UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


                 [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 1996

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the transition period from____to____

                         Commission File Number 0-18645


                           TRIMBLE NAVIGATION LIMITED
             (Exact name of registrant as specified in its charter)


                        California                     94-2802192
              (State or other jurisdiction of        (I.R.S. Employer
              incorporation or organization)          identification No.)

645 North Mary Avenue, Sunnyvale, California                   94088
(Address of Principal Executive Offices)                     (Zip Code)

                                  (408)481-8000
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such shorter  periods that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
               Yes    X             No

As of June 30, 1996, there were 21,887,400 shares of Common Stock (no par value)
outstanding.




                                      (1)

<PAGE>




                           TRIMBLE NAVIGATION LIMITED

This report contains  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934.  Actual  results could differ  materially  from those  indicated in the
forward-looking  statements  as a result of the risk  factors  set forth in this
report. The Company has attempted to identify forward-looking statements in this
report  by  placing  an  asterisk  (*) preceding the sentence containing those 
statements.


                                      INDEX
                                                                           Page

PART I.      FINANCIAL INFORMATION                                        Number




        Item 1.       Financial Statements


                      Condensed Consolidated Balance Sheets -              
                      June 30, 1996 and December 31, 1995                    3

                      Condensed Consolidated Statements of Operations -
                      Three and Six Months ended June 30, 1996
                      and 1995                                               4

                      Condensed Consolidated Statements of Cash Flows -
                      Six Months ended June 30, 1996 and 1995                5

                      Notes to Condensed Consolidated Financial

                      Statements                                             6



        Item 2.       Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                   10




PART II.       OTHER INFORMATION


        Item 4.       Submission of Matters to a Vote of Security Holders   17


        Item 6.       Exhibits and Reports on Form 8-K                      18


SIGNATURES                                                                  19


                                      (2)

<PAGE>




                           TRIMBLE NAVIGATION LIMITED
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                              June 30,     December 31,
                                                1996           1995
- ------------------------------------------------------------------------
(In thousands)                              (Unaudited)       (Note)
ASSETS                                     
Current assets:
    Cash and cash equivalents                $     20,080   $     29,711
    Short term investments, at market              64,537         67,451
    Accounts receivable, net                       37,040         39,123
    Inventories                                    40,633         31,201
    Deferred income taxes                             726            722
    Other current assets                            2,407          3,198
                                            -------------  -------------
      Total current assets                        165,423        171,406
                                            -------------  -------------

Net property and equipment                         22,243         19,751
Intangible assets                                   1,748            870
Deferred income taxes                                 867            852
Other assets                                        3,968          3,884
                                            -------------  -------------
      Total assets                           $    194,249    $   196,763
                                            -------------  -------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Current portion of long-term debt        $      1,326    $      2,014
    Accounts payable                               15,661          15,329
    Accrued compensation and benefits               6,265           5,745
    Other accrued liabilities                       8,998           8,340
    Customer advances                                  -            1,080
    Income taxes payable                            2,001           3,002
                                            -------------  --------------
      Total current liabilities                    34,251          35,510
                                            -------------  --------------

Noncurrent liabilities:
    Noncurrent portion of long-term debt and 
    other liabilities                              30,965           31,316
                                            -------------   --------------
      Total liabilities                            65,216           66,826
                                            --------------  --------------

Shareholders' equity:
    Common stock, less notes receivable            123,322          120,449
    Common stock warrants                              700              700
    Retained earnings                                4,968            8,699
    Unrealized gain (loss) on short 
    term investments                                   (23)             102
    Foreign currency translation adjustment              66            (13)
                                             --------------  --------------
      Total shareholders' equity                    129,033         129,937
                                             --------------  --------------

 Total liabilities and shareholders' equity    $    194,249    $    196,763
                                              =============  ==============

Note:  The balance sheet at December 31, 1995, has been derived from the audited
financial  statements  at that date but does not include all of the  information
and footnotes required by generally accepted accounting  principles for complete
financial statements.

See accompanying notes to condensed consolidated financial statements.



                                      (3)

<PAGE>




                           TRIMBLE NAVIGATION LIMITED
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                        Three Months Ended            Six Months Ended
                                             June 30,                    June 30,
                                     -------------------------  ---------------------------
                                        1996          1995         1996           1995
- -------------------------------------------------------------------------------------------
(In thousands, except per share data)
<S>                                       <C>          <C>          <C>            <C>    
Total revenue                        $     58,602  $    59,012  $    115,324  $     108,909
                                     ------------  -----------  ------------  -------------

Operating expenses:
   Cost of sales                           27,037       23,537        53,052         43,619
   Research and development                 9,144        8,120        17,969         15,944
   Sales and marketing                     16,844       15,913        32,908         29,724
   General and administrative               9,057        5,962        16,468         11,387
                                     ------------  -----------  ------------  -------------
    Total operating expenses               62,082       53,532       120,397        100,674
                                     ------------  -----------  ------------  -------------

Operating income (loss)                    (3,480)       5,480        (5,073)         8,235
                                     ------------  -----------  ------------  -------------

Non operating income (expense):
   Interest income                          1,150          612         2,397          1,071
   Interest and other expenses               (926)      (1,024)       (1,895)        (2,097)
   Foreign exchange gain (loss)                24          570           (93)           965
                                     ------------  -----------  ------------  -------------
   Total non operating income (expense)       248          158           409            (61)
                                     ------------  -----------  ------------  -------------

Income (loss) before income taxes          (3,232)       5,638        (4,664)         8,174
Income tax provision (benefit)               (647)       1,351          (933)         1,960
                                     ------------  -----------  ------------  -------------

Net income (loss)                     $    (2,585)  $    4,287  $     (3,731) $       6,214
                                     ============  ===========  ============  =============

Net income (loss) per share           $     (0.12)  $     0.21  $      (0.17) $        0.31
                                     ============  ===========  ============  =============

Weighted average common and
 dilutive common equivalent shares         21,791       20,471        21,735        20,308
                                     ============  ===========  ============  =============

</TABLE>


See accompanying notes to condensed consolidated financial statements.



