of the
fair market value of a share of Common Stock on the last day of each offering
period. The fair market value of the Common Stock on a given date is generally
the closing sale price of the Common Stock as reported on the Nasdaq National
Market for such date.
Payment of Purchase Price; Payroll Deductions
The purchase price of the shares is accumulated by payroll deductions over
the offering period. The Purchase Plan provides that the aggregate of such
payroll deductions during the offering period shall not exceed 10% of the
participant's compensation during any offering period, nor $21,250 for all
offering periods which end in the same calendar year. During an offering period,
a participant may discontinue his or her participation in the Purchase Plan, and
may decrease, but not increase, the rate of payroll deductions in an offering
period within limits set by the Administrator.
26
<PAGE>
All payroll deductions made for a participant are credited to the
participant's account under the Purchase Plan, are withheld in whole percentages
only and are included with the general funds of the Company. Funds received by
the Company pursuant to exercises under the Purchase Plan are used for general
corporate and working capital purposes. A participant may not make any
additional payments into his or her account.
Withdrawal
A participant may terminate his or her participation in the Purchase Plan
at any time by giving the Company a written notice of withdrawal. In such event,
all of the payroll deductions credited to the participant's account will be
returned, without interest, to such participant. Payroll deductions will not
resume unless a new subscription agreement is delivered in connection with a
subsequent offering period.
Termination of Employment
Termination of a participant's employment for any reason, including
retirement or death, cancels his or her participation in the Purchase Plan
immediately. In such event the payroll deductions credited to the participant's
account but not used to exercise the option will be returned without interest to
such participant, his or her designated beneficiaries or the executors or
administrators of his or her estate.
Adjustments Upon Changes in Capitalization
In the event of any changes in the capitalization of the Company effected
without receipt of consideration by the Company, such as a stock split, stock
dividend, combination or reclassification of the Common Stock, resulting in an
increase or decrease in the number of shares of Common Stock, proportionate
adjustments will be made by the Board of Directors in the shares subject to
purchase and in the price per share under the Purchase Plan. In the event of
liquidation or dissolution of the Company, the offering periods then in progress
will terminate immediately prior to the consummation of such event unless
otherwise provided by the Board of Directors. In the event of a sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, any offering periods then in progress shall be
shortened by the setting of a new exercise date to be held before the Company's
proposed sale or merger. At least ten days before the new exercise date, the
Board of Directors will notify each participant that the exercise date has been
changed and that the participant's option will automatically exercise on the new
exercise date, unless the participant withdraws from the Purchase Plan.
Amendment and Termination
The Board of Directors may at any time and for any reason amend or
terminate the Purchase Plan, except that (i) no such termination shall affect
options previously granted unless the Board of Directors determines that
terminating an Offering Period is in the best interests of the Company and (ii)
no amendment shall make any change in an option granted prior thereto which
adversely affects the rights of any participant.
Certain Federal Income Tax Information
The following brief summary of the effect of federal income taxation upon
the participant and the Company with respect to the shares purchased under the
Purchase Plan does not purport to be complete, and does not discuss the tax
consequences of a participant's death or the income tax laws of any state or
foreign country in which the participant may reside.
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
until the shares purchased under the Purchase Plan are sold or otherwise
disposed. Upon sale or other disposition of the shares, the participant will
generally be subject to tax in an amount that depends upon the holding period.
27
<PAGE>
If the shares are sold or otherwise disposed of more than two years from the
Enrollment Date and one year from the applicable Exercise Date, the participant
will recognize ordinary income measured as the lesser of (a) the excess of the
fair market value of the shares at the time of such sale or disposition over the
purchase price, or (b) an amount equal to 15% of the fair market value of the
shares as of the Enrollment Date. Any additional gain will be treated as
long-term capital gain. If the shares are sold or otherwise disposed of before
the expiration of these holding periods, the participant will recognize ordinary
income generally measured as the excess of the fair market value of the shares
on the date the shares are purchased over the purchase price. Any additional
gain or loss on such sale or disposition will be long-term or short-term capital
gain or loss, depending on the holding period. The Company generally is not
entitled to a deduction for amounts taxed as ordinary income or capital gain to
a participant except to the extent of ordinary income recognized by participants
upon a sale or disposition of shares prior to the expiration of the holding
periods described above.
