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 October 1, 1999

                                       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 November 5, 1999,  there were  22,556,500  shares of Common Stock (no
par value) outstanding


                                       1

<PAGE>



                           TRIMBLE NAVIGATION LIMITED

                                      INDEX
                                                                          Page

PART I.         FINANCIAL INFORMATION                                    Number


 Item 1.  Financial Statements

          Condensed Consolidated Balance Sheets -
          October 1, 1999 and January 1, 1999                                3

          Condensed Consolidated Statements of Operations -
          Three and Nine Months ended October 1, 1999 and October 2, 1998    4

          Condensed Consolidated Statements of Cash Flows -
          Nine Months ended October 1, 1999 and October 2, 1998              5

          Notes to Condensed Consolidated Financial Statement                6


 Item 2.  Management's Discussion and Analysis of Financial Condition and 
          Results of Operations                                             13


 Item 3.  Quantitative and Qualitative Disclosure of Market Risk            21


PART II. OTHER INFORMATION


  Item 6.  Exhibits and Reports on Form 8-K                                 23

SIGNATURES                                                                  24

                                       2

<PAGE>


 PART I. FINANCIAL INFORMATION

 Item 1. Financial Statements

                           TRIMBLE NAVIGATION LIMITED
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                         October 1,  January 1,
                                                           1999        1999
 ------------------------------------------------------------------------------
 (In thousands)                                          (Unaudited)
  ASSETS
  Current assets:
      Cash and cash equivalents                            $ 57,237    $ 40,865
      Short term investments                                 39,654      16,269
      Accounts and other receivable, net                     41,818      33,431
      Inventories                                            18,257      37,166
      Other current assets                                    3,870       4,173
                                                     -------------- -----------
          Total current assets                              160,836     131,904

      Net property and equipment                             12,453      15,104
      Intangible assets                                       1,137       1,320
      Deferred income taxes                                     399         405
      Other assets                                            7,302       7,546
                                                     -------------- -----------
          Total assets                                    $ 182,127   $ 156,279
                                                     ============== ===========

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
      Current portion of long-term debt                     $ 1,388     $ 1,388
      Accounts payable                                       13,945      13,000
      Accrued compensation and benefits                       9,174       4,696
      Customer advances                                           -         808
      Accrued liabilities                                    16,417      15,474
      Deferred Gain on sale of assets                         1,953           -
      Accrued liabilities related to disposal of
         General Aviation                                     2,819       6,743
      Accrued warranty expense                                6,197       5,681
      Income taxes payable                                    3,984       2,158
                                                     -------------- -----------
          Total current liabilities                          55,877      49,948
                                                     -------------- -----------
  Noncurrent portion of long-term debt and 
     other liabilities                                       33,992      31,640
                                                     -------------- -----------
          Total liabilities                                  89,869      81,588
                                                     -------------- -----------
  Shareholders' equity:
      Common stock                                          124,249     122,201
      Accumulated deficit                                   (30,993)    (46,718)
      Unrealized gain (loss) on short term investments          (64)         19
      Foreign currency translation adjustment                  (934)       (811)
                                                     -------------- -----------
          Total shareholders' equity                         92,258      74,691
                                                     -------------- -----------
          Total liabilities and shareholders' equity      $ 182,127   $ 156,279
                                                     ============== ===========

 See accompanying notes to condensed consolidated financial statements.


                                       3

<PAGE>


<TABLE>
<CAPTION>


                                                                    TRIMBLE NAVIGATION LIMITED
                                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                            (Unaudited)

                                                                    Three Months Ended                   Nine Months Ended
                                                                 October 1,       October 2,         October 1,      October 2,
                                                                   1999            1998 *              1999            1998 *
---------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)
<S>                                                                 <C>             <C>              <C>              <C>    
 Total revenue                                                       $ 69,636        $ 59,973         $ 209,245        $ 207,670
                                                             -----------------   -------------   ---------------   --------------
 Operating expenses:
     Cost of sales                                                     32,657          34,445            99,088          107,557
     Research and development                                           9,724          12,363            27,675           34,716
     Sales and marketing                                               13,705          15,952            40,981           47,540
     General and administrative                                         7,738           8,501            26,391           23,168
     Restructuring charges                                                  -           2,453                 -            2,453
                                                             -----------------   -------------   ---------------   --------------
           Total operating expenses                                    63,824          73,714           194,135          215,434
                                                             -----------------   -------------   ---------------   --------------
  Operating income (loss)                                               5,812         (13,741)           15,110           (7,764)
                                                             -----------------   -------------   ---------------   --------------
  Nonoperating income (expense):
     Interest income                                                    1,108             839             2,493            2,853
     Interest and other expenses                                         (922)         (2,362)           (2,574)          (4,039)
     Foreign exchange gain, net                                            31              78                24              358
                                                             -----------------   -------------   ---------------   --------------
                                                                           217          (1,445)              (57)            (828)
                                                             -----------------   -------------   ---------------   --------------
  Income (loss) before income taxes from
      continuing operations                                             6,029         (15,186)           15,053           (8,592)
  Income tax provision                                                    905             350             2,259            1,050
                                                             -----------------   -------------   ---------------   --------------
  Net income (loss) from continuing operations                         $ 5,124       $ (15,536)         $ 12,794         $ (9,642)
                                                             -----------------   -------------   ---------------   --------------
  Discontinued operations:
     Loss from operations (net of tax)                                    $ -        $ (2,036)              $ -         $ (5,760)
     Estimated income (loss) on disposal                                2,931         (19,862)            2,931          (19,862)
                                                             -----------------   -------------   ---------------   --------------
  Loss on discontinued operations                                       2,931         (21,898)            2,931          (25,622)
                                                             -----------------   -------------   ---------------   --------------
  Net income (loss)                                                   $ 8,055       $ (37,434)         $ 15,725        $ (35,264)
                                                             =================   =============   ===============   ==============
 
  Basic income (loss) per share from continuing operations             $ 0.23         $ (0.70)             0.57            (0.43)
  Basic income (loss) per share from discontinued operations             0.13           (0.98)             0.13            (1.13)
                                                             -----------------   -------------   ---------------   --------------
  Basic net income (loss) per share                                    $ 0.36         $ (1.68)           $ 0.70          $ (1.56)
                                                             =================   =============   ===============   ==============
  Shares used in calculating basic
      income (loss) per share                                          22,519          22,305            22,367           22,593
                                                             =================   =============   ===============   ==============
  
  Diluted income (loss) per share from continuing operations           $ 0.22         $ (0.70)             0.57            (0.43)
  Diluted income (loss) per share from discontinued operations           0.13           (0.98)             0.13            (1.13)
                                                             -----------------   -------------   ---------------   --------------
  Diluted net income (loss) per share                                  $ 0.35         $ (1.68)           $ 0.70          $ (1.56)
                                                             =================   =============   ===============   ==============
  Shares used in calculating diluted
      income (loss) per share                                          22,860          22,305            22,573           22,593
                                                             =================   =============   ===============   ==============
</TABLE>



*    Certain amounts in these periods have been restated for discontinued
operations (General Aviation) and subsequent to the restatement, certain amounts
in this  period  related to certain  product  lines  have been  reclassified  to
include  amounts in  continuing  operations  that were  previously  included  in
discontinued operations. See Note 4 for further explanation.


See accompanying notes to condensed consolidated financial statements.


                                       4

<PAGE>

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

<TABLE>
<CAPTION>
                                                                           Nine Months Ended
                                                                     October 1,         October 2,
                                                                        1999              1998 *
------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                                      <C>                 <C>
 Net cash provided by operating activities of continuing operations       $ 13,848            $ 8,158
 Net cash provided (used) by operating activities / 
     disposal of discontinued operations                                     2,931             (5,760)
                                                                    ---------------   ----------------
 Net cash provided by operating activities                                $ 16,779            $ 2,398
                                                                    ---------------   ----------------
 Cash flow from investing activities:
      Purchase of short term investments                                   (40,735)           (69,163)
      Maturities of short term investments                                  17,350            104,712
      Sales of short term investments                                            -              8,473
      Sales (purchases) of equity investments                                  752             (1,051)
      Acquisition of property and equipment                                 (4,887)            (6,711)
      Proceeds from sale of assets                                          26,863                  -
      Capitalized patent expenditures                                         (717)              (802)
                                                                    ---------------   ----------------
        Net cash provided (used) in investing activities of 
          continuing operations                                             (1,374)            35,458
        Net cash used in investing activities of discontinued
          operations                                                             -               (952)
                                                                    ---------------   ----------------
        Net cash provided (used) in investing activities                    (1,374)            34,506
                                                                    ---------------   ----------------
 Cash flow from financing activities:
      Issuance of common stock                                               2,048              3,415
      Repurchase of common stock                                                 -            (15,168)
      (Payment)/collections of notes receivable                                221                (14)
      (Payment)/proceeds from long-term debt and revolving
        credit facilities                                                   (1,302)             2,554
                                                                    ---------------   ----------------
        Net cash provided (used) by financing activities of 
          continuing operations                                                967             (9,213)
                                                                    ---------------   ----------------
        Net cash provided (used) by financing activities                       967             (9,213)
                                                                    ---------------   ----------------

 Net increase in cash and cash equivalents                                  16,372             27,691

 Cash and cash equivalents -- beginning of period                           40,865             19,951
                                                                    ---------------   ----------------
 Cash and cash equivalents -- end of period                               $ 57,237           $ 47,642
                                                                    ===============   ================
                                                     
 Supplemental disclosures of cash flow information:
      Cash paid during the period for:
        Interest                                                             $ 824              $ 790
        Income taxes, net of refunds                                         $ 200            $ 1,410

</TABLE>


*    Certain amounts in this period have been restated for discontinued
operations (General Aviation) and subsequent to the restatement, certain amounts
in this  period  related to certain  product  lines  have been  reclassified  to
include  amounts in  continuing  operations  that were  previously  included  in
discontinued operations. See Note 4 for further explanation.


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 nine
month periods ended October 1, 1999, and October 2, 1998, which are presented in
this Quarterly  Report on Form 10-Q are unaudited.  The balance sheet at January
1, 1999, 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. 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 on Form 10-K for the
year ended January 1, 1999. The three and nine months ended October 2, 1998 have
been  restated  to  reflect a  subsequently  retained  portion  of  discontinued
operations. See Note 4.

     The Company has a 52-53 week fiscal year,  which ends on the Friday nearest
to December 31, which for fiscal 1999 will be December 31, 1999.

     The  results  of  operations  for the three and nine  month  periods  ended
October  1,  1999 are not  necessarily  indicative  of the  results  that may be
expected for the year ending December 31, 1999.