                                      (4)

<PAGE>



                           TRIMBLE NAVIGATION LIMITED
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                        Six Months Ended
                                                            June 30,
                                                      1996            1995
- --------------------------------------------------------------------------------
(In thousands)

Net cash provided (used) by operating activities    $    (6,041)    $      8,421
                                                  --------------  --------------

Cash flow from investing activities:
    Purchase of short term investments                  (46,551)        (25,089)
    Maturity of short term investments                   34,252          14,950
    Sales of short term investments                      15,212               -
    Equity investments                                   (1,400)              -
    Acquisition of property and equipment                (6,624)         (6,642)
    Capitalized patent expenditures                        (438)           (522)
                                                  --------------  --------------
      Net cash used in investing activities              (5,549)        (17,303)
                                                  --------------  --------------
 
Cash flow from financing activities:
    Issuance of common stock                              2,873            4,918
    Collection of notes receivable                           49              105
    Payment of long-term debt                              (963)           (779)
                                                  --------------  --------------
      Net cash provided by financing activities           1,959            4,244
                                                  --------------  --------------


Net decrease in cash and cash equivalents                (9,631)         (4,638)

Cash and cash equivalents -- beginning of period         29,711           17,643
                                                  --------------  --------------
Cash and cash equivalents -- end of period           $   20,080      $    13,005
                                                  ==============  ==============

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
      Interest                                     $        787     $      1,940
      Income taxes, net of refunds                 $         83     $        500



See accompanying notes to condensed consolidated financial statements.




                                      (5)

<PAGE>




                           TRIMBLE NAVIGATION LIMITED
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - Basis of Presentation:

The condensed  consolidated  financial  statements  for the three and six months
ended June 30, 1996, and 1995  presented in this  Quarterly  Report on Form 10-Q
are  unaudited.  In the  opinion of  management,  these  statements  include all
adjustments  (consisting only of normal recurring  adjustments)  necessary for a
fair statement of the results for the interim periods  presented.  The condensed
consolidated financial statements should be read in conjunction with the audited
consolidated  financial  statements and notes thereto  included in the Company's
Annual Report to Shareholders for the year ended December 31, 1995.

The results of  operations  for the three month and six month periods ended June
30, 1996 are not necessarily  indicative of the results that may be expected for
the year ending December 31, 1996.


NOTE 2 - Inventories:

Inventories consist of the following:

                                             June 30,        December 31,
                                               1996              1995
- ---------------------------------------------------------------------------
(In thousands)

Raw materials                                  $ 19,974        $    15,892
Work-in-process                                   7,709              6,782
Finished goods                                   12,950              8,527
                                            ------------     --------------
                                               $ 40,633        $    31,201
                                            ------------     --------------




NOTE 3 - New Accounting Standards:

Effective January 1, 1996, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 121,  "Accounting for the Impairment of Long-Lived Assets
and for  Long-Lived  Assets to Be Disposed Of." The  implementation  of this new
accounting standard did not have a material impact on the Company's consolidated
operating results or financial position.


NOTE 4 - Contingencies:

NovAtel Litigation

In  November  1994,  the  Company  was  named as a  defendant  in an action
commenced in the United States  District Court for the District of Rhode Island,
NovAtel Communication Ltd. v. Trimble Navigation Limited, C.A. No. 94-0498 (ML).
Plaintiff   NovAtel  sought   preliminary  and  permanent   injunctive   relief,
unspecified  damages and interest thereon,  costs and  disbursements,  including
reasonable  attorneys'  fees, based upon the Company's  alleged  infringement of
U.S. Patent No. 5,101,416 (the `416 patent).

                                      (6)

<PAGE>

On April 21, 1995, the Company filed suit against NovAtel for  infringement
of the  Company's  U.S.  Patent No.  4,754,465  (the `465  patent) in the United
States  District  Court,  Northern  District of  California,  San Jose Division,
Trimble  Navigation  v. NovAtel  Communications  Ltd,  C.A. No.  C95-2405 SI. On
February  27,  1996,   Trimble  filed  a  Complaint   against   NovAtel  at  the
International Trade Commission in Washington,  D.C., alleging unfair acts in the
importation of goods,  namely,  infringement  of its `465 patent,  and seeking a
permanent  exclusion  order to  interdict  the  importation  by or on  behalf of
NovAtel into this country of infringing GPS receivers  manufactured  and sold by
NovAtel.

On July 16,  1996,  the  Company  and  NovAtel  entered  into an  agreement
resolving all matters in dispute and cross-licensing  certain  technologies.
The agreement ends the litigation.


Shareholder Litigation

On December 6, 1995, two  shareholders  filed a class action lawsuit against the
Company and certain  directors  and officers of the Company.  Subsequent to that
date,  additional lawsuits were filed by other  shareholders.  The lawsuits were
subsequently  amended and  consolidated  into one  Complaint  which was filed on
April 5, 1996.  The amended  consolidated  Complaint  asserts  claims  under the
federal  securites laws as a putative class action consisting of all persons who
purchased  the common  stock of the Company  during the period  April 18,  1995,
through  December 5, 1995 (the "Class Period").  The plaintiffs  allege that the
defendants  sought to induce the members of the Class to purchase the  Company's
common  stock  during the Class  Period at  artificially  inflated  prices.  The
plaintiffs  seek  unspecified  recissory or  compensatory  damages with interest
thereon as well as reasonable attorneys' fees and extraordinary equitable and/or
injunctive  relief. The Company has filed a motion to dismiss which is scheduled
to be heard by the Court on August 16,  1996.  The Company does not believe that
it is possible to predict the outcome of this litigation.

DAC Arbitration and Litigation

In February 1995, DAC International  Inc.  ("DAC"),  then a distributor and
sales  representative  of  the  Company,  terminated  its  sales  representative
agreement with the Company and thereafter filed an arbitration claim against the
Company in Palo Alto, California,  seeking damages of approximately  $2,100,000.
The damages alleged included claims for (i) damages resulting from the Company's
failure to assist DAC in depleting its  inventory of the  Company's  products by
filling  purchase orders from DAC's  inventory list, (ii) unpaid  commissions on
certain sales of Company  products,  (iii)  reimbursement  for certain marketing
expenses,  and (iv) damages resulting from the Company's  "debooking" of certain
orders for its TNL 8100 product. On July 15, 1996, the Arbitrator issued a Final
Liability  and  Opinion  Award  which  called for the  Company to pay a total of
$1,021,000  including interest,  of which $712,000 had already been paid on June
26, 1996. The Company paid the additional $309,000 on July 16, 1996, in order to
satisfy  the  Arbitrator's  award.  In the second  quarter  of 1996 the  company
charged  $850,000 against income in addition to the $390,000 that was accrued in
1995 to cover the expected settlement.

                                      (7)

<PAGE>

On March 26,  1996,  DAC filed a lawsuit  entitled  DAC  International,  Inc.  v
Trimble  Navigation  Ltd.,  Case No.  96-02032,  filed in the District  Court of
Travis County,  Texas. The Complaint  includes those claims discussed above over
which the arbitrator did not have jurisdiction. In addition, the Complaint makes
claims  of breach  of  contract,  fraud  and  negligent  misrepresentation.  The
Complaint  also seeks  declaratory  judgment  that the claims  asserted  are not
subject to mandatory arbitration, unspecified compensatory and punitive damages,
and attorneys'  fees and costs.  In April 1996, the Company removed this case to
the Federal District Court for the Western District of Texas.