Vote Required
Approval of the increase of 600,000 shares of Common Stock available for
purchase by eligible employees under the Purchase Plan requires the affirmative
vote of the holders of a majority of the shares present at the Annual Meeting in
person or by proxy and entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR an increase of
600,000 shares in the number of shares of Common Stock available for purchase by
eligible employees under the Purchase Plan from 2,350,000 shares to an aggregate
of 2,950,000 shares.
28
<PAGE>
PROPOSAL IV--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP ("Ernst & Young") as
the Company's independent auditors, to audit the financial statements of the
Company for the current fiscal year ending December 31, 1999. Ernst & Young has
been the Company's independent auditors since their appointment in 1986. The
Company expects that a representative of Ernst & Young will be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to answer any appropriate questions.
Vote Required
Ratification of the appointment of Ernst & Young as the Company's
independent auditors for the current fiscal year ending December 31, 1999, will
require the affirmative vote of the holders of a majority of the shares present
at the Annual Meeting in person or by proxy and entitled to vote as of the
Record Date. In the event that such ratification by the shareholders is not
obtained, the Board of Directors will reconsider such selection.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR the ratification of
the appointment of Ernst & Young LLP as the independent auditors for the Company
for the current fiscal year ending December 31, 1999.
OTHER MATTERS
The Company knows of no other matters to be submitted for consideration at
the Annual Meeting. If any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the enclosed Proxy to vote
the shares they represent as the Board of Directors may recommend. Discretionary
authority with respect to such other matters is granted by the execution of the
enclosed Proxy.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to mark, sign,
date, and return the accompanying Proxy as promptly as possible in the envelope
which has been enclosed.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
ROBERT S. COOPER
Chairman of the Board
Dated: April 30, 1999
29
<PAGE>
APPENDIX A
PROXY TRIMBLE NAVIGATION LIMITED PROXY
PROXY FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned shareholder of TRIMBLE NAVIGATION LIMITED, a California
corporation, hereby acknowledges reciept of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each Dated April 30, 1999, and hereby appoints
Robert S. Cooper and Bradford W. Parkinson, and each of them, proxies and
attorneys- in-fact, with full power to each of subsitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 1999 Annual Meeting
of Shareholders of TRIMBLE NAVIGATION LIMITED, to be held on Wednesday, June 2,
1999 at 1:00 p.m., local time, at the Westin Hotel in Santa Clara, located at
5101 Great America Parkway, Santa Clara, California 95054 in the Magnolia Room,
and at any adjournment(s) thereof, and to vote all shares of Common Stock which
the undersigned would be entitled to vote if then and there personally present,
on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, IT
WILL BE VOTED FOR THE LISTED NOMINEES IN THE ELECTION OF DIRECTORS, FOR THE
APPROVAL OF AN INCREASE OF 1,200,000 SHARES IN THE NUMBER OF SHARES AVAILABLE
FOR ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION PLAN, FOR THE APPROVAL OF AN
INCREASE OF 600,000 SHARES IN THE NUMBER OF SHARES AVAILABLE FOR PURCHASE UNDER
THE COMPANY'S 1988 EMPLOYEE STOCK PURCHASE PLAN, FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1999, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Both of such attorneys or substitutes (if both are present and acting at
said meeting or any ajournment(s) thereof, or, if only one shall be present and
acting, then that one) shall have and may exercise all of the powers of said
attorneys-in-fact hereunder.
(Continued, and to be signed on the other side)
FOLD AND DETACH HERE
30
<PAGE>
Please mark
[X] your votes
as this
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1. Elections of Directors WITHHOLD
FOR FOR All
(INSTRUCTION: If you wish to FOR AGAINST ABSTAIN
withhold authority to vote for [ ] [ ] 2.Proposal to approve an increase of
any individual nominee, strike 1,200,000 shares in the number of shares
a line through that nominee's of Common Stock reserved for issuance [ ] [ ] [ ]
name in the list below:) under the Comapny's 1993 Stock Option Plan
from 3,800,000 shares to an aggregate of
Steven W. Berglund, Robert S. Cooper, John B. Goodrich, of 5,000,000 shares.