NOTE 2 - Disposition of Assets:

     On August 10, 1999, Trimble Navigation Limited ("Trimble" or the "Company")
signed an Asset  Purchase  Agreement with  Solectron  Corporation  and Solectron
Federal  Systems,  Inc.   (collectively,   "Solectron").   The  closing  of  the
transaction  occurred on August 13, 1999.  At the closing of the Asset  Purchase
Agreement,  the  Company  transferred  to  Solectron  substantially  all  of the
Company's  tangible  manufacturing  assets  located at the Company's  Sunnyvale,
California campus, including but not limited to equipment,  fixtures and work in
progress, and certain contract and other intangible assets and rights,  together
with certain  related  obligations,  including  but not limited to real property
subleases  covering the Company's  manufacturing  floor space,  and  outstanding
purchase  order  commitments.  In addition,  the Asset  Purchase  Agreement also
provided for Solectron's  subsequent purchase,  on August 30, 1999, of Trimble's
entire component inventory, on hand as of August 13, 1999.

     The final  purchase  price for these assets was $26.9  million.  As part of
this  agreement  the  Company  will incur some  employee  and  facility  related
liabilities,  which have been accrued for and offset  against the gain.  The net
gain on the  transaction to the Company of $5.9 million has been deferred and is
being  recognized  over the three-year  exclusive  life of the Supply  Agreement
described below.

     Concurrently with the closing of the Asset Purchase Agreement,  the Company
and  Solectron  also  entered  into a Supply  Agreement.  The  Supply  Agreement
provides  for the  exclusive  manufacture  by  Solectron  of almost all  Trimble
products for a period of three years.  Solectron will initially manufacture such
Trimble  products  under the Supply  Agreement in the same Trimble  buildings in
which such products were  previously  manufactured  by Trimble,  and Trimble has
sublet such space to Solectron as part of this  transaction.  Solectron  offered
employment to approximately 230 Trimble  manufacturing,  engineering and related
support personnel, and Trimble understands that substantially all such employees
accepted such employment with Solectron.


                                       6

<PAGE>


NOTE 3 - Inventories:

Inventories from continuing operations consist of the following:

                                    October 1,              January 1,
                                       1999                    1999
---------------------------------------------------------------------------
(In thousands)

Raw materials                            $ 1,382                  $ 22,480
Work-in-process                            2,262                     4,033
Finished goods                            14,613                    10,653
                                   --------------       -------------------
                                        $ 18,257                  $ 37,166
                                   --------------       -------------------


NOTE 4 - Discontinued Operations:

     On October 2, 1998, the Company  adopted a plan to discontinue  its General
Aviation division.  The Company currently  anticipates that the division will be
disposed of by the first half of fiscal 2000. Accordingly,  the General Aviation
division is being reported as a discontinued operation for all periods presented
in these  financial  statements.  Net assets of the  discontinued  operation  at
October 2, 1998 were written off and consisted primarily of inventory, property,
plant and equipment and intangible assets.

     As of October 1, 1999, in connection with the discontinued operations,  the
Company had  incurred  cumulative  net  expenses of  approximately  $5.5 million
consisting of $6.0 million for operating losses for the  discontinued  operation
through the estimated  date of disposal,  including  severance  costs and net of
receipts of $543,000 related to the sale of particular inventory items and fixed
assets. The Company has revised its accrual for the remaining costs now expected
to be incurred based on current status of the related liabilities. This resulted
in a reversal of approximately  $2.9 million of prior amounts accrued related to
the  discontinued  operations.  The Company has a  remaining  provision  of $2.8
million which includes $1.5 million for the estimated  operating  losses through
the estimated  date of disposal  including  remaining  severance  costs and $1.3
million for facility and certain other contractual costs.

     On March 31, 1999 the Company made the decision to retain  certain  product
lines  included  within the  General  Aviation  division  which were part of the
previously planned  discontinued  operation.  The basis of the decision was that
these  products use common raw  materials  and labor which are necessary for the
Company's Air Transport products and, therefore,  these particular product lines
could be retained without adding additional overhead from the overhead currently
required for the Air Transport  products.  The revenues and costs related to the
products  retained have been included in the results of operations of continuing
operations in the periods presented.

     The net revenues of the discontinued operation, which have been restated to
exclude  the  retained  product  lines,  are not  included  in net  revenues  of
continuing  operations  in  the  accompanying  statements  of  operations.   The
operating  results  for the three and nine months  ended  October 2, 1998 of the
discontinued operation are summarized as follows:


                                       Three Months Ended      Nine Months Ended
                                            October 2,              October 2,
                                               1998                    1998
--------------------------------------------------------------------------------
(In thousands)
    Net revenues                              $ 2,046                 $ 6,807
    Loss before tax provision                  (2,036)                 (5,760)
    Income tax provision                            -                       -
                                          ============            ============
         Net loss                            $ (2,036)               $ (5,760)
                                          ============            ============

    Basic and diluted net loss per share      $ (0.09)                $ (0.25)

                                       7

<PAGE>


NOTE 5 - Restructuring Charge:

     In fiscal 1998, the Company recorded  restructuring  charges totaling $10.3
million in operating expenses.

     These  charges were a result of the  Company's  reorganization  activities,
through  which the Company has  downsized  its  operations,  including  reducing
headcount  and  facilities   space  usage  and  canceling  its  enterprise  wide
information  system project and certain research and development  projects.  The
impact of these  decisions was that  significant  amounts of the Company's fixed
assets,  prepaid  expenses,  and  purchased  technology  have been  impaired and
certain liabilities incurred. The Company wrote down the related assets to their
net realizable values and made provisions for the estimated liabilities.

     The activity in fiscal 1999 and 1998 related to the  restructuring  and the
amounts  remaining  at October 1, 1999 on the  balance  sheet are as follows (in
thousands):

                                Total
                              charged to                       Remaining in
                             expense in    Amounts paid/     accrued liabilites
                             fiscal 1998    written off   as of October 1, 1999
                             ------------- -------------  ---------------------
Employee termination benefits   $ 2,864       $ (1,973)              $ 891
Facility space reductions         1,061           (897)                164
ERP system abandonment            6,360         (6,081)                279
                              ==========   ============   =====================
     Subtotal                  $ 10,285       $ (8,951)            $ 1,334
                              ==========   ============   =====================

NOTE 6 - Segment Information:

     The Company  currently  manages its  industry  segment  within two Business
Units:  the  Precision  Positioning  Group  (PPG)  and  the  Mobile  and  Timing
Technologies (MTT) Group.

     The  accounting  policies  applied by each of the  markets  are the same as
those used by the Company in general.

     The  following  table  presents  revenues,  operating  income  (loss),  and
identifiable  assets  by  the  Company's  Business  Units.  The  Company  has no
inter-Business  Unit sales or transfers.  As presented,  operating income (loss)
consists  of net sales less  operating  expenses,  excluding  general  corporate
expenses,  interest income (expense),  and income taxes. The identifiable assets
that the Chief  Operating  Decision  Maker (CODM)  views by industry  market are
accounts receivable and inventory.  The Company does not report depreciation and
amortization or capital expenditures by industry markets to the CODM.


                                       8

<PAGE>
 

<TABLE>
<CAPTION>
                                       ----------------------------------------     -------------------------------------------
                                                 Three Months Ended                             Nine Months Ended
                                                   October 1, 1999                               October 1, 1999
                                       ----------------------------------------     -------------------------------------------
                                                   (in thousands)                                 (in thousands)
                                       ----------------------------------------     -------------------------------------------
                                            PPG          MTT         Total               PPG           MTT          Total
                                       ----------------------------------------     -------------------------------------------
<S>                                        <C>          <C>          <C>                <C>           <C>           <C>
External  net revenue                       $ 41,478     $ 28,158     $ 69,636           $ 125,631     $ 83,614      $ 209,245
Operating profit before corporate 
     allocations                              14,280        5,159       19,439              42,175       12,831         55,006
Corporate allocations (1)                     (6,120)      (3,042)      (9,162)            (18,471)      (8,405)       (26,876)
                                       ----------------------------------------     -------------------------------------------
Operating profit from continuing 
     operations                              $ 8,160      $ 2,117     $ 10,277            $ 23,704      $ 4,426       $ 28,130
Assets:
   Accounts recievable (2)                                                                $ 31,217     $ 21,713       $ 52,930
    Inventory                                                                                7,961        9,491         17,452


                                       ----------------------------------------     -------------------------------------------
                                                 Three Months Ended                             Nine Months Ended
                                                   October 2, 1998                               October 2, 1998
                                       ----------------------------------------     -------------------------------------------
                                                   (in thousands)                                 (in thousands)
                                       ----------------------------------------     -------------------------------------------
                                            PPG          MTT         Total               PPG           MTT          Total
                                       ----------------------------------------     -------------------------------------------
External  net revenue                       $ 37,581     $ 22,392     $ 59,973           $ 122,381     $ 85,289      $ 207,670
Operating profit/(loss) before corporate
     allocations                               2,613       (2,773)        (160)             16,728        3,093         19,821
Corporate allocations (1)                     (3,343)      (1,922)      (5,265)            (11,466)      (5,913)       (17,379)
                                       ----------------------------------------     -------------------------------------------
Operating profit/(loss) from continuing
     operations                               $ (730)    $ (4,695)    $ (5,425)            $ 5,262     $ (2,820)       $ 2,442

                                                                                    -------------------------------------------
                                                                                               Twelve Months Ended
                                                                                                 January 1, 1999
                                                                                    -------------------------------------------
                                                                                                  (in thousands)
                                                                                    -------------------------------------------
Assets:                                                                                  PPG           MTT          Total
                                                                                    -------------------------------------------
   Accounts recievable (2)                                                                $ 32,197     $ 14,837       $ 47,034
    Inventory                                                                               10,042       16,251         26,293
</TABLE>



(1)  For the three and nine months ended October 1, 1999, the Company
determined  the amount of corporate  allocations  charged to its Business  Units
based on a percentage of the Business Units' monthly revenue,  gross profit, and
controllable  spending  (research and  development,  marketing,  and general and
administrative).  For the three and nine  months  ended  October  2,  1998,  the
Company  determined  the  amount of the  corporate  allocations  charged  to its
Business Units based on a percentage of the Business  Units'  monthly  inventory
balance  and  gross  profit.  Allocation  percentages  were  determined  at  the
beginning of each of the respective fiscal years.

(2)  As presented, the accounts receivable number excludes cash in advance
and reserves, which are not, allocated between Business Unit segments.