On August 6,  1996,  Trimble  agreed to pay DAC  $500,000  which was  charged to
income  in the  second  quarter  of 1996.  As a  result  of this  agreement  all
litigation between the Company and DAC has been settled.

Other Litigation

In July 1993, an individual filed a Complaint  against the Company in which
the  individual  alleges the Company has an  obligation  to him for  commissions
earned and services provided in an amount in excess of $1,500,000. In June 1995,
the  Company's  motion for  summary  judgment  on all claims was  granted by the
court. The individual has filed an appeal for which no hearing date has yet been
set. The Company believes the Complaint is without merit and intends to continue
to defend itself vigorously.

A former  shareholder has filed an action against the Company claiming rights to
shares that were previously  canceled on the Company's stock records pursuant to
lost stock certificate  indemnification agreements. The Company does not believe
that there will be any adverse  consequences  to the Company as a result of this
case.

In October 1995,  an employee who was  terminated by the Company in 1992 filed a
Complaint  against  the  Company  alleging  that  his  incentive  stock  options
continued to vest and be  exercisable  subsequent to his  termination.  He seeks
damages in excess of  $1,000,000.  The Company has filed a general denial to the
Complaint,  and the matter is currently in discovery.  The Company believes that
the complaint is without merit and intends to defend itself vigorously.

Note 5 - Line of Credit

In August 1995, the Company entered into a $30,000,000  unsecured line of credit
agreement,  that expires in July 1997, with two banks. The agreement enables the
Company to borrow up to  $30,000,000  provided that certain  financial and other
covenants  are met. The  agreement  provides for payment of a commitment  fee of
0.5% for the unused portion of the line of credit.  Borrowings  bear interest at
the higher of (i) one of the bank's annual prime rate and (ii) the federal funds
rate plus 0.5%. To date no  borrowings  have been made under the line of credit.
Under  the  current  line of  credit  the  Company  is  restricted  from  paying
dividends.

As of June 30, 1996, the Company was not in compliance with certain covenants of
the line of credit  agreement.  The agreement was  subsequently  amended and the
Company is currently in compliance.

Note 6 - Acquisition

On July 2, 1996, the Company acquired the net assets of Terra Corporation, a New
Mexico  aviation  corporation,  in exchange for 140,860  shares of the Company's
common  stock and  options to purchase  12,000  shares of the  Company's  common
stock.  This acquisition  will be accounted for as a purchase and  substantially
all of the purchase price is expected to be allocated to goodwill.


                                      (8)

<PAGE>





                           TRIMBLE NAVIGATION LIMITED
 
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS


Revenues

Revenues for the three month and six month  periods  ended June 30,  1996,  were
$58,602,000 and  $115,324,000 as compared with  $59,012,000 and  $108,909,000 in
the  corresponding  1995  periods.  The table  below shows  revenues  during the
relevant period for each of the Company's business units:


<TABLE>
<CAPTION>

                                        Quarter Ended June 30,                  Six Months Ended June 30,
                                 --------------------------------------  ----------------------------------------
                                                             Increase/                                 Increase/
                                     1996         1995        (Decrease)      1996          1995       (Decrease)
- -----------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                  <C>           <C>          <C>         <C>           <C>           <C>

Surveying and mapping                 34,213        35,674       (4%)        66,591        64,668         3%
Tracking and communications           15,588        13,384       16%         29,355        23,293        26%
Navigation, aviation and marine        6,102         6,879      (11%)        12,294        13,771       (11%)
Military                               2,699         3,075      (12%)         7,084         7,177        (1%)
                                  -----------  ------------            ------------- ------------- 
 Total                              $ 58,602      $ 59,012       (1%)     $ 115,324     $ 108,909         6%
                                  -----------  ------------            ------------- -------------
</TABLE>


Surveying and Mapping

The decrease in sales in the second  quarter of 1996 compared to second  quarter
of 1995 was due to a  slowdown  in sales in Europe and  Japan.  Also  during the
quarter,  the Company  experienced delays in shipping newly introduced  products
and was unable to ship them until late in the quarter.  The decrease in sales of
survey and mapping  products in the second quarter of 1996 was partially  offset
by an additional $1,320,000 of revenue resulting from the early termination of a
contract by a customer in Japan.

Tracking and Communications

Tracking and  communications  revenues were higher primarily as a result of
revenues   recognized  related  the  contract  with  American  Mobile  Satellite
Corporation  (AMSC)  which is  discussed  in more  detail  below.  Tracking  and
communications  revenues  did not  increase as much as  expected  due in part to
lower  sales of in  vehicle  navigation  GPS  boards by the OEM group  that were
expected to be sold as "after market"  products.  The Company believes that this
slowdown  was as a result of a shift in demand  from  "after  market" to new car
sales.  There  can be no  assurance  that the  growth  rates in  either of these
markets will be sustained in the near future.

                                      (9)

<PAGE>

In April  1995,  the  Company  signed a large  contract  for the  supply of
Galaxy/GPS  land  mobile  satellite   terminals  to  American  Mobile  Satellite
Corporation (AMSC), a Reston, Virginia, based company that provides a variety of
voice and data services via satellite.  AMSC  contracted for delivery of product
beginning in mid-1995 and  continuing  through 1996.  AMSC requested late in the
fourth  quarter of 1995 that the Company cease delivery in part due to delays in
their completion of software.  Shipments under the original contract were halted
in the fourth  quarter  of 1995 and the  contract  was  amended.  $1,080,000  of
contract  renegotiation  fees were  recognized in the first quarter of 1996. The
amended contract between the Company and AMSC calls for production line shutdown
fees for the time that  Trimble is not  producing  product for shipment to AMSC.
Due to the  uncertainty  about  AMSC's  ability to pay,  revenues  for  products
shipped and contractual  shutdown fees were not recognized  until collection was
considered  probable.  In the second  quarter of 1996,  the  Company  recognized
$1,700,000 in revenue from products  shipped in December 1995 and March 1996 and
$1,000,000 of shutdown fees all of which have been paid.

In June 1996,  AMSC announced the conclusion of a round of financing  sufficient
to continue  operations  and to initiate  discussions  about the  resumption  of
shipments  of the  Galaxy  product.  At  this  time  management  is not  able to
determine when shipments under the amended contract will recur.

