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

                                    FORM 10-K

      (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                   For the fiscal year ended December 28, 2001
                                -----------------

                                       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 Identification No.)
   incorporation or organization)         

 645 North Mary Avenue, Sunnyvale, CA                     94088             
 ---------------------------------------     -----------------------------------
 (Address of principal executive offices)              (Zip Code)

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

        Securities registered pursuant to Section 12(b) of the Act: NONE

           Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                         Preferred Share Purchase Rights
                                (Title of Class)

     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  period  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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     The  aggregate  market  value  of the  registrant's  Common  Stock  held by
non-affiliates of the registrant was approximately  $446,702,176 as of March 22,
2002,  based on the closing  sale price of the common  stock on the NASDAQ Stock
Market for that date.

     There were 28,181,736  shares of the  registrant's  Common Stock issued and
outstanding as of March 22, 2002.

                                       1

<PAGE>

                           FORWARD-LOOKING STATEMENTS

     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act of  1934.  Actual  results  could  differ  materially  from  those
indicated in the forward-looking  statements as a result of the risk factors set
forth in, or  incorporated  by reference into, this report and other reports and
documents that the Company files with the  Securities  and Exchange  Commission.
The Company has attempted to identify forward-looking  statements in this report
by placing an asterisk (*) before paragraphs containing such material.


                                     PART I


Item 1.           Business

General

     Trimble  Navigation  Limited, a California  corporation  ("Trimble" or "the
Company"),  develops,  manufactures,  and distributes products enabled by Global
Positioning  System  ("GPS"),   optical,   laser,  and  wireless  communications
technology.  We provide end-users,  value added resellers ("VAR's") and original
equipment   manufacturers   ("OEM's")  with  positioning  solutions  principally
targeted for the  agriculture,  engineering  and  construction,  fleet and asset
management, timing, automobile navigation, and military markets.

Background

     Trimble  provides  positioning  solutions for many  applications  requiring
precise determination of location using GPS, optical, laser,  communications and
information  technologies.  Positioning  solutions  are used in many  industries
including   construction,    engineering,   agriculture,   trucking,   maritime,
automotive,  aviation, fleet and asset management,  consumer, mobile appliances,
military, in-vehicle navigation, timing, and recreation.

     The  majority  of  Trimble   product  sales  use  GPS  as  the  positioning
technology.  GPS offers major  advantages  over earlier  technologies in ease of
use, precision, and accuracy. It provides worldwide coverage in three dimensions
and can also provide data to enable time and velocity measurements

     GPS is a system of 28 orbiting Navstar satellites established and funded by
the U.S.  government,  which has been fully  operational  since March 1995.  GPS
positioning  is based  on a  trilateration  technique  that  precisely  measures
distances from three or more Navstar  satellites.  The  satellites  continuously
transmit precisely timed radio signals using extremely accurate atomic clocks. A
GPS receiver calculates distances from the satellites in view by determining the
travel time of a signal from the  satellite to the  receiver.  The receiver then
trilaterates its position using its known distance from various satellites,  and
calculates  latitude,  longitude and  altitude.  Under normal  circumstances,  a
stand-alone  GPS  receiver  is able to  calculate  its  position at any point on
earth, in the earth's  atmosphere,  or in lower earth orbit, to approximately 10
meters,  24 hours a day.  Greater  accuracies  are possible  through a technique
called  "differential  GPS."  In addition,  GPS provides  highly  accurate  time
measurement.

     * The usefulness of GPS is dependent upon the locations of the receiver and
the GPS  satellites  that are above the horizon at any given time.  Reception of
GPS signals requires line-of-sight visibility between the Navstar satellites and
the receiver,  which can be blocked by buildings,  hills,  cloud cover and dense
foliage.  The receiver must have a line of sight to at least three satellites in
order to determine its location in two  dimensions--latitude  and longitude--and
at least four  satellites  to  determine  its  location  in three  dimensions  -
latitude,  longitude,  and altitude.  The accuracy of GPS may also be limited by
distortion of GPS signals from ionospheric and other atmospheric conditions, and
intentional or inadvertent signal interference or Selective Availability ("SA").
SA, which was the largest component of GPS distortion, is controlled by the U.S.
Department of Defense and on May 1, 2000, was deactivated.

                                       2

<PAGE>

     Different   applications   require  different   accuracies  -  for  example
navigation  typically  requires  one to three  meters  and  survey  and  machine
guidance  typically  require  less than ten  centimeters.  By using a  technique
called "differential GPS" using two or more GPS receivers, position accuracy can
be  improved  over  unaided  GPS.  This  technique  compensates  for a number of
measurement distortions, including ionospheric and other atmospheric distortions
as well as SA.  Differential  GPS  involves  placing one GPS receiver at a known
location  and  continuously  comparing  its  calculated  location  to its actual
location  to  measure  signal  distortions  and  errors in the  satellite  data.
Measurement  corrections  can  be  transmitted  in  real-time  over a  radio  or
telephone link or integrated later with  accumulated  data. Most distortions and
errors are reasonably  constant over large areas, so that multiple GPS receivers
can use these measurements to correct their own position calculations.

     * Trimble's  GPS products  are based on  proprietary  receiver  technology.
Trimble's GPS receivers  track all satellites in view and  automatically  select
the  optimum  combination  of  satellites  to provide the most  accurate  set of
measurements.   The  convergence  of  positioning,   wireless,  and  information
technologies  enables significant new value to be added to positioning  systems,
thereby  creating a more  robust  solution  for the user.  In  addition,  recent
developments in wireless  technology and  deployments of wireless  networks have
enabled less expensive wireless communications. These developments allow for the
efficient transfer of position data to locations away from the positioning field
device,  allowing  the data to be accessed by more users and thereby  increasing
productivity.

     *  Navstar   satellites  and  their  ground  support  systems  are  complex
electronic  systems  subject to electronic and mechanical  failures and possible
sabotage. The satellites were originally designed to have lives of 7.5 years and
are subject to damage by the hostile  space  environment  in which they operate.
The U.S.  Department  of Defense is  committed  to  maintaining  a 24  satellite
constellation. The total number of GPS satellites that are currently operational
is 28,  some of which  have  been in place for 12 years.  Repairing  damaged  or
malfunctioning  satellites is currently not 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 significant reduction in the number of
operating  satellites would impair the current utility of the GPS system and the
growth of current and additional market opportunities. In addition, there can be
no assurance that the U.S. government will remain committed to the operation and
maintenance  of GPS satellites  over a long period,  or that the policies of the
U.S.  Government  for the  use of GPS  without  charge  will  remain  unchanged.
However, a 1996 Presidential Decision Directive marks the first time that access
to GPS for civilian use has a solid  foundation  in law.  Because of  increasing
commercial GPS applications,  other U.S. Government agencies may become involved
in the administration or the regulation of the use of GPS signals.  Any of these
factors could affect the willingness of buyers of the Trimble products to select
GPS-based  systems  instead of products  based on  competing  technologies.  Any
resulting change in market demand for GPS products could have a material adverse
effect on Trimble's  financial  results.  In 1995,  certain European  government
organizations expressed concern regarding the susceptibility of GPS equipment to
intentional or inadvertent  signal  interference.  Such concern could  translate
into  reduced  demand  for GPS  products  in certain  geographic  regions in the
future.

     Laser and optical products measure  distances very accurately by means of a
light beam. Trimble generally uses commercially available laser diodes to create
laser  light  beams  for  its  applications.   Trimble's  proprietary  precision
mechanics  and software  algorithms  in these  products  combine to give robust,
accurate  distance  and  angle  measurements  for  a  variety  of  agricultural,
surveying, and construction applications.

Business Strategy

     Our  strategy   leverages  our  expertise  in  GPS  and  other  positioning
technologies  to  provide  product  solutions  to  our  customers.  Our  primary
objectives are:

     * Focus on growth  markets.  We target  markets  which offer  potential for
growth,  profitability,  and market  leadership.  Our  current  focus is on four
primary market segments:  Engineering and Construction,  Agriculture,  Fleet and
Asset Management and Component Technologies. In addition, we serve other smaller
markets and include these in the Portfolio Technologies segment. In general, the
customers needs within these market segments can be  characterized by a need for
improved productivity,  lower cost, higher convenience or better information. We
intend to continuously evaluate new market segments as well as specific vertical
markets within these segments as we develop new applications for our technology.

                                       3

<PAGE>

     *  Provide  innovative,  differentiated  product  solutions.  We  strive to
provide innovative  solutions that deliver significant value to our end-users by
developing  products with hardware  capabilities and software  features designed
for specific applications.  Trimble continues to focus on hardware advances that
lead to smaller size, lower power requirements, improved sensitivity and greater
accuracy.  Our products typically bundle hardware and software together. In some
cases, we license the results of our developments to third parties.

     *  Develop   products  that  integrate   positioning   communications   and
information  technologies.  We intend to leverage the  advances in  positioning,
wireless,  and information  technologies  by integrating  them in new classes of
products that provide the user with higher  functionality  and greater access to
information.

     * Develop  distribution  channels to improve  market  penetration.  We have
developed  extensive  distribution  channels within our targeted market segments
and have  established  strong customer  relationships  based on Trimble's strong
product  position and  commitment  to support.  The  acquisition  of the Spectra
Precision Group added significant new distribution capability internationally. A
major focus will be to further  develop our  channels,  both by  increasing  the
capabilities  in  regions  currently  served  as well as  through  international
expansion.

     * Pursue  key  customer  alliances.  Key  customer  alliances  have  been a
significant  element of our success.  We have  established  such  alliances with
companies  including  Caterpillar Inc.; CNH Global N.V.;  Siemens VDO Automotive
AG; Infineon  Technologies;  Nortel Networks  Limited;  Blaupunkt-Werke  GmbH, a
wholly owned subsidiary of Robert Bosch GmbH (Bosch); McNeilus Companies,  Inc.,
a subsidiary of Oshkosh Truck Corporation;  and Seiko Epson. These relationships
have  enhanced  our  ability to enter new  markets,  develop  new  products  and
strengthen  our  distribution   network.   These   relationships  are  generally
terminable  at will by either  party.  As our  markets  develop  and new markets
emerge, we expect that alliances will be a significant factor in our success. We
may also  form  other  types  of  alliances  or take  advantage  of  acquisition
opportunities  that  complement our product  portfolio,  extend our  technology,
enable us to enter new markets, or solidify our current market position.

INDUSTRY SEGMENTS

     We  operate  in four  primary  industry  segments  that  use a  variety  of
positioning-based solutions,  including: (i) Engineering and Construction,  (ii)
Agriculture,  (iii) Fleet and Asset Management, (iv) Component Technologies, and
other smaller segments included in Portfolio Technologies.

     We  design,   market,  and  distribute   products  that  determine  precise
geographic location or position, sometimes combined with data communications and
applications  software.  We sell  our  products  through  a  network  of  direct
salespeople,  OEMs, VARs, independent dealers, distributors and authorized sales
representatives supported by sales offices throughout the world.

     We  conduct  research  and  development  activities  at our  facilities  in
Sunnyvale,  California;  Dayton, Ohio;  Corvallis,  Oregon;  Chandler,  Arizona;
Westminster,  Colorado; Danderyd, Sweden; Christchurch, New Zealand and in Jena,
Munich and  Kaiserslautern  in  Germany.  Solectron  Corporation  and  Solectron
Federal Systems, Inc. (collectively,  "Solectron") currently manufacture most of
Trimble's GPS products. We also have production facilities in Danderyd,  Sweden,
Jena and  Kaiserslautern in Germany and Dayton,  Ohio for the manufacture of our
optical and laser products.

     To achieve distribution,  marketing,  production, and technology advantages
for our targeted markets,  we manage our industry segments within  corresponding
divisions.  Each  division is  responsible  for strategy,  sales and  marketing,
product  development  and  financial  performance,  and is  headed  by a general
manager.

Engineering and Construction

     To pursue the  opportunities in the Engineering and  Construction  industry
segment,  we  employ  GPS,  optical,   laser,   communications  and  information
technology.  We offer a range of hardware and software products that are used by
survey and  construction  professionals in the field to perform precise position
determination,  data collection, field computing, data management, and automated
machine guidance and control. The applications served include surveying, general
construction,  site  preparation,  excavation,  road  and  runway  construction,
interior construction and underground construction.

                                       4

<PAGE>

     Our  products  reduce  the need for  manual  calculations  and  operations,
thereby  improving  productivity  and providing  potential  cost savings.  These
improvements  can also lead to  improved  project  completion  times and reduced
errors   that   lead  to   rework.   Our  goal  is  to   provide   comprehensive
"field-to-office"  solutions that enable users to integrate  field  construction
operations with their office information systems. These solutions streamline the
use of information in the engineering  and  construction  process,  from project
concept to  completion.  For  example,  if the field and the office are  tightly
integrated,  data collected and created in the project  feasibility phase can be
used and modified in the design phase.  Data resulting from the design phase can
be used to automate processes in the construction phase. Finally, data collected
from the construction site can be used for both monitoring progress and quality,
and as an input to required design changes.

     In 2001,  Trimble  generated  approximately  64% of its  revenue  from this
segment.  The current  market size is  estimated at  approximately,  one billion
dollars,  and we believe we have the leadership  position with approximately 29%
market share.

Products

The following is a table of some of the key Engineering and Construction
products.


<TABLE>
<CAPTION>
 -------------------------------------------------------------------------------------------------------------------
                   Product                                                Description
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
<S>                                         <C>    
 GPS Total Station(R)5700                    A GPS measurement system that provides three dimensional position
                                             within 10 millimeters.  Provides surveyors and civil engineers with
                                             features that improve speed and accuracy. Combined with Trimble
                                             Survey Controller(TM)field software and Trimble Geomatics Office
                                             Software(TM), survey and design tasks are unified in one system.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
  5600DR 200+ Total Station                  A reflectorless total station surveying instrument that does not
                                             require a reflecting prism. Surveyors can survey objects that cannot
                                             be physically reached from over 200 meters away.   The instrument
                                             can, in its robotic version, be operated remotely which enables one
                                             operator to execute all applications without assistance.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 SiteVision(R)                               GPS 3D Machine Control System A grade control system for the
                                             construction market that combines a ruggedized on-board computer, a
                                             high precision dual frequency receiver, two duel frequency GPS
                                             antennas, three light bars and a radio. The System enables a
                                             bulldozer operator to grade to the design that is displayed in the cab
                                             and eliminate the need to follow stakes.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 Spectra                                     Precision Laser GL700 series An innovative series of laser
                                             transmitters designed for a variety of machine control, general
                                             construction and agricultural applications. Simple to setup and
                                             use they offer higher stability and more consistent accuracy over wide
                                             areas. The transmitters improve productivity and reduce rework for
                                             a range of site prep and general construction grading applications.
 -------------------------------------------------------------------------------------------------------------------
</TABLE>


Agriculture

     In today's competitive  agriculture market, where low cost producers have a
significant  advantage,  efficient  field  operation and data  management can be
critical to success.  We provide water  management,  machine  guidance and field
management solutions to enhance the productivity of equipment assets, to improve
yields and shorten key  processes.  Our products  serve a number of  agriculture
applications including precise land leveling, machine guidance, yield monitoring
and variable-rate  applications of fertilizers and chemicals.  For example,  our
GPS-based  machinery  guidance  systems  and  field  monitoring  systems  enable
machinery  operators to achieve  improved  accuracy  when planting row crops and
applying fertilizers and chemicals.

                                       5

<PAGE>

     * We believe that there is a considerable  growth  opportunity in replacing
traditional  positioning  technologies  in the  agriculture  market with GPS and
laser positioning  technology.  Given the recent introduction of the technology,
the Company believes that the market remains  relatively  unpenetrated.  Machine
guidance  systems have  primarily  been sold and  installed in the  aftermarket.
Original equipment manufacturers are increasingly integrating these capabilities
into  new  machines.   We  believe  that  we  are   positioned  to  address  the
opportunities in the new equipment market as the result of our relationship with
CNH Global (formerly Case Corporation), a global manufacturer and distributor of
agricultural  equipment.  Since 1997,  CNH Global has utilized our GPS receivers
for advanced  farming systems.  Our customers in the agriculture  market segment
include  family  farmers,   commercial  growers,  crop  consultants,   equipment
manufacturers, farm centers and service providers.

     In 2001 this segment represented approximately 5% of Trimble's revenue.

Products

The following is a table of some of the key Agriculture products.