                                       9

<PAGE>

     Following are  reconciliations  corresponding to totals in the accompanying
consolidated financial statements (in thousands):


<TABLE>
<CAPTION>
                                                                   Three Months Ended               Nine Months Ended
                                                              October 1,        October 2,      October 1,      October 2,
Revenues:                                                        1999              1998            1999            1998
---------------------------------------------------------------------------   ---------------  -------------   -------------
<S>                                                              <C>               <C>           <C>             <C>  
Total for reportable markets                                      $ 69,636          $ 59,973      $ 209,245       $ 207,670
                                                            ===============   ===============  =============   =============

Operating profit/(loss) from continuing operations:
------------------------------------------------------------
Total for reportable markets                                      $ 10,277          $ (5,425)      $ 28,130         $ 2,442
Unallocated corporate expenses                                      (4,465)           (8,316)       (13,020)        (10,206)
                                                            ===============   ===============  =============   =============
     Income before income taxes from continuing operations         $ 5,812         $ (13,741)      $ 15,110        $ (7,764)
                                                            ===============   ===============  =============   =============

                                                                                               Nine Months    Twelve Months
                                                                                                  Ended           Ended
                                                                                                October 1,      January 1,
Assets:                                                                                            1999            1999
------------------------------------------------------------                                   -------------   -------------
Accounts receivable total for reportable markets                                                   $ 52,930        $ 47,034
Unallocated (1)                                                                                     (11,112)        (13,603)
                                                                                               =============   =============
   Total                                                                                           $ 41,818        $ 33,431
                                                                                               =============   =============

Inventory total for reportable markets                                                             $ 17,452        $ 26,293
Common inventory (2)                                                                                    805          10,873
                                                                                               =============   =============
   Net inventory                                                                                   $ 18,257        $ 37,166
                                                                                               =============   =============

</TABLE>


(1)  Includes cash in advance and reserves that are not allocated by segment.
(2)  Consists of inventory that is common between the Business Unit segments. 
     Parts can be used by either segment.


NOTE 7 - Comprehensive Income (Loss):

     The components of  comprehensive  income,  net of related tax for the three
and nine months ended October 1, 1999 and October 2, 1998 are as follows:


<TABLE>
<CAPTION>
                                                 Three Months Ended                     Nine Months Ended
                                          October 1,         October 2,          October 1,        October 2,
                                             1999               1998                1999              1998
----------------------------------------------------------------------------    ----------------------------------
(In thousands)
<S>                                           <C>                <C>                <C>                <C>    
Net income (loss)                              $ 8,055            $ (37,434)         $ 15,725           $ (35,264)
Unrealized gains (losses) on securities            (31)                  56               (83)                 44
Foreign currency translation adjustments            80                  (13)             (123)               (475)
                                         --------------  -------------------    --------------  ------------------
Comprehensive income (loss)                    $ 8,104            $ (37,391)         $ 15,519           $ (35,695)
                                         ==============  ===================    ==============  ==================

</TABLE>


     The  components of  accumulated  other  comprehensive  loss, net of related
taxes at October 1, 1999 and January 1, 1999 are as follows:

                                         October 1,         January 1,
                                             1999               1999
----------------------------------------------------------------------------
(In thousands)

Unrealized gains (loss) on securities            $ (64)                $ 19
Foreign currency translation adjustments          (934)                (811)
                                         --------------  -------------------
Accumulated comprehensive loss                  $ (998)              $ (792)
                                         ==============  ===================

                                       10

<PAGE>

NOTE 8 - New Accounting Standards:

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 133, (SFAS 133)  "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 will require the Company to record
all derivatives  held on the balance sheet at fair value.  Derivatives  that are
not hedges  must be  adjusted  to fair value  through  income.  With  respect to
derivatives  which are  hedges,  then,  depending  on the  nature of the  hedge,
changes in the fair  value of  derivatives  either  will be offset  against  the
change in fair  value of the hedged  assets,  liabilities,  or firm  commitments
through earnings,  or will be recognized in other comprehensive income until the
hedged item is recognized in earnings. The ineffective portion of a derivative's
change in fair value will be immediately recognized in earnings. In June of 1999
the  Financial   Accounting  Standards  Board  delayed  the  effective  date  of
implementation for one year;  therefore,  SFAS 133 is effective for fiscal years
beginning  after June 15, 2000. The Company  expects to adopt SFAS 133 as of the
beginning  of its fiscal  year 2001.  The effect of  adopting  the  Standard  is
currently being evaluated, but is not expected to have a material adverse effect
on the Company's financial position or results of operations.

NOTE 9 - Earnings Per Share:

     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share:


<TABLE>
<CAPTION>
                                                                             Three Months Ended               Nine Months Ended
                                                                        October 1,       October 2,      October 1,      October 2,
                                                                           1999             1998            1999            1998
------------------------------------------------------------------------------------------------------  ----------------------------
(In thousands, except per share amounts)
<S>                                                                      <C>            <C>              <C>              <C> 
Numerator:
    Income (loss) from continuing operations available to common
       shareholders used in basic and diluted income (loss) per share      $ 5,124        $ (15,536)      $ 12,794         $ (9,642)

    Income (loss) from discontinued operations available to common
       shareholders used in basic and diluted income (loss) per share      $ 2,931        $ (21,898)       $ 2,931         $(25,622)
                                                                       ------------   --------------  -------------   --------------

    Income (loss) from operations available to common
       shareholders used in basic and diluted income (loss) per share      $ 8,055        $ (37,434)      $ 15,725         $(35,264)
                                                                       ============   ==============  =============   ==============

Denominator:
     Weighted-average number of common
        shares used in calculating basic income (loss) per share            22,519           22,305         22,367           22,593

     Effect of dilutive securities:
          Common stock options                                                 328                -            206                -
          Common stock warrants                                                 13                -              -                -
                                                                       ------------   --------------  -------------   --------------

     Weighted-average number of common
         shares and dilutive potential common shares
        used in calculating diluted income (loss) per share                 22,860           22,305         22,573           22,593
                                                                       ============   ==============  =============   ==============


 Basic income (loss) per share from continuing operations                   $ 0.23          $ (0.70)        $ 0.57          $ (0.43)
 Basic income (loss) per share from discontinued operations                 $ 0.13          $ (0.98)        $ 0.13          $ (1.13)
                                                                       ------------   --------------  -------------   --------------
 Basic income (loss) per share                                              $ 0.36          $ (1.68)        $ 0.70          $ (1.56)
                                                                       ============   ==============  =============   ==============


 Diluted income (loss) per share from continuing operations                 $ 0.22          $ (0.70)        $ 0.57          $ (0.43)
 Diluted income (loss) per share from discontinued operations               $ 0.13          $ (0.98)        $ 0.13          $ (1.13)
                                                                       ------------   --------------  -------------   --------------
 Diluted income (loss) per share                                            $ 0.35          $ (1.68)        $ 0.70          $ (1.56)
                                                                       ============   ==============  =============   ==============
</TABLE>


                                       11

<PAGE>

NOTE 10 - Contingencies:

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 sought to bring an action
as a 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 alleged 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  recissory  or
compensatory  damages with interest  thereon,  as well as reasonable  attorneys'
fees and extraordinary  equitable and/or injunctive  relief. The Company filed a
motion to dismiss,  which was heard by the Court on August 16,  1996.  The court
rejected  the  plaintiffs'  lawsuit,  but allowed  thirty  days to resubmit  its
complaint.  On September 24, 1996, the plaintiffs filed an amended complaint. On
April 28, 1997,  the Court  granted in part,  and denied in part,  the Company's
motion to dismiss.  The Court further  granted the  plaintiffs  leave to replead
certain dismissed claims. On June 19, 1997, the plaintiffs filed a third amended
and  consolidated  complaint.  The Company has answered the complaint by denying
all  liability.  On March  19,  1999,  the  parties  executed  a  Memorandum  of
Understanding  with  respect  to  settlement  of  the  litigation.  The  parties
negotiated a definitive stipulation of settlement which was formally approved by
the court on September 23, 1999. The final court-approved  settlement was funded
by  insurance  proceeds and payment by the Company of $1.8  million.  The entire
amount of the Company's  obligation has been  previously  reserved and the final
settlement did not adversely effect the Company's  financial position or results
of operations.

Other Litigation

     On November 12,  1998,  the Company  brought suit in district  court in San
Jose,  California against Silicon RF Technology,  Inc. (SiRF) for alleged patent
infringement  of three Trimble  patents.  No action by the Court has taken place
yet.

     On January 31,  1997,  counsel for one Philip M. Clegg wrote to the Company
asserting that a license under Mr. Clegg's U.S. Patent No. 4,807,131,  which was
issued  February 21, 1989,  would be required by the Company  because of a joint
venture  that  the  Company  had  previously   entered  into  with   Caterpillar
Corporation concerning the use of Trimble GPS products in combination with earth
moving equipment.  To date, no infringement  action has been initiated on behalf
of Mr.  Clegg.  The  Company  does not  believe  that there will be any  adverse
consequences to the Company as a result of this inquiry.

Other Matters

     Western Atlas, a Houston based  supplier to the oil  exploration  business,
has  accused the Company  and other GPS  manufacturers,  suppliers  and users of
infringing two U.S.  Patents owned by it, namely U.S. Patent Nos.  5,014,066 and
5,619,212.  Western  Atlas  contends  that the  foregoing  patents cover certain
aspects of GPS receiver  design.  Lawsuits for infringement of these two patents
were  filed  in  federal  district  court in  Houston,  Texas  against  Rockwell
International Corp and Garmin International Inc. and both have settled. Although
Trimble has not been sued by Western Atlas on the foregoing patents, the Company
has instructed its counsel thoroughly to investigate the infringement threat. At
the  present  time,  the Company  does not expect  this  threat to have  adverse
consequences on the Company's business.


                                       12

<PAGE>



     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange  Act of 1934,  as  amended.  Actual  results  could  differ
materially  from those  indicated  in the  forward-looking  statements  due to a
number of factors including, but not limited to, as a result of the risk factors
set forth below in this report as well as the  Company's  Annual  Report on Form
10-K and other  reports and  documents  that the Company files from time to time
with the  Securities  and  Exchange  Commission.  The Company has  attempted  to
identify forward-looking statements in this report by placing an asterisk (*) in
the left-hand margin of paragraphs containing those statements.