Aviation and Marine Navigation 

Sales of navigation products were lower in the 1996 periods as compared
to the 1995 periods,  due in part to lower sales of handheld products.  Sales of
product acquired from Terra  Corporation (see "Liquidity and Capital  Resources"
for additional  information) are expected to increase  aviation revenues for the
rest of the year. *The Company considers its aviation products to be a long term
growth  opportunity.  *It  believes  that success in this area will be dependent
upon the success of a current  strategic  alliance with Honeywell.  *Significant
shipments to Honeywell are expected to start in the third  quarter of 1996.  The
Company's  ability to ship such products are dependent upon FAA certification of
these  products.  The  Company  expects  to receive  certification  in the third
quarter of 1996.

Military 

Military sales are highly dependent on contracts which are subject to government
approval and are,  therefore,  expected to continue to fluctuate  from period to
period.  The  Company  believes  that  opportunities  in this  market  have been
substantially reduced by cutbacks in U.S. and foreign military spending.

Revenue outside the US

Sales to  unaffiliated  customers in locations  outside the U.S.  comprised
approximately  48% of revenue in the first six months of 1996 and  approximately
55% in the first six  months of 1995.  During  1996,  lower  revenues  in Europe
affected many of the Company's  product lines, and in Japan revenues were lower,
which  primarily  relating  to  surveying  and  mapping  products.  The  Company
anticipates  that export revenue and sales made by its subsidiaries in locations
outside  the U.S.  will  continue to account  for a  significant  portion of its
revenue,  and  therefore  the Company is subject to the risks  inherent in these
sales, including unexpected changes in regulatory requirements,  exchange rates,
governmental  approval,   tariffs  or  other  barriers.  Even  though  the  U.S.
Government  announced on March 29, 1996,  that it would support and maintain the
GPS system,  as well as  eliminate  the use of Selective  Availability  (S/A) (a
method of degrading GPS accuracy)  in certain foreign  markets,  there may be a
reluctance to purchase products based on GPS technology given the control of GPS
by the U.S.  Government.  The Company's results of operations could be adversely
affected if the Company were unable to continue to generate significant sales in
locations outside the U.S.

                                      (10)

<PAGE>


Gross Margin

Gross  margin  varies on a  quarterly  basis  due to a number  of  factors,
including product mix, domestic versus international  sales,  customer type, the
effects of  production  volumes and fixed  manufacturing  costs on unit  product
costs and new product  start-up  costs.  Gross margin as a  percentage  of total
product revenue was 54% in both the three month and six month periods ended June
30, 1996, as compared with 60% in both of the corresponding 1995 periods.  These
margins are enhanced by the positive impact of revenues recognized of $2,300,000
and  $1,080,000  in the second and first  quarters of 1996,  respectively.  (See
"Results of Operations - Revenue" for more details.) While these items are large
and non-  recurring,  the Company has a history of  recording  such items in the
past,  including  revenues of $1,333,000  and  $1,000,000  recorded in the third
quarter  and fourth  quarters  of 1995,  respectively.  There can  however be no
assurance  that similar  items will recur in the future.  The lower gross margin
percentage  in the 1996  period  primarily  reflects a shift in product mix from
higher  margin  surveying  and  mapping  sales  to  lower  margin  tracking  and
communications sales and decreases in the margins obtained on sales of surveying
and mapping products. There is no assurance that these margins will be sustained
because of mix changes within and among the business units,  market pressures on
unit selling prices, fluctuations in unit manufacturing costs and other factors.

In the future the Company expects a higher percentage of its business to be
conducted through alliances with strategic partners, e.g. Honeywell. As a result
of volume pricing and the assumption of certain  operating costs by the partner,
margins on this  business  are likely to be lower  than  sales  directly  to end
users.


Operating Expenses

The  following  table shows  operating  expenses for the periods  indicated  and
should be read in conjunction with the narrative descriptions of those operating
expenses below:

<TABLE>
<CAPTION>

                                  Quarter Ended June 30,                  Six Months Ended June 30,
                            -------------------------------------  ----------------------------------------

                               1996         1995       Increase         1996          1995    Increase
- --------------------------------------------------------------------------------------------------------
(In thousands) 
<S>                             <C>           <C>         <C>         <C>           <C>          <C>

Research and development         9,144         8,120       13%         17,969        15,944       13%
Sales and marketing             16,844        15,913        6%         32,908        29,724       11%
General and administrative       9,057         5,962       52%         16,468        11,387       45%
                            -----------  ------------            ------------- -------------
 Total                        $ 35,045      $ 29,995       17%      $  67,345     $  57,055       18%
                            -----------  ------------            ------------- -------------
</TABLE>


                                      (11)

<PAGE>



Research and Development

Research  and  development   increased  as  a  result  of  continued  aggressive
development of future products.

The Company expects that a significant  portion of future revenues will continue
to be  derived  from  sales  of newly  introduced  products.  Consequently,  the
Company's  future  success  depends on its  ability to  continue  to develop and
manufacture  new  competitive  products.  Advances  in product  technology  will
require continued substantial investment in research and development in order to
maintain and enhance the Company's market position and achieve high gross profit
margins.  Development and  manufacturing  schedules for technology  products are
difficult  to  predict,  and there can be no  assurance  that the  Company  will
achieve  timely  initial  customer   shipments  of  new  products.   The  timely
availability  of these products in volume and their  acceptance by customers are
important  to the future  success of the Company.  In  addition,  certain of the
Company's products are subject to governmental and similar certifications before
they can be sold. For example,  FAA  certification  is required for all aviation
products.  An inability or delay in obtaining such certifications  could have an
adverse effect on the Company's operating results.


Sales and Marketing

The  increased  expense  in the 1996  period  is a  primary  result  of the
expansion of the Company's selling efforts into new geographic areas.

The  Company's  future  growth  will  depend  upon the  timely  development  and
continued  viability of the markets in which the Company currently  competes and
upon the  Company's  ability to continue to identify and exploit new markets for
its products. In addition, the Company has encountered  significant  competition
in selected  markets,  and the Company expects such  competition to intensify as
the market for GPS applications  receives  acceptance.  Several of the Company's
competitors  are  major  corporations  with  substantially   greater  financial,
technical,  marketing and  manufacturing  resources.  Increased  competition  is
likely to result in reduced  market share and in price  reductions  of GPS-based
products, which could adversely affect the Company's revenues and profitability.
The increase in  competition  has also led to a longer sales cycle which has the
effect of reducing the ratio of revenues to sales and marketing expenses.


General and Administrative

The increased general and administrative expense in the 1996 second quarter
primarily  reflects  higher  legal fees and costs of  settling  litigation.  The
Company  expects that legal fees and settlement  costs will decrease as a result
of the  settlement  of  litigation  with DAC and  NovAtel  in July  1996.  Costs
associated with these  settlements  were accrued into the quarter ended June 30,
1996.  See Note 4 of the Condensed  Consolidated  Financial  Statements for more
details.