<TABLE>
<CAPTION>
 -------------------------------------------------------------------------------------------------------------------
                   Product                                                Description
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
<S>                                        <C>    
 AgGPS(R)132                                Farmers use the AgGPS 132 to tag soil type, insect infestation, or
                                            crop yield information with precise, sub-meter location data.
                                            Mapping this data highlights problem areas and helps farmers
                                            target their use of agricultural products, saving money and
                                            increasing productivity.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 AgGPS(R)Autopilot                           A system that automatically steers tractors to within centimeters for
                                             row-crop applications. The driver, with hands-free operation, can now
                                             concentrate on working the implements for listing, bed preparation,
                                             planting and cultivating.  This technology translates into increased
                                             productivity for the farmer through more efficient utilization of
                                             tractors and extended working hours.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 Laser-based                                 Water Management Systems Laser-based water management allows
                                             the agricultural industry to make topographical maps of their fields,
                                             design solutions for drainage or irrigation, and control the
                                             machines that grade the land using a rotating plane of laser light.
                                             Growers generally have either too much water or too little water to
                                             grow a crop. Landleveling and farm tile drainage is a high
                                             productivity long-term investment for a grower to enhance crop yields.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 AgGPS(R)EZ-GuideTM 110                      The AgGPS EZ-Guide 110 is a low-cost, easy-to-use parallel swathing
                                             system that uses GPS technology to help the operator guide farm
                                             machinery in precise rows.  The system allows farmers to increase
                                             productivity and profitability through more efficient utilization of
                                             agriculture vehicles, extending working hours available in a day and
                                             reducing costs.  The EZ-Guide system is fully upgradable with
                                             Trimble's EZ-Map and Field Manager products for field mapping or
                                             variable rate management.
 -------------------------------------------------------------------------------------------------------------------
</TABLE>


Fleet and Asset Management

     Our Fleet and Asset Management  segment includes the mapping and Geographic
Information  Systems (GIS) market and the mobile  positioning and communications
market.

     We  integrate  wireless,  GPS  and  information   technologies  to  provide
solutions for a variety of applications in fleet  management and asset tracking.
Our  products  enable  end-users  to monitor and manage  their  mobile and fixed
assets  by  communicating  location-relevant  information  from the field to the
office.  The keys to these  applications  is the  ability to  accurately  locate
assets and to rapidly  collect and transfer a wide range of  asset-related  data
from the field to the  office for  monitoring  and  verification  and for use in
decisions. We currently offer a range

                                       6

<PAGE>


of  products  that  address a number of sectors of this market  including  truck
fleets,  security,  telematics,  public  safety  vehicles,  and fixed asset data
collection for a variety of governmental and private entities.

     Our mobile  asset  management  products  offer a range of asset  management
solutions,  including an internet delivered, cellular based solution for vehicle
fleet  management  that  provides  all the  functionality  necessary to actively
manage  vehicles  in the  field.  End-users  can  track  the  movement  of their
vehicles,  employees,  and goods and services. This allows them to improve their
decisions regarding asset utilization. For example, end-users can route vehicles
in their fleet more  efficiently,  reducing  vehicle  downtime,  and potentially
increasing  the number of  deliveries or trips per vehicle.  Other  benefits may
include  more  efficient  vehicle  maintenance,  reduced  misuse of vehicles and
providing  their  customers  with more detailed  information  on the location of
products and services.

     In fixed asset  tracking,  the  increased  use of the Internet and wireless
communication is providing asset-rich  organizations such as utilities,  natural
resource  agencies  and local  governments  with better  access to data on their
field  assets.  A key to this  market is the  creation  and  maintenance  of GIS
databases.  Our range of GPS based GIS data collection and maintenance  products
enable these  organizations  to capture and maintain the features and attributes
of their field assets.

     As with our other  targeted  market  segments,  we  believe  that  there is
considerable growth opportunity in this market,  which is in the early stages of
adopting  positioning-based  solutions.  Currently,  mobile  resources are often
tracked using inefficient and incomplete systems such as wireless telephones and
pagers.  We believe that  penetration of GPS-based  positioning  systems in this
market  segment  will  accelerate  as the  cost of such  systems  decreases  and
functionality increases.

     In 2001, this segment  represented  approximately 12% of Trimble's revenue.
We estimate that the current market size is approximately $500 million.

Products

The following is a table of some of the key Fleet and Asset Management products.


<TABLE>
<CAPTION>
 -------------------------------------------------------------------------------------------------------------------
                   Product                                                Description
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
<S>                                         <C>    
 Pathfinder Pro Family                       The GPS Pathfinder(R)Pro XR and Pro XRS Systems are GIS data
                                             collection and maintenance systems that provide real-time submeter
                                             accuracy.  These systems are used in a range of applications
                                             including utility asset management, environmental monitoring,
                                             scientific research, hazardous waste clean up, municipal asset
                                             management, and natural resource management.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 CrossCheck(R)                               Product Family A cellular mobile unit that combines GPS, cellular,
                                             and computing technologies onto a single module - provides a
                                             cost-effective asset and route management tool for fleet management.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 GeoExplorer(R)3                             A data collection and maintenance system that provides a rugged
                                             handheld GPS solution for creating and maintaining GIS databases for
                                             management of utility, urban, and natural resources.
 -------------------------------------------------------------------------------------------------------------------
</TABLE>


Component Technologies

     We market our component  products  through a network of OEM  relationships.
The products include proprietary chipsets,  printed circuit boards,  modules and
intellectual  property  licenses.  The  products  are  incorporated  into timing
sources for synchronizing  wireless and computer systems;  in-vehicle navigation
and telematics  systems;  fleet management;  security  systems;  data collection
systems;   and  wireless   handheld  consumer   products.   

     * We believe that  technological  advances in GPS components will result in
reduced size, lower cost, lower power consumption and improved capability. These
improvements  will allow GPS to be potentially  useful for a number of new, high
volume  applications,  many of them in consumer  markets.  The  applications may
include 

                                       7

<PAGE>


wireless handheld products (smart phones,  pagers, child and personal locators);
automobile  products  (navigation  systems,  security  systems,  auto  emergency
response systems, and telematics systems);  PC-based products (in-car computers,
portable PCs, and PDAs); and general consumer products  (wristwatches,  portable
navigation systems, and pet locators).

     * Our in-vehicle  navigation and telematics  technologies  are sold to OEMs
that  sell  directly  to  automobile  manufacturers,  including  Pioneer,  Bosch
Blaupunkt-Werke GmbH, Siemens VDO Automotive AG, and Magneti Marelli. Automobile
manufacturers that currently purchase products  incorporating our GPS technology
include:  Alfa Romeo, BMW, Fiat, Honda,  Mercedes,  Opel, Porsche,  Renault, and
VW/Audi.

     * A significant  consumer  market for GPS  components is expected to be the
wireless  handset  market.  The FCC has mandated that wireless  carriers must be
able to provide  location  data for all 911  emergency  calls made from cellular
phones.  This  Enhanced  911 (E911)  mandate now  requires  all carriers and all
markets to deploy the location  capability by 2006.  The mandate is creating the
need for the wireless  carriers and handset  manufacturers  to find ways to meet
the mandate's  accuracy  requirements  of 50 meters,  67 percent of the time and
within 150 meters, 95 percent of the time for handsets.  GPS technology provides
a potential  solution to meet or exceed the  requirements  of the E911  mandate.
This market will require very small,  low-cost GPS components  that consume very
little power.  Trimble's  current products and technical  development  plans are
aligned  with the needs of the high volume  market and we expect to be an active
participant in the market.  The mandate also allows for network based  solutions
that can  provide  accuracy  of 100 meters 67 percent of the time and within 300
meters 95  percent  of the time.  We also offer  precision  GPS timing  products
designed for the network based E911 solutions.

     This segment  represented  approximately 12% of Trimble's 2001 revenue.  We
estimate the market size today is approximately $300 million.

Products

The following is a table of some of the key Component Technologies products.


<TABLE>
<CAPTION>

 -------------------------------------------------------------------------------------------------------------------
                   Product                                                Description
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
<S>                                         <C>    
 FirstGPS(TM)                                Specifically developed for power-sensitive mobile information
                                             devices such as laptops, PDAs, digital cameras, smart phones,
                                             pagers and automobile navigation systems. The architecture allows
                                             high-volume manufacturers of consumer products to add GPS
                                             location with minimal impact on the device's size or battery life.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 Thunderbolt(TM)                             GPS-disciplined Clock A GPS clock designed specifically for precision
                                             timing and synchronization of wireless networks. Wireless systems
                                             need precise timing to optimize use of their assigned radio spectrums
                                             across wide geographic areas.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 Custom CDMA Clock                           A GPS clock supplied to major supplies of CDMA equipment.
 -------------------------------------------------------------------------------------------------------------------
 -------------------------------------------------------------------------------------------------------------------
 Lassen(TM)                                  LP GPS A miniature, low-power GPS receiver module for battery-powered
                                             applications. It is suited to embedding GPS in portable devices
                                             such as PDAs, personal communication systems, data
                                             terminals, recorders and instrumentation units.
 -------------------------------------------------------------------------------------------------------------------
</TABLE>


Portfolio Technologies

     This segment is an aggregation of various  operations  that each equal less
than ten percent of the Company's total operating revenue.  The products in this
segment are navigation  modules and embedded  sensors that are used in avionics,
flight,  and  military  applications.  Also,  included  in this  segment are the
operations of our Tripod Data Systems subsidiary, which was acquired on November
14, 2000.

                                       8

<PAGE>

     On March 6, 2001, the Company sold its Air Transport Systems (ATS) business
to Honeywell.  The ATS business was a part of our Portfolio Technologies segment
and involved the Trimble 8100, the HT 9100 and two other product lines.

Products

The following is a table of some of the key Portfolio Technologies products.


<TABLE>
<CAPTION>
----------------------------------------------- ----------------------------------------------------------------------
<S>                                            <C>    
TA-12(TM)                                       An all-in-view, PPS GPS receiver for military aircraft operating
                                                within the US National Airspace System. The TA-12 receiver is
                                                FAA TSO-C129A certified and designed for integration with
                                                Flight Management Systems that require Instrument Flight Rules
                                                certified operations.
----------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------- ----------------------------------------------------------------------
Force 5 GRAM-S(TM)                              An  all-in-view,  dual  frequency  PPS  embedded  GPS  receiver  card
                                                designed for integration with military  inertial  navigation  systems
                                                for use on high performance aircraft and missiles.
----------------------------------------------- ----------------------------------------------------------------------
</TABLE>


Sales and Marketing

     Trimble  currently has regional sales offices  throughout North America and
Europe. Offices serving the rest of the world include Australia,  Canada, China,
Dubai,  Japan,  Manila, New Zealand,  and Singapore.  We tailor the distribution
channel to the needs of the product and regional  market.  Therefore,  we have a
number of forms of sales channel solutions around the world.

     North  America.  Trimble sells its products in the United States  primarily
through dealers, distributors,  and authorized representatives.  This channel is
supplemented and supported by employees who provide additional sales support. In
some cases, where third party distribution is not available, we utilize a direct
sales force. We also utilize  distribution  alliances and OEM relationships with
other companies as a means to serve selected markets.

     International.  Trimble  markets to end-users  through a network of dealers
and  distributors  in more  than 85  countries.  Distributors  carry one or more
product lines and are generally limited to selling either in one country or in a
portion of a country.  Trimble  occasionally  grants  exclusive rights to market
certain products within specified countries.

     Sales to  unaffiliated  customers in locations  outside the U.S.  comprised
approximately  50% of total  revenues in fiscal 2001, 52% in fiscal 2000 and 52%
in fiscal 1999. North and South America  represented 58% of our revenue,  Europe
30%, and Asia 12% in fiscal 2001.

     Support.  The warranty periods for Trimble's products are generally between
one and three  years  from date of  shipment.  Selected  military  programs  may
require extended warranty periods,  and certain products sold by our Tripod Data
Systems  subsidiary have a 90 day warranty  period.  We support our GPS products
through an on-board  replacement  program from locations in the United  Kingdom,
Germany,  Japan,  and Sunnyvale,  California.  The repair and calibration of our
non-GPS  products  is  available  from  company  owned  or  funded   facilities.
Additionally over 200 service providers  globally perform warranty  servicing of
our products.  We reimburse dealers and distributors for all authorized warranty
repairs  they  perform.  Trimble  does not derive a  significant  portion of its
revenues from support or service activities.

Competition

     In the Engineering and Construction  segment, we face competition primarily
from other GPS and  optical  vendors,  including  Leica AG,  Topcon  Corporation
Thales Group, NovAtel Inc., Sokkia Company, Ltd., and Nikon Geosystems.

     In the  Agriculture  segment  we face  competition  from  John  Deere,  CSI
Wireless, Starlink, AgSystems, Integrinautics, and Topcon Corporation.

                                       9

<PAGE>

     In the  Component  Technologies  segment  for GPS  components  the  primary
competitors  are Japan Radio  Corporation  (JRC),  Motorola,  SirF,  uBlox,  and
Leadtech. In the timing markets, the primary competitor is Symmetricom.

     In the Fleet and Asset  management  segment  we face  competition  from CSI
Wireless, @Road, MinorPlanet,  @Track, AirIQ, Leica AG, Garmin Corporation,  and
Corvallis Micro Technologies.

     In the Portfolio  Technologies  segment,  we face competition from Rockwell
Collins Inc., L3 Communications, Raytheon Company, and Thales Group.

     * The  principal  competitive  factors vary widely from segment to segment,
but typically include ease of use, size, weight,  power  consumption,  features,
performance,  reliability  and price. In the commercial  solution  applications,
ease of use and  user  functionality  become  the  differentiating  factors.  We
believe  that our products  currently  compare  favorably  with respect to these
factors. We intend to maintain our leadership position through:

     o    systems, products and services that have significantly  differentiated
          features with improved benefits to end-users.

     o    a strong  commitment  to new product  development.  Trimble  currently
          offers more than 100 products and  continues to improve and expand the
          line.

     o    our technology leadership with approximately 531 patents issued.

     o    extensive worldwide distribution.

     * We believe that our ability to compete successfully in the future against
existing  and  additional  competitors  will  depend  largely on our  ability to
provide more  complete  solutions,  as well as products  and services  that have
significantly  differentiated  features with improved cost/benefit ratios to our
end-users.  There can be no  assurances  that we will be able to implement  this
strategy successfully,  or that our competitors, many of whom have substantially
greater  resources,  will not apply  those  resources  to  compete  successfully
against us.

Research and Development

     Our leadership  position in our targeted market segments is the result,  in
large part, of our strong  commitment to research and development.  We invest in
developing  positioning  technologies,  information  technologies,  and wireless
communications,  realized in the design of proprietary  software,  optics, laser
systems,  control systems,  integrated circuits,  network radios, GPS receivers,
and real time kinematic  (RTK)  technology.  We devote a portion of our research
and development  expenditures  to advancing core  positioning  technologies  and
integrating them with synergistic technologies such as communications,  sensors,
and information technologies.

     The majority of our research and development  staff develops products for a
variety  of  applications  that  utilize  these  technologies.  Recent  examples
include:

     o    3-D passive  positioning  through  the use of rotating  lasers for the
          construction market
     o    5600DR 200+ reflectorless  robotic total station for the surveying and
          construction market
     o    Crosscheck  GSM,  integrating  cellular and GPS  technology  for fleet
          management
     o    Autosteer tractor controls  utilizing GPS and sensor  technologies for
          the agricultural market.
     o    The  GPS  Total  Station  5700  incorporating   Trimble's  latest  RTK
          technology for surveying and stake out, and
     o    The FirstGPS technology,  offering small, low-power GPS for automotive
          and other embedded applications.


                                       10

<PAGE>


     Below is a table of Trimble's expenditures on research and development over
the last three fiscal years.

                             December 28,      December 29,       December 31,
Fiscal Years Ended               2001              2000               1999
------------------------- ----------------- ------------------ -----------------
(In thousands)

Research and development       $62,881            $46,520           $36,493

     * Trimble  expects that a  significant  portion of future  revenues will be
derived  from  sales of newly  introduced  products.  Consequently,  our  future
success  depends in part on our ability to  continue to develop and  manufacture
new competitive products with timely market  introductions.  Advances in product
technology  will require  continued  investment in research and  development  in
order to maintain and enhance our market position.

Manufacturing

     In August of 1999, we began  outsourcing  the  manufacture of our GPS-based
products,   to  Solectron  Corporation   (Solectron).   Solectron  continues  to
manufacture our GPS products and is responsible for  substantially  all material
procurement,  assembly and testing.  Trimble  continues to manage product design
through pilot production.  While Solectron is responsible for most facets of the
physical manufacturing process, we are directly involved in qualifying suppliers
and the key components used in our products.