William Hart, Norman Y. Mineta, and Bradford W. Parkinson
___________________________________________________________ 3. Proposal to approve an increase of 600,000
shares in the number of shares of Comon Stock
available for purchase by eligible employees
under the Company's 1988 Employee Stock [ ] [ ] [ ]
Purchase Plan from 2,350,000 shares to
2,950,000 shares.
4.Proposal to approve to ratify the appoint-
ment of Ernst & Young LLP as the independent [ ] [ ] [ ]
auditors of the Company for the current
fiscal year ending December 31, 1999.
I PLAN TO ATTEND THE MEETING [ ] 5. Proposal to approve to transact such other
business as may properly come before the [ ] [ ] [ ]
meeting or any adjournment thereof.
_ _ _ _ _ _
|
|
|
|
|
|
|
COMMENTS/ADDRESS CHANGE
Please mark this box if you
have written comments/address [ ]
change on the reverse side.
Signature(s)______________________________________________ Dated _______, 1999
(This Proxy should be marked, dated, signed by the shareholder(s) exactly as his
or her name appears hereon, an returned promptly in the enclosed envelope. If
signing for estates, trusts, corporations, or partnerships title or capacity
should be stated. If shares are held jointly each holder should sign.)
</TABLE>
FOLD AND DETACH HERE
31
<PAGE>
APPENDIX B
TRIMBLE NAVIGATION LIMITED ANNUAL MEETING TO BE HELD ON 06/02/99 AT 1:00 P.M.
PDT FOR HOLDERS AS OF 04/09/99 * ISSUER CONFIRMATION COPY - INFO ONLY*
14 1-0001 THIS FORM IS PROVIDED FOR INFORMATIONAL
PURPOSES ONLY. PLEASE DO NOT USE IT FOR
VOTING PURPOSES.
CUSIP: 896239100
DIRECTORS CONTROL NO.
- ---------- |-------
DIRECTORS RECOMMENDED: A VOTE FOR ELECTION OF THE FOLLWOING |
DIRECTORS 0010100|
1- 01-STEVEN W. BERGLUND, 02-ROBERT S. COOPER, 03-JOHN B GOODRICH, |
04-WILLIAM HART, 05-NORMAN Y. MINETA, 06-BRADFORD W. PARKINSON |
DIRECTORS
PROPOSALS RECOMMENDED
- ---------- ------------
2 *- PROPOSAL TO APPROVE AN INCERASE OF 1,200,000 SHARES FOR
IN THE NUMBER OF SHARES OF COMMON STOCK RESERVED 0020701
FOR ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION
PLAN FROM 3,800,000 SHARES TO AN AGGREGATE OF
5,000,000 SHARES.
3 *- PROPOSAL TO APPROVE AN INCREASE OF 600,000 SHARES IN FOR
THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR 0020801
PURCHASE BY ELIGIBLE EMPLOYEES UNDER THE COMPANY'S
1988 EMPLOYEE STOCK PURCHASE PLAN FROM 2,350,000 SHARES
TO AN AGGREGATE OF 2,950,000 SHARES.
4 *- PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP FOR
AS INDEPENDENT AUDTIORS OF THE COMPANY FOR THE CURRENT 0010200
FISCAL YEAR ENDING DECEMBER 31, 1999.
5 *- PROPOSAL TO APPROVE TO TRANSACT SUCH OTHER BUSINESS AS FOR
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT 0039902
THEREOF.
32
<PAGE>
FOLD AND DETACH HERE
TRIMBLE NAVIGATION LIMITED
06/02/99 AT 1:00 P.M. PDT
2 ITEM(S) SHARE(S)
DIRECTORS
---------
(MARK 'X' FOR ONLY ONE BOX)
1 [ ] FOR ALL NOMINEES
|------
[ ] WITHHOLD ALL NOMINEES |
|
[ ] WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE. WRITE
NUMBER(S) OF NOMINEE(S) BELOW.