Income Taxes

The Company  recorded a tax benefit of 20% of the loss before  income  taxes for
the six months ended June 30, 1996.  The income tax rates of 20% and 24% for the
first six months  ended June 30, 1996 and 1995  respectively,  are less than the
federal  statutory rate primarily due to the realization of previously  reserved
deferred  tax  assets.  The 1996  rate is lower  than the 1995 rate due to lower
foreign taxes.


                                      (12)

<PAGE>

Liquidity and Capital Resources

For the six  month  period  ended  June 30,  1996,  the cash  used in  operating
activities  was  $6,041,000  as compared to an inflow of  $8,421,000 in the same
period  in 1995.  Cash  provided  by sales of  Common  Stock in 1996  represents
proceeds from purchases made pursuant to the Company's stock option and employee
stock  purchase  plans and totaled  $2,873,000 for the six months ended June 30,
1996.  During the last six  months the  Company  has  relied  primarily  on cash
provided by financing activities and net sales of short-term investments to fund
operations,  capital expenditures and other investing activities.  The Company's
ability to generate cash from operations will depend in a large part on revenues
and the rate of collections of accounts receivable. Management believes that its
cash, cash  equivalents and short-term  investment  balances,  with its existing
credit line, will be sufficient to meet its anticipated  cash needs for at least
one  year.  At June 30,  1996,  the  Company  had cash and cash  equivalents  of
$20,080,000 and short-term investments of $64,537,000.

In February  1996, the Company  announced  that it had approved a  discretionary
program  whereby up to 600,000  shares of its common stock may be repurchased to
offset  potential  dilutive  effects to earnings  per share from the issuance of
stock options.  The Company intends to use existing cash,  cash  equivalents and
short-term  investments to finance any stock repurchases under this program.  No
shares have been purchased under this program to date.

On July 2, 1996, the Company acquired the net assets of Terra  Corporation,
a New  Mexico  aviation  corporation,  in  exchange  for  140,860  shares of the
Company's  common stock and options to purchase  12,000  shares of the Company's
common  stock.  This  acquisition  will  be  accounted  for  as a  purchase  and
substantially all of the purchase price is expected to be allocated to goodwill.
There can be no assurances that this acquisition will be successful.


Other Risk Factors

Revenue has tended to fluctuate  on a quarterly  basis due to the timing of
shipments of products under  contracts,  the sale of license rights and seasonal
patterns favoring spring and summer for the surveying and mapping business. This
pattern was not  repeated in 1996 and the  Company can give no  assurances  that
there will be any  reversion to the  seasonal  revenue  trends  during the third
quarter of 1996. A significant  portion of quarterly  revenues occur from orders
received and immediately  shipped to customers in the last few weeks and days of
a quarter.  If orders are not  received,  or shipments  were to be delayed a few
days at the end of a quarter, operating results would be significantly adversely
impacted.  The visibility and predictability of future revenues are difficult to
predict and projections  are primarily based on historical  models which are not
necessarily accurate representations of the future.

A significant number of components used by the Company in the manufacture of its
products are  obtainable  only from sole  sources.  Furthermore,  in many cases,
despite the  availability of multiple  sources,  the Company may select a single
source  in  order  to  maintain  quality  control  and to  develop  a  strategic
relationship  with the supplier.  However,  if the Company is unable to obtain a
sufficient supply of these components from its current vendors, it is likely the
Company  could  experience  a delay in product  shipments  that would  adversely
affect the Company's  results of operations  and damage  customer  relationships
until an alternative source could be obtained.  In addition,  the Company has in
the past experienced  shortages of semiconductors and other components that have
impacted the Company's ability to build inventory to ship on demand.

                                      (13)

<PAGE>

Scarcity of certain  components,  especially  semiconductors,  has  required the
Company to order greater quantities,  for safety stock, than under normal supply
conditions.  While  in the  past it was  possible  to  delay  receipt  of  these
components,  or cancel orders, it may become  increasingly  difficult to do this
leaving the Company with an excess supply of these components. While the Company
does not  believe  that it has any major  problems  of supply at this time it is
possible that they may occur in the future.

The Company has a  relatively  fixed cost  structure  in the short term which is
determined by the business plans and strategies the Company intends to implement
in the markets it addresses.  As a result  percentage  increases or decreases in
revenues have a significantly  higher  percentage impact on net income or losses
and earnings per share than a company with a more variable cost structure.

The current tax rate of 20% assumes a return to profitability in the second half
of the year.  The tax rate could  change  significantly  if this does not occur,
resulting in additional tax expense in future periods.

* In the longer term the Company believes that the OEM market will comprise
a  significant  portion of the  Company's  business.  The OEM market  differs in
nature from most of the Company's  markets  because volumes are high and margins
relatively low. OEM customers are extremely price  sensitive.  As costs decrease
through technological advances these advances will be passed on to the customer.
To compete in the OEM market requires high volume  production and  manufacturing
techniques.  Customers expect high quality standards with very low defect rates.
The Company is relatively inexperienced compared to competitors with far greater
resources in such high volume manufacturing and associated support activities.

The  Company's  stock price is subject to  significant  volatility.  If revenues
and/or earnings fail to meet the expectations of the investment community, there
could  be an  immediate  and  significant  impact  on the  trading  price of the
Company's stock.

The value of the Company's  products relies  substantially on the Company's
technical  innovation in fields in which there are many current patent  filings.
The  Company  recognizes  that as new  patents  are issued or are brought to the
Company's  attention by the holders of such patents, it may be necessary for the
Company to withdraw  products  from the market,  take a license from such patent
holders,  or redesign  its  products.  The  Company  does not believe any of its
products  infringe  patents or other  proprietary  rights of third parties,  but
cannot  be  certain  they  do  not do so.  In  addition,  the  legal  costs  and
engineering  time  required  to  safeguard  intellectual  property  or to defend
against litigation could become a significant expense of operations. Such events
could have a material adverse effect on the Company's revenues or profitability.

The Company is continually evaluating alliances and external investments in
technologies  related to its business and has already entered into alliances and
made  relatively  small  investments  in  GPS  related   technology   companies.
Acquisitions  of companies,  divisions of  companies,  or products and alliances
entail  numerous  risks,  including (i) the potential  inability to successfully
integrate acquired operations and products or to realize anticipated  synergies,
economies of scale or other value, (ii) diversion of management's attention, and
(iii) loss of key employees of acquired operations. Any such problems could have
a material  adverse effect on the Company's  business,  financial  condition and
results of  operations.  No  assurances  can be given that the Company  will not
incur problems from current or future alliances,  acquisitions,  or investments.
Furthermore,  there can be no assurance that the Company will realize value from
any such alliances, acquisitions, or investments.