     We manufacture our optical and laser-based  products at four  manufacturing
facilities  located in Dayton,  Ohio;  Danderyd,  Sweden; and Kaiserslautern and
Jena, Germany.  Some of these products and subassemblies are also assembled on a
contract basis.

     In  addition,  as of August  2001,  Trimble  completed  the transfer of its
manufacturing  activities in Austin,  Texas,  to Sunnyvale,  California.  We are
currently in the process of transferring our FAA certifications to our Sunnyvale
manufacturing facility.

     While most of the  components  used in our products are standard and can be
obtained from multiple  qualified  manufactures,  some of our key components are
proprietary or sole sourced and require extended lead times. If we were required
to find new vendors for these sole or limited sourced components,  we would have
to qualify replacement  components and possibly  reconfigure our products.  This
qualification  or  reconfiguration  process  could  result in  product  shipment
delays.  Our supply management team works closely with  strategically  important
suppliers who provide sole or limited sourced products.

Backlog

     Trimble  believes that due to the volume of products  delivered  from shelf
inventories and the shortening of product delivery  schedules,  backlog is not a
meaningful  indicator of future business prospects.  Therefore,  we believe that
backlog information is not material to an understanding of our business.

Patents, Trademarks, and Licenses

     Our success  depends to a significant  extent on technical  innovation.  We
pursue  an  active   program   of  filing   patent   applications   to   protect
technologically   sensitive   features  of  our  products.   We  currently  hold
approximately  370 U.S.  GPS related  patents and  approximately  20 foreign GPS
related  patents that expire at various dates no earlier than 2005,  and we hold
approximately 40 other technology  patents. We also have approximately 100 laser
or optical related patents  worldwide.  We currently license certain  peripheral
aspects  of  our  technology   from  Spectrum   Information   Technologies   and
GeoResearch.  Trimble may enter into  additional  licensing  arrangements in the
future relating to its technologies.

     At  present  there  are  92  trademarks   registered  to  Trimble  and  its
subsidiaries.   Specifically,   "Trimble"   with  the  sextant  logo,   "Trimble
Navigation," "GeoExplorer," and "GPS Total Station," are trademarks of Trimble

                                       11

<PAGE>


Navigation  Limited,  registered  in the  United  States  and  other  countries.
"Trimble" with the globe and triangle logo and additional trademarks are pending
registration.

     Although we believe that our patents and trademarks  have value,  there can
be no assurance that those patents and trademarks, or any additional patents and
trademarks  that  may  be  obtained  in  the  future,  will  provide  meaningful
protection from  competition.  We actively  develop and protect our intellectual
property through a program of patenting, enforcement, and licensing.

     We do not  believe  that  any of our  products  infringe  patent  or  other
proprietary  rights of third parties,  but we cannot be certain that they do not
do so. (See Note 21 to  Consolidated  Financial  Statements.) If infringement is
alleged,  legal defense  costs could be material,  and there can be no assurance
that the necessary  licenses could be obtained on terms or conditions that would
not have a material adverse effect on our profitability.

Employees

     As of December 28, 2001, Trimble employed 2,099 people: 555 in research
and development, 715 in sales and marketing, 583 in manufacturing, and 246 in
general administration. Of these, 598 were located in Europe (of which 246 were
in Germany and 245 were in Sweden), 196 in New Zealand, 39 in the Asia Pacific
region and 1,266 in the United States, Canada and Mexico. We also employ
temporary and contract personnel that are not included in the above headcount
numbers.

     Trimble's  success  depends  in  part  on the  continued  contribution  and
long-term  effectiveness of our employees.  Competition in recruiting  personnel
can be  significant  in some labor markets and our continued  ability to attract
and retain  highly  skilled  employees  is  essential  to our future  growth and
success.  Our employees are not  represented by labor unions,  except in certain
European  countries  where union  membership  is almost  universal.  We have not
experienced work stoppages.


                                       12

<PAGE>

Executive Officers of the Company

     The names,  ages, and positions of the Company's  executive  officers as of
March 5, 2002 are as follows:


<TABLE>
<CAPTION>
Name                                        Age                  Position
-----------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>   
Steven W. Berglund..................        50          President, Chief Executive Officer
Mary Ellen P. Genovese..............        42          Chief Financial Officer
William C. Burgess..................        55          Vice President, Human Resources
Joe F. Denniston, Jr................        41          Vice President of Operations
John E. Huey........................        52          Treasurer
Irwin L. Kwatek.....................        63          Vice President and General Counsel
Michael W. Lesyna...................        41          Vice President and General Manager, Mobile Solutions Division
Bruce E. Peetz......................        50          Vice President, Advance Technology and Systems
Karl G. Ramstrom....................        58          Senior Vice President and General Manager,
                                                        Engineering and Construction Division
Anup V. Singh.......................       31          Corporate Controller
Alan R. Townsend....................       53          Vice President and General Manager, Trimble Field Solutions Division
Dennis L. Workman...................       56          Vice President and General Manager, Component Technologies Division
</TABLE>



     All officers serve at the  discretion of the Board of Directors.  There are
no family  relationships  between any of the directors or executive  officers of
the Company.

     Steven W.  Berglund  joined the Company as  President  and Chief  Executive
Officer in March  1999.  Mr.  Berglund  was  elected to the  Company's  Board of
Directors  at the  Annual  Meeting  of  Shareholders  held in June of 1999.  Mr.
Berglund has  experience  in  engineering,  manufacturing,  finance,  and global
operations.  Prior to joining the Company, Mr. Berglund was president of Spectra
Precision,  Inc., a subsidiary of Spectra-Physics.  Spectra Precision had global
revenue of approximately  $200 million and developed and manufactured  surveying
instruments,  laser based construction instruments, and machine control systems.
During  his  fourteen  years  with  Spectra-Physics,  which was a pioneer in the
development  of lasers,  Mr.  Berglund held a variety of positions that included
four years  based in Europe.  Prior to  Spectra-Physics,  Mr.  Berglund  spent a
number of years at Varian  Associates in Palo Alto,  California  where he held a
number of planning and  manufacturing  roles. Mr. Berglund began his career as a
process engineer at Eastman Kodak in Rochester,  New York. Mr. Berglund attended
the University of Oslo and the University of Minnesota  where he received a B.S.
degree  in  Chemical  Engineering  in 1974  and  received  his  M.B.A.  from the
University of Rochester in 1977.

     Mary Ellen P.  Genovese  joined  Trimble  as  Controller  of  Manufacturing
Operations  in  December  1992.  From 1994 to 1997 she served as  Business  Unit
Controller for Component  Technologies,  and for the tracking and communications
business units. She was appointed Corporate  Controller in October 1997 and Vice
President of Finance and  Corporate  Controller  in February  1998. In September
2000 she was appointed Chief Financial Officer.  Prior to joining Trimble,  Mrs.
Genovese  was  Chief   Financial   Officer  and  President  for  Minton  Co.,  a
distributing  company to the commercial  building market,  from 1991 to 1992. In
her position as Chief Financial  Officer she was responsible for the accounting,
management  reporting and bank and investor financing for the company.  In March
of 1992,  the board of  directors  asked her to assume the role of  President to
reorganize  the  company,   including  the  divestiture  of  the   manufacturing
operations.  Prior  to  1991,  she  worked  for 10  years  with  General  Signal
Corporation. She was appointed European Financial Controller in July 1990, where
she was responsible for the company's three European operations, Germany, France
and the United Kingdom.  From 1988 to 1990 she served as Unit Financial Officer,
for General  Signal's  Semiconductor  Systems  Division.  She held several other
management  positions including  Materials Manager,  Controller of Manufacturing
Operation and International  Projects  Controller for General Signal's Ultratech
Stepper  Division  from  1984 to  1988.  Mrs.  Genovese  is a  Certified  Public
Accountant  and received her B.S. in  accounting  from  Fairfield  University in
Connecticut in 1981.

                                       13

<PAGE>

     William C. Burgess joined Trimble in August 2000 as Vice President of Human
Resources.  From August 1998 to July 2000,  Mr.  Burgess was Vice  President  of
Human  Resources and  Management  Information  Systems for Sonoma West Holdings,
Inc. Mr. Burgess also served as Vice President of Human  Resources from May 1995
through July 1998 for Optical Coating Laboratory, a large high-tech manufacturer
of fiber optic  products.  Mr.  Burgess'  experience  also  includes  Telenekron
Communications  Systems, a developer of  telecommunications  software;  and Asea
Brown Boveri (ABB), a global technology  company.  Mr. Burgess received his B.S.
from the University of Nebraska in 1973 and a M.S. in organizational development
from Pepperdine University in 1978.

     Joe F.  Denniston,  Jr. joined  Trimble in April 2001 as vice  president of
operations.  In  his  role,  he  is  responsible  for  worldwide  manufacturing,
distribution and logistics strategy. Prior to Trimble, Denniston worked for 3Com
Corporation.  During his  14-year  tenure,  he held  several  positions  in test
engineering,  manufacturing engineering and operations.  Most recently he served
as vice president of supply chain management for the Americas.  Prior to joining
3Com,  he served over five years at Sentry  Schlumberger  in various  roles.  He
received a B.S. in electrical engineering technology from the Missouri Institute
of  Technology  in 1981 and a M.S. in computer  science  engineering  from Santa
Clara University in 1990.

     John E. Huey  joined  Trimble  in 1993 as  Director  Corporate  Credit  and
Collections,  and was promoted to Assistant  Treasurer in 1995 and  Treasurer in
1996. Past experience includes two years with ENTEX Information  Services,  five
years with  National  Refractories  and Minerals  Corporation  (formerly  Kaiser
Refractories),  and thirteen years with Kaiser Aluminum and Chemical Sales, Inc.
He has held positions in Credit Management,  Market Research, Inventory Control,
Sales and as an  Assistant  Controller.  Mr. Huey  received  his B.A.  degree in
Business  Administration in 1971 from Thiel College in Greenville,  Pennsylvania
and an MBA in 1972 from West Virginia University in Morgantown, West Virginia.

     Irwin L. Kwatek joined  Trimble as Vice  President  and General  Counsel in
November 2000. Mr. Kwatek was Vice President and General Counsel of Tickets.com,
Inc., a ticketing  services  provider,  from May 1999 to November 2000. Prior to
that he was engaged in the private  practice of law for more than six years.  In
his career,  Mr.  Kwatek has served as Vice  President  and  General  Counsel to
several publicly-held high-tech companies, including Emulex Corporation, Western
Digital Corporation and General Automation,  Inc. Mr. Kwatek received his B.B.A.
from Adelphi  College in Garden City, New York and a M.B.A.  from the University
of Michigan in Ann Arbor.  He received his J.D.  from Fordham  University in New
York City in 1968.

     Michael W. Lesyna joined Trimble as Vice  President of Strategic  Marketing
in September  1999.  In September  2000,  he was  appointed  Vice  President and
General Manager of the Mobile Positioning and Communications  Division (recently
renamed  Mobile  Solutions  Division).  Mr.  Lesyna  brings broad  experience in
developing business and marketing  strategies for high tech companies.  Prior to
Trimble,  Mr.  Lesyna  worked  for Booz Allen and  Hamilton,  where he spent six
years, most recently serving as a principal in the operations  management group.
While at Booz Allen and Hamilton, he was responsible for advising companies on a
wide range of strategic  issues.  Prior to Booz Allen and  Hamilton,  Mr. Lesyna
held a variety of engineering positions at Allied Signal Aerospace. He served as
a Project  Engineer for Allied Signal's  European  consortium in Germany,  was a
Development  and  Test  Engineer  for the  altitude  chamber,  and was a  Design
Engineer for the  company's  first jet fighter  engine  afterburner.  Mr. Lesyna
received an MBA from  Stanford  University  in 1994. He also received an M.S. in
mechanical  engineering  in 1983 and a B.S. in mechanical  engineering  in 1982,
both from Stanford University.

     Bruce E.  Peetz  joined  Trimble in June 1988 as  Program  Manager  for GPS
Systems.  From January 1990 to January 1993 he served as Development Manager for
commercial  dual-frequency  products,  and from January 1993 to December 1995 he
served as Engineering Manager for Surveying and Core Engineering. In January1996
he was appointed  General  Manager of the Land Surveying unit, and from February
1998 started the Advanced Systems  division as General Manager.  In October 1998
he was named Vice President of Advanced  Technology  and Systems,  consolidating
Systems and Trimble Laboratories.  Prior to joining Trimble, Mr. Peetz served in
a variety of engineering and management positions during eleven years at Hewlett
Packard.  Mr.  Peetz  received  his BSEE  from the  Massachusetts  Institute  of
Technology in 1973, and did graduate work at UCLA.

     Karl G. Ramstrom joined Trimble in August 2000 as Senior Vice President and
General Manager of the Engineering and Construction  Division.  Prior to joining
Trimble,  Mr. Ramstrom served as President of the Spectra 

                                       14

<PAGE>


Precision Group,  which was acquired by Trimble in July 2000. During his 31-year
tenure at Spectra Precision and its predecessor companies,  he held a variety of
positions,  including  marketing,  sales  management,  general  management,  and
finally  executive  responsibilities.  Before his appointment as President,  Mr.
Ramstrom  headed  Spectra  Precision's  Survey  business unit  headquartered  in
Danderyd,  Sweden.  After  completing  his education in his native  Sweden,  Mr.
Ramstrom  began his career as a surveyor  with the Swedish  Road  Administration
before joining Spectra Precision in 1969.

     Anup V. Singh  joined  Trimble in December  2001 as  corporate  controller.
Prior to joining  Trimble,  Mr. Singh worked for  Excite@Home  from July 1999 to
December 2001.  During his tenure there, he held the position of senior director
of  Corporate  Financial  Planning  and Analysis  where he was  responsible  for
worldwide budgeting,  forecasting,  management reporting and long-term strategic
financial  planning.  He also held the  position  of  international  controller,
responsible for all Finance and  Administrative  functions of the  International
Business  Unit.  In this role he developed and managed the execution of business
plans for several joint ventures and overseas subsidiaries.  Before Excite@Home,
Mr. Singh also worked for 3Com  Corporation from December 1997 to July 1999, and
Ernst and  Young  LLP in both San Jose,  California,  and  London,  England.  He
received his B.A. in 1991 and M.A. in 1995 in economics and  management  science
from Cambridge University in England. He is also a chartered accountant, and was
admitted as a member of the  Institute of Chartered  Accountants  in England and
Wales in 1994.

     Alan  R.  Townsend  joined  Trimble  in  1991  as the  Manager  of  Trimble
Navigation  New  Zealand  Ltd.,  a product  development  subsidiary  of  Trimble
Navigation Ltd. In 1995, he was appointed General Manager of the Mapping and GIS
systems  group.  In January 2001, he was promoted to Vice  President and General
Manager  of the  Mapping  and GIS  Division  and in  November  2001  he  assumed
responsibility for the Agriculture  business. He is also serving as the Managing
Director of Trimble  Navigation New Zealand Ltd. Prior to Trimble,  Mr. Townsend
served in a variety  of roles  within  the  Datacom  group of  companies  in New
Zealand including  Managing Director of Datacom Software Research Ltd. from 1986
to 1991.  Trimble acquired Datacom Software  Research Ltd. in 1991. In addition,
Mr.  Townsend is a Director of IT Capital Ltd., a venture  capital company based
in Auckland,  New  Zealand;  and a Director of Pulse Data Ltd.,  an  electronics
company  that  produces  aids for the  visually  impaired in  Christchurch,  New
Zealand.  He is also a fellow of the New Zealand  Institute of Management  and a
past president of the New Zealand Software Exporters  Association.  Mr. Townsend
received a B.Sc. in economics from the University of Canterbury in 1970.

     Dennis L. Workman  joined  Trimble in 1995 as Director of Timing,  where he
led the  development  of GPS-based  precision  timing  products for the wireless
telecom market. In 1997, he was promoted to Director of Engineering for Software
and Component  Technologies.  In 1998, Mr. Workman was appointed Senior Director
and Chief Technical  Officer of the newly formed Mobile and Timing  Technologies
(MTT) business  group.  Mr. Workman also served as General  Manager of Trimble's
Automotive  and Timing group,  as well as Chief  Technology  Officer for MTT. In
September  1999, he was appointed to serve as Vice President and General Manager
of the  Component  Technologies  Division.  Prior to Trimble,  Mr.  Workman held
various senior-level  technical positions at Datum Inc. During his 9-year tenure
at Datum, he spearheaded  technology  development for GPS products.  Mr. Workman
also led the  development of board-level  products  unrelated to GPS for Datum's
Bancomm division.  In 1978, Mr. Workman co-founded  Bancomm,  which manufactures
board-level and  instrumentation  products for precision timing and data logging
applications.  In 1984, he was appointed President of Bancomm. Prior to Bancomm,
Mr. Workman  co-founded  Compression  Labs in 1977 and served as Chief Technical
Officer.  Mr.  Workman  began his career at Chicago  Aerial  Industries  as lead
engineer. He then joined Goodyear Aerospace,  now Loral, as program manager. Mr.
Workman  received a B.S. in  mathematics  from St. Mary's  College in 1967 and a
M.S. in electrical engineering from the Massachusetts Institute of Technology in
1969.