I
tem 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF CONTINUING OPERATIONS

Revenues

     Revenues  of  continuing  operations  for the three and nine  months  ended
October 1, 1999 were  $69,636,000 and $209,245,000  respectively,  compared with
$59,973,000 and $207,670,000 in the corresponding 1998 periods.  The table below
breaks out the Company's revenues by segment:


<TABLE>
<CAPTION>
                                             Three Months Ended                             Nine Months Ended
                                 --------------------------------------------  --------------------------------------------
                                   October 1,     October 2,     Increase/      October 1,      October 2,     Increase/
                                     1999            1998        (Decrease)        1999           1998         (Decrease)
-----------------------------------------------------------------------------  --------------------------------------------
(In thousands)
<S>                                  <C>             <C>                <C>      <C>             <C>                  <C>
 Precision Positioning Group          $ 41,478        $37,581            10%      $ 125,631       $ 122,381             3%
 Mobile and Timing Technologies         28,158         22,392            26%         83,614          85,289            (2%)
                                 --------------  -------------  -------------  -------------  --------------  -------------
 Total                                $ 69,636        $59,973            16%      $ 209,245       $ 207,670             1%
                                 --------------  -------------  -------------  -------------  --------------  -------------
</TABLE>


Precision Positioning Group

     Precision  Positioning Group revenues increased for both the three and nine
month periods ended October 1, 1999 as compared to the corresponding periods for
1998.  The increase for the three month period was primarily due to  significant
growth in the Land Survey market from  continued  strong demand of the Real-time
Kinematic  (RTK) total  stations;  as well as strong  shipments to the Company's
Japanese OEM partner.  These  increases  were  partially  offset by  anticipated
declines  in machine  guidance  products  due to the down turn in the mining and
agricultural markets.

     The increase for the nine month period was  primarily  due to strong demand
in the Mapping and GIS market, as well as, significant growth in the Land Survey
market from  continued  strong  demand of the  Real-time  Kinematic  (RTK) total
stations.

Mobile and Timing Technologies

     Mobile and  Timing  Technologies  revenues  increased  for the three  month
period ended October 1, 1999, as compared with the corresponding period in 1998.
The growth was primarily  concentrated in in-vehicle navigation products sold to
the  automotive   market,   embedded  products  sold  into  a  wide  variety  of
applications,  timing products, and sales to the military.  These increases were
partially offset by declines in the commercial marine and air transport markets.
The Company made the decision to exit the commercial marine market in the fourth
quarter  of 1998 and the  remaining  products  in this  market  were sold in the
second quarter of 1999.

     Mobile and Timing  Technologies  revenues  decreased  slightly for the nine
month period ended October 1, 1999, as compared with the corresponding period in
1998 due primarily to lower military shipments, lower Commercial Avionics sales,


                                       13

<PAGE>

and the Company's  decision to exit the  commercial  marine  market.  These
decreases were not completely  offset by increases in the remaining  Automotive,
Timing, and Mobile Positioning product lines.

Revenues outside the U.S.

*    Sales to unaffiliated customers from continuing operations in locations
outside the U.S.  comprised  approximately 50% and 45% of the Company's revenues
in the first nine months of fiscal 1999 and 1998, respectively. During the first
nine months of 1999, the Company  experienced strong demand in Europe,  Asia and
Latin America.  The Company  anticipates  that export revenues and sales made by
its  subsidiaries  in locations  outside the U.S. will continue to account for a
significant  portion of its revenues and,  therefore,  the Company is subject to
the risks inherent in these international sales, including unexpected changes in
regulatory  requirements,  exchange rates,  governmental  approvals,  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),  customers
in certain  foreign  markets may be reluctant to purchase  products based on GPS
technology  given  the  control  of GPS by the U.S.  government.  The  Company's
results of operations would be adversely  affected if the Company were unable to
continue to generate significant sales in locations outside the U.S.

Gross Margin

*    Gross margin from continuing operations varies on a quarterly basis due
to a number of factors, including product mix, technology license fees, 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  revenues was 53% for both the
three and nine month periods ending October 1, 1999 as compared with 43% and 48%
in the  corresponding  1998 periods.  The increases in gross margin  percentages
primarily  reflect  improved  manufacturing  cost controls  achieved through the
consolidation   of  the   manufacturing   organization   resulting  in  improved
efficiencies and reduced inventory.  Because of mix changes within and among the
Business Units,  market  pressures on unit selling prices,  fluctuations in unit
manufacturing  costs,  and other  factors,  there can be no  assurance  that the
Company's current margins will be sustained.

*    The Company also expects that a higher percentage of its business in the
future may be conducted through alliances with larger strategic  partners.  As a
result of volume  pricing  and the  assumption  of  certain  operating  costs in
connection with such partners,  margins related to these revenues from strategic
alliances are likely to be lower than revenues from sales directly to end-users.

Operating Expenses

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


<TABLE>
<CAPTION>

                                          Three Months Ended                                 Nine Months Ended
                             ----------------------------------------------    -----------------------------------------------
                              October 1,       October 2,       Increase/       October 1,       October 2,       Increase/
                                 1999             1998         (Decrease)          1999             1998          (Decrease)
------------------------------------------------------------------------------------------------------------------------------
(In Thousands)
<S>                               <C>             <C>                 <C>          <C>              <C>                 <C>
Research and development           $ 9,724         $ 12,363            (21)%        $ 27,675         $ 34,716             (20)%
Sales and marketing                 13,705           15,952            (14)%          40,981           47,540             (14)%
General and administrative           7,738            8,501             (9)%          26,391           23,168              14 %
Restructuring charges                    -            2,453           (100)%               -            2,453            (100)%
                             --------------   --------------   ------------    --------------   --------------   -------------
     Total                        $ 31,167         $ 39,269            (21)%        $ 95,047        $ 107,877             (12)%
                             --------------   --------------   ------------    --------------   --------------   -------------
</TABLE>


Research and Development

*    Research and development expenses decreased in the three and nine month
periods ended October 1, 1999,  as compared  with the  corresponding  periods in
fiscal 1998. The lower research and development  expenses for the three and nine


                                       14

<PAGE>


month  periods of fiscal  1999 as  compared  with the  corresponding  periods in
fiscal 1998 are primarily due to the Company receiving increased funds from cost
reimbursement  projects.  Also,  there was a decrease in the Company's  expenses
related to personnel, consultants, outside engineering, travel, electronic parts
and  other  supplies  as part of the  Company's  restructuring  plan  which  was
implemented  in the last half of fiscal 1998.  The Company plans to continue its
aggressive development of future products.

*    The Company expects that a significant portion of its future revenues and
operating  income  will  continue to be derived  from sales of newly  introduced
products.  Consequently,  the Company's future success depends,  in part, on its
ability to continue to advance product technology and to develop and manufacture
new  competitive  products  with 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.

Sales and Marketing

     The decrease in sales and  marketing  expenses for the three and nine month
periods ended October 1, 1999,  as compared  with the  corresponding  periods in
fiscal 1998 is due primarily to decreases in the Company's  expenses  related to
personnel,   consultants,   travel,  advertising,  trade  shows,  expensed  demo
equipment, and other office supplies as part of the Company's restructuring plan
which was implemented in the last half of fiscal 1998.

*    The Company's future growth will also depend upon the timely development
and  continued  viability  of the  Business  Unit  segments in which the Company
currently  competes and upon the  Company's  ability to continue to identify and
penetrate new markets for its products. In addition, the Company has significant
competition  in some  markets,  and the  Company  expects  such  competition  to
intensify  as the  market  for GPS  applications  receives  greater  acceptance.
Several of the Company's  competitors are major  corporations with substantially
greater financial,  technical, and marketing 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
if the Company is unable to make corresponding changes to compete effectively.

General and Administrative

     The  decrease in general and  administrative  expenses for the three months
ended  October 1, 1999,  as compared  with the  corresponding  period for fiscal
1998,  is  primarily  due to decreases  in outside  services  related to certain
litigation  matters  and  travel  expenses  which  have  decreased  as part  the
Company's  restructuring  plan, which was implemented in the last half of fiscal
1998.  Also, there was decrease in cash  contributions  and bank fee expenses in
the third quarter of 1999 as compared to the third quarter of 1998.

     The  increase in general and  administrative  expenses  for the nine months
ended  October 1, 1999,  as compared  with the  corresponding  period for fiscal
1998, is primarily  due to an increase in the  allowance  for doubtful  accounts
related to  customers  in South  America for the first nine  months of 1999.  In
addition,  the Company had an increase in  expenditures  associated with certain
litigation matters during the first nine months of 1999.

Restructuring Charges

     During  the  quarter  ended  October  2,  1998,  the  Company   recorded  a
restructuring  charge of  $2,453,000.  Components of this  restructuring  charge
included employee severance costs,  including costs for the Company's former CEO
and certain  other former  senior  employees of  approximately  $1,454,000,  and
write-downs of idle assets of approximately $999,000.

Income Taxes

     The Company's effective income tax rate from continuing  operations for the
three months ended  October 1, 1999 and the nine months ended October 1, 1999 is
15%. This rate is less than the federal  statutory  rate of 35% primarily due to
the  utilization  of net operating  loss  carryforwards  and the  realization of
previously  reserved  deferred tax assets.  The effective  income tax rates from
continuing  operations  for the  corresponding  periods in 1998 were (2.3%) and


                                       15

<PAGE>

(12.2%),  respectively.  These rates reflect foreign taxes on profits in foreign
jurisdictions  and the  inability  to benefit the  operating  loss in the United
States.

Inflation

     The effects of inflation on the Company's  financial  results have not been
significant to date.

Liquidity and Capital Resources

*    At October 1, 1999, the Company had cash and cash equivalents of
$57,237,000 and short-term  investments of  $39,654,000.  The Company has relied
primarily on cash provided by operating and financing  activities  and net sales
of short-term  investments to fund capital  expenditures,  the repurchase of the
Company's  common stock (see further  explanation  below),  and other  investing
activities.  Management  believes that its cash, cash equivalents and short-term
investment balances,  together with its existing credit line, will be sufficient
to meet its anticipated cash needs for at least the next twelve months.

*    For the nine months ended October 1, 1999, net cash provided from
operating  activities was $16,779,000 as compared to cash provided of $2,398,000
in the  corresponding  period in 1998. Cash provided by operating  activities in
1999 resulted  primarily from decreases in inventories  and increases in accrued
compensation and benefits. Inventory from continuing operations as of October 1,
1999 decreased by $18,909,000 from the 1998 year end levels primarily due to the
transition of substantially all of the Company's manufacturing to Solectron (See
Note 2 to the consolidated financial  statements);  as well as, a focused effort
by the Company to reduce  inventory  by supply chain  synchronization,  lead and
cycle times reduction, product line simplification, and tighter control over its
material  forecasts.  The  Company's  ability to continue to generate  cash from
operations  will depend in a large part on revenues,  the rate of collections of
accounts receivable and the successful management of the Solectron manufacturing
relationship.