                                      (14)

<PAGE>


The  Company's  products rely on signals from the GPS Navstar  satellite  system
built and maintained by the U.S.  Department of Defense.  Navstar satellites and
their  ground  support  systems  are  complex   electronic  systems  subject  to
electronic  and  mechanical  failures  and possible  sabotage.  Some of these 24
satellites have exceeded their design lives of 7.5 years and are also subject to
damage by the hostile space environment in which they operate. Repair of damaged
or  malfunctioning   satellites  is  impossible.  If  a  significant  number  of
satellites were to become inoperable,  there could be a substantial delay before
they are replaced  with new  satellites.  A reduction in the number of operating
satellites  would impair the current utility of the GPS system and the growth of
current  and  additional  market  opportunities.  In  addition,  there can be no
assurance that the U.S.  Government  will remain  committed to the operation and
maintenance of GPS  satellites  over a long period of time, nor that policies of
the U.S.  Government  allowing  for the use of GPS  without  charge  will remain
unchanged. Because of ever increasing commercial applications of GPS, other U.S.
Government  agencies may become involved in the administration or the regulation
of the  use of GPS  signals.  Any of the  foregoing  factors  could  affect  the
willingness  of buyers of the  Company's  products to select  GPS-based  systems
instead of products  based on competing  technologies.  Any resulting  change in
market  demand for GPS  products  would have a  material  adverse  effect on the
Company's  financial  results.  Certain European  government  organizations have
expressed concern  regarding the  susceptibility of GPS equipment to intentional
or inadvertent  signal  interference.  Such concern could translate into reduced
demand for GPS products in certain geographic regions.


                                      (15)

<PAGE>



                                    






P
ART II.  OTHER INFORMATION


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                The annual  meeting of  shareholders  of the company was held in
 Sunnyvale, California, on May 2, 1996.

                An election of Directors was held with the following individuals
being elected to the Company's Board of Directors.

                                                                 VOTES          
                                                          For          Withheld
                      Robert S. Cooper                 17,939,776        65,525
                      Zvonko Fazarinc                  17,933,419        71,882
                      John B. Goodrich                 17,896,188       109,113
                      William Hart                     17,939,076        66,225
                      Bradford W. Parkinson            17,941,391        63,910
                      Charles R. Trimble               17,941,441        63,860

Other  matters  voted upon at the  meeting  and the  results of the voting  with
respect to each such matter were as follows:

     (1) Approval of an increase of 600,000 shares of Common Stock available for
issuance  under the  Company's  1993 Stock  Option  Plan  (16,040,908  in favor,
1,689,509 opposed, 256,619 abstentions, 18,265 broker non-votes).

     (2) Approval of an increase of 100,000 shares of Common Stock available for
issuance  under the Company's  1990 Director  Stock Option Plan  (17,016,236  in
favor, 708,737 opposed, 261,763 abstentions, 18,565 broker non-votes).

     (3)  Ratification  of the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1996 (17,871,178 in favor,
77,244 opposed, 55,879 abstentions, 0 broker non-votes).



                                      (16)

<PAGE>




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        A.     Exhibits                                                     Page
                                                                          Number

               10.54  Revolving Credit Agreement-First Amendment           19-21
                     
               10.55  Revolving Credit Agreement-Second Amendment          22-24

               11.1   Computation of Earnings (Loss) Per Share                25

               27     Financial Data Schedule                                 26
                                                                      
        B.     Report on Form 8-K

               There were no reports on Form 8-K filed  during the
        quarter ended June 30, 1996.


                                      (17)

<PAGE>






                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.




TRIMBLE NAVIGATION LIMITED
(Registrant)



By:       /s/ John H. Barnet
               John H. Barnet
               (Executive Vice President Finance and Chief Financial Officer)



DATE:  August 12, 1996


                                      (18)

<PAGE>






                          
                           TRIMBLE NAVIGATION LIMITED

                                 FIRST AMENDMENT
                                       to
                           REVOLVING CREDIT AGREEMENT


         This FIRST AMENDMENT (the "Amendment"),  dated as of April 30, 1996, is
among Trimble  Navigation  Limited (the "Borrower"),  The First National Bank of
Boston  ("FNBB"),  Mellon  Bank,  N.A.  ("Mellon"  and together  with FNBB,  the
"Banks"),  and The First  National  Bank of Boston as agent for  itself  and the
other Banks (the "Agent").

         WHEREAS,  the  Borrower,  the Banks and the Agent are  parties  to that
certain  Revolving  Credit  Agreement,  dated as of August 4, 1995 (the  "Credit
Agreement"),  pursuant to which the Banks,  upon certain  terms and  conditions,
have  made  loans to and may issue  letters  of credit  for the  benefit  of the
Borrower; and

         WHEREAS, the Borrower had requested that the Banks agree, and the Banks
have agreed,  on the terms and subject to the  conditions  set forth herein,  to
make certain changes to the Credit Agreement;

         NOW, THEREFORE, the parties hereto hereby agree as follows:

         P 1. Defined  Terms.  Capitalized  terms  which are used  herein  
without  definition  and which are  defined in the Credit Agreement shall 
have the same meanings herein as in the Credit Agreement.

         P 2. Amendment of Credit  Agreement.  Section 9.1 of the Credit 
Agreement is hereby amended by deleting from clause
 (i) of such P 9.1
the parenthetical "(treated as a single accounting period)".

         P 3.  Affirmation and Acknowledgment of the Borrower.  The Borrower
hereby  ratifies and confirms all of its  Obligations  to the Banks,  including,
without limitation,  the Revolving Credit Loans, and the Borrower hereby affirms
its absolute and unconditional  promise to pay to the Banks the Revolving Credit
Loans and all other amounts due under the Credit Agreement as amended hereby.

         P 4. Representations and Warranties.  The Borrower hereby represents 
and warrants to the Banks as follows:

                  (a)  The  execution  and  delivery  by the  Borrower  of  this
         Amendment and the  performance by the Borrower of its  obligations  and
         agreements  under this  Amendment  and the Credit  Agreement as amended
         hereby, are within the corporate  authority of the Borrower,  have been
         authorized  by all  necessary  corporate  proceedings  on behalf of the
         Borrower,  and do not and will not  contravene  any provision of law or
         any of the Borrower's charter,  other incorporation papers,  by-laws or
         any stock  provision  or any  amendment  thereof  or of any  indenture,
         agreement, instrument or undertaking binding upon the Borrower.

                                      (19)

<PAGE>


                  (b) This Amendment and the Credit  Agreement as amended hereby
         constitute  legal,  valid  and  binding  obligations  of the  Borrower,
         enforceable  in  accordance  with  their  respective  terms,  except as
         limited  by  bankruptcy,  insolvency,  reorganization,   moratorium  or
         similar laws  relating to or affecting  generally  the  enforcement  of
         creditors' rights.