I
tem 2.           Properties

     Trimble  currently  leases an aggregate of 309,480  square feet in fourteen
buildings in Sunnyvale,  California.  Trimble uses approximately  165,000 square
feet, with approximately 30,000 square feet used for final assembly and shipping
of GPS-based  products  and the balance is  subleased to others.  The leases and
subleases  on these  buildings  expire at various  dates  through  2005.  We are
leasing two buildings in  Westminster,  Colorado  totaling 73,000 square feet of
which Trimble uses the 28,000 square foot facility.  It is expected that Trimble
will use  approximately  10,000  square feet of the 45,000  square foot building
with the balance subleased. The leases expire in 2006. We lease a

                                       15

<PAGE>


building in Chandler,  Arizona totaling 26,039 square feet and the lease expires
in  November  2002.  Trimble  leases  65,000  square  feet in two  buildings  in
Christchurch,  New Zealand, for software development.  The leases expire in 2005
and 2010.  We also lease a 57,200 square foot  building in Huber  Heights,  Ohio
(our  Dayton,   Ohio  facility)  where  22,300  square  feet  are  used  in  the
manufacturing  of optical and laser based products,  and the balance is used for
sales, marketing, research and development and administration. The lease expires
July 16,  2011.  The Company  owns an  additional  150,000  square feet in Huber
Heights,   Ohio  of  which   approximately   96,500  square  feet  is  used  for
manufacturing  and  warehousing  and the remainder  are used for  administration
activities.  We also lease a 21,600  square foot  building  in Atlanta,  Georgia
where approximately 2,100 square feet is used in  manufacturing/warehouse  space
and 19,500 square feet is used for sales,  marketing,  research and  development
and  administration  and this lease expires in September 2002.  Trimble leases a
93,900  square  foot  building  in  Danderyd,  Sweden and a 26,000  square  foot
building in  Kaiserslautern,  Germany and a 28,700 square foot building in Jena,
Germany. These buildings are primarily used for manufacturing. Trimble's largest
international sales office is leased in Raunheim,  Germany (28,700 square feet).
In addition, our sales offices in Austria,  Australia,  Belgium,  China, France,
Germany,  Italy, Japan,  Mexico,  Netherlands,  Philippines,  Spain,  Singapore,
Russia, United Kingdom,  United Arab Emirates,  and in various cities throughout
the United States are leased.  Trimble's  international  office leases expire at
various dates through 2010. Certain of the leases have renewal options.  Trimble
owns a two story, 20,000 square foot building in Corvallis,  Oregon, used by our
Tripod Data Systems  subsidiary,  that is  encumbered  by a $1.9 million  dollar
loan.  We believe  that our  facilities  are adequate to support our current and
anticipated near-term future operations.


Item 3.           Legal Proceedings

     The information with respect to legal proceedings  required by this item is
included in Part II, Item 8, Note 21 to the Consolidated  Financial  Statements,
hereof.



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

     Not applicable.


                                       16

<PAGE>


                                     PART II


Item 5.           Market for Registrant's Common Equity and Related Stockholder 
                  Matters

     Trimble's  Common Stock is quoted on the Nasdaq  National  Market under the
symbol TRMB. The following  table sets forth,  for the quarters  indicated,  the
range of high and low closing  sales  prices for  Trimble's  Common Stock on the
Nasdaq National Market:

                                     High              Low 
                                     -----             ----
           2001:
                    Fourth           $18.41            $12.89
                    Third             19.80             13.06
                    Second            21.25             12.75
                    First             28.50             16.50

           2000:
                    Fourth           $28.19            $18.00
                    Third             62.81             20.44
                    Second            50.75             18.44
                    First             30.25             19.00

     As of March 22, 2002 there were 1,112  registered  shareholders  of record,
and the closing price of Trimble's common stock on that day was $15.95 per share
as reported on the Nasdaq National Market.

     Trimble has never paid cash  dividends  on its Common  Stock.  We presently
intend to retain earnings to finance our business,  and do not intend to declare
any cash dividends in the foreseeable future. Under the provisions of the Credit
Facilities, the Company is allowed to pay dividends and repurchase shares of its
common stock up to 25% of net income for the prior  fiscal year.  See Note 11 to
the Consolidated Financial Statements contained in Item 8 below.

Recent Sales of Unregistered Securities

     On May  31,  2001,  affiliates  of  John  Hancock  Life  Insurance  Company
exercised warrants to acquire 400,000 shares of common stock at a purchase price
of $10.95 for  aggregate  cash  proceeds  of  approximately  $4.4  million.  The
warrants  were  issued in a  privately  negotiated  transaction  in 1994.  These
securities  were exempt from  registration  under Section 4(2) of the Securities
Act of 1933, as amended.

     On December 21, 2001, we completed the first closing of a private placement
equity offering of 1,783,337 shares of our common stock at a price of $15.00 per
share  to  certain   qualified   investors  for   aggregate   cash  proceeds  of
approximately $26.8 million.  Additionally, we granted these investors five-year
warrants to purchase an additional  356,670 shares of stock,  subject to certain
adjustments, at an exercise price of $19.475 per share.

     On  January  15,  2002,  we  completed  the second  closing of the  private
placement equity offering,  through which, we issued 1,280,004 additional shares
of our  common  stock at a price  of  $15.00  per  share  to  certain  qualified
investors  for  aggregate   cash  proceeds  of   approximately   $19.2  million.
Additionally,  we granted  these  investors  five-year  warrants  to purchase an
additional 256,002 shares of common stock, subject to certain adjustments, at an
exercise price of $19.475 per share.

     On March 20 2002,  in  connection  with the  amendment to the  subordinated
note,  the Company  agreed to issue to Thermo  Electron a  five-year  warrant to
purchase  200,000  shares of  Trimble's  common  stock at an  exercise  price of
$15.11.  Under the terms of the agreement,  beginning on July 14, 2002,  Trimble
will also issue  five-year  warrants to purchase 250 shares of common stock on a
quarterly basis for every $1 million of principal and interest outstanding until
the note is paid off.  These  warrants will be  exercisable  at a price equal to
Trimble's  closing  price on the last  trading  day of each  quarter.  Under the
five-year  warrant,  the total number of warrants issued will not exceed 376,233
shares.

                                       17

<PAGE>
         
     These sales of securities in the private  placement were deemed exempt from
the  registration in reliance on Section 4(2) of the Securities Act, as amended,
or Regulation D promulgated  thereunder,  based on the nature of the  purchasers
and the nature of the arms-length  negotiated  transaction,  and the filing of a
Form D.

     The Warrant exercise price and/or the number and kind of shares purchasable
upon the  exercise  of the  warrant is subject  to certain  adjustments  such as
subdivision or combination of stock, dividends or distributions in common stock,
other stock or property,  reorganization,  consolidation  or merger,  or sale or
issuance of securities below warrant price.

     We used the net proceeds of the sales for working  capital  purposes and to
pay down a portion of our outstanding debt.


Item 6.           Selected Financial Data

HISTORICAL FINANCIAL REVIEW

     The  following  selected  consolidated  financial  data  should  be read in
conjunction with " Management's  Discussion and Analysis of Financial  Condition
and Results of Operations" and our consolidated financial statements and related
notes  appearing  elsewhere in this annual  report.  Historical  results are not

necessarily indicative of future results. In particular,  because the results of
operations and financial  condition related to the Spectra Precision Group which
was  acquired  on July 14,  2000,  Tripod  Data  Systems  which was  acquired on
November 14, 2000, and the acquired  assets of Grid Data, Inc. on April 2, 2001,
are included in our consolidated  statement of operations and balance sheet data
commencing  on  those  dates,  comparisons  of our  results  of  operations  and
financial  condition for periods prior to and  subsequent to those  acquisitions
are not indicative of future results.

Summary Consolidated Statements of Operations Data


<TABLE>
<CAPTION>
                                             December 28,     December 29,     December 31,      January 1,       January 2,
Fiscal Years Ended                               2001             2000             1999             1999             1998
------------------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
(In thousands of dollars, except per
share data)     
<S>                                             <C>              <C>              <C>              <C>              <C>    
Revenue                                          $  475,292       $  369,798       $  271,364       $  268,323       $  266,442
Cost of sales                                       238,057          173,237          127,117          141,075          124,411
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Gross Margin                                     $  237,235       $  196,561       $  144,247       $  127,248       $  142,031

Operating expenses
   Research and development                          62,881           46,520           36,493           45,763           38,242
   Sales and marketing                              103,778           79,901           53,543           61,874           57,661
   General and administrative                        37,407           30,514           33,750           33,245           27,424
   Restructuring charges                              3,599               --               --           10,280               --
   Amortization of goodwill and other
      purchased intangibles                          29,389           13,407               --               --               --
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Total operating expenses                            237,054          170,342          123,786          151,162          123,327
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Operating income (loss) from
     continuing operations                              181           26,219           20,461         (23,914)           18,704
Nonoperating income (expense), net                                  (10,459)              274          (2,041)            1,172
                                                   (21,773)
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Income (loss) before income taxes
     from continuing operations                    (21,592)                                           (25,955)
                                                                      15,760           20,735                            19,876
Income tax provision                                  1,900            1,575            2,073            1,400            2,496
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Net income (loss) from continuing
      operations                                $  (23,492)       $   14,185       $   18,662      $  (27,355)       $   17,380
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Loss from discontinued operations
      (net of tax)                                       --               --               --          (5,760)          (8,101)
Gain (loss) on disposal of
      discontinued operations (net of tax)              613               --            2,931         (20,279)               --
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Net income (loss)                               $  (22,879)       $   14,185       $   21,593      $  (53,394)       $    9,279
                                            ================ ================ ================ ================ ================

                                       18

<PAGE>

Basic net income (loss) per share from
      continuing operations                      $   (0.95)        $    0.60        $    0.83       $   (1.22)        $   0.78
Basic net income (loss) per share from
        discontinued operations                       0.02                --             0.13           (1.16)           (0.36)
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Basic net income (loss) per share                $   (0.93)        $    0.60        $    0.96       $   (2.38)        $   0.42
                                            ================ ================ ================ ================ ================
        Shares used in calculating basic
                earnings per share                   24,727           23,601           22,424           22,470           22,293
                                            ================ ================ ================ ================ ================

Diluted net income (loss) per share
         from continuing operations              $   (0.95)        $    0.55        $    0.82       $   (1.22)        $   0.75
Diluted net income (loss) per share
         from discontinued operations                 0.02                --             0.13           (1.16)           (0.35)
                                            ---------------- ---------------- ---------------- ---------------- ----------------
Diluted net income (loss) per share              $   (0.93)        $    0.55        $    0.95       $   (2.38)        $   0.40
                                            ================ ================ ================ ================ ================
         Shares used in calculating diluted
               earnings per share                   24,727            25,976           22,852           22,470           22,947
                                            ================ ================ ================ ================ ================

Cash dividends per share                          $      --        $      --        $      --        $      --        $      --
                                            ================ ================ ================ ================ ================
</TABLE>


Other Operating Data:

<TABLE>
<CAPTION>
                                             December 28,     December 29,     December 31,      January 1,       January 2,
Fiscal Years ended                               2001             2000             1999             1999             1998
------------------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
(In thousand of dollars, except where
shown as a percentage of revenue)
<S>                                                 <C>              <C>              <C>             <C>               <C>    
Gross margin percentage                                 50%              53%              53%              47%              53%
Operating income (loss) percentage                       0%               7%               8%             (9%)               7%
EBITDA (1)                                           41,038           49,196           29,345         (13,637)           31,130
EBITDA percentage (1)                                    9%              13%              11%             (5%)              12%
Depreciation and amortization                        41,524           23,476            9,073           12,510           12,207
Cash provided (used) by operating
  activities                                         25,093           19,835           23,625            6,968          (2,051)
Cash provided (used) by investing
  activities                                       (11,441)        (167,180)         (17,882)           22,484          (7,106)
Cash provided (used) by financing
  activities                                       (23,450)          138,957            2,656          (8,538)            6,437
</TABLE>


Selected Consolidated Balance Sheet:

<TABLE>
<CAPTION>
                                             December 28,     December 29,     December 31,      January 1,       January 2,
As of                                            2001             2000             1999             1999             1998
------------------------------------------- ---------------- ---------------- ---------------- ---------------- ----------------
(In thousands)
<S>                                              <C>            <C>               <C>              <C>              <C>  
Working capital (deficit)                         $  19,304      $  (10,439)       $  111,808       $   81,956       $  133,434
Total assets                                        419,395          488,628          181,751          156,279          207,663
Noncurrent portion of long-term debt                131,759          143,553           33,821           31,640           30,697
Shareholders' equity                                138,489          134,943          100,796           74,691          139,483
</TABLE>

--------------------------------------------------------------------------------
(1)  EBITDA consists of earnings from continuing operations before interest
     income, interest expense, income taxes, depreciation and amortization. Our
     EBITDA is presented because it is a widely accepted financial indicator.
     EBITDA is not a measure of financial performance in accordance with
     generally accepted accounting principles and should not be considered in
     isolation or as an alternative to net income (loss) as an indicator of a
     Company's performance or to cash flows from operating activities as a
     measure of liquidity. Trimble's EBITDA may not be comparable to similarly
     titled measures as defined by other companies.

                                       19

<PAGE>


     The  following  table  sets  forth,  for  the  periods  indicated,  certain
financial data as a percentage of total revenue:

<TABLE>
<CAPTION>
                                        December 28,     December 29,     December 31,   January 1,    January 2,
Fiscal Years ended                          2001             2000             1999          1999          1998
<S>                                             <C>               <C>             <C>          <C>           <C>   
Revenue                                          100%              100%            100%         100%          100%
Cost of sales                                     50%               47%             47%          53%           47%
                                                ------            ------          ------       ------        ------
Gross margin                                      50%               53%             53%          47%           53%

Operating expenses:
   Research and development                       13%               13%             13%          17%           14%
   Sales and marketing                            22%               22%             21%          23%           22%
   General and administrative                      8%                8%             12%          12%           10%
   Restructuring charges                           1%                0%              0%           4%            0%
   Amortization of goodwill and
       other purchased intangibles                 6%                4%              0%           0%            0%
                                                ------            ------          ------       ------        ------

Total operating expense                           50%               46%             46%          56%           46%
                                                ------            ------          ------       ------        ------
Operating income (loss) from
    continuing operations                          0%                7%              8%         (9%)            7%

Nonoperating income (expense), net                (5%)              (3%)              0%         (1%)            0%
                                                ------            ------          ------       ------        ------
Income (loss) before income taxes
   from continuing operations                    (5%)                4%              8%        (10%)            7%

Income tax provision                               0%                0%              1%           1%            1%
                                                ------            ------          ------       ------        ------
Net income (loss) from
    continuing operations                         (5%)                4%              7%        (10%)            7%
                                                ------            ------          ------       ------        ------
Loss from discontinued
   operations, (net of tax)                        0%                0%              0%         (2%)          (3%)
Gain (loss) on disposal of
     discontinued operations (net of tax)          0%                0%              1%         (8%)            0%
                                                ------            ------          ------       ------        ------

Net income (loss)                                 (5%)               4%              8%        (20%)            3%
                                                ======            ======          ======       ======        ======
</TABLE>



Item 7.           Management's Discussion and Analysis of Financial Condition 
                  and Results of Operations

     For a more complete understanding of our financial condition and results of
operations,  and some of the risks that could affect future  results,  see "Risk
Factors"  beginning on page 34. This section  should also be read in conjunction
with  the  Consolidated  Financial  Statements  and  Supplementary  Data,  which
immediately follow this section.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Trimble's discussion and analysis of its financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,   and  related  disclosure  of  contingent  assets  and
liabilities.  On an on-going basis,  we evaluate our estimates,  including those
related  to  product  returns,  doubtful  accounts,  inventories,   investments,
intangible assets, income taxes, warranty obligations,

                                       20

<PAGE>


restructuring costs, and contingencies and litigation.  We base our estimates on
historical  experience and on various other  assumptions that are believed to be
reasonable  under the  circumstances,  the  results  of which form the basis for
making  judgments  about the amount and timing of revenue and  expenses  and the
carrying  values of assets and  liabilities  that are not readily  apparent from
other sources.  Actual results may differ from these  estimates  under different
assumptions or conditions.