USE NUMBER ONLY __________________________
FOR AGAINST ABSTAIN
2 [ ] [ ] [ ] PLEASE INDICATE YOUR PROPOSAL SELECTION BY
FIRMLY PLACING AN 'X' IN THE APPROPRIATE [X]
NUMBERED BOX WITH BLUE OR BLACK INK ONLY
DO NOT USE SEE VOTING INSTRUCTIONS NO. 2 ON REVERSE
DO NOT USE ACCOUNT NO:
FOR AGAINST ABSTAIN CUSIP: 896239100
3 [ ] [ ] [ ]
CONTROL NO:
DO NOT USE CLIENT NO:
DO NOT USE PLEASE MARK HERE IF YOU PLAN TO ATTEND
AND VOTE YOUR SHARES AT THE MEETING [ ]
FOR AGAINST ABSTAIN
4 [ ] [ ] [ ]
DO NOT USE
51 MERCEDES WAY
DO NOT USE EDGEWOOD NY 17717
FOR AGAINST ABSTAIN
5 [ ] [ ] [ ]
DO NOT USE
TRIMBLE NAVIGATION LIMITED
DO NOT USE ATTN:BARBARA HALL
645 N MARY AVE
SUNNYVALE, CA 94088
_____________________________________ /____/____
FOLD AND DETACH HERE SIGNATURE(S) DATE
33
<PAGE>
APPENDIX C
TRIMBLE NAVIGATION LIMITED
1993 STOCK OPTION PLAN
(as amended May 5, 1998)
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" shall mean the Committee, if one has been appointed, or the
Board of Directors of the Company, if no Committee is appointed.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(e) "Common Stock" shall mean the Common Stock of the Company.
(f) "Company" shall mean Trimble Navigation Limited, a California
corporation.
(g) "Consultant" shall mean any person who is engaged by the Company or
any Parent or Subsidiary to render consulting services and is compensated for
such consulting services, and any director of the Company whether compensated
for such services or not, provided that the term Consultant shall not
include directors who are not compensated for their services or are paid
only a director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Company or any Parent or Subsidiary of
the Company; provided that such leave is for a period of not more than
90 days or reemployment upon the expiration of such leave is guaranteed by
contract or statute.
34
<PAGE>
(i) "Employee" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported, as quoted
on such system or exchange for the last market trading day prior to the time of
determination) as reported in the Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and low asked prices for the
Common Stock or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.
(l) "Incentive Stock Option" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" shall mean an Option not intended
to qualify as an Incentive Stock Option.
(n) "Option" shall mean a stock option granted pursuant to the Plan.
(o) "Optioned Stock" shall mean the Common Stock subject to an Option.
(p) "Optionee" shall mean an Employee or Consultant who receives an
Option.
(q) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(r) "Plan" shall mean this 1993 Stock Option Plan.
(s) "Share" shall mean a share of the Common Stock, as adjusted
in accordance with Section 11 of the Plan.
35
<PAGE>
(t) "Subsidiary" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 3,800,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. Notwithstanding any other provision of the Plan, shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant or sale under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups
of Employees and Consultants.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(b) Powers of the Administrator. Subject to the provisions of the Plan
and in the case of a Committee, the specific duties delegated by the Board to
such committee, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options
are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
36
<PAGE>
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any Option and/
or the shares of Common Stock relating thereto, based in each case on such
factors as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(e) instead of Common Stock;
(viii) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the election of
the participant (including providing for and determining the amount, if
any, of any deemed earnings on any deferred amount during any deferral period);
(ix) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted; and
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
(d) Grant Limits. The following limitations shall apply to grants of
Options under the Plan:
(i) No employee shall be granted, in any fiscal year of the
Company, Options under the Plan to purchase more than 150,000 Shares, provided
that the Company may make an additional one-time grant of up to 250,000
Shares to newly-hired Employees.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization
as described in Section 11.
(iii) If an Option is cancelled (other than in connection
with a transaction described in Section 11), the cancelled Option shall be
counted against the limits set forth in Section 4(d)(i). For this purpose,
if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted only to Employees,
Directors, and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee, Director, or
37
<PAGE>
Consultant who has been granted an Option may, if he is otherwise eligible,
be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be taken
into account in the order in which they were granted, and the Fair Market Value
of the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect
to continuation of employment or consulting relationship with the Company,
nor shall it interfere in any way with his right or the Company's right to
terminate his employment or consulting relationship at any time, with or without
cause.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company as described in Section 18 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 14 of the
Plan.