                  (c)  No  approval  or  consent   of,  or  filing   with,   any
         governmental  agency or authority is required to make valid and legally
         binding the execution,  delivery or performance by the Borrower of this
         Amendment  or  the  Credit   Agreement  as  amended   hereby,   or  the
         consummation  by the  Borrower  of the  transactions  among the parties
         contemplated hereby and thereby or referred to herein.

                  (d) The representations and warranties contained in P 6 of
         the Credit Agreement were correct at and as of the date made. Except to
         the  extent  that  the  facts  upon  which  such   representations  and
         warranties  were based have changed in the ordinary  course of business
         (which  changes,  either  singly  or in the  aggregate,  have  not been
         materially  adverse) and after giving effect to the provisions  hereof,
         such  representations  and warranties also are correct at and as of the
         date hereof.

                  (e) The Borrower has  performed  and complied in all materials
         respects with all terms and conditions  herein required to be performed
         or complied  with by it prior to or at the time  hereof,  and as of the
         date hereof, after giving effect to the provisions hereof, there exists
         no Event of Default or Default.

       P 6. Effectiveness.  The  effectiveness  of this  Amendment  shall be
subject to the  satisfaction  of the following condition:

                  (a) Delivery.  Each of the  Borrower,  the Banks and the 
Agent  shall have  executed  and  delivered  this Amendment.

         P 7.  Miscellaneous  Provisions.  (a) Except as otherwise expressly
provided by this Amendment,  all of the terms,  conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement,  as amended hereby,  shall continue in
full force and effect, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.

                  (b) THIS  AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT
         UNDER SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS
         OF THE COMMONWEALTH OF MASSACHUSETTS.

                  (c)  This   Amendment   may  be  executed  in  any  number  of
         counterparts,  but all such counterparts shall together  constitute but
         one  instrument.  In  making  proof of this  Amendment  it shall not be
         necessary to produce or account for more than one counterpart signed by
         each party hereto by and against which enforcement hereof is sought.

                                      (20)

<PAGE>


                  (d) Pursuant to P 15 of the Credit Agreement, the Borrower
         hereby  agrees  to  pay to the  Agent,  on  demand  by the  Agent,  all
         reasonable  out-of-pocket  costs and expenses  incurred or sustained by
         the  Agent  in  connection  with  the  preparation  of  this  Amendment
         (including reasonable legal fees).

         IN WITNESS WHEREOF,  the parties hereto have executed this Amendment as
of the date first written above.

                           TRIMBLE NAVIGATION LIMITED



                             By: /s/ John H. Barnet
                                Executive Vice President and
                                Chief Financial Officer

                           THE FIRST NATIONAL BANK OF
                           BOSTON, Individually, and as Agent



                            By: /s/ Lee A. Merkle
                                Vice President

                            MELLON BANK, N.A.



                            By: /s/ Jane R. Westrich
                                Vice President



                                      (21)

<PAGE>



                                                               
                           TRIMBLE NAVIGATION LIMITED

                                SECOND AMENDMENT
                                       to
                           REVOLVING CREDIT AGREEMENT


         This SECOND AMENDMENT (the "Amendment"),  dated as of June 30, 1996, is
among Trimble  Navigation  Limited (the "Borrower"),  The First National Bank of
Boston  ("FNBB"),  Mellon  Bank,  N.A.  ("Mellon"  and together  with FNBB,  the
"Banks"),  and The First  National  Bank of Boston as agent for  itself  and the
other Banks (the "Agent").

         WHEREAS,  the  Borrower,  the Banks and the Agent are  parties  to that
certain  Revolving Credit  Agreement,  dated as of August 4, 1995 (as amended by
the First Amendment to Revolving Credit  Agreement,  dated as of April 30, 1996,
the "Credit  Agreement"),  pursuant to which the Banks,  upon certain  terms and
conditions,  have made loans to and may issue  letters of credit for the benefit
of the Borrower; and

         WHEREAS, the Borrower had requested that the Banks agree, and the Banks
have agreed,  on the terms and subject to the  conditions  set forth herein,  to
make certain changes to the Credit Agreement;

         NOW, THEREFORE, the parties hereto hereby agree as follows:

         P. 1. Defined  Terms.  Capitalized  terms  which are used  herein  
without  definition  and which are  defined in the Credit Agreement shall have 
the same meanings herein as in the Credit Agreement.

         P. 2. Amendment of Credit
  Agreement.  Section 9.1 of the Credit  
Agreement is hereby amended by adding the following proviso at the end of 
such P.  from clause (I) of such P. 9.1:

                  ; provided,  however, solely for the fiscal quarter ended June
                  30,  1996,  so long as each of  Consolidated  Net  Deficit and
                  Consolidated  Net Operating  Deficit shall not be greater than
                  $4,500,000,  the Borrower shall not be required to comply with
                  clause (I) of this P. 9.1

         P. 3. Affirmation  and  Acknowledgment  of the Borrower.  The Borrower
hereby  ratifies and confirms all of its  Obligations  to the Banks,  including,
without limitation,  the Revolving Credit Loans, and the Borrower hereby affirms
its absolute and unconditional  promise to pay to the Banks the Revolving Credit
Loans and all other amounts due under the Credit Agreement as amended hereby.

         P. 4. Representations and Warranties.  The Borrower hereby represents 
and warrants to the Banks as follows:

                  (a)  The  execution  and  delivery  by the  Borrower  of  this
         Amendment and the  performance by the Borrower of its  obligations  and
         agreements  under this  Amendment  and the Credit  Agreement as amended
         hereby, are within the corporate  authority of the Borrower,  have been
         authorized  by all  necessary  corporate  proceedings  on behalf of the
         Borrower,  and do not and will not  contravene  any provision of law or
         any of the Borrower's charter,  other incorporation papers,  by-laws or
         any stock  provision  or any  amendment  thereof  or of any  indenture,
         agreement, instrument or undertaking binding upon the Borrower.

                                      (22)

<PAGE>

                  (b) This Amendment and the Credit  Agreement as amended hereby
         constitute  legal,  valid  and  binding  obligations  of the  Borrower,
         enforceable  in  accordance  with  their  respective  terms,  except as
         limited  by  bankruptcy,  insolvency,  reorganization,   moratorium  or
         similar laws  relating to or affecting  generally  the  enforcement  of
         creditors' rights.

                  (c)  No  approval  or  consent   of,  or  filing   with,   any
         governmental  agency or authority is required to make valid and legally
         binding the execution,  delivery or performance by the Borrower of this
         Amendment  or  the  Credit   Agreement  as  amended   hereby,   or  the
         consummation  by the  Borrower  of the  transactions  among the parties
         contemplated hereby and thereby or referred to herein.