*    During the third quarter of fiscal 1999, the Company received cash of
$26.9 million as part of an agreement with Solectron for the  outsourcing of the
manufacturing operations located in Sunnyvale, California. The inflow of cash in
the third quarter of fiscal 1999 will be employed by the Company to fund capital
expenditures and for other investing  activities (See Note 2 to the consolidated
financial statements).

     Cash provided by sales of common stock in 1999 represents the proceeds from
purchases made by the Company's employees pursuant to the Company's stock option
plan and employee stock purchase plan and totaled $2,048,000 for the nine months
ended October 1, 1999.

*    In August 1997, the Company entered into a three-year, $50,000,000
unsecured  revolving  credit facility with four banks (the "Credit  Agreement").
The Credit Agreement  enables the Company to borrow up to $50,000,000,  provided
that certain  financial and other covenants are met. As of October 20, 1999, the
Company,  the Agent and the Lenders agreed to change and amend certain covenants
for the  remaining  life of the loan,  which  expires  in  August  of 2000.  The
$50,000,000  revolving  credit  facility was  modified to include the  Company's
prior separate $5,000,000 line of credit and to simplify the entire arrangement.
The Credit  Agreement  provides  for  payment of a  commitment  fee of 0.25% and
borrowings  to bear interest at 1% over LIBOR if the total funded debt to EBITDA
is less than or equal to 1.00 times,  0.3% and  borrowings  to bear  interest at
1.25% over LIBOR if the ratio is greater  than 1.00 times and less than or equal
to 2.00 times,  or 0.4% and  borrowings  to bear interest at 1.75% over LIBOR if
the ratio is greater than 2.00 times.  In addition to borrowing at the specified
LIBOR rate,  the Company has the right to borrow with  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,  the Company has not made any  borrowings  under the  $50,000,000
unsecured revolving credit facility, but has issued certain letters of credit as
of October 1, 1999 amounting to approximately $133,000. In addition, the Company
is restricted from paying dividends under the terms of the Credit Agreement.

     In June 1994, the Company issued $30.0 million of  subordinated  promissory
notes bearing  interest at an annual rate of 10%, with principal due on June 15,
2001.  Interest payments are due monthly in arrears.  The notes are subordinated
to the Company's senior debt, which is defined as all pre-existing  indebtedness
for  borrowed  money  and  certain  future   indebtedness   for  borrowed  money
(including,  subject  to  certain  restrictions,  secured  bank  borrowings  and


                                       16

<PAGE>

borrowed money for the acquisition of property and capital  equipment) and trade
debt  incurred in the ordinary  course of business.  If the Company  prepays any
portion of the  principal,  it is  required  to pay  additional  amounts if U.S.
Treasury  obligations of a similar maturity exceed a specified yield.  Under the
agreement, the Company is also restricted from paying dividends.

     The  issuance  of the  subordinated  promissory  notes  also  included  the
issuance of warrants  entitling  holders to  purchase  400,000  shares of common
stock at a price of $10.95 per share at any time through June 15, 2001.  The net
proceeds of the notes were  $29,348,000.  The notes are  recorded as  noncurrent
liabilities,  net of appraised fair value attributed to the warrants.  The value
of the warrants and the issuance costs are being amortized to interest  expense,
using the  interest  rate  method over the term of the  subordinated  promissory
notes. The effective annual interest rate on the notes is 11.5%. Under the terms
of the note,  the Company is required to meet a minimum  consolidated  net worth
requirement.  If the  Company  falls below the  minimum  consolidated  net worth
requirement the Company could be in default of its loan  covenants.  Such events
could have a material adverse effect on the Company's operations and liquidity.

     In 1998,  the Company  approved the repurchase of 1.6 million shares on the
open  market  under a  discretionary  program to offset the  potential  dilutive
effects to  earnings  (loss) per share from the  issuance  of  additional  stock
options.  The  Company  intends  to use  existing  cash,  cash  equivalents  and
short-term investments to finance any such stock repurchases under this program.
During  1998,  the  Company  purchased  1.08  million  shares at a cost of $16.1
million.  During  the first  nine  months of fiscal  1999,  no shares  have been
repurchased under the discretionary program.

     The Company is continually  evaluating  potential  external  investments in
technologies  related to its business and, to date,  has made  relatively  small
strategic investments in a number of GPS related technology companies. There can
be no assurance that any such outside investments made to date nor any potential
future investments will be successful.

*    The Company has evaluated the issues raised by the introduction of the
Single  European  Currency  (Euro) for initial  implementation  as of January 1,
1999, and during the transition period through January 1, 2002. The Company does
not  currently  believe that the  introduction  of the Euro will have a material
effect on the Company's foreign exchange and hedging activities. The Company has
also assessed the potential  impact the Euro  conversion  will have in regard to
its internal systems accommodating  Euro-denominated  transactions.  The Company
will continue to evaluate the impact of the Euro  introduction  over time, based
on currently available  information.  The Company does not currently  anticipate
any adverse impact of the Euro conversion on the Company.

Year 2000 and GPS Week Number Rollover Issues

GPS Week Number Rollover Issues

     During the third quarter of 1999 another  date-related  issue, known as the
"GPS Week Number  Roll-Over" or "WNRO" occurred.  The WNRO issue is unrelated to
the Year 2000 issue and is unique to GPS technology.  All GPS satellites,  which
are operated by the U.S.  government,  broadcast time in the form of a "GPS week
number" and a time offset  into each "GPS  week." Week  numbers  range from 0 to
1023. Week 0 started on January 6, 1980, and week 1023 ended on August 21, 1999,
at which time the week number broadcast by all GPS satellites  rolled over, back
to 0.

     On  Saturday,  August 21,  1999,  the Company  was fully  staffed to assist
customers and monitor the performance of over 100 products in real-time  before,
during and after the GPS Rollover event.  Testing was conducted at various sites
in the United States,  New Zealand,  the United  Kingdom,  Japan,  Singapore and
Australia.  The  Company  was  pleased  to  report  that,  based on  engineering
observations and field reports from preliminary data, its products  performed as
expected or better.

Year 2000 Issues

     Computers and software,  as well as other equipment that relies on only two
digits to identify or  represent a year may be unable to  accurately  process or
display certain information at or after the Year 2000. This is commonly referred
to as the "Year 2000 issue." The Year 2000 issue may materially affect Trimble's
vendors,  suppliers,  internal  systems,  products  and  customers.  The Company
continues  to address  the Year 2000 issue to avoid  what might  otherwise  be a
material and adverse effect on the Company's  consolidated  financial  position,
results of operations, or cash flows.

     The Company continues to assess the potential impact of the Year 2000 issue
on its vendors,  suppliers,  internal systems,  products,  and customers-and has
begun, and in many cases completed, corrective efforts in these areas.

                                       17

<PAGE>

Year 2000 Remediation Plan 

     The  Company's  Board  of  Directors  adopted  a  comprehensive  Year  2000
Remediation Plan, the goal of which is to minimize business disruptions and risk
exposure  that  might  otherwise  arise  as a  consequence  of  moving  into the
twenty-first  century.  The plan focuses on achieving Year 2000 readiness across
the  Company's  entire  supply  chain,  and is  designed  to deal  with the most
critical systems first.  Additionally,  the Company's Year 2000 remediation plan
calls for the  development of  contingency  plans to address  potential  problem
areas with internal  systems,  and with  suppliers and other third  parties.  To
these ends, a Y2K Program  Management  Office has been established to manage and
coordinate  implementation  of the plan on a company wide basis.  It is expected
that  assessment,  remediation,  and  contingency  planning  activities  will be
ongoing  throughout  1999,  with the  objective of  appropriately  resolving all
material Year 2000 issues before the 21st century rollover.

Information Technology and Other Systems 

     The Company continues to assess the potential impact of the Year 2000 issue
on its  internal  systems,  including  information  technology  (IT) and  non-IT
systems,  and is nearing  completion  of  corrective  efforts  in this area,  as
follows:

o    The Company upgraded its existing MRP/ERP information systems to a Year
     2000  compliant  version  as of the end of the  second  quarter.  As a 
     result of testing the upgrade it was determined  that further  upgrades are
     required.  The additional  upgrades  along with the final  testing of the 
     upgraded  systems for Year 2000  compliance  will be completed  before the 
     21st century  rollover.  In addition  ancillary  critical  systems continue
     to be upgraded during the fourth quarter of 1999 to be Year 2000 compliant.

o    Assessment and remediation efforts in connection with the Company's other 
     IT and non-IT systems are in progress as part of the Company's general Y2K 
     Remediation Plan. This effort is expected to be completed before the 21st 
     century rollover.

*    Additionally, the Company currently plans to complete renovation, testing
and implementation of critical systems,  or successful  execution of contingency
plans,  during the fourth quarter of 1999.  There can be no assurance,  however,
that  there  will  not be a  delay  in,  or  increased  costs  associated  with,
renovation,  testing,  implementation  or execution of the Year 2000 remediation
plan. The Company's  inability to  successfully  and timely complete these tasks
could  have a  material  adverse  effect  on future  results  of  operations  or
financial condition.

Products 

     To address and minimize the anticipated  impact of the Year 2000 issue upon
the Company's  products,  the Company continues to assess the anticipated impact
this issue may have on the  performance of its products,  and resolve various of
its current products' related performance problems. In addition, the Company has
adopted a formal Year 2000 Policy to:

o   Publish Year 2000 related product performance information on the Company's 
    public web site;

o   Respond to individual customer inquiries regarding the anticipated 
    performance of particular Company products;

o   Furnish upgrades to customers whose Trimble products are upgradable; and


o   Provide information regarding available product alternatives to customers 
    with non-compliant products.

     Assessment  of  products,   resolution  of  certain   products'  Year  2000
performance problems,  and implementation of the Company's Year 2000 Policy, are
ongoing, and as to many Company products is complete.

*    The Company does not anticipate that the Year 2000 issue will have a
material adverse effect on sales of its products.  The Company has incurred, and
will  continue  to  incur,  through  1999  and  thereafter,  increased  expenses
associated  with Year 2000 related  product  assessment,  resolution  of certain
products' Year 2000 performance  problems,  implementation of the Company's Year
2000 Policy,  and fulfillment of Year 2000 related customer support and warranty


                                       18

<PAGE>

obligations, in amounts that management believes has not had and will not have a
material  adverse  effect  on the  Company's  historical  or future  results  of
operations or financial condition.