     We believe  the  following  critical  accounting  policies  affect our more
significant  judgments and estimates used in the preparation of our consolidated
financial statements.

Revenue Recognition

     Trimble's  revenues  are recorded in  accordance  with the  Securities  and
Exchange  Commission's (SEC) Staff Accounting  Bulletin (SAB) No. 101, " Revenue
Recognition".  We require the  following:  (i)  execution of a written  customer
order, (ii) delivery of the product,  (iii) fee is fixed and  determinable,  and
(iv)  collectibility  of the  proceeds is probable.  We  recognize  revenue from
product  sales  when  the  products  are  shipped  to the  customer,  title  has
transferred,  and no significant  obligations remain. The Company defers revenue
if there is uncertainty about customer  acceptance.  The Company reduces product
revenue for  estimated  customer  returns and for any  discounts  that may occur
under programs the Company has with its customers and partners.

     Our shipment  terms for domestic  orders are typically FOB shipping  point.
Our international orders are typically shipped FOB destination, and accordingly,
international  orders  are not  recognized  as  revenue  until  the  product  is
delivered and title has transferred.

     Revenues  from  purchased  extended  warranty  and support  agreements  are
deferred and recognized  ratably over the term of the  warranty/support  period.
Substantially  all  technology  licenses and research  revenue have consisted of
initial license fees and royalties,  which were recognized when earned, provided
Trimble had no remaining obligations.

     Sales to distributors and resellers are recognized upon shipment  providing
that there is evidence of such an arrangement  through a distribution  agreement
or purchase order, title has transferred,  no remaining performance  obligations
exist,  the price and terms of the sale are fixed and  collection  is  probable.
Distributors and resellers do not have a right of return.

     The  Company's  software  arrangements  consist  of a license  fee and post
contract  customer  support (PCS).  The Company has established  vendor specific
objective evidence (VSOE) of fair value for its PCS contracts based on the price
of the  renewal  rate.  The  remaining  value  of the  software  arrangement  is
allocated to license fee using the residual  method,  which revenue is primarily
recognized  when the  software  has been  delivered  and there are no  remaining
obligations.  Revenue from PCS is recognized  ratably over the period of the PCS
agreement.

Allowance for Doubtful Accounts

     Trimble  maintains  allowances for doubtful  accounts for estimated  losses
resulting from the inability of its customers to make required payments.  If the
financial  condition  of our  customers  were to  deteriorate,  resulting  in an
impairment  of their  ability to make  payments,  additional  allowances  may be
required.

Inventory Valuation

     Inventory  is  recorded  at the lower of cost or market.  We use a standard
cost  accounting  system to value  inventory and these  standards are reviewed a
minimum  of  once  a  year  and  multiple  times  a  year  in  our  most  active
manufacturing  plants.  We adjust the inventory  value for estimated  excess and
obsolete inventory, based on management's assessment of future demand and market
conditions. If actual future demand or market conditions are less favorable than
those projected by management, additional inventory write-downs may be required.

                                       21

<PAGE>



Goodwill and Other Purchased Intangible Assets

     Trimble has significant tangible and intangible assets on its balance sheet
that include goodwill and other purchased  intangibles  related to acquisitions.
The valuation and  classification  of these assets and the  assignment of useful
amortization lives involve significant  judgments and the use of estimates.  The
testing  of  these  intangibles  under  established  accounting  guidelines  for
impairment also requires significant use of judgment and assumptions.  Trimble's
assets are tested and  reviewed  for  impairment  on an ongoing  basis under the
established  accounting   guidelines.   Changes  in  business  conditions  could
potentially require future adjustments to asset valuations.

     If facts and  circumstances  indicate that the goodwill,  other  intangible
assets or property and  equipment  may be impaired,  an evaluation of continuing
value would be performed.  If an evaluation  is required,  the estimated  future
undiscounted  cash flows associated with these assets would be compared to their
carrying  amount to determine if a write down to fair market value or discounted
cash flow value is required.

Warranties

     We provide for the estimated cost of product warranties at the time revenue
is  recognized.  While we engage  in  extensive  product  quality  programs  and
processes,  including  actively  monitoring  and  evaluating  the quality of our
component  suppliers,  our warranty  obligation  is affected by product  failure
rates,  material  usage and service  delivery  costs  incurred in  correcting  a
product failure.  Should actual product failure rates, material usage or service
delivery  costs differ from our estimates,  revisions to the estimated  warranty
accrual and related costs may be required.

BUSINESS DEVELOPMENTS

     * On March 15, 2002,  Trimble and Caterpillar Inc. announced that they have
reached a definitive  agreement to form Caterpillar Trimble Control Technologies
LLC.  The joint  venture,  50 percent  owned by Trimble and 50 percent  owned by
Caterpillar,  will develop the next generation of advanced  electronic  guidance
and control products for earthmoving  machines in the  construction,  mining and
waste industries.  Caterpillar Trimble Control Technologies LLC will be based in
Dayton,  Ohio and is expected to begin  operations  on April 1, 2002.  Under the
terms of the agreement,  Caterpillar contributed $14.5 million cash and selected
technology,  and Trimble  contributed  select  existing  machine control product
technologies valued at $25.5 million. Additionally, both companies have licensed
patents  and other  intellectual  property  from their  portfolios  to the joint
venture.  Also,  Trimble has received a special cash distribution of $11 million
from the joint venture.


     The joint venture's  intention is to develop machine control  products that
integrate  site design  information  with  accurate  positioning  technology  to
automatically  control blades and other machine  functions This machine  control
technology  will  combine   historical  Trimble   positioning   technology  with
capability gained through the acquisition of Spectra Precision.

     Effective as of April 2, 2001, Trimble completed the acquisition of certain
assets  of  Grid  Data,  Inc.  ("Grid  Data"),  an  Arizona   corporation,   for
approximately $3.5 million in cash and the assumption of certain liabilities. In
addition,  Trimble may make certain earn-out  payments based upon the completion
of certain business  milestones.  If the first milestone is achieved by April 2,
2002,  218,352  shares  of  Trimble  common  stock  will  be  paid  out  to  the
shareholders  of Grid Data.  If the first  milestone  is  achieved  and a second
milestone is  completed  by October 2, 2003,  an  additional  141,928  shares of
Trimble  common  stock  will be paid  out.  However,  if at the time the  second
milestone is achieved  Trimble's  common stock is at a price less than the price
per share as defined in the  agreement,  then  Trimble  may, at its option,  pay
$3.25  million in cash or $3.25 million in Trimble  common stock,  valued on the
date that the second  milestone is achieved.  The additional  consideration,  if
earned, will be recorded as additional goodwill.  At the date of this report, it
was uncertain whether the first milestone will be achieved by April 2, 2002.

     On March 6, 2001,  Trimble sold certain  product lines of its Air Transport
Systems business, to Honeywell International Inc. for approximately $4.5 million
in cash. The Air Transport System business was not material to the

                                       22

<PAGE>


Company's financial results and was not considered strategic to Trimble's future
operations.  Under the asset  purchase  agreement,  Honeywell  purchased the Air
Transport Systems' product lines that included the HT 1000, HT 9000, HT 9100 and
Trimble's  TNL 8100.  As part of an  alliance  that began in 1995,  Trimble  and
Honeywell jointly  developed,  manufactured,  marketed,  and sold the HT product
line.  These  products  are  installed  in many  commercial  aircraft  and major
airlines around the world for GPS based navigation.  During the third quarter of
fiscal 2001 Trimble also sold off other related  product lines and  discontinued
its manufacturing  operations in Austin, Texas. These actions resulted in a loss
on disposal of approximately $113,000,  which is included in nonoperating income
(expense)  for  fiscal  2001.  The  Company  also  incurred  severance  costs of
approximately  $1,724,000 which is included in restructuring  charges related to
the  termination of employees  associated  with the product lines disposed of in
fiscal 2001.

     Trimble  acquired  the  Spectra  Precision  Group on July 14,  2000,  which
resulted  in  Trimble's   emergence  as  the  leader  in  the   Engineering  and
Construction  market. An integration team was immediately  created to manage the
transition,  reduce risks, and achieve  approximately  $20 million of annualized
cost synergies.  Management  believes the integration  efforts have proceeded in
accordance  with the  plans.  The sales  force has been  integrated,  the global
distribution channel has been extended,  the survey and machine guidance product
lines have been  rationalized,  redundant  development  has been  eliminated and
redundant sales and service  facilities have been consolidated.  Overall,  these
actions have resulted in approximately  $19 million of annualized cost synergies
implemented  by the end of  fiscal  2001.  We expect  these  cost  synergies  to
primarily benefit our sales and marketing expenses, but operational efficiencies
will also reduce our administrative  expenses,  and costs of goods sold with the
elimination of duplicate  product  lines,  and  consolidation  of purchasing and
manufacturing  operations. We have realized to date approximately $13 million of
these cost reductions,  primarily in sales and marketing expenses, and expect to
realize the  balance in fiscal  2002.  The  remaining  savings  are  expected to
benefit our sales and marketing expenses,  as well as favorably impact our gross
margins through increased manufacturing efficiencies. [Additional cost reduction
activities  are planned for fiscal 2002 such as further  consolidation  of sales
and service facilities  primarily in Europe,  which are expected to enable us to
meet the original $20 million estimate in cost synergies.

RESULTS FROM CONTINUING OPERATIONS EXCLUDING INFREQUENT, AND ACQUISITION RELATED
ADJUSTMENTS

     Income (loss) from continuing  operations  include  certain  infrequent and
acquisition  related  charges that  management  believes are not  reflective  of
on-going operations.  The following table, which does not purport to present the
results  of  continuing   operations  in  accordance  with  generally   accepted
accounting principles,  reflects results of operations to exclude the effects of
such items as follows (in thousands):

                                       23

<PAGE>


<TABLE>
<CAPTION>
                                                         December 28,       December 29,     December 31,
Fiscal Years Ended                                           2001               2000             1999
------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                  <C>            <C>   
Income (loss) before income taxes from continuing
  Operations                                               $(21,592)            $15,760        $20,735
Infrequent and acquisition-related charges:
   Loss on sale of business (Other income and
     expense)                                                   113                  --             --
   Amortization of goodwill and other purchased
     intangibles                                             29,389              13,407             --
   Restructuring charges                                      3,599                  --             --
   Gain on sale of minority investment (Other income
     and expense)                                              (270)             (1,274)            --
   Inventory purchase accounting adjustment (Cost of
       sales)                                                    --               4,600             --
   Debt extinguishment costs (Interest income and
       expense)                                                  --               1,185             --
   Write down of investment
           (Other income and expense)                           136                  --             --
   Facility relocation costs - Boulder, Colorado
       (General and administrative)                              --                 917             --
                                                      ---------------     ---------------  -------------
 Total infrequent and acquisition-related charges            32,967              18,835           20,735
                                                      ---------------     ---------------  -------------
Adjusted income before income taxes from continuing
     operations                                              11,375              34,595         20,735
Income tax provision                                          1,900               3,460          2,073
                                                      --------------      ---------------  -------------
Adjusted net income                                        $  9,475             $31,135        $18,662
                                                      ==============      ===============  =============
</TABLE>


RESULTS OF CONTINUING OPERATIONS

     In fiscal 2001, the Company's  annual revenues from  continuing  operations
increased  to $475.3  million  from  $369.8  million  in fiscal  2000 and $271.4
million in fiscal 1999. In fiscal 2001, the Company had net loss from continuing
operations of $23.5 million, or $0.95 diluted loss per share,  compared to a net
income from continuing  operations of $14.2 million,  or $0.55 diluted  earnings
per share, in fiscal 2000 and $18.7 million or $0.82 diluted  earnings per share
in fiscal  1999.  The total net loss for  fiscal  2001,  including  discontinued
operations,  was $22.9 million,  or $0.93 diluted loss per share,  compared to a
total net income for fiscal 2000, including  discontinued  operations,  of $14.2
million, or $0.55 diluted earnings per share and $21.6 million, or $0.95 diluted
earning per share for fiscal 1999. Summary of financial data by business segment
is as follows:

     The following  table shows revenue and operating  income by segment for the
periods  indicated  and  should  be  read  in  conjunction  with  the  narrative
descriptions below.  Operating income by segment excludes unallocated  corporate
expenses,  which are comprised  primarily of general and  administrative  costs,
amortization of goodwill and other purchased intangibles, as well as other items
not controlled by the business segment.

                                       24

<PAGE>



<TABLE>
<CAPTION>
                                                      % of                         % of                        % of
                                     December 28,     Total       December 29,     Total       December 31,    Total
Fiscal Years Ended                       2001        Revenue         2000         Revenue         1999        Revenue
----------------------------------- --------------- ----------- ---------------- ----------- --------------- -----------
(Dollars in thousands)
<S>                                    <C>                <C>        <C>               <C>       <C>               <C>
Engineering and Construction
   Revenue                              $  303,944         64%        $ 195,150         53%       $ 108,536         40%
   Segment Operating income
     from continuing operations             51,625                       43,937                      37,223
   Segment Operating income
    as a percentage of  segment
    revenue                                    17%                          23%                         34%
Agriculture
   Revenue                                  24,632          5%           26,024          7%          12,837          5%
   Segment Operating income
     (loss) from continuing                  (617)                        4,254                       2,407
    operations
   Segment Operating income
     (loss) as a percentage of
      segment revenue                         (3%)                          16%                         19%
Fleet and Asset Management
   Revenue                                  57,678         12%           65,099         18%          67,271         25%
   Segment Operating income
     from continuing operations              4,810                       15,211                      14,677
   Segment Operating income
    as a percentage of  segment
    revenue                                     8%                          23%                         22%
Component Technologies
   Revenue                                  58,083         12%           60,230         16%          58,660         22%
   Segment Operating income
     from continuing operations             10,882                       14,850                      15,055
   Segment Operating income
    as a percentage of  segment
    revenue                                    19%                          25%                         26%
Portfolio Technologies
   Revenue                                  30,955          7%           23,295           6%         24,060           9%         
                                                                        
   Segment Operating income
     from continuing operations                803                      (1,540)                     (2,598)
   Segment Operating income
    as a percentage of  segment
    revenue                                     3%                         (7%)                       (11%)

Total Revenue                             $475,292                     $369,798                    $271,364
Total Segment Operating
     income from continuing
      operations                           $67,503                      $76,712                     $66,764
</TABLE>



                                       25

<PAGE>


     A reconciliation  of Trimble's  consolidated  segment operating income from
continuing  operations  to  consolidated  income (loss) before income taxes from
continuing operations follows:


<TABLE>
<CAPTION>
                                                         December 28,      December 29,     December 31,
Fiscal Years Ended                                           2001              2000             1999
------------------------------------------------------- ---------------- ----------------- ----------------
(In thousands)
<S>                                                         <C>               <C>             <C>   
Consolidated segment operating income from
  continuing operations                                      $  67,503         $  76,712       $   66,764
Unallocated corporate expense                                  (34,334)          (37,086)         (46,303)
Amortization of  goodwill and other purchased
  intangibles                                                  (29,389)          (13,407)               -
Restructuring charges                                           (3.599)                -                -
Non-operating  income (expense), net                           (21,773)          (10,459)             274
                                                        ---------------- ----------------- ----------------
Income (loss) from continuing operations before
   income taxes                                             $  (21,592)        $  15,760       $   20,735
                                                        ================ ================= ================
</TABLE>


Revenue.

     In fiscal  2001,  total  revenue  increased  by $105.5  million or 28.5% to
$475.3  million from $369.8 million in fiscal 2000.  Total revenue  increased in
fiscal 2000 by $98.4 million or 36.3% from $271.4 million in fiscal 1999.