                  (d) The  representations  and warranties  contained in P. 6 of
         the Credit Agreement were correct at and as of the date made. Except to
         the  extent  that  the  facts  upon  which  such   representations  and
         warranties  were based have changed in the ordinary  course of business
         (which  changes,  either  singly  or in the  aggregate,  have  not been
         materially  adverse) and after giving effect to the provisions  hereof,
         such  representations  and warranties also are correct at and as of the
         date hereof.

                  (e) The Borrower has  performed  and complied in all materials
         respects with all terms and conditions  herein required to be performed
         or complied  with by it prior to or at the time  hereof,  and as of the
         date hereof, after giving effect to the provisions hereof, there exists
         no Event of Default or Default.

         P. 6. Effectiveness.  The  effectiveness  of this Amendment shall be
subject to the agent of this Amendment  executed by each of the Borrower,
the Banks and the Agent.

         P. 7.  Miscellaneous  Provisions.  (a)  Except as  otherwise  expressly
provided by this Amendment,  all of the terms,  conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement,  as amended hereby,  shall continue in
full force and effect, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.

                  (b) THIS  AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT
UNDER SEAL AND SHALL BE  CONSTRUED  ACCORDING TO AND GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.

                  (c)  This   Amendment   may  be  executed  in  any  number  of
counterparts,  but all  such  counterparts  shall  together  constitute  but one
instrument.  In making  proof of this  Amendment  it shall not be  necessary  to
produce or account for more than one counterpart  signed by each party hereto by
and against which enforcement hereof is sought.

                                      (23)

<PAGE>

                  (d)  Pursuant to P. 15 of the Credit  Agreement,  the Borrower
hereby  agrees  to pay to the  Agent,  on demand by the  Agent,  all  reasonable
out-of-pocket  costs  and  expenses  incurred  or  sustained  by  the  Agent  in
connection with the preparation of this Amendment  (including  reasonable  legal
fees).

         IN WITNESS WHEREOF,  the parties hereto have executed this Amendment as
of the date first written above.

                           TRIMBLE NAVIGATION LIMITED



                             By: /s/ John H. Barnet
                                 Executive Vice President
                                 Chief Financial Officer

                           THE FIRST NATIONAL BANK OF
                           BOSTON, Individually, and as Agent



                           By: /s/Elizabeth C. Evertt
                                Vice President

                          MELLON BANK, N.A.



                          By: /s/ V. Charles Jackson
                              Senior Vice President



                                      (24)

<PAGE>







                           TRIMBLE NAVIGATION LIMITED
                                  EXHIBIT 11.1

                 Computation of Earnings (Loss) Per Common Share

<TABLE>
<CAPTION>

                                                          Three Months Ended            Six Months Ended
                                                                June 30,                   June 30,
                                                         1996           1995          1996          1995
- -------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)

PRIMARY EARNINGS (LOSS) PER COMMON SHARE
<S>                                                        <C>           <C>           <C>           <C>    

 Computation of common and common
   equivalent shares outstanding:
    Common stock outstanding                                21,791        19,079        21,735        18,970
    Common stock options                                        -          1,194            -          1,161
    Common stock warrants                                       -            198            -            177
                                                      ------------   ------------  ------------ -------------
 Total weighted average common
    and dilutive common equivalent shares outstanding       21,791        20,471        21,735        20,308
                                                      ============   ============  ============ =============


 Net income (loss)                                     $   (2,585)   $     4,287   $    (3,731) $      6,214
                                                      ============   ============  ============ =============


 Primary earnings (loss) per share                     $    (0.12)   $      0.21   $     (0.17) $       0.31
                                                      ============   ============  ============ =============


FULLY DILUTED EARNINGS (LOSS) PER COMMON SHARE

 Computation of common and common
   equivalent shares outstanding:
    Common stock outstanding                               21,791         19,079        21,735        18,970
    Common stock options                                       -           1,255            -          1,203
    Common stock warrants                                      -             210            -            185
                                                      ------------   ------------  ------------ -------------
 Total weighted average common
    and dilutive common equivalent shares outstanding      21,791         20,544        21,735        20,358
                                                      ============   ============  ============ =============


 Net income (loss)                                     $   (2,585)   $     4,287   $    (3,731) $      6,214
                                                      ============   ============  ============ =============


 Fully diluted earnings (loss) per share               $    (0.12)   $      0.21   $     (0.17) $       0.31
                                                      ============   ============  ============ =============
</TABLE>


                                      (25)

<PAGE>






<TABLE> <S> <C>
                                    
<ARTICLE>                                5
<LEGEND>                             
 THE SCHEDULE  CONTAINS  SUMMARY  FINANCIAL  INFORMATION  EXTRACTED FROM THE
CONDENSED  CONSOLIDATED  BALANCE SHEET AND CONDENSED  CONSOLIDATED  STATEMENT OF
EARNINGS  AND IS  QUALIFIED  IN ITS  ENTIRETY  BY  REFERENCE  TO SUCH  FINANCIAL
STATEMENTS
</LEGEND>                            
<MULTIPLIER>                                    1,000
                                          
<S>                                        <C>
<PERIOD-TYPE>                            6-MOS
<FISCAL-YEAR-END>                        DEC-31-1996
<PERIOD-END>                             JUN-30-1996

<CASH>                                         20,080
<SECURITIES>                                   64,537
<RECEIVABLES>                                  37,040
<ALLOWANCES>                                        0
<INVENTORY>                                    40,633
<CURRENT-ASSETS>                              165,423
<PP&E>                                         22,243
<DEPRECIATION>                                      0
<TOTAL-ASSETS>                                194,249
<CURRENT-LIABILITIES>                          34,251
<BONDS>                                             0
<PREFERRED-MANDATORY>                               0
<PREFERRED>                                         0
<COMMON>                                      123,322
<OTHER-SE>                                      5,711
<TOTAL-LIABILITY-AND-EQUITY>                  194,249
<SALES>                                       115,324
<TOTAL-REVENUES>                              115,324
<CGS>                                          53,052
<TOTAL-COSTS>                                  53,052
<OTHER-EXPENSES>                               67,345
<LOSS-PROVISION>                                    0
<INTEREST-EXPENSE>                              1,895
<INCOME-PRETAX>                                (4,664)
<INCOME-TAX>                                     (933)
<INCOME-CONTINUING>                            (3,731)
<DISCONTINUED>                                      0
<EXTRAORDINARY>                                     0
<CHANGES>                                           0
<NET-INCOME>                                   (3,731)
<EPS-PRIMARY>                                      (0.17)
<EPS-DILUTED>                                      (0.17)
        

                             



</TABLE>