Vendors and Suppliers

*    For its successful operation, the Company materially relies on goods and
services  purchased  from certain  vendors.  If these vendors fail to adequately
address the Year 2000 issue such that their  delivery  of goods and  services to
the Company is materially  impaired,  it could have a material adverse impact on
the Company's operations and financial results. The Company has sent a survey to
its  principal  vendors  to assess  the  effect the Year 2000 issue will have on
their ability to supply their goods and services without material  interruption,
and at this time the  Company  cannot  determine  or predict the outcome of this
effort.  The  Company is  planning  to  increase  inventory  levels for  certain
sole-sourced critical components. However, because the Company cannot be certain
that its vendors  will be able to supply  goods and  services  without  material
interruption,  and because the Company  cannot be certain that  execution of its
contingency  plans  will  be  capable  of  implementation  or will  result  in a
continuous and adequate supply of such goods and services,  the Company can give
no assurance  that these matters will not have a material  adverse effect on the
Company's future consolidated financial position, results of operations, or cash
flows.

Customers

*    The Company has material relationships with certain customers. If the
Company's  customers fail to achieve an adequate state of Year 2000 readiness in
their  own  operations,   or  if  their  Year  2000  readiness  efforts  consume
significant  resources,  their ability to purchase the Company's products may be
impaired.  This could  adversely  affect demand for the Company's  products and,
therefore, the Company's future revenues. The Company plans to assess the effect
the Year 2000  issue  will  have on its  principal  customers,  and at this time
cannot determine the impact it will have.

Related Costs to the Company

*    The Company currently expects that the supplementary total cost of Year
2000 remediation efforts will not exceed approximately $1.0 million. The Company
has been and will be expensing these costs as incurred.  The total cost estimate
does not include  potential costs related to any customer or other claims or the
cost of  internal  software  and  hardware  replaced  in the  normal  course  of
business.  The total cost  estimate  is based on the current  assessment  of the
projects, and is subject to change as the projects progress.

Overall Impact on the Company

*    At the present time and subject to the cost estimates above, management
does not believe that the Year 2000 matters discussed above will have a material
adverse impact on the Company's financial condition or overall trends in results
of operation.  As a result,  internal system enhancements have been and continue
to be delayed and the extent of these delays can not be measured by the Company.
It is  uncertain  to what extent the Company  maybe  affected at the time of the
21st century rollover by such matters and, therefore,  there can be no assurance
that these  matters  will not have a material  adverse  effect on the  Company's
future consolidated financial position, results of operations, or cash flows.

Other Risk Factors

     The Company's revenues have historically tended to fluctuate on a quarterly
basis due to the timing of shipments of products under contracts and the sale of
licensing  rights.  A significant  portion of the Company's  quarterly  revenues
occurs from orders received and immediately shipped to customers in the last few
weeks and days of a quarter. If orders are not received, or if shipments were to
be  delayed  a few  days at the end of a  quarter,  the  operating  results  and
reported  earnings per share for that quarter could be  significantly  impacted.
Future revenues are difficult to predict, and projections are based primarily on
historical  models,  which are not necessarily  accurate  representations of the
future.

     During  the  third  quarter  of  fiscal  1999,  the  Company   transitioned
substantially all of its manufacturing  operations to an exclusive manufacturing
partner. The Company is now substantially dependent upon a sole supplier for the
manufacture  of its precision  positioning  and mobile  timing and  technologies
products. In addition,  the Company relies on sole suppliers for a number of its
critical Asics. The dependence upon these sole suppliers subjects the Company to
risks  associated  with an  interruption of supply if the Company is not able to
find alternative  sources on a timely basis.  There can be no assurance that any


                                       19

<PAGE>

delay,  disruptions,  or  quality  problems  resulting  from  the  use of a sole
supplier will not have a material  adverse effect on the Company's  business and
results of operations.

     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  currently  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.
(See Note 10 to the Condensed Consolidated Financial Statements - Contingencies:
Other Litigation).

     The Company is continuously  evaluating  alliances and external investments
in technologies related to its business,  and has already entered into alliances
and made  relatively  small  strategic  investments  in a number of GPS  related
technology  companies.  Acquisitions  of companies,  divisions of companies,  or
products  and  alliances  and  strategic   investments  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;  (iii) loss of key
employees  of  acquired  operations;  and (iv)  inability  to recover  strategic
investments  in  development  stage  entities.  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.

*    The ability of the Company to maintain its competitive technological
position will depend,  in a large part, on its ability to attract,  motivate and
retain highly qualified  development and managerial  personnel.  Competition for
qualified employees in the Company's industry and location is intense, and there
can be no  assurance  that the  Company  will be able to attract,  motivate  and
retain enough qualified employees necessary for the future continued development
of the Company's business and products.

     The Company  has certain  products  that are  subject to  governmental  and
similar  certifications  before they can be sold. For example, FAA certification
is required for all aviation  products.  Also,  the Company's  products that use
integrated  radio  communication   technology  require  an  end-user  to  obtain
licensing from the Federal  Communications  Commission (FCC) for  frequency-band
usage.  During the fourth  quarter of 1998,  the FCC  temporarily  suspended the
issuance of licenses for certain of the Company's  Real-time  Kinematic products
because of interference  with certain other users of similar radio  frequencies.
An  inability or delay in obtaining  such  certifications  or FCC's delays could
have an adverse effect on the Company's operating results.

     The  Company's GPS  technology  is dependent on the use of radio  frequency
spectrum.   The  assignment  of  spectrum  is  controlled  by  an  international
organization known as, the International Telecommunications Union (ITU). Any ITU
reallocation of radio frequency spectrum,  including frequency band segmentation
or sharing of spectrum,  may  materially  and  adversely  affect the utility and
reliability of the Company's  products,  which would,  intern,  cause a material
adverse effect on the Company's operating results.  In addition,  emissions from
mobile  satellite  service and other equipment  operating in adjacent  frequency
bands may  materially  and adversely  affect the utility and  reliability of the
Company's  products,  which  could  result in a material  adverse  effect on the
Company's operating results.

     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.  The
satellites  have  design  lives of 7.5  years and are  subject  to damage by the
hostile  space  environment  in which  they  operate.  The  array of  satellites
consists of 27 of which the oldest  satellite has been in orbit for 21 years and
the  youngest  satellite  has been in orbit for 5 years.  To repair  damaged  or
malfunctioning   satellites  is  currently  not  economically   feasible.  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


                                       20

<PAGE>

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, or that the policies of the U.S.  government for the use of GPS without
charge will remain unchanged. However, in 1996 the U.S. Administration announced
the  first  comprehensive  national  policy  statement  on  GPS,  known  as  the
Presidential  Decision  Directive,  which  confirms  civilian,  commercial,  and
consumer  access to the use of GPS free of direct user fees.  The U.S.  Congress
provided  a  statutory  foundation  for  this  access  in the  National  Defense
Authorization Act for fiscal year 1998.  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 in the future. 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.  In 1995, certain
European government organizations expressed concern regarding the susceptibility
of GPS equipment to intentional or inadvertent signal interference. Such similar
concern  could  translate  into  reduced  demand  for GPS  products  in  certain
geographic regions in the future.


I
tem 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

     The  following is a  discussion  of the  Company's  exposure to market risk
related to changes in interest rates and foreign  currency  exchange rates.  The
Company uses certain derivative financial instruments to manage these risks. The
Company does not use derivative financial instruments for speculative or trading
purposes.  All financial  instruments are used in accordance with board-approved
polices.

Market Interest Rate Risk

     Short-term  Investments  Owned by the Company.  As of October 1, 1999,  the
Company  had  short-term   investments  of  $39.7  million.   These   short-term
investments consist of highly liquid investments with original maturities at the
date of purchase between three and twelve months.  These investments are subject
to  interest  rate  risk and will  decrease  in value if market  interest  rates
increase.  A  hypothetical  10 percent  increase in market  interest  rates from
levels  at  October  1, 1999  would  cause  the fair  value of these  short-term
investments  to decline by an  immaterial  amount.  Because  the Company has the
ability to hold these  investments  until  maturity the Company would not expect
the value of these  investments to be affected to any significant  degree by the
effect of a sudden change in market interest  rates.  Declines in interest rates
over time will, however, reduce the Company's interest income.

     Outstanding  Debt of the  Company.  As of October 1, 1999,  the Company had
outstanding  long-term  debt of  approximately  $30.0  million  of  subordinated
promissory  notes at a fixed  interest rate of 10 percent.  The interest rate of
this instrument is fixed.  However,  a hypothetical  10 percent  decrease in the
interest  rates would not have a material  impact on the  Company.  Increases in
interest rates could, however,  increase interest expense associated with future
borrowings of the Company,  if any. The Company does not currently hedge against
interest rate increases.

Foreign Currency Exchange Rate Risk

     The Company hedges risks associated with foreign  currency  transactions in
order to minimize the impact of changes in foreign  currency  exchange  rates on
earnings. The Company utilizes forward contracts to hedge trade and intercompany
receivables and payables. These contracts reduce the exposure to fluctuations in
exchange  rate  movements,  as the  gains and  losses  associated  with  foreign
currency  balances are  generally  offset with the gains and losses on the hedge
contracts.  All hedge  instruments  are marked to market through  earnings every
period.

*    The Company does not anticipate any material adverse effect on its
consolidated   financial   position  utilizing  the  Company's  current  hedging
strategy.

     All contracts  have a maturity of less than one year,  and the Company does
not defer any gains and losses,  as they are all accounted for through  earnings
every period.

                                       21

<PAGE>

     The  following  table  provides  information  about the  Company's  foreign
exchange forward contracts outstanding as of October 1, 1999:


                               Foreign          Contract Value      Fair Value
                  Buy/     Currency Amount           USD              in USD
    Currency      Sell     (in thousands)       (in thousands)    (in thousands)
--------------------------------------------------------------------------------
YEN               Sell        273,900             $ 2,530           $ 2,618
NZD               Buy           4,900             $ 2,587           $ 2,542
Euro              Sell          1,945             $ 2,049           $ 2,082
STERLING          Buy           1,250             $ 2,007           $ 2,069



*    The hypothetical changes and assumptions made above will be different
from what actually occurs in the future.  Furthermore,  the  computations do not
anticipate  actions that may be taken by the  Company's  management,  should the
hypothetical  market  changes  actually  occur  over time.  As a result,  actual
earnings effects in the future will differ from those quantified above.

                                       22

<PAGE>


PART II. OTHER INFORMATION


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
Number
     A.    Exhibits

           10.68*   Asset Purchase Agreement dated August 10, 1999 by and among
                    Trimble Navigation Limited and Solectron Corporation and 
                    Solectron Federal Systems, Inc. (1)

           10.69*   Supply Agreement dated August 10, 1999 by and among Trimble
                    Navigation Limited and Solectron Corporation and Solectron
                    Federal Systems, Inc. (1)

           10.70    Revolving Credit Agreement  - Loan - Fourth Amendment

           27.1     Financial Data Schedule for the quarters ended
                    October 1, 1999 and October 2, 1998
           --------------------

           *   Confidential treatment has been requested for certain portions of
               this exhibit.