7. Term of Option. The term of each Option shall be ten (10) years from the
date of grant thereof or such shorter term as may be provided in the Option
Agreement. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
38
<PAGE>
(B) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Administrator and may consist entirely of (1) cash, (2) check,
(3) promissory note, (4) other Shares which (x) either have been owned by the
Optionee for more than six months on the date of surrender or were not
acquired, directly or indirectly, from the Company, and (y) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, (5) authorization from
the Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to
which the Option is exercised, (6) delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver
to the Company the amount of sale or loan proceeds required to pay the exercise
price, (7) delivery of an irrevocable subscription agreement for the Shares
which irrevocably obligates the option holder to take and pay for the Shares
not more than twelve months after the date of delivery of the subscription
agreement, (8) any combination of the foregoing methods of payment, (9) or
such other consideration and method of payment for the issuance of Shares to
the extent permitted under Applicable Laws. In making its determination
as to the type of consideration to accept, the Board shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria
with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
39
<PAGE>
consideration and method of payment allowable under Section 8(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as an Employee or Consultant. In the event
of termination of an Optionee's Continuous Status as an Employee or Consultant
(as the case may be), such Optionee may, but only within thirty (30) days (or
such other period of time, not exceeding three (3) months in the case of an
Incentive Stock Option or six (6) months in the case of a Nonstatutory Stock
Option, as is determined by the Board) after the date of such termination
(but in no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), exercise his Option to the extent that he
was entitled to exercise it at the date of such termination. To the extent
that he was not entitled to exercise the Option at the date of such termination,
or if he does not exercise such Option (which he was entitled to exercise)
within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 9
(b) above, in the event of termination of an Optionee's Continuous Status
as an Employee or Consultant as a result of his total and permanent disability
(as defined in Section 22(e)(3) of the Code), he may, but only within six (6)
months (or such other period of time not exceeding twelve (12) months as is
determined by the Board) from the date of such termination (but in no event
later than the date of expiration of the term of such Option as set forth
in the Option Agreement), exercise his Option to the extent he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of termination, or if he does not
exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
(i) during the term of the Option who is at the time of his
death an Employee or Consultant of the Company and who shall have been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within twelve (12) months
following the date of death (but in no event later than the date of expiration
of the term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as an Employee or Consultant twelve (12) months
after the date of death, subject to the limitation set forth in Section 5(b); or
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(ii) within thirty (30) days (or such other period of time not
exceeding three (3) months as is determined by the Board) after the
termination of Continuous Status as an Employee or Consultant, the Option may
be exercised, at any time within twelve (12) months following the date of death
(but in no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 10.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the Optionee at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised, the Option
will terminate immediately prior to the consummation of such proposed action. In
the event of a merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
In the even the successor corporation does not agree to assume the option or the
substitute and equivalent option, the Board shall, in lieu of such assumption or
substitution, provide for the Optionee to have the right to vest in and exercise
the Option as to all of the
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Optioned Stock, including Shares as to which the Option would not otherwise
be vested or exercisable. If the Board makes an Option fully vested and
exercisable in lieu of assumption or substitution in the event of a merger, the
Board shall notify the Optionee that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option will terminate upon the expiration of such period. If, in such a
merger, the Option is assumed or an equivalent option is substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
and if during a one-year period after the effective date of such merger, the
Optionee's Continuous Status as an Employee or Consultant is terminated for any
reason other than the Optionee's voluntary termination of such relationship,
then the Optionee shall have the right within thirty days thereafter to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not be otherwise exercisable, effective as of the date of such
termination.
12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined.
13. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent.
In addition, to the extent necessary and desirable to comply with Section
422 of the Code (or any other applicable law or regulation, including the
requirements of the NASD or an established stock exchange), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not
been amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by the
Optionee and the Company.
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15. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws.
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APPENDIX D
TRIMBLE NAVIGATION
1988 EMPLOYEE STOCK PURCHASE PLAN
(as amended May 5, 1998)
The following constitute the provisions of the Employee Stock Purchase Plan
of Trimble Navigation.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Trimble Navigation.
