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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss. 240.14a-11(c) orss. 240.14a-12
Trimble Navigation Limited
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(Name of Registrant as Specified in its Charter)
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(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
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TRIMBLE NAVIGATION LIMITED Preliminary Copy
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 2000
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 Thursday, May 11, 2000, 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 925,000 shares in the number of shares of
Common Stock reserved for issuance under the Company's 1993 Stock
Option Plan from 5,000,000 shares to an aggregate of 5,925,000 shares.
3. To approve an increase of 200,000 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 2,950,000 shares to an
aggregate of 3,150,000 shares.
4. To approve an amendment of the Company's 1990 Director Stock Option
Plan to extend the term of such plan by three years.
5. To approve an amendment of the Company's bylaws to change the
authorized number of the board of directors to a variable range between
five and nine members.
6. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the current fiscal year ending December 29,
2000.
7. 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 March 13, 2000, 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 card as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. This year, you may also
vote via the Internet or by telephone in accordance with the detailed
instructions on your Proxy card. Any shareholder attending the meeting may vote
in person even if such shareholder previously returned a Proxy.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
ROBERT S. COOPER
Chairman of the Board
Sunnyvale, California
March ___, 2000
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IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU
ARE REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD
IN THE POSTAGE-PREPAID ENVELOPE PROVIDED OR VOTE VIA THE INTERNET OR BY
TELEPHONE TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
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TRIMBLE NAVIGATION LIMITED Preliminary Copy
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PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 11, 2000
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 Thursday, May 11, 2000, 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 March ___,
2000, 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
December 31, 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 December 31, 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 March 13, 2000 (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 [____________] 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
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administered by the Company's transfer agent 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.
Voting Via the Internet or By Telephone
This year, instead of completing the enclosed proxy card and submitting
it by mail, shareholders may vote by submitting proxies electronically either
via the Internet or by telephone. Please note that there are separate
arrangements for using the Internet and telephone depending on whether shares
are registered in the Company's stock records directly in a shareholder's name
or whether shares are held in the name of a brokerage firm or bank. Detailed
electronic voting instructions can be found on the individual proxy card mailed
to each shareholder.
The Internet and telephone voting procedures have been designed to
authenticate each shareholder's identity, in order to allow individual
shareholders to vote their shares and to confirm that their instructions have
been properly recorded. Shareholders voting via the Internet should be aware
that there may be costs associated with electronic access, such as usage charges
from Internet access providers and telephone companies, that will be borne
solely by the individual shareholder.
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 $3,500. In addition, 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 2001 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 2001 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 November ___, 2000. 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 2000 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 2001 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 2001 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 seven 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 48 President and Chief Executive Officer of the Company 1999
Robert S. Cooper 68 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 58 Member of the law firm of Wilson Sonsini Goodrich & 1981
Rosati, P.C., legal counsel to the Company
William Hart 59 General Partner, Technology Partners 1984
Ulf J. Johansson 54 Chairman and Founder of Europolitan Holdings AB 1999
Norman Y. Mineta 68 Vice President for Special Business Initiatives of 1999
Lockheed Martin Corporation
Bradford W. Parkinson 65 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 was elected to the Company's Board of
Directors at the Annual Meeting of Shareholders held in June of 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.
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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 BAE Systems 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, a 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.
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 a 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 also currently serves on
the board of directors of several privately held technology companies. Mr. Hart
received a Bachelor of Management Engineering degree from Rensselaer Polytechnic
Institute in 1965 and a M.B.A. degree from the Amos Tuck School of Business
Administration at Dartmouth College in 1967.
Ulf J. Johansson was appointed to serve on the Company's board of
directors in December 1999. Dr. Johansson is a Swedish national with a
distinguished career in communications technology. He is a founder and Chairman
of Europolitan Holdings AB, a GSM mobile telephone operator in Sweden. Dr.
Johansson currently serves as Chairman of both Zodiak Venture AB, a venture fund
focused on information technology (IT), and the University Board of Royal
Institute of Technology in Stockholm. Dr. Johansson also currently serves on the
board of directors of Novo Nordsk A/S, a Danish pharmaceutical/life science
company, and Trio AB as well as several privately held companies. Dr. Johansson
formerly served as President and Chief Executive Officer of Spectra-Physics, and
Executive Vice President at Ericsson Radio Systems AB. Dr. Johansson received a
Master of Science in Electrical Engineering, and a Doctor of Technology
(Communication Theory) from the Royal Institute of Technology in Sweden.
Norman Y. Mineta was elected to the Company's Board of Directors at the
Annual Meeting of Shareholders held in June of 1999. Mr. 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
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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.
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
has also directed the Gravity Probe-B spacecraft development project at Stanford
University, sponsored by NASA, which is the largest program delegated by NASA to
a 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.
Vote Required
The seven 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 seven 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.
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Board Meetings and Committees
The Board of Directors held 16 meetings during the fiscal year ended
December 31, 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 1999 fiscal year were William Hart,
Bradford W. Parkinson and Charles R. Trimble. The current members of the Audit
Committee are directors Hart and Parkinson and director Parkinson serves as the
committee chairman. The Audit Committee held five meetings during fiscal year
1999. 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 current
members of the Compensation Committee are directors Cooper, Goodrich and Hart
and director Goodrich serves as the committee chairman. Such Compensation
Committee held one meeting during fiscal year 1999. 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.
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 members of the Nominating Committee at
the beginning of fiscal 1999 were directors Cooper, Goodrich and Parkinson. The
current members of the Nominating Committee are directors Berglund, Cooper and
Goodrich and director Cooper serves as the committee chairman. The Nominating
Committee held a number of various informal meetings and one formal meeting
during fiscal 1999. 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 1999 fiscal year. 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 through August 1999 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 currently retains. 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."
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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 1998, 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 is
established as base salary and the balance is variable and consists of an annual
cash bonus and/or stock option grants.
Due to the unique challenges then facing the Company, a majority of the
remaining disinterested members of the Board of Directors approved a base salary
of $30,000 per month through June 1999 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 Directors
through August 1999.
Within these established ranges and guidelines, and taking into account the
Company's historical performance compared to peer companies, 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 beginning in March 1999. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements."
The Committee also carefully reviewed and considered its cash bonus program
for fiscal year 1999 for senior executives of the Company. Such program provided
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. The percentage for each executive was then
adjusted by factoring in an evaluation of such individual's performance. The
total size of the Company's bonus pool for all employees, including executives,
was determined with respect to the Company's performance in meeting certain
goals for both revenue and income for fiscal year 1999 and bonuses were only
paid once at the end of the fiscal year. For fiscal year 1999 the total bonus
pool for all employees, including executives, was approximately $1.7 million. In
connection with Dr. Parkinson serving as the Company's interim President and
Chief Executive Officer during the first quarter of fiscal year 1999, in January
2000 the Board of Directors approved a special bonus to Dr. Parkinson of
approximately 50% of the base salary paid to him for such time period. Pursuant
to the terms of his employment agreement, Mr. Berglund is 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 was 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 in August 1998, he was granted an option to purchase an
aggregate of 100,000 shares of the Company's Common Stock which vested over six
months and had 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
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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 his starting with the Company in March
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 size of option grants, if any, to other senior executive officers 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
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 fiscal year 1999, the Compensation Committee and the Board of
Directors determined that all employees and executive offices of the Company
should be reviewed as part of a single worldwide program. The purpose of this
single review plan is to provide a common, annual review date for all levels of
managers to review all employees of the Company. All executive officers,
including the Chief Executive Officer, will be reviewed by the Compensation
Committee at the same time. The annual review period for this new plan was
established as the month of April.