          (1)  Incorporated by reference to identically numbered exhibits filed 
               in response Item 7(c), "Exhibits," of the registrant 's Current 
               Report on Form 8-K filed on August 25, 1999.


     B.   Reports on Form 8-K

          On August 25, 1999, the Company filed a report on Form 8-K relating to
          an Asset Purchase Agreement with Solectron Corporation and Solectron 
          Federal Systems, Inc. (collectively, "Solectron"). Under the agreement
          the Company transferred to Solectron substantially all the 
          manufacturing assets, associated commitments, and manufacturing 
          technology located at its Sunnyvale, California campus to Solectron 
          for total cash of approximately $26.9 million.  Concurrently with the 
          closing of the Asset Purchase Agreement, the Company and Solectron 
          also entered into a Supply Agreement. The Supply Agreement provides 
          for the exclusive manufacture by Solectron of almost all Trimble 
          products for a period of three years.


                                       23

<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 C. Zimmerman
    --------------------------------------------------------   
        John C. Zimmerman
        (Chief Financial Officer and Senior Vice President)



DATE:  November 11, 1999

                                       24

<PAGE>





                                                                  Exhibit 10.70

                           TRIMBLE NAVIGATION LIMITED

                                FOURTH AMENDMENT


     THIS FOURTH AMENDMENT (this  "Amendment") is entered into as of October 20,
1999 by and among TRIMBLE NAVIGATION  LIMITED,  a California  corporation having
its chief executive office at 645 North Mary Avenue, Sunnyvale, California 94086
(the  "Borrower")  and FLEET  NATIONAL  BANK,  a  national  banking  association
organized  under  the laws of the  United  States  and  having  an office at One
Federal  Street,  Boston,  Massachusetts  02110,  as the  Agent and as a Lender,
BANKBOSTON,  N.A., a national banking  association,  organized under the laws of
the United States and having an office at One Hundred  Federal  Street,  Boston,
Massachusetts  02110,  as the  Syndication  Agent  and as a Lender,  SANWA  BANK
CALIFORNIA,  a  banking  corporation  organized  under  the laws of the State of
California and having an office at 220 Almaden Boulevard,  2nd Floor,  San Jose,
California  95113,  as a Lender,  and ABN AMRO BANK N.V., a Netherlands  banking
corporation  having  an  office  at  101  California  Street,  Suite  4550,  San
Francisco,  California 94115, as a Lender,  under the Loan Agreement (as defined
below), to which reference is made for the definitions of all capitalized terms,
used, but not otherwise defined, herein.


                                 R E C I T A L S

     WHEREAS,  the parties have entered into a Loan Agreement dated as of August
27, 1997 among the Borrower,  the Agent, the Syndication  Agent, and the lenders
from time to time  party  thereto  (the  "Lenders"),  as  amended by a Letter of
Amendment dated December 17, 1997, and a Second Letter of Amendment dated August
11, 1998 and a Third Amendment dated as of February 16, 1999 (the  "Agreement"),
pursuant to which the Lenders issued a Revolving  Credit Loan  Commitment to the
Borrower in the maximum principal amount of $50,000,000;

     WHEREAS,  pursuant to a certain  Waiver Letter dated October 27, 1998 and a
certain  Supplement  to  Loan  Agreement  and  Additional  Waiver  Letter  dated
December 9, 1998,  the Borrower was granted a limited waiver with respect to the
Borrower's  compliance with certain covenants contained in the Agreement for the
Borrower's   fiscal  quarters  ended  October  2,  1998  and  January  1,  1999,
conditional  upon  the  satisfaction  of  certain  specified  waiver  conditions
contained  therein on or prior to February 16, 1999,  which was satisfied by the
above-referenced Third Amendment;

     WHEREAS,  the Borrower has  requested  the Agent and the Lenders to further
amend the Agreement as  hereinafter  set forth and the Agent and the Lenders are
willing to do so;

     NOW THEREFORE,  in  consideration of the mutual benefits to be derived from
the parties' continuing  relationship under the Agreement and for other good and
valuable   consideration,   the  receipt  and   adequacy  of  which  are  hereby
acknowledged,  the Borrower,  the Agent, the Syndication  Agent, and the Lenders
hereby  agree that the  Agreement  is hereby  amended,  effective as of the date
first set forth above (the "Effective Date"), as follows:

     1. Section 1.1 of the Agreement is hereby  further  amended by the addition
of the following new defined term to be added alphabetically thereto:

     "Allowed  Repurchase"  means the repurchase by the Borrower from certain of
Borrower's  stockholders  of up to an aggregate  of  $30,000,000  of  Borrower's
capital stock with the proceeds of the Borrower's sale of certain assets.

     2. Section  5.1.10 of the  Agreement  is hereby  amended in its entirety to
read as follows:

     Section 5.1.10. Maximum Ratio of Total Funded Debt to Total Capitalization.
Commencing September 30, 1999, maintain a ratio of (i) Total Funded Debt to (ii)
Total Capitalization of less than .7:1.00.

     3. Section  5.1.11 of the  Agreement  is hereby  amended in its entirety to
read as follows:

   

     Section 5.1.11.  Minimum  Consolidated  Tangible Net Worth.  (i) Maintain a
Consolidated  Tangible  Net  Worth in an  amount  not less  than the  Borrower's


                                       25

<PAGE>

Consolidated  Tangible Net Worth as of the end of the  Borrower's  September 30,
1999 fiscal quarter minus the sum of $5,000,000 and the lesser of (a) the amount
of the Allowed  Repurchase and (b) $30,000,000,  and (ii) comply with Section 8K
of the Note  Purchase  Agreement  dated as of June 13, 1994 among the  Borrower,
John Hancock  Mutual Life and John Hancock  Life  Insurance,  as the same may be
amended,  amended and restated,  supplemented or otherwise modified from time to
time.

     4. Section  5.1.12 of the  Agreement  is hereby  amended in its entirety to
read as follows:

     Section 5.1.12.  Minimum Cash Balances.  Maintain at all times on and after
the Effective Date unrestricted cash balances and Cash Equivalent Investments in
an amount  equal to or  greater  than  $50,000,000  of which  unrestricted  cash
balances and Cash Equivalent Investments (to the extent and of types issued by a
Lender) in an amount equal to or greater than the aggregate  outstanding  amount
of the Obligations  (including without limitation the Revolving Credit Loan, the
aggregate  outstanding  amount of any Letters of Credit and any Unpaid Drawings)
must be kept in one or more accounts maintained by the Borrower with one or more
of the Lenders.

     5. Section 5.2.8 of the Agreement is hereby amended in its entirety to read
as follows:

     Section  5.2.8.  Overall  Aggregate  Cap.  Notwithstanding  the  terms  and
conditions  of  Sections  5.2.4,  5.2.6,   5.2.7.3,   5.2.7.4  and  5.2.10,  the
Consolidated Tangible Net Worth measurements of permitted transactions contained
therein are subject to an aggregate  Consolidated  Tangible Net Worth limitation
of  thirty  percent  (30%)  of  Consolidated  Tangible  Net  Worth  for all such
transactions  permitted  by any  of  said  Sections  excluding,  to  the  extent
otherwise includable therein, the Allowed Repurchase.

     6. Exhibit  3.1.1.10 to the Agreement  (Form of Compliance  Certificate) is
hereby  deleted and a new  Exhibit  3.1.1.10  in the form  attached  hereto as "
Exhibit 3.1.1.10 " is substituted in its stead.

     7. This  Amendment  shall take effect as of the Effective Date upon receipt
by the Agent of this Amendment duly executed by the parties hereto.

     8. The Borrower hereby represents and warrants to the Agent and the Lenders
that no Default or Event of Default exists
under the Agreement.

     9. This  Amendment  is  executed as an  instrument  under seal and shall be
governed by and construed in  accordance  with the laws of The  Commonwealth  of
Massachusetts  without  regard to its  conflicts of law rules.  All parts of the
Agreement not affected by this Amendment are hereby ratified and affirmed in all
respects,  provided that if any provision of the Agreement  shall conflict or be
inconsistent  with this  Amendment,  the terms of this Amendment shall supersede
and prevail.  Upon and after the date of this  Amendment  all  references to the
Agreement in that document, or in any related document, shall mean the Agreement
as amended by this  Amendment.  Except as expressly  provided in this Amendment,
the execution and delivery of this Amendment does not and will not amend, modify
or  supplement  any  provision of, or constitute a consent to or a waiver of any
noncompliance with the provisions of the Agreement,  and, except as specifically
provided in this Amendment, the Agreement shall remain in full force and effect.
This Amendment may be executed in one or more  counterparts with the same effect
as if the signatures hereto and thereto were upon the same instrument.


             [THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                       26

<PAGE>


     IN WITNESS WHEREOF, each of the Borrower, the Agent, the Syndication Agent,
and the Lenders in accordance with Section 9.5 of the Agreement, has caused this
Amendment  to be executed  and  delivered by their  respective  duly  authorized
officers as an instrument under seal as of the Effective Date.

                                   BORROWER:

                                   TRIMBLE NAVIGATION LIMITED


                                   By: /s/ John E. Huey________________________
                                          John E. Huey
                                          Treasurer


                                   AGENT:

                                   FLEET NATIONAL BANK


                                   By: /s/ Mathew M. Glauninger________________
                                          Mathew M. Glauninger
                                          Senior Vice President


                                   SYNDICATION AGENT:

                                   BANKBOSTON, N.A.


                                   By:/s/ Anthony B. Kwee______________________
                                          Anthony B. Kwee
                                          Vice President


                                       27

<PAGE>
                                   

                                   LENDERS:

                                   FLEET NATIONAL BANK


                                   By: /s/ Mathew M. Glauninger
                                          Mathew M. Glauninger
                                          Senior Vice President


                                   BANKBOSTON, N.A.

                                   By: /s/ Anthony B. Kwee_____________________
                                          Anthony B. Kwee
                                          Vice President


                                   SANWA BANK CALIFORNIA

                                   By: /s/ Jillian Mathur______________________
                                          Jillian Mathur
                                          Vice President



                                   ABN AMRO BANK N.V.