Engineering and Construction

Revenue

     Products within the Engineering and Construction segment include surveying,
general   construction,   site   preparation,   excavation,   road  and   runway
construction,   interior  construction  and  underground  construction  systems.
Engineering  and  Construction  revenues  increased by $108.8  million or 56% in
fiscal 2001 over fiscal 2000. The increase in 2001 revenue  compared to 2000 was
due to the following factors:
o    In fiscal 2001 Trimble  experienced a full year of revenues  generated from
     the  purchase  of the Spectra  Precision  Group  compared to  approximately
     half-year results in fiscal 2000, which accounted for  approximately  $85.0
     million.
o    Strong  demand  for  land  survey   product  line   primarily  due  to  the
     introduction  of the "Trimble  ToolboxTM" in first fiscal  quarter of 2001.
     The  new  Trimble  Toolbox  is a set of  integrated  surveying  tools  that
     provides   significantly   higher  functionality  to  surveyors  and  other
     construction professionals.
o    Higher demand for GPS machine guidance equipment.

     Engineering and Construction  revenues increased by $86.6 million or 80% in
fiscal 2000 over fiscal 1999. The increase in 2000 revenue  compared to 1999 was
due to the following factors:
o    Higher  revenues  in 2000  resulting  from the  partial  year effect of the
     purchase of the Spectra  Precision  Group in July  2000.This  accounted for
     approximately  $87 million of  additional  revenues for the period July 14,
     2000 through December 29, 2000.
o    Higher demand for GPS machine guidance equipment.
o    These increases were partially  offset due to delivery  problems related to
     critical part shortages from suppliers.

Operating Income

     Engineering and Construction  operating income increased by $7.7 million or
17% in fiscal  2001 over fiscal  2000.  The  increase  in fiscal 2001  operating
income compared to fiscal 2000 was due to the following:
o    Fiscal 2001 included a full year of the Spectra  Precision  acquisition and
     the benefits of the  consolidation  of product lines in the Engineering and
     Construction  business areas. In addition,  results were favorably impacted
     by the  introduction  of the Trimble  Toolbox survey  products in the first
     quarter of 2001.

                                       26

<PAGE>

o    The worldwide  cost reduction  program,  implemented as part of the Trimble
     and  Spectra  Precision  integration,  also  favorably  impacted  operating
     income.

     Engineering and Construction  operating income increased by $6.7 million or
18% in fiscal 2000 over fiscal  1999.  The  increase  in 2000  operating  income
compared to 1999 was  primarily  due to the  partial  year effect in fiscal year
2000 of  consolidating  Spectra  Precision  for the period July 14, 2000 through
December 29, 2000. This added approximately $5.6 million of operating income.

Agriculture

Revenue

     Products within the Agriculture  segment include GPS-based machine guidance
systems,  field management  systems and laser-based  water  management  systems.
Agriculture  revenues decreased by $1.4 million or 5% in fiscal 2001 over fiscal
2000.  The 2001  decrease in revenue  compared to 2000 was due to the  following
factors:
o    Increased  revenues  generated  from  the  water  management  product  line
     acquired  with  the  purchase  of  Spectra  Precision  Group  in July  2000
     accounted  for an  increase  of  approximately  $2.7  million  through  the
     reporting of a full year's revenue in 2001.
o    This was more  than  offset by lower  demand  for our GPS  machine  control
     products due to the slowdown in the U.S. agricultural economy.

     Agriculture revenues increased by $13.2 million or 103% in fiscal 2000 over
fiscal  1999.  The 2000  increase  in  revenue  compared  to 1999 was due to the
following factors:
o    Increased  revenues  generated  from the partial  year effect of  including
     Spectra  Precision  revenues for the period July 14, 2000 through  December
     29, 2000. This added approximately $6.9 million.
o    Introduction of new products,  including the AgGPS 170 Field Computer,  the
     AgGPS 114, and the PSO Plus Parallel Swathing Option with Data Logging.
o    Higher general demand for GPS agriculture products.
o    These increases were partially  offset due to delivery  problems related to
     critical part shortages from suppliers.

Operating Income

     Agriculture  operating  income  decreased by $4.9 million or 115% in fiscal
2001 over fiscal 2000.  The decrease in 2001 operating  income  compared to 2000
was due to the following factors:
o    A product mix shift towards lower priced  products and a general  reduction
     in prices.
o    Startup development,  selling and support costs associated with the ramp up
     of the Autopilot product line.

     Agriculture  operating  income  increased  by $1.8 million or 77% in fiscal
2000 over fiscal 1999.  The increase in 2000 operating  income  compared to 1999
was due to sharply higher sales volumes.

Fleet and Asset Management

Revenue

     Products  within  the  Fleet  and  Asset  Management  segment  use  GPS and
information  technologies to provide  solutions for a variety of applications in
fleet  management  and  asset  tracking.  Fleet and  Asset  Management  revenues
decreased  by $7.4  million or 11% in fiscal  2001 over  fiscal  2000.  The 2001
decrease in revenue compared to 2000 was due to the following factors:
o    A reduction of approximately $4.0 million in our Satcom GalaxyTM Inmarsat-C
     line due to the  announcement  of our intention to  discontinue  certain of
     these  product  lines  in early  2001,  Mexico's  satellite  communications
     systems  capacity  limitations,  and as a result  of the  general  economic
     slowdown.
o    Sales  of  the   CrossCheck(R)and   Placer   product  lines  were  down  by
     approximately $3.0 million as a result of the economic slow down.

                                       27

<PAGE>

     Fleet and Asset  Management  revenues  decreased  by $2.2  million or 3% in
fiscal 2000 over fiscal 1999. The 2000 revenue  change  compared to 1999 was due
to the following factors:
o    Asset  management and tracking  product  revenues were down due to delivery
     problems related to critical part shortages from suppliers.
o    These  decreases were partially  offset by increased  demand in our Mapping
     products, especially our new GeoExplorer 3 used for GIS data collection and
     data  maintenance.  In addition,  unit sales for our  Crosscheck  family of
     products increased by 30% over the prior year.

Operating Income

     Fleet and Asset  Management  operating income decreased by $10.4 million or
68% in fiscal 2001 over fiscal  2000.  The  decrease  in 2001  operating  income
compared to 2000 was due to the following factors:
o    Decrease in margins due to the  sell-off of existing  Satcom  inventory  at
     reduced prices.
o    Competitive price pressures on wireless hardware
o    Significant  costs  incurred in the  development  of a service  platform to
     enable  a  range  of  asset  management  solutions  including  an  internet
     delivered cellular based solution for vehicle fleet management.

     Fleet and Asset Management operating income increased by $0.5 million or 4%
in fiscal 2000 over fiscal 1999. The increase in 2000 operating  income compared
to 1999 was due to an  increase  in revenue of  Geographic  Information  Systems
product  lines  with  higher  margins,  partially  offset by  decreasing  Satcom
revenue.

Component Technologies

Revenues

     Products within the Component  Technologies  segment consist principally of
proprietary   GPS   chipsets   and  modules   marketed  to  original   equipment
manufacturers.  Component  Technologies revenues decreased by $2.1 million or 4%
in fiscal 2001 over fiscal 2000.  The 2001 revenue  change  compared to 2000 was
due to the following:
o    Embedded  product  lines were down  approximately  $2.7 million or 16% year
     over year due to the economic slowdown.
o    Timing   product   lines  were  down  due  to  reduced   spending   in  the
     telecommunications market.
o    In-vehicle  navigation unit sales increased by approximately  $0.9 million.
     Volume  grew by 29%,  which was offset by a  decrease  of 19% in an average
     selling  price of these  products  during the year. We expect this trend to
     continue as technology  advances in component  technology will enable among
     other things, reduced cost.

     Component  Technologies  revenues increased by $1.6 million or 3% in fiscal
2000 over fiscal 1999. The 2000 revenue  change  compared to 1999 was due to the
following:  
o    Strong demand for GPS embedded  applications  such as vehicle  tracking and
     safety and security.
o    The sales  increase was partially  offset by delivery  problems  related to
     critical part shortages from our suppliers.

Operating Income

     Component Technologies operating income decreased by $4.0 million or 27% in
fiscal 2001 over fiscal 2000. The decrease in 2001 operating  income compared to
2000 was due to the following:
o    Lower revenue and product mix changes.
o    Higher  expenditures  primarily in research and  development  and sales and
     marketing areas due to new product and channel development.

     Component  Technologies operating income decreased by $0.2 million or 1% in
fiscal 2000 over fiscal 1999. The decrease in 2000 operating  income compared to
1999 was due primarily to product mix changes.

                                       28

<PAGE>


Portfolio Technologies

Revenues

     This segment is an aggregation of various  operations  that each equal less
than ten percent of the Company's total operating revenue.  The products in this
segment are navigation  modules and embedded  sensors that are used in avionics,
flight,  and  military  applications.  Also,  included  in this  segment are the
operations of our Tripod Data Systems  subsidiary which was acquired on November
14, 2000.  Portfolio  Technologies  revenues increased by $7.7 million or 33% in
fiscal 2001 over fiscal 2000. The 2001 revenue increase compared to 2000 was due
to the following factors:
o    In fiscal 2001, Trimble  experienced a full year of revenues generated from
     the purchase of Tripod Data Systems as compared to one and one-half  months
     in fiscal 2000,  which  accounted  for an increase of  approximately  $12.2
     million.
o    The above increase was partially  offset by a $4.1 million or 48% reduction
     in our commercial aviation product line during fiscal 2001. The sale of the
     air transport  product line to Honeywell  was completed in March 2001.  See
     Note 8 to the Consolidated Financial Statements.

     Portfolio  Technologies  revenues decreased by $0.8 million or 3% in fiscal
2000 over fiscal 1999. The 2000 revenue decrease compared to 1999 was due to the
following:
o    Decreases in revenues for military and air transport products.
o    Trimble's  decision to exit the  commercial  marine  business in the fourth
     quarter  of 1998 and the sale of the last of such  products  in the  second
     quarter of 1999.

Operating Income

     Portfolio  Technologies  operating income increased by $2.3 million or 152%
in fiscal 2001 over fiscal 2000.  The increase in fiscal 2001  operating  income
compared  to  fiscal  2000 was  primarily  due to an  incremental  $2.5  million
resulting from a full years operating results of Tripod Data Systems acquired on
November 14, 2000.

     Portfolio Technologies operating income increased by $1.1 million or 41% in
fiscal 2000 over fiscal  1999.  The  increase  in fiscal 2000  operating  income
compared to fiscal 1999 was due to the following:
o    In fiscal 2000, we had a decrease in research and  development  expenses of
     approximately $0.5 million.
o    We had an  increase of  approximately  $0.2  million in cost  reimbursement
     funds received for research and development projects.

International Revenues.

     * Sales  to our  unaffiliated  customers  in  locations  outside  the  U.S.
comprised approximately 50% of total revenues in fiscal 2001, 52% in fiscal 2000
and 52% in  fiscal  1999.  North  and  South  America  represented  58% of total
revenue,  Europe 30%, and Asia 12% in fiscal 2001. We  anticipate  that sales to
international  customers  will continue to account for a significant  portion of
our  revenue.  For this  reason,  we are subject to the risks  inherent in these
foreign sales, including unexpected changes in regulatory requirements, exchange
rates,  governmental  approval,  and tariffs or other barriers.  Even though the
U.S. Government  announced on March 29, 1996, that it would support and maintain
the GPS system,  and on May 1, 2000,  stated that it has no intent to ever again
use Selective  Availability (SA), a method of degrading GPS accuracy,  there may
be reluctance  in certain  foreign  markets to purchase such products  given the
control of GPS by the U.S. Government.  Trimble's results of operations could be
adversely  affected if we were unable to continue to generate  significant sales
in locations outside the U.S.

     No  single  customer,  including  the  U.S.  Government  and its  agencies,
accounted for 10% or more of the Company's  total revenues in fiscal 2001,  2000
or 1999. It is possible;  however,  that in future periods the failure of one or
more large  customers  to purchase  products in  quantities  anticipated  by the
Company may adversely affect the results of operations.

                                       29

<PAGE>



Gross Margin.

     * Gross margin  varies due to a number of factors,  including  product mix,
international  sales mix,  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 revenues was 50% in fiscal 2001 and 53% in
fiscal  2000.  Not  including  a $4.6  million  charge  for  inventory  purchase
accounting  adjustment for the acquisition of the Spectra Precision group, gross
margin was 54% in fiscal  2000 and 53% in fiscal  1999.  The  decrease  in gross
margin percentage for fiscal 2001,  compared with fiscal 2000, is due largely to
approximately  $6.0 million of charges  associated with the write-down of excess
and obsolete inventory partially related to the consolidation and simplification
of  product  lines,  and  partially  due to  components  in excess of our demand
forecast horizon of twelve months,  which impacted gross margin by approximately
1.3%.  We expect that these  excess and  obsolete  products  will be disposed of
during fiscal 2002. These disposals may result from selling at deeply discounted
prices,  use in research and development,  or scrap. Also during fiscal 2001, we
exited a number of our direct sales offices,  in an ongoing effort to change our
sales model from  direct to dealer  discount,  which  impacted  gross  margin by
approximately  0.8%.  The  remaining  decrease  in gross  margin  percentage  is
attributable  to product mix  changes and a full year sale of Spectra  Precision
Group's  products (as compared to half a year in fiscal 2000),  which  typically
are  sold at  lower  gross  margins  than  Trimble's  traditional  products.  In
addition,  there were unabsorbed fixed manufacturing overheads due to lower than
expected revenues in fiscal 2001, resulting from the economic slowdown.

     In fiscal 2000,  adjusted gross margin  increased by one  percentage  point
over  fiscal  year 1999 due to the  favorable  product  mix of  Engineering  and
Construction and Agriculture products,  which yielded higher margins through the
integration  of  software  and  wireless  communications.  In  addition,  it was
favorably  impacted by the cost benefits of  outsourcing  our  manufacturing  to
Solectron.  These  increases  were  partially  offset by higher costs to acquire
components due to worldwide component shortages.

     Because of  potential  product  mix changes  within and among the  industry
markets,  market  pressures  on  unit  selling  prices,   fluctuations  in  unit
manufacturing costs,  including increases in component prices and other factors,
current level gross margins  cannot be assured.  In addition,  should the global
economic conditions deteriorate further, gross margin could be further adversely
impacted.

Operating Expenses.

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


<TABLE>
<CAPTION>
                                                                   December 28,      December 29,        December 31,
Fiscal Years Ended                                                     2001              2000                1999
---------------------------------------------------------------- ----------------- ------------------ -----------------
(In thousands)
<S>                                                             <C>               <C>                <C>   
Research and development                                         $      62,881     $     46,520       $         36,493
Sales and marketing                                                    103,778           79,901                 53,543
General and administrative                                              37,407           30,514                 33,750
Restructuring charges                                                    3,599               --                     --
Amortization of goodwill and other purchased intangibles                29,389           13,407                     --     
                                                                 ---------------   ---------------    ------------------ 
 Total                                                           $     237,054     $    170,342       $        123,786
                                                                 ===============   ===============    ==================
</TABLE>


Research and Development.

     Research and development  spending increased by $16.4 million during fiscal
2001, and  represented  13% of revenue,  consistent with 13% in fiscal 2000. The
dollar increase in 2001 was due primarily to the following factors:
o    In fiscal 2001 Trimble experienced a full year of operations of the Spectra
     Precision  Group compared with half a year in fiscal 2000,  which accounted
     for approximately $11.7 million of the increase.

                                       30

<PAGE>

o    The increase was also due to  approximately  $5.0 million related to a full
     year of  operations of Tripod Data Systems in fiscal 2001 compared with one
     and one-half  months for fiscal 2000, as well as the inclusion of Grid Data
     for approximately nine months in fiscal 2001.

     Research and development  spending increased by $10.0 million during fiscal
2000,  representing  13% of  revenue,  consistent  with 13% in 1999.  The dollar
change in 2000 was due primarily to the following factors:
o    The  acquisition  of Spectra  Precision in July 2000,  which  accounted for
     approximately $10.0 million of the increase.
o    Lower cost  reimbursement  for development  projects of approximately  $2.0
     million.
o    Net  reductions  in  spending  of  approximately  $2.0  million  related to
     personnel, temporary help, facilities and consulting.

     * The  Company  believes  that  the  development  and  introduction  of new
products is critical  to its future  success and expects to continue  its active
development of future products.

Sales and Marketing.

     Sales and marketing  expense  increased by $23.9 million in fiscal 2001 and
represents 22% of revenue, consistent with 22% in fiscal 2000. The dollar change
in 2001 was due  primarily to the  inclusion of a full year of operations of the
Spectra  Precision  Group as  compared  with half a year in fiscal  2000,  which
accounted for approximately $23.1 million of the increase.

     Sales and marketing  expenses increased by $26.4 million during fiscal 2000
and  represents  22% of revenues,  compared with 21% in 1999. The primary reason
for the  increase in expenses  from 1999 to 2000 was due to the  purchase of the
Spectra Precision Group in July 2000, which had  approximately  $26.6 million in
sales and  marketing  expenses  recorded in July 14, 2000  through  December 29,
2000.