Under the new review plan, the total compensation of all employees of the
Company, including executive officers, will be reviewed annually in April in
accordance with the same common criteria. Base salary guidelines have been
established and will be revised periodically based upon market conditions, the
economic climate and the Company's financial position. Merit increases, if any,
for all employees of the Company, including executive officers, will be based
upon the following criteria: the individual employee's performance for the year
as judged against his/her job goals and responsibilities, the individual
employee's salary and performance as compared to other employees in the same or
similar department, the individual employee's position in the salary grade, the
employee's salary relative to market data for the position and the Company's
fiscal budget and any associated restrictions.
Robert S. Cooper, Member John B. Goodrich, Member William Hart, Member
Compensation Committee Compensation Committee Compensation Committee
Steven W. Berglund, Ulf J. Johansson,
Board of Directors Board of Directors
Norman Y. Mineta, Bradford W. Parkinson,
Board of Directors Board of Directors
8
<PAGE>
Compensation of Directors
Cash Compensation. 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 effective January 2,
1999. Under the this cash compensation plan, all non-employee directors 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 receive $750 per meeting which is not held on the same day as a
meeting of the full Board of Directors. Non-employee directors are also
reimbursed for travel and other necessary business expenses incurred in the
performance of their services as directors of the Company.
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
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 198,333 shares,
having an average exercise price of $14.0641 per share and expiring from
December 19, 2000 to December 16, 2009 were outstanding and 95,833 shares
remained available for future grant under the Director Plan. During the fiscal
year ended December 31, 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 $12.4375 per share and directors Mineta and
Johansson were each granted Directors Options to purchase 15,000 shares of the
Company's Common Stock at an exercise prices of $12.4375 and $19.3125 per share,
respectively, upon beginning to serve on the Company's Board of Directors.
Other Arrangements. Dr. Parkinson has served as a consultant to the Company
since 1982. During the last fiscal year and in connection with serving as the
Company's President and Chief Executive Officer and in providing transitional
services, Dr. Parkinson was employed by the Company through June 1999 and
received a salary of $30,000 per month. From June 1999 through August 1999, Dr.
Parkinson continued to help in the transition of the Company and received
monthly payments of $12,000 per month for such services. Beginning in September
1999, Dr. Parkinson resumed his usual consulting role to the Company for which
he receives $6,000 per month for such consulting services. See "Employment
Contracts and Termination of Employment and Change-in-Control Arrangements" and
"Compensation Committee Report."
In addition to serving as a director of the Company, in August 1998, Dr.
Cooper began serving as the Company's Chairman of the Board of Directors for
which he was employed by the Company through August 1999 and for which he was
paid $10,000 per month for such services. Dr. Cooper has continued as the
Company's Chairman of the Board of Directors since that time but has not
received any special compensation for such services. 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 (unless otherwise noted below) 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 11.20
333 South Hope Street
Los Angeles, California 90071
Frontier Capital Management LLC (4).................................................. 1,313,730 5.79
99 Summer Street
Boston, Massachusetts 02110
Steven W. Berglund(5)................................................................ 88,176 *
Robert S. Cooper(6).................................................................. 142,722 *
John B. Goodrich(7).................................................................. 43,210 *
William Hart(8)...................................................................... 82,431 *
Ulf J. Johansson(9).................................................................. 1,667 *
Norman Y. Mineta (10)................................................................ 4,583 *
Bradford W. Parkinson(11)............................................................ 152,642 *
Charles E. Armiger, Jr.(12).......................................................... 36,146 *
Mary Ellen Genovese(13).............................................................. 16,877 *
David M. Hall(14).................................................................... 52,438 *
Ronald C. Hyatt(15).................................................................. 230,753 1.01
All Directors and Executive Officers, as a group
(15 persons)(5)-(16)............................................................ 967,869 4.15
- ------------------
</TABLE>
* 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 11, 2000 by CRMC and SWFI. 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 2,540,000 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.
(4) The information presented with respect to Frontier Capital Management LLC
("Frontier") is as reported pursuant to a Schedule 13G filed by Frontier
with the Securities and Exchange Commission on February 15, 2000.
(5) Includes 86,666 shares subject to stock options exercisable within 60
days of the Record.
(6) Includes 109,722 shares subject to stock options exercisable within 60
days of the Record Date.
10
<PAGE>
(7) Includes 24,722 shares subject to stock options exercisable within 60
days of the Record Date.
(8) 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
51,389 shares subject to stock options exercisable within 60 days of the
Record Date.
(9) Includes 1,667 shares subject to stock options exercisable within 60 days
of the Record Date.
(10) Includes 4,583 shares subject to stock options exercisable within 60 days
of the Record Date.
(11) Includes 3 shares held by Dr. Parkinson's spouse, 2,515 shares held in a
charitable remainder trust and 146,789 shares subject to stock options
exercisable within 60 days of the Record Date.
(12) Includes 18,416 shares subject to stock options exercisable within 60 days
of the Record Date.
(13) Includes 10,434 shares subject to stock options exercisable within
60 days of the Record Date.
(14) Includes 44,098 shares subject to stock options exercisable within 60
days of the Record Date.
(15) Includes 107,501 shares subject to stock options exercisable within 60
days of the Record Date.
(16) Includes 655,469 shares subject to stock options exercisable within
60 days of the Record Date.
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 1999
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 December 31, 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 December 31, 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) one former executive officer 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 he was no longer serving as an executive officer of the
Company at the end of the last completed fiscal year:
Summary Compensation Table
<TABLE>
<CAPTION>
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>
Steven W. Berglund(4) 1999 320,000 0 400,000(5) 137,016(6)
President and Chief Executive Officer 1998 - - - -
1997 - - - -
Bradford W. Parkinson(7) 1999 205,293 0 35,000(8) 21,650(9)
Former President and Chief Executive 1998 123,231 0 125,000(8) 64,061(10)
Officer, Current Director and Consultant 1997 - - 5,000(8) 57,000(11)
David M. Hall 1999 268,404 0 60,000 9,273(12)
Group Vice President, 1998 213,858 7,928 0 7,700(13)
Mobile and Timing Technologies 1997 179,518 40,893 20,000 7,700(13)
Ronald C. Hyatt 1999 250,000 0 0 1,200
Group Vice President, 1998 139,399 0 90,000 1,200
Precise Positioning Group 1997 104,810 0 50,000 1,200
Mary Ellen Genovese 1999 194,879 0 26,000 1,939(14)
Vice President, Finance; Chief Financial 1998 147,183 5,105 20,000 1,200
Officer and Corporate Controller 1997 103,458 14,848 2,500 1,200
Charles E. Armiger, Jr. 1999 191,130 12,000(15) 30,000 9,214(16)
Vice President, Worldwide Sales 1998 176,090 9,431 0 7,050(17)
1997 147,505 39,598 10,000 7,050(17)
Charles R. Trimble (18) 1999 201,195 0 0 1,358(19)
Former Vice Chairman and Director 1998 389,584 21,022 0 23,600(20)
1997 358,376 95,779 20,000 12,200(21)
- -----------------------------
</TABLE>
(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.
(4) Mr. Berglund served as the Company's President and Chief Executive Officer
since 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
1933, as amended (the "Securities Act").
(5) Mr. Berglund received a one-time grant of an option to purchase
400,000 shares in connection with being hired as the Company's
President and Chief Executive Officer.
12
<PAGE>
(6) Includes $99,479 of relocation costs paid by the Company in connection
with the hiring of Mr. Berglund, $42,333 in connection with a loan,
including related accrued interest, made to Mr. Berglund by the Company
that was forgiven during the year and $1,204 paid by the Company for
fitness center dues provided to Mr. Berglund.
(7) 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. Dr. Parkinson continues to serve as a director and
consultant to the Company subsequent to March 1999.