(e) "Compensation" shall mean all regular straight time gross
earnings, commissions, incentive bonuses, overtime, shift premium, lead pay and
other similar compensation, but excluding automobile allowances, relocation and
other non-cash compensation. Notwithstanding the foregoing, the Employee may
elect to exclude bonuses from the calculation of compensation.
(f) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(h) "Employee" shall mean any person, including an officer, whose
customary employment with the Company is at least twenty (20) hours per week by
the Company or one of its Designated Subsidiaries and more than five (5) months
in any calendar year.
(i) "Enrollment Date" shall mean the first day of each Offering
Period.
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(j) "Exercise Date" shall mean the last day of each Offering Period.
(k) "Offering Period" shall mean, except with respect to the first
Offering Period as described herein, a period of six (6) months during which an
option granted pursuant to the Plan may be exercised. The first Offering Period
shall commence August 15, 1988, and end December 31, 1988.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any Employee as defined in paragraph 2 who has been continuously
employed by the Company for at least two (2) consecutive months and who shall be
employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan. However, notwithstanding the foregoing, for purposes of
the first Offering Period only, any Employee defined in paragraph 2 who was
employed by the Company as of August 9, 1988 shall be eligible to participate in
the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 425(d) of the Code) would own stock and /or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) which permits his or her
rights to purchase stock under all employee stock purchase plans of the Company
and its subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the fair market value of the
shares at the time such option is granted) for each calendar year in which such
option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods with a new Offering Period commencing on or about January 1 and July 1
of each year; provided, however, that the first Offering Period shall commence
on or about August 15, 1988. The Plan shall continue thereafter until terminated
in accordance with paragraph 19 hereof. Subject to the shareholder approval
requirements of paragraph 19, the Board of Directors of the Company shall have
the power to change the duration of Offering Periods with respect to future
offerings without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing
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it with the Company's payroll office at least five (5) business days prior to
the applicable Enrollment Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given
Offering Period.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in paragraph 10.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each payday during the
Offering Period in an amount not exceeding ten percent (10%) of the Compensation
which he receives on each payday during the Offering Period, and the aggregate
of such payroll deductions during the Offering Period shall not exceed ten
percent (10%) of the participant's aggregate Compensation during said Offering
Period. (b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan. A participant may not make any additional
payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in paragraph 10, or may decrease, but not increase, the rate of his
or her payroll deductions during the Offering Period (within the limitations of
Section 6(a)) by completing or filing with the Company a new subscription
agreement authorizing a change in payroll deduction rate. The change in rate
shall be effective with the first full payroll period following five (5)
business days after the Company's receipt of the new subscription agreement. A
participant's subscription agreement shall remain in effect for successive
Offering Periods unless revised as provided herein or terminated as provided in
paragraph 10.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and paragraph 3(b) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year (the "Current
Offering Period") that the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in a prior Offering Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Offering Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Offering Period which is scheduled to
end in the following calendar year, unless terminated by the participant as
provided in paragraph 10.
7. Grant of Option.
(a) On the Enrollment Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period up to a number of
shares of the Company's Common Stock determined by dividing such Employee's
payroll deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the lower of (i) eighty-five
percent (85%) of the fair market
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value of a share of the Company's Common Stock on the Enrollment Date or (ii)
eighty-five percent (85%) of the fair market value of a share of the Company's
Common Stock on the Exercise Date; provided that in no event shall an Employee
be permitted to purchase during each Offering Period more than a number of
shares determined by dividing $12,500 by the fair market value of a share of the
Company's Common Stock on the Enrollment Date, and provided further that such
purchase shall be subject to the limitations set forth in Section 3(b) and 12
hereof. Exercise of the option shall occur as provided in Section 8, unless the
participant has withdrawn pursuant to Section 10, and shall expire on the last
day of the Offering Period. Fair market value of a share of the Company's Common
Stock shall be determined as provided in Section 7(b) herein.