                                   By:_________________________________________
                                          _____________________________________
                                                        Print Name
                                   Title:______________________________________

                                   By:_________________________________________
                                          _____________________________________
                                                        Print Name
                                   Title:______________________________________


                                       28

<PAGE>


                                                          
                EXHIBIT 3.1.1.10 - FORM OF COMPLIANCE CERTIFICATE


Fleet National Bank
One Federal Street
Boston, MA 02110

  Attention:________Mathew M. Glauninger, Senior Vice President
                    High Technology Group,   MA OF DO7A

  Re: Compliance Certificate Required by Sections 3.1.1.10 or 5.3.4 of the Loan
      Agreement dated as of August 27, 1997 by and among you as Agent, 
      BankBoston, N.A., as the Syndication Agent, the undersigned and the 
      Lenders from time to time party thereto, as amended from time to time 
      (the "Loan Agreement")

Gentlemen:

     This certificate is submitted by the undersigned (the "Borrower")  pursuant
to  Sections 3.1.1.10  or 5.3.4 of the Loan  Agreement.  Capitalized  terms used
herein have the same meaning as in the Loan Agreement.

     The  Borrower  hereby  certifies  to the  Agent  and the  Lenders  that the
following information is true, accurate and complete as of the Borrower's fiscal
quarter ending ____________, ________ (the "Quarter").

Section 5.1.10.  Maximum Ratio of Total Funded Debt to Total
                    Capitalization  (Calculated as at end of the Quarter)

(a)    Obligations (all Indebtedness under
       Financing Documents)................................$___________________

(b)    Subordinated Debt...................................$___________________

(c)    Capitalized Lease Obligations.......................$___________________

(d)    Total Funded Debt [Sum of Lines (a) - (c)]..........$___________________

(e)    Consolidated Net Worth..............................$___________________

(f)    Total Capitalization [Sum of Line (d) + Line (e)]...$___________________

(g)    Actual Ratio: [Line (d) divided by Line (f)]........            :1.0

(h)    Maximum Ratio Permitted by Agreement................            :1.0


                                       29

<PAGE>

Section 5.1.11. Minimum Consolidated Tangible Net Worth
                  (Calculated as at end of the Quarter)

 (a)    Total assets of Borrower and Subsidiaries...............$______________

 (b)    Consolidated Total Liabilities..........................($_____________)

 (c)    Consolidated Net Worth
        [Line (a) minus Line (b)]...............................$______________

 (d)    Excluded items (if any)* ...............................($_____________)

 (e)    Consolidated Tangible Net Worth.........................$______________

 (f)    Minimum Permitted by Agreement:

        (i)  Consolidated Tangible Net Worth
        as at September 30, 1999 quarter end minus sum of $5,000,000
        and lesser of Allowed Repurchase and
        $30,000,000, i.e., $________............................$______________

        (ii) Minimum "Consolidated Net Worth"
        Required Under Section 8K of Note Purchase Agreement
        dated 6/13/94 ("NPA")...................................$______________

Section 5.1.12.  Minimum Cash Balances..
                    (Calculated on any date after September 30, 1999)

 (a)   Obligations (under Financing Documents)..................$______________

        (i)    Revolving Loans   $_____________________
        (ii)   Letters of Credit $_____________________

(b) Total Cash Balances and Cash Equivalent Investments.........$______________

(c) Minimum Required by Agreement.................................$50,000,000.

(d) Total Cash Balances and qualified Cash Equivalent Investments
   in accounts with Lenders.......................................$____________

(e) Minimum Required is amount of (a)











--------
* Excluded items are (a)book value of intangible assets,  including  goodwill,  
unamortized debt discount and expense,  patents,  trade and  service   marks  
and  names,   copyrights,   franchises,   etc.  of   $_______________________;
and  (b)  other   (describe)  of $__________________________.



                                       30

<PAGE>


Section 5.1.13.  Minimum Quick Ratio.
                    (Calculated as at end of the Quarter)

(a)    Cash.....................................................$______________

(b)    Cash Equivalent Investments..............................$______________

(c)    Net outstanding amount of
       accounts receivable......................................$______________

(d)    Sum of Lines (a), (b) and (c)............................$______________

(e)    Current Liabilities......................................$______________

(f)    Less Current Liabilities consisting of Revolving Credit Loans..($_______)

(g)    Line (e) minus Line (f)........................................$________

(h)    Quick Ratio [Line (d) divided by Line(g).......................   :1.0

(g)    Minimum Quick Ratio Permitted by Agreement.....................   :1.0

Section 5.2.9.  Minimum Operating and Net Income.

Calculated as at end of the Quarter:

(a)    Net income (loss) (GAAP) as at end of the Quarter............$__________

(b)    Less extraordinary or other non-recurring gains
       as at end of the Quarter.....................................($_________)

(c)    Less gains from sale or other non-ordinary course
       disposition of assets as at end of the Quarter...............($_________)

(d)    Net Income as at end of the Quarter
       [Line (a) minus sum of Lines (b) and (c)]....................$__________

Calculated as at End of Immediately Preceding Quarter:

(e)    Net income (loss) (GAAP) as at end of the fiscal quarter
       immediately preceding the Quarter............................$__________

(f)    Less extraordinary or other non-recurring gains as at end of
       the fiscal quarter immediately preceding the Quarter.........($_________)


                                       31

<PAGE>

(g)    Less gains from sale or other non-ordinary course
       disposition of assets as at end of the fiscal quarter
       immediately preceding the Quarter.............................($________)

(h)    Net Income as at end of the fiscal quarter immediately
       preceding the Quarter
       [Line (e) minus sum of Lines (f) and (g)].....................$_________

Calculated as at End of Second Immediately Preceding Quarter:

(i)    Net income (loss) (GAAP) as at end of the fiscal quarter
       immediately preceding the Quarter.............................$_________

(j)    Less extraordinary or other non-recurring gains as at end of
       the fiscal quarter immediately preceding the Quarter..........($________)

(k)    Less gains from sale or other non-ordinary course
       disposition of assets as at end of the fiscal quarter
       immediately preceding the Quarter.............................($________)

(l)    Net Income as at end of the fiscal quarter immediately
       preceding the Quarter
       [Line (i) minus sum of Lines (l) and (k)].....................$_________

Calculated as at End of Third Immediately Preceding Quarter:

(m)    Net income (loss) (GAAP) as at end of the fiscal quarter
       immediately preceding the Quarter.............................$_________

(n)    Less extraordinary or other non-recurring gains as at end of
       the fiscal quarter immediately preceding the Quarter..........($________)

(o)    Less gains from sale or other non-ordinary course
       disposition of assets as at end of the fiscal quarter
       immediately preceding the Quarter.............................($________)

(p)    Net Income as at end of the fiscal quarter
       immediately preceding the Quarter
       [Line (m) minus sum of Lines (n) and (o)].....................$_________

                                       32

<PAGE>

     

(q)    Net Income

       The Quarter [line (d)], plus Excluded items (if any)** of $___....$_____
       Immediately Preceding Quarter [line (e)]
         plus excluded items (if any)** of $__________.................$_______
       Second Immediately Preceding Quarter [line (i)]
         plus Excluded items (if any)** of $__________.................$_______
       Third Immediately Preceding Quarter [line (m)]
         plus excluded items (if any)** of $__________.................$_______

(r)    Operating Income

       The Quarter plus Excluded items (if any) **
         of $_________________________.................................$_______
       Immediately Preceding Quarter plus excluded items (if any)**
         of $_________________________.................................$_______
       Second Immediately Preceding Quarter plus
         Excluded items (if any) ) ** of $___________________..........$_______
       Third Immediately Preceding Quarter
         plus excluded items (if any)** of $_________________..........$_______

(s)    Minimum Operating Income and Net Income
         Required under the Agreement:

     (i) during the period  beginning with the Borrower's  fiscal quarter ending
         March, 1999  and  ending on the fiscal  quarter ending  December, 1999,
         have a negative  Operating Income or a negative Net Income for any two 
         fiscal quarters, and

     (ii) as of the end of each fiscal quarter of the Borrower  commencing  with
          the Borrower's fiscal quarter ending in March, 2000, have a negative 
          Operating Income, or a negative Net Income for the rolling four 
          quarter fiscal period consisting of such fiscal quarter and the three 
          immediately preceding fiscal quarters.











-------------
**  Excluded  items are any  amount  taken as a one-time  charge  against 
earnings  attributable  to (a)  settlement  of class  action litigation;  
(b)  closing  of  commercial  marine  division;  and  (c)  reduction  in  
employees  resulting  from  switch  to  contract manufacturing, (a) - (c) not 
to exceed $2,000,000 in the aggregate.


                                       33

<PAGE>

     The Borrower further certifies to the Lenders that as of the date hereof no
Event of Default or Default has occurred without having been waived in writing.

                                            TRIMBLE NAVIGATION LIMITED


                                            By:                     
                                               Name:  [                        ]
                                               Title:    [                     ]




                                       34

<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>                                            <C>
<PERIOD-TYPE>                                       9-MOS                                        9-MOS
<FISCAL-YEAR-END>                                   DEC-31-1999                            JAN-01-1999
<PERIOD-END>                                        OCT-01-1999                            OCT-02-1998

<CASH>                                                        57,237                            47,642
<SECURITIES>                                                  39,654                             9,149
<RECEIVABLES>                                                 41,818                            37,121
<ALLOWANCES>                                                       0                                 0
<INVENTORY>                                                   18,257                            46,200
<CURRENT-ASSETS>                                             160,836                           144,412
<PP&E>                                                        12,453                            17,203
<DEPRECIATION>                                                     0                                 0
<TOTAL-ASSETS>                                               182,127                           170,558
<CURRENT-LIABILITIES>                                         55,877                            46,792
<BONDS>                                                            0                                 0
<PREFERRED-MANDATORY>                                              0                                 0
<PREFERRED>                                                        0                                 0
<COMMON>                                                     124,249                           121,602
<OTHER-SE>                                                   (31,991)                          (29,567)
<TOTAL-LIABILITY-AND-EQUITY>                                 182,127                           170,558
<SALES>                                                      209,245                           207,670
<TOTAL-REVENUES>                                             209,245                           207,670
<CGS>                                                         99,088                           107,557
<TOTAL-COSTS>                                                 99,088                           107,557
<OTHER-EXPENSES>                                              95,047                           107,877
<LOSS-PROVISION>                                                   0                                 0
<INTEREST-EXPENSE>                                             2,545                             2,550
<INCOME-PRETAX>                                               15,053                            (8,592)
<INCOME-TAX>                                                   2,259                             1,050
<INCOME-CONTINUING>                                           12,794                            (9,642)
<DISCONTINUED>                                                 2,931                           (25,622)
<EXTRAORDINARY>                                                    0                                 0
<CHANGES>                                                          0                                 0
<NET-INCOME>                                                  15,725                           (35,264)
<EPS-BASIC>                                                   0.70                             (1.56)
<EPS-DILUTED>                                                   0.70                             (1.56)
        
 


</TABLE>