(8) 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.
(9) Includes $18,000 paid by the Company for consulting services
provided by Dr. Parkinson and $2,750 paid by the Company to
Dr. Parkinson in connection with Board attendance fees.
(10) Includes $49,500 paid by the Company for consulting services provided to
the Company by Dr. Parkinson for the portion of the 1998 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.
(11) Includes $57,000 paid by the Company for consulting services provided by
Dr. Parkinson during the fiscal year.
(12) Includes $6,500 paid to Mr. Hall as an auto allowance and $1,573 paid by
the Company for fitness center dues provided to Mr. Hall.
(13) Includes $6,500 paid to Mr. Hall as an auto allowance.
(14) Includes $739 paid by the Company as fitness center dues provided to
Mrs. Genovese.
(15) Represents a bonus paid by the Company to Mr. Armiger which was used to
help offset the interest costs associated with a loan previously made to
him by the Company.
(16) Includes $5,850 paid to Mr. Armiger by the Company as an auto allowance
and $2,164 paid by the Company for fitness center dues provided to
Mr. Armiger.
(17) Includes $5,850 paid to Mr. Armiger by the Company as an auto allowance.
(18) Mr. Trimble served as the Company's President and Chief Executive Officer
until August 1998 and as a consultant and member of the Company's Board of
Directors until June 1999 and is included in the Summary Compensation
Table solely pursuant to Item 402(a)(3)(iii) of Regulation S-K of the
Securities Act. Until June 1999, Mr. Trimble continued to be paid as a
consultant to the Company at his full regular salary rate.
(19) Includes $858 paid by the Company for fitness center dues provided to
Mr. Trimble.
(20) Includes $22,400 paid by the Company for tax planning services provided to
Mr. Trimble.
(21) Includes $11,000 paid by the Company for tax planning services provide to
Mr. Trimble.
13
<PAGE>
The following table sets forth the number and terms of options granted to
the persons named in the Summary Compensation Table during the fiscal year ended
December 31, 1999:
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
- -------------------------------------------------------------------------------------------
Number of % of Total Potential Realizable
Securities Options Value at Assumed
Underlying Granted to Annual Rates of Stock
Options Employees in Exercise Expiration Price Appreciation
Granted Fiscal Year Price Date for Option Term (4)
-------------------------
Name (#) (1) ($/Share) (2) (3) 5% ($) 10% ($)
- ----------------------------- ------------- ------------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Steven W. Berglund........... 400,000 22.06 8.000 3/17/09 2,012,800 5,100,800
Bradford W. Parkinson........ 30,000 1.65 9.625 2/1/09 181,624 460,268
5,000 0.28 12.435 6/2/09 39,108 99,107
David M. Hall................ 60,000 3.31 11.563 8/25/09 436,369 1,105,838
Ronald C. Hyatt.............. 0 - - - 0 0
Mary Ellen Genovese.......... 15,000 0.83 11.563 8/25/09 109,092 276,459
11,000 0.61 19.313 12/16/09 133,623 338,625
Charles E. Armiger, Jr....... 30,000 1.65 11.563 8/25/09 218,184 552,919
Charles R. Trimble(5)........ 0 - - - 0 0
- ------------------
</TABLE>
(1) The Company granted options to purchase an aggregate of 1,812,982 shares
of the Company's Common Stock to employees, consultants and non-employee
directors during fiscal year 1999 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).
(5) Mr. Trimble served as the Company's President and Chief Executive Officer
until August 1998 and as a consultant and member of the Company's Board of
Directors until June 1999. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table", footnote #18.
14
<PAGE>
The following table provides information on option exercises by the persons
named in the Summary Compensation Table during the fiscal year ended December
31, 1999:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Shares Number of Securities
Acquired on Options at In-the-Money Options
Exercise Value Realized Fiscal Year-End (#) at Fiscal Year-End ($)(1)
---------------------------- ---------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------- ------------ --------------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven W. Berglund.......... - - 0 400,000 0 5,450,000
Bradford W. Parkinson....... 30,000 232,381 144,206 15,794 1,436,869 80,256
David M. Hall............... - - 40,529 79,471 270,083 705,917
Ronald C. Hyatt............. - - 91,667 78,333 1,066,798 950,135
Mary Ellen Genovese......... - - 8,267 43,733 76,790 368,123
Charles E. Armiger, Jr...... - - 16,299 40,701 77,599 358,376
Charles R. Trimble(2)....... - - 0 0 0 0
- ------------------
</TABLE>
(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 December 31, 1999 as quoted
on the Nasdaq National Market System was $21.625.
(2) Mr. Trimble served as the Company's President and Chief Executive Officer
until August 1998 and as a consultant and member of the Company's Board of
Directors until June 1999. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table", footnote #18.
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 and an amendment to extend the term of the
1990 Director Stock Option 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. Because all grants under the 1990 Director Stock Option Plan are
automatic pursuant to the terms on the plan and contingent upon each outside
director being re-elected to the Company's Board of Directors by the
shareholders, future grants under the 1990 Director Stock Option Plan are also
not yet determinable. Accordingly, the following table summarizes the number of
stock options granted under the 1993 Stock Option Plan, the number of shares
purchased under the 1988 Employee Stock Purchase Plan and the number of stock
options granted under the 1990 Director Stock Option Plan during the last fiscal
year ended December 31, 1999 to (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 1990 Director
1993 Stock Option Plan (1) Purchase Plan (3) Stock Option Plan (5)
-------------------------- ------------------------ --------------------------
Exercise Purchase Exercise
Price Number of Price Number of Price Number of
($ per Options ($ per Shares ($ per Options
Name and Position Share) (2) Granted Share) (4) Purchased Share) Granted
- -------------------------------------------- ------------- ---------- ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Steven W. Berglund
President and Chief Executive Officer.. 8.000 275,000 - 0 - -
Bradford W. Parkinson
Former President and Chief Executive
Officer, Current Director and
Consultant............................. 9.625 30,000 6.481 1,869 18.438 5,000
David M. Hall
Group Vice President, MTT.............. 11.563 60,000 6.481 2,994 - -
Ronald C. Hyatt
Group Vice President, PPG.............. - 0 7.777 2,664 - -
Mary Ellen Genovese
Vice President, Finance; Chief
Financial Officer and Corporate 11.563 15,000
Controller............................. 19.313 11,000 7.627 2786 - -
Charles E. Armiger, Jr.
Vice President, Worldwide Sales........ 11.563 30,000 8.194 1,166 - -
Charles R. Trimble(6)(7)
Former Vice Chairman and Director...... - 0 - 0 - -
Current Executive Officers, as a group(8)... 9.832 763,500 7.446 15,653 - -
Non-Executive Officer Directors, as a
group(9)............................... - 0 - - 18.703 50,000
Non-Executive Officer Employees, as a group. 11.829 874,482 8.038 301,557 - -
- ------------------
</TABLE>
(1) Only employees and consultants (including officers and directors) of the
Company are eligible for option grants under the 1993 Stock Option Plan as
approved by the Company's Board of Directors.
(2) Exercise prices for the options granted during the fiscal year ended
December 31, 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) Only Non-employee directors are eligible to receive automatic option
grants under the 1990 Director Stock Option Plan. See "Proposal
IV-Amendment to the 1990 Director Stock Purchase Plan". Future benefits
under the 1990 Director Stock Option Plan are not determinable, as grants
of options are contingent upon being re-elected to the Company's Board of
Directors by the shareholders and are dependent upon the price of the
Company stock in the future at such time.