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Enrollment Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion; provided, however, that
where there is a public market for the Common Stock, the fair market value per
share shall be the closing price of the Common Stock for such date, as reported
by the NASDAQ National Market System, or, in the event the Common Stock is
listed on a stock exchange, the fair market value per share shall be the closing
price on such exchange on such date, as reported in the Wall Street Journal.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in paragraph 10 below, his or her option for the purchase of shares
will be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable option price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased and any payroll deductions
accumulated in a participant's account which are not used to purchase shares
shall remain in the participant's account for the subsequent Offering Period,
subject to an earlier withdrawal as provided in paragraph 10. During a
participant's life time, a participant's option to purchase shares hereunder is
exercisable only by him or her.
9. Delivery. Unless a participant makes an election to delay the issuance
of Certificate representing purchased shares, as promptly as practicable after
each Exercise Date on which a purchase of shares occurs, the Company shall
arrange the delivery to each participant, as appropriate, of a certificate
representing the shares purchased upon exercise of his or her option. A
participant may make an election to delay the issuance of stock certificates
representing shares purchased under the Plan by giving written notice to the
Company the form of Exhibit D to this Plan. Any such election shall remain in
effect until it is revoked by the participant or, if earlier, upon the
termination of the participant's Continuous Status as an Employee. The Company
may limit the time or times during which participants may revoke such elections,
except that a participant shall automatically receive a certificate as soon as
practicable following termination of his or her Continuous Status as an Employee
and that participants shall be given the opportunity to revoke such elections at
least once each calendar year.
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10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company
in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account will be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Offering Period.
If a participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date for any reason, including retirement or
death, the payroll deductions credited to such participant's account during the
Offering Period but not yet used to exercise the option will be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under paragraph 14, and such participant's option will be
automatically terminated.
(c) In the event an Employee fails to remain in Continuous Status as
an Employee of the Company for at least twenty (20) hours per week during an
Offering Period in which the Employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the payroll deductions credited to
his or her account will be returned to such participant and such participant's
option terminated.
(d) A participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.
11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 2,350,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in paragraph 18. If on a given Exercise Date the number of shares with respect
to which options are to be exercised exceeds the number of shares then available
under the Plan, the Company shall make a pro rata allocation of the shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.
(b) The participant will have no interest or voting right in shares
covered by his option until such option has been exercised.
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(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
13. Administration. The Plan shall be administered by the Board of the
Company or a committee of members of the Board appointed by the Board. The
administration, interpretation or application of the Plan by the Board or its
committee shall be final, conclusive and binding upon all participants. Members
of the Board who are eligible Employees are permitted to participate in the
Plan.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in paragraph 14 hereof) 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 funds from
an Offering Period in accordance with paragraph 10.
16. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees
semi-annually promptly following the Exercise Date, which statements will set
forth the amounts of payroll deductions, the per share purchase price, the
number of shares purchased and the remaining cash balance, if any.
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18. Adjustments Upon Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration". Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
19. Amendment or Termination. The Board of Directors of the Company may at
any time and for any reason terminate or amend the Plan. Except as provided in
paragraph 18, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board of Directors on
any Exercise Date if the Board determines that the termination of the Plan is in
the best interests of the Company and its shareholders. Except as provided in
paragraph 18, no amendment may make any change in any option theretofore granted
which adversely affects the rights of any participant. In addition, to the
extent necessary to comply with Section 423 of the Code (or any successor rule
or provision or any other applicable law or regulation), the Company shall
obtain shareholder approval in such a manner and to such a degree as so
required.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
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21. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve months before or after
the date the Plan is adopted. Such shareholder approval shall be obtained in the
manner and degree required under the applicable state and federal tax and
securities laws.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company as described in para graph 21. It shall continue in effect for a
term of twenty (20) years unless sooner terminated under paragraph 19.
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EXHIBIT A
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. ________________________hereby elects to participate in the Trimble
Navigation Employee Stock Purchase Plan (the "Stock Purchase Plan")
and subscribes to purchase shares of the Company's Common Stock
in accordance with this Subscription Agreement and the Stock
Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (not to exceed 10%) during
the Offering Period in accordance with the Stock Purchase Plan.
________ Include bonuses as part of Compensation subject to payroll
deduction.
________ Exclude bonuses from Compensation subject to payroll
deduction.