     * Trimble's future growth will depend in part on the timely development and
continued  viability  of the markets in which we currently  compete,  and on our
ability to continue to identify and exploit new markets for our products.

General and Administrative.

     General and  administrative  expense  increased  by $6.9  million in fiscal
2001, representing 8% of revenue,  consistent with 8% in fiscal 2000. The dollar
increase in 2001 was due primarily to the following:
o    In  fiscal  2001,  Trimble  experienced  a full year of  operations  of the
     Spectra  Precision Group as compared with half a year in fiscal 2000, which
     accounted for approximately $5.6 million of the increase.
o    The increase was also due to  approximately  $0.9 million related to a full
     year of  operations  of Tripod Data Systems in fiscal 2001 as compared with
     one and one-half months for fiscal 2000.

     General and administrative expenses decreased by $3.2 million during fiscal
2000,  representing  8% of  revenues,  compared  with 12% in  fiscal  1999.  The
decrease in fiscal 2000 as compared to fiscal 1999 was due to the following:
o    An allowance for doubtful accounts charge of approximately  $1.4 million in
     fiscal 1999, of which  approximately $1.0 million related to collectibility
     issues for certain  customers in Brazil who were  impacted by a significant
     devaluation  of the Brazilian  real against the United States dollar during
     that year.
o    Trimble  also had  decreases  of  approximately  $6.1  million in  expenses
     related  to  personnel,  legal,  facilities,  equipment  and  other  office
     supplies.
o    These decreases were partially offset by approximately  $3.0 million of the
     Spectra  Precision  Group's  expenses  included  since its purchase in July
     2000.

Restructuring Charges

     Restructuring  charges of $3.6 million were recorded in fiscal 2001,  which
related to severance costs incurred as a result of the Company being impacted by
the global economic slow down, as well as severance costs

                                       31

<PAGE>

related to employees terminated due to the disposition of certain product lines.
As a result of these actions,  Trimble's  headcount  decreased in fiscal 2001 by
232  individuals.  This headcount  reduction will reduce our on-going  operating
expenses and enable us to be better  positioned to achieve our strategic  goals.
As  of  December  28,  2001,  all  of  the  restructuring   charges  except  for
approximately  $80,000 have been paid. The remaining  amounts are expected to be
paid in fiscal 2002.

Spectra Precision Group Restructuring Activities

     At the time we acquired  the  Spectra  Precision  Group,  we  formulated  a
restructuring  plan and provided  approximately  $9.0 million for costs to close
certain  duplicative office facilities,  combine operations  including redundant
domestic and foreign legal entities,  reduce workforce in overlapping areas, and
relocate  certain  employees.  These  costs  were  accrued  for as  part  of the
allocation of the purchase price.  Included in the total cost was  approximately
$2.7 million related to the  discontinuance  of overlapping  product lines which
was  included in our reserve for excess and  obsolete  inventory.  The  facility
consolidation and employee relocations resulted primarily from combining certain
office facilities and duplicative functions,  including management functions, of
the Spectra  Precision  Group.  Through the end of fiscal  2001,  we had charged
against the reserve  approximately  $3.3 million which consisted of $0.9 million
for  legal  and tax  consulting  expenses  relating  to  consolidation  of legal
entities,  $1.3 million for severance expenses,  $0.7 million for facilities and
direct sales offices closures, $0.3 million for an underfunded pension plan, and
other costs of $0.1 million.

     We revised  our final  estimates  of the costs to  complete  the  remaining
planned  activities  and  accordingly  reduced  the  restructuring   reserve  by
approximately $1.1 million,  with a corresponding  adjustment to goodwill in the
fourth  quarter of fiscal  2001.  The  reserve  balance was  approximately  $1.9
million at December 28, 2001 and we  anticipate  completing  the majority of our
restructuring activities during fiscal 2002.

     The  elements  of the reserve at  December  28,  2001 on the balance  sheet
(included in accrued liabilities) are as follows:


<TABLE>
<CAPTION>
                                Employee Severance and    Facility Closure, Legal
                                      Relocation              and Tax Expense             Total
(In thousands)
<S>                                   <C>                        <C>                   <C>   
Total reserve                          $ 1,945                    $ 4,370               $ 6,315
Amounts paid/written off                (1,685)                    (1,610)               (3,295)
Revision to estimates                    (260)                       (812)               (1,072)
                                ------------------------------------------------------------------------
Balance as of December 28, 2001        $    -                     $ 1,948               $ 1,948
                                ========================================================================
</TABLE>


Amortization of Goodwill and Other Purchased Intangibles.


<TABLE>
<CAPTION>
                                                                 December 28,         December 29,         December 31,
Fiscal Years Ended                                                   2001                 2000                 1999
------------------------------------------------------------- -------------------- -------------------- --------------------
------------------------------------------------------------- -------------------- -------------------- --------------------
(In thousands)
<S>                                                           <C>                  <C>                     <C>  
Amortization of goodwill                                       $        7,647       $        3,116          $         -
Amortization of  other purchased intangibles                           21,742               10,291                    -
Amortization of other intangibles                                         917                  930                  961
                                                              -------------------- -------------------- --------------------
Total amortization of goodwill, other purchased, and other
     intangibles                                                $      30,306        $      14,337         $        961
                                                              ==================== ==================== ====================
</TABLE>


     Amortization expense of goodwill and other purchased  intangibles increased
in fiscal  2001 by  approximately  $16.0  million  representing  6% of  revenue,
compared  with  4% in  fiscal  2000.  The  increase  was  primarily  due  to the
acquisition  of the Spectra  Precision  Group in July 2000,  which resulted in a
year  over  year  increase  of  approximately  $15.0  million  in  goodwill  and
intangibles amortization.

                                       32

<PAGE>

     Amortization of goodwill and other purchased intangibles increased by $13.4
million  during fiscal 2000,  representing  4% of revenues,  compared with 0% in
fiscal 1999.  The increase in fiscal 2000, as compared to fiscal 1999, is due to
the  purchase  of  the  Spectra   Precision  Group  in  July  2000,   which  had
approximately  $13.4  million in  amortization  of goodwill and other  purchased
intangibles recorded in July 14, 2000 through December 29, 2000.

Nonoperating Income (Expense), Net.

     The  following  table shows  nonoperating  income  (expenses),  net for the
periods  indicated  and  should  be  read  in  conjunction  with  the  narrative
descriptions of those expenses below:

                               December 28,     December 29,    December 31,
Fiscal Years Ended                 2001             2000            1999
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
(In thousands)

Interest income               $      1,118          $  4,478         $  3,857
Interest expense                   (22,224)          (14,438)          (3,394)
Foreign exchange gain (loss)          (237)             (376)              28
Other income (expense)                (430)             (123)            (217)
                              --------------- ---------------- ----------------
 Total                         $   (21,773)       $  (10,459)         $   274
                              =============== ================ ================

     Nonoperating  expense, net increased by $11.3 million during fiscal 2001 as
compared with fiscal 2000. The primary reasons for the increase were as follows:
o    Increase  in  interest  expenses  related  to loans and  Credit  Facilities
     incurred  primarily  to finance the  acquisition  of the Spectra  Precision
     Group accounted for approximately $7.8 million.
o    Decreased  interest  income  resulting  from  the sale  and  maturities  of
     short-term investments used to finance the acquisition of Spectra Precision
     Group accounted for approximately $3.4 million.

     Nonoperating income (expense), net increased by $10.7 million during fiscal
2000 as compared  with fiscal 1999.  The primary  reason for the increase was an
increase in interest expenses related to loans and credit  facilities  resulting
from the  acquisition  of the Spectra  Precision  Group of  approximately  $10.7
million

     Income Tax Provision.  Trimble's effective income tax rates from continuing
operations  for  fiscal  years  2001,  2000 and  1999  were  (9%),  10% and 10%,
respectively.  The 2001 income tax rate differs from the federal  statutory rate
of 35%, due  primarily to foreign taxes and the inability to realize the benefit
of net  operating  losses.  The 2000 and 1999 income tax rates are less than the
federal  statutory  rate, due primarily to the  realization of the benefits from
prior net operating losses and previously reserved deferred tax assets.

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

LITIGATION

     * Trimble is involved in a number of legal  matters as discussed in Note 21
to the  Consolidated  Financial  Statements.  While  Trimble  does not expect to
suffer  significant  adverse  effects  from  these  litigation  matters  or from
unasserted claims, the nature of litigation is unpredictable and there can be no
assurance that it will not do so.

                                       33

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                                                            December 28,     December 29, 2000      December 31,
As of                                                           2001                                    1999
--------------------------------------------------------- ----------------- -------------------- -------------------
(Dollars in thousands)
<S>                                                             <C>                   <C>                 <C>   
Cash and cash equivalents                                        $ 31,078            $ 40,876            $ 49,264
As a percentage of total assets                                      7.4%                8.4%               27.1%
Accounts receivable days sales outstanding (DSO)                       55                  57                  46
Inventory turns per year                                              4.1                 4.2                 6.6

Cash provided by operating  activities                           $ 25,093            $  19,835            $ 23,625
                                     25,093
Cash used by investing activities                                $(11,441)           $(167,180)           $(17,882)
Cash provided (used) by financing
   activities                                                    $(23,450)           $ 138,957            $  2,656
Net increase (decrease)  in cash and
   cash equivalents                                              $ (9,798)           $  (8,388)           $  8,399
</TABLE>


     In fiscal  2001,  Trimble's  cash and cash  equivalents  decreased  by $9.8
million  from  fiscal  2000.  The  Company  repaid  $60.7  million  of its  debt
outstanding under its senior secured credit facilities. This was financed by the
issuance of common stock of approximately $36.4 million, and cash generated from
operating  activities  of  approximately  $25.1  million.  The Company also used
approximately  $3.5 million for the purchase of certain assets of Grid Data, and
approximately $7.3 million for net capital expenditures.

     At December 28, 2001,  Trimble's  debt mainly  consisted of $101.3  million
outstanding  under  senior  secured  credit  facilities,   and  an  $84  million
subordinated promissory note related to the acquisition of the Spectra Precision
Group.  Trimble has relied primarily on cash provided by operating activities to
fund capital expenditures,  and other investing activities. During December 2001
and  January  2002,   the  Company  raised  $26.8  million  and  $19.2  million,
respectively, in a private placement of equity.

     On March 20, 2002,  the Company used $21.2 million of net proceeds from its
private   placement  to  retire  accrued   interest  and  principal   under  its
subordinated  note with Spectra Physics  Holdings,  Inc., a subsidiary of Thermo
Electron,  reducing  the  outstanding  principal  amount  to $68.7  million.  In
addition, the Company renegotiated the terms of the subordinated note. Under the
revised agreement, the maturity of the note was extended until July 14, 2004, at
the current  interest rate of  approximately  10.4% per year. In connection with
the amendment, on March 20, 2002, the Company agreed to issue to Thermo Electron
a five-year  warrant to purchase  200,000 shares of Trimble's common stock at an
exercise price of $15.11.  Under the terms of the  agreement,  beginning on July
14, 2002,  Trimble will also issue five-year  warrants to purchase 250 shares of
common stock on a quarterly basis for every $1 million of principal and interest
outstanding  until the note is paid off. These warrants will be exercisable at a
price equal to Trimble's  closing price on the last trading day of each quarter.
Under the five-year warrant, the total number of warrants issued will not exceed
376,233 shares.

     * In fiscal 2001, cash provided by operating  activities was $25.1 million,
as compared to $19.8  million in fiscal 2000.  Trimble's  ability to continue to
generate cash from operations will depend in large part on revenues, the rate of
collections of accounts  receivable,  and continued focus on reducing  operating
costs and the move towards profitability.  Both the inventory turns and accounts
receivable days sales outstanding metrics were similar at the end of fiscal 2001
to the fiscal 2000 level.  The decrease in  inventory  turns from fiscal 1999 to
fiscal 2000 was primarily due to the acquisition of the Spectra  Precision Group
in July 14, 2000.  We moved from an outsource  model in 1999 to  significant  in
house  manufacturing in fiscal 2000 as a result of the factories acquired in the
USA,  Sweden and Germany.  Also, the increase in accounts  receivable days sales
outstanding  from fiscal  1999 to fiscal  2000 was due to the Spectra  Precision
Group  conducting  a  significant  portion of its  business  with  international
customers, who are traditionally slower payers.

                                       34

<PAGE>

     Cash flows used in investing  activities  were $11.4 million in fiscal 2001
as compared to $167.2 million in fiscal 2000. Cash used in investing  activities
in fiscal 2000 was  primarily  related to the purchase of the Spectra  Precision
Group, offset by net sales of short term investments.

     Cash used by  financing  activities  was $23.5  million  in fiscal  2001 as
compared with cash provided by financing  activities of $139.0 million in fiscal
2000. During fiscal 2001, the Company made $60.7 million of payments against its
senior  secured credit  facilities.  These payments were offset by proceeds from
the  issuance of common stock to  employees  pursuant to Trimble's  stock option
plan and employee  stock  purchase plan of $6.9 million,  as well as issuance of
common stock under a private equity  placement of $26.8 million.  Also in fiscal
2001, John Hancock Life Insurance Company exercised warrants of $4.4 million.

     In July 2000,  Trimble  obtained  $200  million of senior,  secured  credit
facilities  (the "Credit  Facilities")  from a syndicate of banks to support the
acquisition of the Spectra  Precision  Group and the Company's  ongoing  working
capital  requirements and to refinance certain existing debt (see Note 11 to the
Consolidated   Financial   Statements).   At  December  28,  2001,  Trimble  had
approximately $101 million outstanding under the Credit Facilities, comprised of
$61 million  under a five-year  $100 million term loan,  $30 million under a $50
million three-year U.S. dollar only revolving Credit Facility ("revolver"),  and
$10 million under a $50 million three-year multi-currency revolver.

     The Credit  Facilities  are secured by all material  assets of the Company,
subject  to foreign  tax  considerations.  If  Trimble  is able to  achieve  and
maintain a leverage  ratio  (Debt/EBITDA)  of 2.0x or less for four  consecutive
quarters,  the security for the Credit  Facilities  will be released.  Financial
covenants of the Credit Facilities  include leverage,  fixed charge, and minimum
net worth  tests.  During  December  2001,  the  Company  received a waiver with
respect to compliance with the fixed charge ratio for the quarter ended December
28, 2001,  and  modified the fixed charge ratio for the quarter  ended March 29,
2002. At December 28, 2001,  the Company is in compliance  with debt  covenants.
The  amounts  due  under  the three  year  revolver  loans are paid as the loans
mature,  and the loan commitment fees are paid on a quarterly  basis.  Under the
five-year term loan, the Company is due to make payments (excluding interest) of
approximately  $20  million in fiscal  2002,  $24 million in fiscal 2003 and the
remaining $17 million in fiscal 2004. In order to reduce variable  interest rate
exposure  on  borrowings  under its  existing  credit  facility,  Trimble had an
interest rate swap agreement on a portion of the variable rate debt, which fixes
the rate on the  notional  amount of $25.0  million  at 5.195%.  This  agreement
expired in February 2002 and was not renewed.

     Management  believes that its cash and cash equivalents,  together with its
credit  facilities,  will be sufficient to meet its  anticipated  operating cash
needs beyond the next twelve months. At December 28, 2001, the Company had $31.1
million of cash and cash  equivalents,  as well as access to $60 million of cash
under the terms of its  three-year  revolver  loans.  On January  15,  2002,  we
completed the second closing of the private  placement equity offering,  through
which, we received aggregate cash proceeds of approximately $19.2 million. These
proceeds were used to repay debt.

     Trimble is currently  restricted from paying dividends and is limited as to
the amount of its common  stock  that it can  repurchase  under the terms of the
Credit Facilities. The Company is allowed to pay dividends and repurchase shares
of its common  stock up to 25% of net income in the previous  fiscal  year.  The
Company has  obligations  under  noncancelable  operating  leases for its office
facilities (see Note 12 to the  Consolidated  Financial  Statements).  In fiscal
2002, the payments under these noncancelable operating leases are expected to be
approximately $12.7 million.

     * The Company expects fiscal 2002 capital  expenditures to be approximately
$7.0 million to $9.0 million,  primarily for computer equipment,  software,  and
leasehold improvements associated with business expansion.  Decisions related to
how much cash is used for  investing are  influenced  by the expected  amount of
cash to be provided by operations.