(6) As Mr. Trimble then held more than 5% of the Company's voting stock,
he was 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) Mr. Trimble served as the Company's President and Chief Executive Officer
until August 1998 and as a consultant and member of the Company's Board of
Directors until June 1999. See "COMPENSATION OF EXECUTIVE OFFICERS-Summary
Compensation Table", footnote #18.
(8) Employee officers of the Company who are also members of the Board of
Directors are not eligible for option grants under the 1990 Director
Stock Option Plan.
(9) Non-employee directors of the Company are not eligible to participate in
the 1988 Employee Stock Purchase Plan.
16
<PAGE>
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
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
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 any 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; provided, 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 and pursuant
to the terms of his employment agreement, the Company provided him with interim
housing and reimbursed him for certain moving costs and expenses and provided
him with a loan for $400,000 to assist in the purchase of a new primary
residence. Such loan is secured by a second deed of trust on the residence and
was made at the lending rate at which the Company is able to borrow, as adjusted
from time to time. Such loan is to be forgiven by the Company ratably over five
years contingent upon Mr. Berglund continuing to be employed by the Company;
provided, however, that any remaining unpaid obligation would be due and payable
to the Company upon the anniversary of any separation if Mr. Berglund's
employment relationship with the Company ends during such time period.
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.
Robert S. Cooper
In connection with agreeing to serve as the Company's Chairman of the Board
of Directors beginning in August 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. During such time period, Dr. Cooper was 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 vested ratably over
12 months from the original date of grant and have a five year term of exercise
contingent upon Dr. Cooper remaining as an employee, consultant or director to
the Company.
17
<PAGE>
Bradford W. Parkinson
In connection with agreeing to serve as the Company's interim President and
Chief Executive Officer beginning in August 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. 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 provided reimbursement to
him in order to retain certain medical and dental benefits that he normally
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 was not eligible for any similar benefits available to the Company's
employees during such time period. 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. Due to
the additional transitional services required at the time, Dr. Parkinson
received an additional $24,000 for the month of June 1999 and an additional
$6,000 per month payment from July 1, 1999 through September 30, 1999 for such
services that he provided above those specified in the consulting agreement.
In addition, pursuant to his employment agreement and 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 Dr. Parkinson
remaining as an employee, consultant or director to the Company.
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 license 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 1999, IntegriNautics
purchased and paid for approximately $16,600 worth of the Company's products for
use as component parts. In addition, during fiscal year 1999, the Company
purchased and paid for approximately $40,000 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
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
18
<PAGE>
of the Company's products for use in its products and development
processes. During fiscal year 1999, ProShot purchased and paid for approximately
$1,031,000 of the Company's products for use in its products and development
processes. At 1999 fiscal year end, ProShot had an outstanding long-term note of
approximately $258,000 secured by a letter of credit owed to the Company related
to prior accounts payable balances. Ralph F. Eschenbach, the Company's current
Chief Technical Officer, serves on the board of directors of ProShot. John B.
Goodrich, a director and current corporate secretary of the Company also served
on ProShot's board of directors during a portion of fiscal year 1999 but he has
since resigned from such position. In addition, Mr. Eschenbach is an individual
shareholder of ProShot and during fiscal 1998 and 1999 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
- ----------------------------------------- ------------- -------------- ---------------- ---------------------
<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% 200,000 200,000
Senior Vice President, Chief
Manufacturing Officer
Steven W. Berglund 6/25/99 5.40% 353,333 400,000
President and Chief Executive
Officer
</TABLE>
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, 98 and 99. The graph has a vertical axis at its left which lists
from bottom to top the numbers 0, 100, 200, 300, 400, 500, 600, 700, 800, and
900. 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
12/94 12/95 12/96 12/97 12/98 12/99
----------------------------------------------
TRIMBLE NAVIGATION
LIMITED TRMB 100 113 70 132 44 131
NASDAQ STOCK MARKET
(U.S.) INAS 100 141 178 213 300 542
S & P TECHNOLOGY
SECTOR ITES 100 144 204 258 446 781
- -----------------------------
(1) The data in the above graph is presented on a calendar year basis through
December 31, 1999 which is the most currently available data from the
indicated sources. The Company adopted a 52-53 week fiscal year effective
upon the end of fiscal year 1997 and the actual date of the Company's
fiscal year end for 1999 was also December 31, 1999. Any variations due to
the differences between the actual date of a particular fiscal year end
and the calendar year end for such year are not expected to be material.
* Assumes an investment of $100 on December 31, 1994 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 number of shares
reserved for issuance thereunder to an aggregate of 5,000,000 shares of the
Company's Common Stock. At the Record Date, options to purchase an aggregate of
[________] shares, having an average exercise price of $[________] per share and
expiring from [_____________ to _____________], were outstanding and only
[________] shares remained available for future grant under the Option Plan.
In March 2000, 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 925,000 shares to an aggregate of 5,925,000
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 motivating 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 925,000 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 1/60th 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
23
<PAGE>
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.
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 initial time of the grant of 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 925,000 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
925,000 shares in the number of shares of Common Stock reserved for issuance
under the Option Plan from 5,000,000 shares to an aggregate of 5,925,000 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 an aggregate of
2,950,000 shares of the Company's Common Stock. As of the Record Date, eligible
employees have purchased an aggregate of 2,264,368 shares of the Company's
Common Stock under the Purchase Plan and 685,632 shares remained available for
future sales under the Purchase Plan. During fiscal year 1999, eligible
employees of the Company purchased an aggregate of 317,210 shares at an average
price of $8.0085 per share under the Purchase Plan and, during the prior fiscal
year 1998, eligible employees purchased an aggregate of 332,154 shares at an
average price of $8.51 per share under the Purchase Plan.
In January 2000, 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 200,000 shares to an
aggregate of 3,150,000 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 motivating 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 200,000 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
27
<PAGE>
of the shares, the participant will generally be subject to tax in an
amount that depends upon the holding period. 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 200,000 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
200,000 shares in the number of shares of Common Stock available for purchase by
eligible employees under the Purchase Plan from 2,950,000 shares to an aggregate
of 3,150,000 shares.
PROPOSAL IV--AMENDMENT OF 1990 DIRECTOR STOCK OPTION PLAN
The 1990 Director Stock Option Plan (the "Director Plan") was adopted
by the Board of Directors on December 19, 1990 and approved by the shareholders
in April 1991. The Board of Directors initially reserved 180,000 shares of the
Company's Common Stock for issuance under the terms of the Director Plan to
non-employee directors ("Outside Directors") upon the exercise of the options
issuable pursuant to the Director Plan (the "Director Options"). Since then, the
Board of Directors and shareholders of the Company have approved amendments to
the Director Plan increasing the number of shares reserved for issuance
thereunder by an additional to an aggregate of 380,000 shares. At the Record
Date, Director Options to purchase an aggregate of 198,333 shares, having an
average exercise price of $14.0641 per share and expiring from December 2000 to
December 2009, were outstanding. At the Record Date 95,833 shares remained
available for future grant as Director Options under the Director Plan; however,
the Director Plan will expire by its terms in December 2000, unless the
shareholders approve extending the term pursuant to this proposed amendment
In January 2000, the Board of Directors approved an amendment to the
Director Plan extending the term of the Director Plan by three additional years
through December 19, 2003 in order for the Company to be able to effectively use
the shares currently remaining under the Director Plan as previously approved by
the shareholders. At the Annual Meeting, the shareholders are being asked to
approve such amendment of the term of the Director Plan to extend the life of
the Director Plan from ten to thirteen years. This amendment will have no effect
on any of the Director Options previously granted under the Director Plan. The
purpose of proposed amendment is to allow new options to be automatically
granted to non-employee directors from those 95,833 remaining available shares
which have already been approved by the shareholders of the Company pursuant to
the terms of the Director Plan, as described below. If such amendment and
extension of the term of the Director Plan is not
28
<PAGE>
approved, then the Director Plan will expire according to its current terms
in December 2000 and no additional Director Options will be granted from such
plan after such date.