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price
determined in accordance with the Stock Purchase Plan. I understand
that if I do not withdraw from an Offering Period, any accumulated
payroll deductions will be used to automatically exercise my option.
4. I have received a copy of the complete "Trimble Navigation Employee
Stock Purchase Plan." I understand that my participation in the Stock
Purchase Plan is in all respects subject to the terms of the Plan. I
understand that the grant of the option by the Company under this
Subscription Agreement is subject to obtaining shareholder approval of
the Stock Purchase Plan.
5. Shares purchased for me under the Stock Purchase Plan should be issued
in the name(s) of:____________________________________________________
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares), I will be
treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the excess
of the fair market value of the shares at the time such shares were
delivered to me over the price which I paid for the shares.
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I hereby agree to notify the Company in writing within 30 days after
the date of any such disposition. However, if I dispose of such shares
at any time after the expiration of the 2-year holding period, I
understand that I will be treated for federal income tax purposes as
having received income only at the time of such disposition, and that
such income will be taxed as ordinary income only to the extent of an
amount equal to the lesser of (1) the excess of the fair market value
of the shares at the time of such disposition over the purchase price
which I paid for the shares under the option, or (2) the excess of the
fair market value of the shares over the option price, measured as if
the option had been exercised on the Enrollment Date. The remainder of
the gain, if any, recognized on such disposition will be taxed as
capital gain.
7. I hereby agree to be bound by the terms of the Stock Purchase Plan. The
effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Stock Purchase Plan:
NAME: (Please print)
-----------------------------------------------------------
(First) (Middle) (Last)
- ------------------------------------ ---------------------------------------
Relationship
---------------------------------------
(Address)
NAME: (Please print)
-----------------------------------------------------------
(First) (Middle) (Last)
- ------------------------------------ ---------------------------------------
Relationship
---------------------------------------
(Address)
Employee's Social
Security Number: ---------------------------------------
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Employee's Address: ---------------------------------------
---------------------------------------
---------------------------------------
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:--------------------------------------- ---------------------------------
Signature of Employee
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EXHIBIT B
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Trimble
Navigation Employee Stock Purchase Plan which began on ____________, 19____ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as possible all the payroll deductions credited to his
or her account with respect to such Offering Period. The undersigned understands
and agrees that his or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement.
Name and Address of Participant
---------------------------------------
---------------------------------------
---------------------------------------
Signature
---------------------------------------
Date:----------------------------------
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EXHIBIT C
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
NOTICE TO RESUME PAYROLL DEDUCTIONS
The undersigned participant in the Offering Period of the Trimble
Navigation Employee Stock Purchase Plan which began on ______________, 19___
hereby notifies the Company to resume payroll deductions for his or her account
at the beginning of the next Exercise Period within such Offering Period in
accordance with the terms of the Subscription Agreement executed by the
undersigned at the beginning of the Offering Period. The undersigned understands
that he or she may change the payroll deduction rate or the beneficiaries named
in such Subscription Agreement by submitting a revised Subscription Agreement.
Name and Address of Participant
---------------------------------------
---------------------------------------
---------------------------------------
Signature
---------------------------------------
Date:----------------------------------
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EXHIBIT D
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
ELECTION/REVOCATION OF ELECTION
DELAY ISSUANCE OF CERTIFICATE
The undersigned participant in the 1988 Trimble Navigation Employee Stock
Purchase Plan (the "Stock Purchase Plan"), hereby elects to allow Trimble
Navigation (the "Company") or its agent to delay issuance of a certificate
representing shares purchased under the Plan in accordance with the provisions
of the Stock Purchase Plan. This election shall continue in effect until the
termination of the undersigned's Continuous Status as an Employee or until
revoked pursuant to such Stock Purchase Plan. This election shall not otherwise
affect the participant's rights as a shareholder of the Company.
-OR-
____________________ hereby revokes his or her prior election to allow
the Company to delay issuance of a certificate pursuant to the terms of the
Stock Purchase Plan. The Company shall deliver to participant as promptly as
practicable a certificate representing all shares purchased thereby.
Name and Address of Participant
---------------------------------------
---------------------------------------
---------------------------------------
Signature
---------------------------------------
Date:----------------------------------
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