The essential features of the Director Plan are outlined below:
Purpose
The purposes of the Director Plan are to attract and retain the best
available individuals for service as directors of the Company, to provide
additional equity incentive to the Outside Directors, and to encourage the
continued service of such Outside Directors on the Board of Directors and
committees thereof.
Administration
The Director Plan provides for administration and interpretation by the
Board of Directors, which receives no additional compensation in connection with
such service. Members of the Board of Directors who are eligible for Director
Options may vote on matters affecting the administration of the Director Plan.
The interpretation and construction of any provision of the Director Plan is
within the sole discretion of the Board of Directors, whose determination shall
be final and conclusive.
Eligibility and Participation
The Director Plan provides that Director Options may be granted only to
Outside Directors as reflected in the terms of the Plan and written option
agreements. All grants are automatic and are not subject to the discretion of
any person, except that an Outside Director may decline to accept Director
Options. As of the Record Date, six Outside Directors were eligible to
participate in the Director Plan.
Automatic Grant of Director Options
Each Outside Director who was serving as such on December 19, 1990, the
date of the adoption of the Director Plan by the Board of Directors, was
automatically granted a Director Option to purchase 15,000 shares of Common
Stock at an exercise price equal to the then current fair market value of the
shares (a "First Option"). Following the shareholder approval of the Director
Plan in April 1991, such First Option became exercisable in installments
cumulatively with respect to 1/36th of the shares at the end of each month
following the date of grant of such First Option. Each non-employee who becomes
a director of the Company subsequent to the date of the adoption of the Director
Plan and, therefore, qualifies as an Outside Director, also receives an
automatic First Option grant having the same terms as described above on the
date of election or appointment to the Board of Directors.
After receiving a First Option, an Outside Director is automatically
granted an additional Director Option to purchase 5,000 shares at a similarly
determined price per share under the Director Plan (a "Subsequent Director
Option") on the date of each annual shareholders' meeting at which such Outside
Director is re-elected to the Board of Directors, provided that no Subsequent
Director Option is granted to an Outside Director for the first annual
shareholders' meeting following the grant of a First Option. Each Subsequent
Director Option also becomes exercisable in installments cumulatively with
respect to 1/36th of such shares at the end of each month following the date of
grant.
Terms of Director Options
Each Director Option is evidenced by a written stock option agreement
between the Company and the Outside Director and is subject to the terms and
conditions listed below:
29
<PAGE>
(a) Exercise of Director Options. The Director Options become exercisable
as described above under "Automatic Grant of Director Options." A Director
Option is exercised by giving written notice of exercise to the Company and
tendering full payment of the purchase price to the Company. Payment for shares
issued upon exercise of a Director Option may be cash, check, or surrender of
other shares of the Company's Common Stock which the director has held for more
than six months.
(b) Option Price. The exercise price of Director Options granted under the
Director Plan is the fair market value of the Company's Common Stock on the date
of grant as determined by the Board of Directors in accordance with the Director
Plan. The Director Plan provides that, because the Company's Common Stock is
currently traded on the NASDAQ National Market System, the fair market value per
share shall be the closing price on such system on the date of grant of the
Director Option.
(c) Termination of Service as a Director. The Director Plan provides that
in the event of the termination of an Outside Director's continuous service as a
director for any reason other than death or disability, any outstanding Director
Options then held by such director may be exercised only within thirty days
after the date of such termination and only to the extent to which such director
was entitled to exercise the Director Options at the time of termination. Any
such Director Options which are not exercised within the specified time period
terminate automatically and are returned to the Director Plan.
(d) Disability. If an Outside Director's service as a director of the
Company terminates due to total or permanent disability of such Outside
Director, any outstanding Director Options then held may be exercised within six
months from the date of termination to the extent to which such director was
entitled to exercise the Director Options at the time of termination.
(e) Death. If an Outside Director should die while still in service as a
director of the Company or within thirty days following termination of his
service as a director, any outstanding Director Options then held may be
exercised at any time within twelve months after death, but only to the extent
to which such director was entitled to exercise the Director Options at the time
of termination.
(f) Termination of Options. Director Options granted under the Director
Plan have a term of ten years from the date of grant.
(g) Nontransferability of Director Options. Director Options are
nontransferable by the Outside Directors, other than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order,
and are exercisable during an Outside Director's lifetime only by the Outside
Director or permitted transferree or, in the event of death, by a person who
acquires the rights to exercise the Director Option by bequest or inheritance by
reason of death of the Outside Director.
Adjustments Upon Changes in Capitalization
In the event that any change is made in the Company's capitalization, such
as a stock split or dividend, which results in an increase or decrease in the
number of outstanding shares of Common Stock without receipt of consideration by
the Company, appropriate adjustment shall be made in the price and in the number
of shares subject to each Director Option. In the event of the proposed
dissolution or liquidation of the Company, all outstanding Director Options will
automatically terminate. In the event of a merger of the Company with or into
another corporation in which the Company does not survive, all Director Options
then outstanding may be fully assumed or an equivalent option may be substituted
by the successor corporation. In the event that such successor corporation does
not assume or substitute all such outstanding Director Options, then such
Director Options shall fully accelerate and become fully exercisable, such that
the Outside Directors shall have the right to exercise all such Director Options
on or before the effective date of such merger.
30
<PAGE>
Amendment and Termination
The Board of Directors may at any time alter, amend or terminate the
Director Plan, but no such amendment or termination shall be made which would
impair the rights of any Outside Director under any grant theretofore made under
the Director Plan, without the consent of such director. In addition, the
Company shall obtain shareholder approval of any amendment to the Director Plan
in such a manner and to the extent necessary to comply with applicable laws or
regulations.
Federal Income Tax Information
Director Options granted under the Director Plan are deemed to be
nonstatutory options under the Internal Revenue Code of 1986, as amended. An
Outside Director does not recognize any taxable income at the time of the
initial grant of a nonstatutory option. However, upon the exercise of a Director
Option, an Outside Director recognizes ordinary income (subject to tax
withholding) for tax purposes as measured by the excess, if any, of the then
fair market value of the shares over the option exercise price. Upon the
subsequent sale of such shares by an Outside Director, any difference between
the then sale price and the purchase price which the Outside Director paid upon
exercise, to the extent not already recognized as taxable income as described
above, is treated as long-term or short-term capital gain or loss, depending on
how long the Outside Director has held such shares.
Because all Outside Directors of the Company are subject to Section 16(b)
of the Securities and Exchange Act of 1934, as amended, the measurement date and
the timing of the ordinary income that must be recognized by an Outside
Director, as well as the commencement of any capital gain holding period for
such shares, upon the exercise of a Director Option may be deferred under
certain limited circumstances by the filing of an election under Section 83(b)
of the Code by such Outside Director. The Company is entitled to a tax deduction
in the same amount, and at the same time, as such ordinary income is recognized
by the Outside Director with respect to shares acquired upon the exercise of
nonstatutory Director Options.
The foregoing is only a summary of the effect of federal income taxation
upon the Outside Directors and the Company with respect to the grant and
exercise of options under the Director 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 an Outside Director's
death or the income tax laws of any municipality, state or foreign country in
which such director may reside.
Vote Required
The extension of the term of the Director Plan by an additional three years
to December 19, 2003 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 amendment of the
Director Plan to extend the term of such Director Plan from ten years to
thirteen years.
31
<PAGE>
PROPOSAL V--AMENDMENT OF THE COMPANY'S BYLAWS
The Company's bylaws, as amended to date, currently provide that the
authorized number of members of the Company's Board of Directors shall be not
less than four and no more than seven members. The exact number of directors is
currently set at seven members. Pursuant to the Company's bylaws, either the
Board of Directors or the shareholders of the Company may change the authorized
number of directors within these limits; provided, however that no such
amendment which reduces the authorized number of directors shall have the effect
of removing any director then currently serving on the Board of Directors until
such directors' term of office expires. The approval of the shareholders of the
Company is required to change the variable range of the authorized number of
directors or to set the number of directors at a number, which is outside these
currently authorized limits.
The Board of Directors believes that it is in the best interests of the
Company and its shareholders to increase the authorized number of members of the
Company's Board of Directors to a range which is not less than five and no more
than nine members. Such an amendment would allow the Company's Board of
Directors to change the number of the authorized number of directors within the
limits set forth above in order to be able to appoint new qualified candidates
as they become available during the year without the additional cost and delay
of a special shareholder's meeting. Such amendment of the bylaws would not have
an effect on any of the current members of the Company's Board of Directors. The
amendment of the Company's bylaws is necessary to give the Board of Directors
additional flexibility to attract and add new members to the Board of Directors
who are critical to the immediate and long-term success of the Company.
At the Annual Meeting, the shareholders are being asked to approve the
amendment and restatement of the first two sentences of Section 3.2 of the
Company's current bylaws, to provide that the authorized number of the Company's
Board of Directors shall be not less than five and no more than nine members, as
follows:
"3.2 NUMBER AND QUALIFICATION OF DIRECTORS.
-------------------------------------
The number of directors of the corporation shall be not less
than five (5) nor more than nine (9). The exact number of
directors shall be seven (7) until changed, within the limits
specified above, by a bylaw amending this Section 3.2, duly
adopted by the board of directors or by the shareholders."
All other provisions of the Company's current bylaws, including the remaining
provisions of Section 3.2 would remain unchanged by this proposed amendment.
Vote Required
The amendment of the Company's bylaws to provide that the authorized number
of the Company's Board of Directors shall be not less than five and no more than
nine members 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 amendment of the
Company's bylaws to provide that the authorized number of the Company's Board of
Directors shall be a variable range not less than five and no more than nine
members.
32
<PAGE>
PROPOSAL VI--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 29, 2000. 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 29, 2000, 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 29, 2000.
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
postage-prepaid envelope which has been enclosed for your convenience or vote
electronically via the Internet or by telephone in accordance with the detailed
instructions on your individual Proxy card.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
ROBERT S. COOPER
Chairman of the Board
Dated: March ___, 2000
33
<PAGE>
APPENDIX A
PROXY TRIMBLE NAVIGATION LIMITED PROXY
PROXY FOR 2000 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 March 31, 2000, and hereby appoints
Robert S. Cooper and Steven W. Berglund, 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 2000 Annual Meeting
of Shareholders of TRIMBLE NAVIGATION LIMITED, to be held on Thursday, May 11,
2000 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 925,000 SHARES IN THE NUMBER OF SHARES AVAILABLE FOR
ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION PLAN, FOR THE APPROVAL OF AN
INCREASE OF 200,000 SHARES IN THE NUMBER OF SHARES AVAILABLE FOR PURCHASE UNDER
THE COMPANY'S 1988 EMPLOYEE STOCK PURCHASE PLAN, FOR THE APPORVAL OF AN
AMENDMENT OF THE COMPANY'S 1990 DIRECTOR STOCK OPION PLAN TO EXTEND THE TERM OF
SUCH PLAN BY THREE YEARS, FOR THE APPROVAL OF AN AMENDMENT OF THE COMPANY'S
BYLAWS TO CHANGE THE AUTHORIIZED NUMBER OF THE BOARD OF DIRECTORS TO A VARIABLE
RANGE BETWEEN FIVE AND NINE MEMBERS, FOR THE RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER
29, 2000, 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
YOU MAY VOTE IN ANY OF THE FOLLOWING THREE WAYS
1. Vote via the Internet at http://www.eproxy.com/trmb. You will need the
Control Number that appears in the box in the lower right corner of
this card.
2. Vote by telephone by calling 1-800-840-1208 from a touch-tone phone in
the U.S. There is no charge for this call. You will need the Control
Number that appears in the box in the lower right conrner of this card.
3. Mark, sign and date this proxy form and return it in the enclosed
envelope.
34
<PAGE>
Please mark
your votes [X]
as indicated in
in this example
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Elections of Directors WITHHOLD
FOR FOR All
(INSTRUCTION: If you wish to FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
withhold authority to vote for [ ] [ ] 2. To approve an increase of 4. To approve an
any individual nominee, strike 925,000 shares in the number of amendment of
a line through that nominee's shares of Common Stock re- [ ] [ ] [ ] the Company's [ ] [ ] [ ]
name in the list below:) served for issuance under the 1990 Director
Company's 1993 Stock Option Stock Option Plan
Plan from 5,000,000 shares to to extended the term
01 Steven W. Berglund, 02 Robert S. Cooper, an aggregate of 5,925,000 shares. of such plan by
03 John B. Goodrich, 04 William Hart, 05 Ulf three years.
J. Johansson, 06 Norman Y. Mineta, and 07 3. To approve an increase
Bradford W. Parkinson of 200,000 shares in the number 5. To approve an
of shares of Common Stock ammendment of
available for purchase by eligible the Company's [ ] [ ] [ ]
employees under the Company's [ ] [ ] [ ] bylaws to change
1988 Employee Stock Purchase the authorized
Plan from 2,950,000 shares to number of board of
an aggregate of 3,150,000 shares. directors to a variable
______________________________________________________ range between five and
nine members.
6. To ratify the
appointment of
Ernst & Young
LLP as the
independent [ ] [ ] [ ]
auditors of the
Company for the
current fiscal year
ending December 29, 2000.
7. To transact such
other business as
may properly [ ] [ ] [ ]
come before
the meeting or any
adjournment thereof.
_ _ _ _ _ _
|
|
|
|
|
|
|
Signature(s)______________________________________________ Dated _______, 2000
(This Proxy should be marked, dated, signed by the shareholder(s) exactly as his
or her name appears hereon, and 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
[Omitted picture of VOTE BY TELEPHONE OR INTERNET [Omitted picture
telephone] of computer]
QUICK * * * EASY * * * IMMEDIATE
YOUR VOTE IS IMPORTANT - YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone
24 hours a day - 7 days a week.
There is NO CHARGE to you for this call. - Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in
the lower right hand conrner of this form.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1.
When asked, please confirm your vote by Pressing 1.
OPTION #2: If you choose to vote on each proposal separately, press 0. You will
hear these instructions:
Proposal 1: To vote FOR ALL nominee, press 1; to WITHHOLD FOR
ALL nominees, press 9.
Proposal 2: To vote FOR, press 1; AGAINST, press 9;
ABSTAIN, press 0.
When asked, please confirm your vote by Pressing 1.
The instructions are the same for all remaining proposals.
or
2. VOTE BY INTERNET: Follow the instructions at our Website Address:
http://www.exproxy.com/trmb
or
3. VOTE BY PROXY: Mark, sign and date your proxy card and return promptly in
the enclosed envelope.
NOTE: If you vote by internet or telephone, THERE IS NO NEED TO MAIL BACK your
Proxy Card.
THANK YOU FOR VOTING.
35
<PAGE>
APPENDIX B
TRIMBLE NAVIGATION LIMITED ANNUAL MEETING TO BE HELD ON 05/11/00 AT 1:00 P.M.
PDT FOR HOLDERS AS OF 03/13/00
4 1-0001 AS AN ALTERNATIVE TO COMPLETING THIS FORM, YOU MAY ENTER
YOUR VOTE INSTRUCTION BY TELEPHONE AT 1-800-454-8683, OR
VIA THE INTERNET AT WWW.PROXYVOTE.COM AND FOLLOW THE SIMPLE
INSTRUCTIONS.
CUSIP: 896239100
DIRECTORS CONTROL NO.
- ---------- |-------
DIRECTORS RECOMMENDED: A VOTE FOR ELECTION OF THE FOLLWOING |
NOMINEES 0010100|
1- 01-STEVEN W. BERGLUND, 02-ROBERT S. COOPER, 03-JOHN B GOODRICH, |
04-WILLIAM HART, 05-ULF J. JOHANSSON, 06-NORMAN Y. MINETA, |
07-BRADFORD W. PARKINSON |
DIRECTORS
PROPOSALS RECOMMENDED
- ---------- ------------
2 - TO APPROVE AN INCERASE OF 925,000 SHARES -->>> FOR --->>>2
IN THE NUMBER OF SHARES OF COMMON STOCK RESERVED 0020702
FOR ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION
PLAN FROM 5,000,000 SHARES TO AN AGGREGATE OF
5,925,000 SHARES.
3 - TO APPROVE AN INCREASE OF 200,000 SHARES IN -->>> FOR --->>>3
THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR 0020702
PURCHASE BY ELIGIBLE EMPLOYEES UNDER THE COMPANY'S
1988 EMPLOYEE STOCK PURCHASE PLAN FROM 2,950,000 SHARES
TO AN AGGREGATE OF 3,150,000 SHARES.
4 - TO APPROVE AN AMENDMENT OF THE COMPANY'S 1990 ---->>> FOR --->>>4
DIRECTOR STOCK OPTION PLAN TO EXTEND THE TERM OF 0020702
SUCH PLAN BY THREE YEARS.
5 - TO APPROVE AN AMENDMENT OF THE COMPANY'S BYLAWS ---->>> FOR --->>>5
TO CHANGE THE AUTHORIZED NUMBER OF THE BOARD OF 0010105
DIRECTORS TO A VARIABLE RANGE BETWEEN FIVE AND
NINE MEMBERS.
6 - TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP ------->>> FOR --->>>6
AS THE INDEPENDENT AUDTIORS OF THE COMPANY FOR THE 0010200
CURRENT FISCAL YEAR ENDING DECEMBER 29, 2000.
*NOTE* SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF
36
<PAGE>
FOLD AND DETACH HERE
TRIMBLE NAVIGATION LIMITED
05/11/00 AT 1:00 P.M. PDT
6 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. 1 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
FOR AGAINST ABSTAIN
6 [ ] [ ] [ ]
DO NOT USE
DO NOT USE
_____________________________________ /____/____
FOLD AND DETACH HERE SIGNATURE(S) DATE
37
<PAGE>
[Logo] TRIMBLE
Two new ways to vote
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and you can get all future materials [] posted.
by internet. []
[] Using a touch-tone phone call the
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APPENDIX C
TRIMBLE NAVIGATION LIMITED
1993 STOCK OPTION PLAN
(as amended June 2, 1999)
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.
(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.
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(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.
(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 5,000,000 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
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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
Employeesand 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;
(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);
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(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 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
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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.
(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
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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
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
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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
(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 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.
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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.
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.
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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 June 2, 1999)
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 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.
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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 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
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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 lifetime, 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.
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.
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(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 2,950,000 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.
(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
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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.
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.
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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.
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 paragraph 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. 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
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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: ----------------------------
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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APPENDIX E
TRIMBLE NAVIGATION LIMITED
1990 DIRECTOR STOCK OPTION PLAN
(amended as of November 1, 1996)
1. Purposes of the Plan. The purposes of this Director Stock Option Plan
are to attract and retain the best available personnel for service as Directors
of the Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.
All options granted hereunder shall be "non-statutory stock options".
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the Common Stock of the Company.
(c) "Company" shall mean TRIMBLE NAVIGATION LIMITED, a California
corporation.
(d) "Continuous Status as a Director" shall mean the absence of any
interruption or termination of status as a Director.
(e) "Director" shall mean a member of the Board.
(f) "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 in and of itself to
constitute "employment" by the Company.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Option" shall mean a stock option granted pursuant to the Plan.
(i) "Optioned Stock" shall mean the Common Stock subject to an Option.
(j) "Optionee" shall mean an Outside Director who receives an Option.
(k) "Outside Director" shall mean a Director who is not an Employee.
(l) "Parent" shall mean a "parent corporation", whether now or hereafter
existing, as defined in Section 425(e) of the Internal Revenue Code of 1986, as
amended.
(m) "Plan" shall mean this 1990 Director Stock Option Plan.
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(n) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(o) "Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 425(f) of the Internal Revenue Code of
1986, as amended.
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 380,000 Shares (the "Pool") 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.
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein, the Plan shall be
administered by the Board.
(b) Procedure for Grants. All grants of Options hereunder shall be
automatic and non-discretionary and shall be made strictly in accordance with
the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an Option
to purchase 15,000 Shares (the "First Option") upon the later to occur of (A)
the effective date of this Plan, as determined in accordance with Section 6
hereof, or (B) the date on which such person first becomes a Director, whether
through election by the shareholders of the Company or appointment by the
Board of Directors to fill a vacancy.
(iii) After a First Option has been granted to any Outside Director, each
Outside Director shall thereafter be automatically granted an Option to purchase
5,000 Shares (a "Subsequent Option") on the day of each subsequent annual
shareholders meeting at which such Outside Director is reelected to an
additional term; provided, however, that no Subsequent Option shall be granted
for the first annual shareholders meeting following the grant of a First Option
to any director.
(iv) Notwithstanding the provisions of subsections (ii) and (iii) hereof,
in the event that a grant would cause the number of Shares subject to
outstanding Options plus the number of Shares previously purchased upon exercise
of Options to exceed the Pool, then each such automatic grant shall be for that
number of Shares determined by dividing the total number of Shares remaining
available for grant by the number of Outside Directors on the automatic grant
date. Any further grants shall then be deferred until such time, if any, as
additional Shares become available for grant under the Plan through action to
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increase the number of Shares which may be issued under the Plan or through
cancellation or expiration of Options previously granted hereunder.
(v) The terms of an Option granted hereunder shall be consistent with the
requirements set forth elsewhere in this plan and shall additionally include the
following:
(A) the Option shall be exercisable only while the Outside Director
remains a Director of the Company, except as set forth in Section 9 hereof.
(B) the Option shall become exercisable in installments cumulatively
with respect to 1/36 of the Shares for each complete calendar month after the
date of grant of such Option provided, however, that in no event shall any
Option be exercisable prior to obtaining shareholder approval of the Plan in
accordance with Section 17 hereof.
(c) Powers of the Board. Subject to the provisions and restrictions of the
Plan, the Board shall have the authority, in its discretion: (i) to determine,
upon review of relevant information and in accordance with Section 8(b) of the
Plan, the fair market value of the Common Stock; (ii) to determine the exercise
price per share of Options to be granted, which exercise price shall be
determined in accordance with Section 8(a) of the Plan; (iii) to interpret the
Plan; (iv) to prescribe, amend and rescind rules and regulations relating to the
Plan; (v) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted
hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
(e) Suspension or Termination of Option. If the President or his designee
reasonably believes that an Optionee has committed an act of misconduct, the
President may suspend the Optionee's right to exercise any option pending a
determination by the Board of Directors (excluding the Outside Director accused
of such misconduct). If the Board of Directors (excluding the Outside Director
accused of such misconduct) determines an Optionee has committed an act of
embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the
Company, breach of fiduciary duty or deliberate disregard of the Company rules
resulting in loss, damage or injury to the Company, or if an Optionee makes an
unauthorized disclosure of any Company trade secret or confidential information,
engages in any conduct constituting unfair competition, induces any Company
customer to breach a contract with the Company or induces any principal for whom
the Company acts as agent to terminate such agency relationship, neither the
Optionee nor his estate shall be entitled to exercise any option whatsoever. In
making such determination, the Board of Directors (excluding the Outside
Director accused of such misconduct) shall act fairly and shall give the
Optionee an opportunity to appear and present evidence on Optionee's behalf at a
hearing before a committee of the Board.
5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
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he is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his directorship at any time.
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 17 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 13 of the
Plan.
7. Term of Option. The term of each Option shall be ten (10) years from the
date of grant thereof.
8. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be 100% of the fair market value
per Share on the date of grant of the Option.
(b) Fair Market Value. The fair market value 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 mean of the
bid and asked prices of the Common Stock in the over-the-counter market on the
date of grant, as reported in The Wall Street Journal (or, if not so reported,
as otherwise reported by the National Association of Securities Dealers
Automated Quotation ("NASDAQ") System) or, in the event the Common Stock is
traded on the NASDAQ National Market System or listed on a stock exchange, the
fair market value per Share shall be the closing price on such system or
exchange on the date of grant of the Option, as reported in The Wall Street
Journal.
(c) Form of Consideration. The consideration to be paid for the Shares to
be issued upon exercise of an Option shall consist entirely of cash, check,
other Shares of Common Stock of the Company which (i) either have been owned by
the Optionee for more than six (6) months on the date of surrender, or were not
acquired directly or indirectly from the Company, and (ii) 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, or any combination of such
methods of payment.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times as are set forth in Section 4(b)
hereof; provided, however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with Section 17 hereof has been
obtained.
An Option may not be exercised for a fraction of a Share.
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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 consist of any consideration and method of payment
allowable under Section 8(c) 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. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after 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 a Director. In the event of the termination of
the Outside Director's Continuous Status as a Director, he may, but only within
thirty (30) days after the date of such termination, 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 an 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 a
Director as a result of his total and permanent disability (as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended), 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 a Director of the Company and who shall have been in Continuous
Status as a Director 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, 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 death.
(ii) within thirty (30) days after the termination of Continuous
Status as a Director, the Option may be exercised, at any time within twelve
(12) months following the date of death, 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.
10. Non-Transferability of Options. Unless otherwise provided for by the
Board, 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. If the Board
makes an option transferable, such option shall contain such additional terms
and conditions as the Board deems appropriate.
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 payment
or 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 in which
the stock of the Company is exchanged for stock of another company, 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
event that options are not assumed or substituted for in the event of a merger
as described in this Section, then the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. If the Option becomes fully
exercisable in the event of a merger, the Board shall notify the Optionee that
the Option shall be fully 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.
12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4(b) hereof. Notice
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of the determination shall be given to each Outside Director to whom an Option
is so granted within a reasonable time after the date of such grant.
13. 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 any 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.
14. 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,
state securities laws, 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.
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.
15. 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.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
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17. Shareholder Approval.
(a) Continuance of the Plan shall be subject to approval by the
shareholders of the Company at or prior to the first annual meeting of
shareholders held subsequent to the granting of an Option hereunder. If such
shareholder approval is obtained at a duly held shareholders' meeting, it may be
obtained by the affirmative vote of the holders of a majority of the outstanding
shares of the Company present or represented and entitled to vote thereon. If
such shareholder approval is obtained by written consent, it may be obtained by
the written consent of the holders of a majority of the outstanding shares of
the Company.
(b) Any required approval of the shareholders of the Company shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act and
the rules and regulations promulgated thereunder.
18. Information to Optionees. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports to shareholders, proxy statements and other
information provided to all shareholders of the Company.
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TRIMBLE NAVIGATION LIMITED
OUTSIDE DIRECTOR
NONSTATUTORY STOCK OPTION AGREEMENT
(as amended January 20, 1994)
Trimble Navigation Limited, a California corporation (the "Company"), has
granted to ____________________________ (the "Optionee"), an option (the
"Option") to purchase a total of __________ shares of Common Stock (the
"Shares"), at the price determined as provided herein, and in all respects
subject to the terms, definitions and provisions of the 1990 Director Stock
Option Plan (the "Plan") adopted by the Company, which is incorporated herein by
reference. Unless other wise defined herein, the terms defined in the Plan shall
have the same defined meanings herein.
1. Nature of the Option. This Option is intended by the Company and the
Optionee to be a Nonstatutory Stock Option, and does not qualify for any special
tax benefits to the Optionee. This Option is not an Incentive Stock Option.
2. Exercise Price. The exercise price is $__________ for each share of
Common Stock.
3. Exercise of Option. This Option shall be exercisable during its term in
accordance with the provisions of Section 9 of the Plan as follows:
(i) Right to Exercise.
(a) Subject to subsections 3(i)(b), (c) and (d) below, this Option
shall vest and become exercisable cumulatively, to the extent of 1/36 of the
Shares subject to the Option for each complete calendar month after the date
of grant of the Option.
(b) This Option may not be exercised for a fraction of a share.
(c) In the event of Optionee's death, disability or other
termination of Continuous Status as a Director, the exercisability of the Option
is governed by Section 9 of the Plan.
(d) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in Section 8 below.
(ii) Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise the Option and the number of Shares
in respect of which the Option is being exercised. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The written notice shall be accompanied by payment
of the exercise price. This Option shall be deemed exercised upon receipt by the
Company of such written notice accompanied by the exercise price.
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No Shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with
respect to such Shares.
4. Optionee's Representations. In the event the Shares purchasable pursuant
to the exercise of this Option have not been registered under the Securities Act
of 1933, as amended, at the time this Option is exercised, Optionee shall,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company an Investment Representation Statement in a form acceptable to the
Company.
5. Method of Payment. Payment of the exercise price shall be made, at the
election of the Board, by cash, check, or surrender of other shares of Common
Stock of the Company which (A) either have been owned by the Optionee for more
than six (6) months on the date of surrender or were not acquired, directly or
indirectly, from the Company and (B) have a fair market value on the date of
surrender equal to the exercise price of the Shares as to which the Option is
being exercised.
6. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
7. Non-Transferability of Option. This Option may not be transferred in any
manner other wise than by will or by the laws of descent or distribution or
pursuant to a qualified domestic relations order and may be exercised during the
lifetime of Optionee only by him. The terms of this Option shall be binding upon
the executors, administrators, heirs, successors and assigns of the Optionee.
8. Term of Option. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, and may be exercised during such
term only in accordance with the Plan and the terms of this Option.
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9. Taxation Upon Exercise of Option. Optionee understands that, upon
exercise of this Option, he will recognize income for tax purposes in an amount
equal to the excess of the then fair market value of the shares over the
exercise price. Upon a resale of such shares by the Optionee, any difference
between the sale price and the fair market value of the shares on the date of
exercise of the Option will be treated as capital gain or loss.
DATE OF GRANT: TRIMBLE NAVIGATION LIMITED,
----------
a California corporation
By:_______________________
Title:____________________
OPTIONEE ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
COMPANY'S 1990 DIRECTOR STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY
REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
STATUS AS A DIRECTOR OF THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS
RIGHT OR THE COMPANY'S RIGHT UNDER APPLICABLE LAW TO TERMINATE HIS STATUS AS A
DIRECTOR.
Optionee acknowledges receipt of a copy of the Plan and certain information
related thereto and represents that he is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Plan.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
Dated:___________ ____________________________________
Optionee
Residence Address:
___________________________________
___________________________________
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