     * Trimble has evaluated the issues and does not currently  believe that the
introduction of the Euro for widespread business use in January 2002 will have a
material effect on its foreign exchange and hedging activities. Trimble has also
assessed the potential  impact that the Euro  conversion  will have in regard to
its internal systems  accommodating  Euro-denominated  transactions and does not
currently anticipate any adverse impact to the Company.

                                       35

<PAGE>

     * Trimble has entered into forward foreign currency  exchange  contracts to
offset  the  effects  of  changes  in  exchange  rates  on   foreign-denominated
intercompany receivables.  At December 28, 2001, we had forward foreign currency
exchange   contracts  to  sell   approximately   181.0  million   Japanese  yen,
approximately  3.0 million Euros, and to buy  approximately  0.3 million British
pounds sterling at contracted rates that mature over the next six months.

CERTAIN OTHER RISK FACTORS

Our Annual and Quarterly Performance May Fluctuate.

     Our operating  results have  fluctuated  and can be expected to continue to
fluctuate in the future on a quarterly  and annual basis as a result of a number
of factors, many of which are beyond our control. Results in any period could be
affected by changes in market  demand,  competitive  market  conditions,  market
acceptance  of  new or  existing  products,  fluctuations  in  foreign  currency
exchange  rates,  the  cost and  availability  of  components,  our  ability  to
manufacture and ship products,  the mix of our customer base and sales channels,
the mix of  products  sold,  our  ability  to expand  our  sales  and  marketing
organization  effectively,  our ability to attract and retain key  technical and
managerial  employees,  the timing of shipments of products under  contracts and
sale of licensing rights, and general global economic  conditions.  In addition,
demand for our  products  in any  quarter  or year may vary due to the  seasonal
buying  patterns  of our  customers  in the  agricultural  and  engineering  and
construction industries.  Due to the foregoing factors, our operating results in
one  or  more  future   periods  are  expected  to  be  subject  to  significant
fluctuations.  The price of our common stock could decline  substantially in the
event such  fluctuations  result in our  financial  performance  being below the
expectations of public market analysts and investors,  which are based primarily
on historical models that are not necessarily  accurate  representations  of the
future.

Our Operating Results in Each Quarter May Not Accurately Reflect Business
Activity in Each Quarter.

     Due,  in part,  to the buying  patterns  of our  customers,  a  significant
portion of our quarterly  revenues  occurs from orders  received and immediately
shipped to  customers in the last few weeks and days of each  quarter,  although
our operating expenses tend to remain constant. If for any reason expected sales
are  deferred,  orders are not received,  or shipments  were to be delayed a few
days at the end of a quarter,  our operating  results and reported  earnings per
share for that quarter could be significantly impacted.

Our Gross Margin Is Subject to Fluctuation.

     Our gross margin is affected by a number of factors, including product mix,
product  pricing,  cost of  components,  foreign  currency  exchange  rates  and
manufacturing  costs.  For example,  since our Engineering and  Construction and
Geographic  Information  Systems  (GIS)  products  generally  have higher  gross
margins than our Component Technologies products,  absent other factors, a shift
in sales toward  Engineering and  Construction  and GIS products would lead to a
gross margin improvement.  On the other hand, if market conditions in the highly
competitive  Engineering and  Construction  and GIS market segments forced us to
lower unit prices, we would suffer a decline in gross margin unless we were able
to timely offset the price  reduction by a reduction in  production  costs or by
sales of other  products  with higher gross  margins.  A decline in gross margin
could have a material effect on our operating results.

We Are Dependent on a Sole Manufacturer for Our Products and on Sole Suppliers
of Critical Parts for Our Products.

     With the selection of Solectron  Corporation in August 1999 as an exclusive
manufacturing  partner for many of our GPS products previously  manufactured out
of our Sunnyvale facilities, we are substantially dependent upon a sole supplier
for the  manufacture  of our products.  Under the agreement with  Solectron,  we
provide to Solectron a twelve-month  product  forecast and place purchase orders
with  Solectron  sixty  calendar  days in advance of the  scheduled  delivery of
products to our customers.  Although  purchase  orders placed with Solectron are
cancelable,  the  terms of the  agreement  would  require  us to  purchase  from
Solectron  all material  inventory not  returnable or usable by other  Solectron
customers.  Accordingly, if we inaccurately forecast demand for our products, we
may be unable to obtain adequate  manufacturing  capacity from Solectron to meet
customers'  delivery  requirements or we may accumulate excess  inventories,  if
such inventories are not usable by other Solectron customers.

                                       36

<PAGE>

     In addition,  we rely on sole suppliers for a number of our critical ASICS.
We have experienced  shortages of supplies,  including ASICS, in the past. As an
example,  we were  affected by  industry-wide  shortages  of memory  devices and
electronic  components  that  reached  their  most  severe  impact  in the third
calendar  quarter of 2000.  Our current  reliance on sole or a limited  group of
suppliers involves several risks,  including a potential  inability to obtain an
adequate  supply of required  components and reduced  control over pricing.  Any
inability to obtain  adequate  deliveries or any other  circumstance  that would
require  us to  seek  alternative  sources  of  supply  or to  manufacture  such
components  internally  could  significantly  delay  our  ability  to  ship  our
products,   which  could  damage  relationships  with  current  and  prospective
customers and could harm our reputation  and brand,  which could have a material
adverse effect on our business.

Our Credit Agreement Contains Stringent Financial Covenants.

     Two of the financial  covenants in our Credit Agreement with ABN AMRO Bank,
N.V. and certain other banks,  dated as of July 14, 2000 as amended (the "Credit
Agreement"),  minimum  fixed charge  coverage and maximum  leverage  ratio,  are
extremely sensitive to changes in earnings before interest,  taxes, depreciation
and amortization  ("EBITDA").  In turn,  EBITDA is highly correlated to revenues
and cost  cutting.  Due to  uncertainties  associated  with the  downturn in the
worldwide economy, our future revenues by quarter are becoming increasingly more
difficult  to forecast and we have  recently  put in place  various cost cutting
measures,  including the consolidation of service functions and centers, closure
of redundant offices, consolidation of redundant product lines and reductions in
staff.  If revenues  should decline at a faster pace than the rate of these cost
cutting measures, on a quarter to quarter basis we may not be in compliance with
the two  above  mentioned  financial  covenants.  If we  default  on one or more
covenants, we will have to obtain either negotiated waivers or amendments to the
Credit  Agreement.  If we are unable to obtain such waivers or  amendments,  the
banks  would  have the  right  to  accelerate  the  payment  of our  outstanding
obligations  under the Credit  Agreement,  which  would have a material  adverse
effect on our  financial  condition and  viability as an operating  company.  In
addition,  a  default  under  one of  our  debt  instruments  may  also  trigger
cross-defaults  under our other debt instruments.  An event of default under any
debt instrument, if not cured or waived, could have a material adverse effect on
us.

Our Substantial Indebtedness Could Materially Restrict Our Operations and 
Adversely Affect Our Financial Condition.

     We now have, and for the foreseeable  future will have, a significant level
of indebtedness. Our substantial indebtedness could:
     o    increase our  vulnerability  to general adverse  economic and industry
          conditions;
     o    limit  our   ability  to  fund   future   working   capital,   capital
          expenditures,  research and  development  and other general  corporate
          requirements, or to make certain investments that could benefit us;
     o    require  us to  dedicate  a  substantial  portion  of our cash flow to
          service interest and principal payments on our debt;
     o    limit our  flexibility  to react to  changes in our  business  and the
          industry in which we operate; and
     o    limit our ability to borrow additional funds.

We Face Competition in Our Markets.

     Our  markets  are highly  competitive  and we expect  that both  direct and
indirect  competition  will  increase  in the future.  Our  overall  competitive
position  depends  on a number of  factors  including  the  price,  quality  and
performance of our products,  the level of customer service,  the development of
new technology and our ability to participate in emerging  markets.  Within each
of our markets,  we encounter  direct  competition  from other GPS,  optical and
laser  suppliers and  competition may intensify from various larger domestic and
international  competitors  and new  market  entrants,  some of which may be our
current customers.  The competition in the future, may, in some cases, result in
price  reductions,  reduced margins or loss of market share,  any of which could
materially and adversely  affect our business,  operating  results and financial
condition.  We believe  that our ability to compete  successfully  in the future
against  existing and additional  competitors will depend largely on our ability
to execute our  strategy  to provide  systems and  products  with  significantly
differentiated  features compared to currently available products.  There can be
no assurance  that we will be able to implement this strategy  successfully,  or
that any such products will be competitive

                                       37

<PAGE>

with other  technologies  or products that may be developed by our  competitors,
many of whom have  significantly  greater financial,  technical,  manufacturing,
marketing,  sales and other resources than we do. There can be no assurance that
we will be able to compete successfully against current or future competitors or
that  competitive  pressures cause us to lose market share or force us to engage
in price reductions that could have a material adverse effect on our business.

We May Encounter Problems Associated With International Operations and Sales.

     Our  customers  are located  throughout  the world.  Sales to  unaffiliated
customers in foreign locations represented  approximately 50% of our revenues in
our  fiscal  year 2001 and 52% in each of our  fiscal  years  2000 and 1999.  In
addition, we have significant international operations,  including manufacturing
facilities,  sales personnel and customer support operations.  Our international
sales operations include offices in Australia,  Canada, China, France,  Germany,
Great Britain, Japan, Mexico, New Zealand, Sweden, Russia, Singapore and others.
Our  international  manufacturing  facilities  are in Sweden  and  Germany.  Our
international  presence  exposes  us  to  risks  not  faced  by  wholly-domestic
companies.  Specifically,  we have experienced issues relating to integration of
foreign operations, greater difficulty in accounts receivable collection, longer
payment cycles and currency  fluctuations.  Additionally,  we face the following
risks, among others: unexpected changes in regulatory requirements;  tariffs and
other trade  barriers;  political,  legal and  economic  instability  in foreign
markets,  particularly in those markets in which we maintain  manufacturing  and
research  facilities;  difficulties  in staffing  and  management;  language and
cultural  barriers;  seasonal  reductions  in business  activities in the summer
months  in  Europe  and  some  other  countries;  and  potentially  adverse  tax
consequences.  Although we  implemented  a program to attempt to manage  foreign
exchange risks through hedging and other  strategies,  there can be no assurance
that  this  program  will  be  successful   and  that  currency   exchange  rate
fluctuations  will  not  have  a  material  adverse  effect  on our  results  of
operations.  In addition, in certain foreign markets, there may be reluctance to
purchase products based on GPS technology,  given the control of GPS by the U.S.
Government.

We are Dependent on Proprietary Technology.

     Our  future  success  and  competitive   position  is  dependent  upon  our
proprietary  technology,  and we rely on patent,  trade  secret,  trademark  and
copyright law to protect our  intellectual  property.  There can be no assurance
that the patents owned or licensed by us will not be invalidated,  circumvented,
challenged,  or that the rights  granted  thereunder  will  provide  competitive
advantages to us or that any of our pending or future patent  applications  will
be issued  within  the  scope of the  claims  sought  by us,  if at all.  We are
currently defending two separate lawsuits for alleged patent  infringement,  one
alleging  infringement  of a patent by some of our  grade  control  systems  and
another alleging  infringement by our surveying  products.  In the event that in
either or both of these suits our  products  are held to be  infringing  a valid
patent,  we could be prevented from  continuing to sell these products and could
be  required  to  pay  substantial  damages,  or,  alternatively,  enter  into a
royalty-bearing license agreement.

     There can be no assurance  that others will not develop  technologies  that
are similar or superior to our  technology,  duplicate our  technology or design
around the patents  owned by us. In addition,  effective  copyright,  patent and
trade  secret  protection  may be  unavailable,  limited or not  applied  for in
certain foreign countries.  There can be no assurance that the steps taken by us
to protect our technology will prevent the  misappropriation of such technology.
The value of our products relies  substantially  on our technical  innovation in
fields in which there are many current patent filings.  We recognize that as new
patents  are  issued or are  brought  to our  attention  by the  holders of such
patents, it may be necessary for us to withdraw products from the market, take a
license from such patent  holders,  or redesign our products.  We do not believe
any of our products  currently  infringe patents or other proprietary  rights of
third  parties,  but we 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  our  revenues  or
profitability.

We Are Dependent on New Products.

     Our future revenue stream depends to a large degree on our ability to bring
new products to market on a timely basis.  We must continue to make  significant
investments  in  research  and  development  in order to continue to develop new
products,  enhance  existing  products  and achieve  market  acceptance  of such
products.  However,  there can be no assurance that  development  stage products
will be  successfully  completed  or, if  developed,  will  achieve  significant
customer  acceptance.  If we were  unable to  successfully  define,  develop and
introduce competitive new

                                       38

<PAGE>

products,  and enhance existing products, our future results of operations would
be adversely  affected.  Development and manufacturing  schedules for technology
products are  difficult to predict,  and there can be no assurance  that we 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 our future success.  In some of our markets where we currently have
a market leadership position, a delay in new product  introductions could have a
significant impact on our results of operations.  No assurance can be given that
we will not incur  problems  in the future in  innovating  and  introducing  new
products.

Our Stock Price May Be Volatile.

     Our  common  stock  has  experienced  and  can be  expected  to  experience
substantial  price  volatility  in response to actual or  anticipated  quarterly
variations in results of operations,  announcements of technological innovations
or new  products by us or our  competitors,  developments  related to patents or
other  intellectual  property  rights,  developments  in our  relationship  with
customers,  suppliers,  or strategic  partners  and other events or factors.  In
addition, any shortfall or changes in revenue, gross margins, earnings, or other
financial  results  from  analysts'  expectations  could  cause the price of our
common stock to fluctuate  significantly.  Additionally,  certain macro-economic
factors  such as changes in  interest  rates as well as market  climate  for the
high-technology  sector  could also have an impact on the  trading  price of our
stock.

We Face Risks of Entering Into and Maintaining Alliances.

     We believe that in certain  emerging markets our success will depend on our
ability to form and maintain  alliances with  established  system  providers and
industry  leaders.  Our  failure to form and  maintain  such  alliances,  or the
preemption  of  such  alliances  by  actions  of  other  competitors  or us will
adversely affect our ability to penetrate emerging markets. No assurances can be
given that we will not experience  problems from current or future  alliances or
that we will realize value from any such strategic alliances.

We Face Risks in Investing in and Integrating New Acquisitions.

     We are continuously evaluating external investments in technologies related
to our business,  and have made relatively small strategic equity investments in
a  number  of GPS  related  technology  companies.  Acquisitions  of  companies,
divisions of companies,  or products entail  numerous  risks,  including (i) the
potential  inability to successfully  integrate acquired operations and products
or to realize cost savings or other anticipated benefits from integration;  (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 harm our growth  strategy and have a
material adverse effect on our business and financial condition.

We Are Dependent on Key Customers.

     We currently enjoy strong  relationships with key customers.  An increasing
amount of our revenue is generated from large original  equipment  manufacturers
such as Siemens VDO Automotive,  Nortel,  Caterpillar,  CNH Global,  Bosch,  and
others.  A  reduction  or loss of  business  with these  customers  could have a
material  adverse  effect on our financial  condition and results of operations.
There can be no assurance that we will be able to continue to realize value from
these relationships in the future.

We Are Dependent on Retaining and Attracting Highly Skilled Development and 
Managerial Personnel.

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

                                       39

<PAGE>

We Are Subject to the Impact of Governmental and Other Similar Certifications.

     We market  certain  products that are subject to  governmental  and similar
certifications  before  they can be sold.  For  example,  CE  certification  for
radiated  emissions is required  for most GPS  receiver and data  communications
products sold in the European Union. An inability to obtain such  certifications
in a timely manner could have an adverse effect on our operating results.  Also,
our 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 our  real-time  kinematic
products  because of  interference  with  certain  other users of similar  radio
frequencies. An inability or delay in obtaining such certifications or delays of
the FCC could  adversely  affect our  ability to bring our  products  to market,
which could harm our customer  relationships  and have a material adverse effect
on our business.

We Are Dependent on the Availability of Allocated Bands Within the Radio 
Frequency Spectrum.

     Our GPS  technology  is dependent  on the use of the  Standard  Positioning
Service ("SPS")  provided by the U.S.  Government's  Global  Positioning  System
("GPS").  The GPS SPS  operates  in radio  frequency  bands  that  are  globally
allocated for radio navigation satellite services.  International allocations of
radio frequency are made by the International  Telecommunications Union ("ITU"),
a specialized  technical  agency of the United  Nations.  These  allocations are
further  governed by radio  regulations that have treaty status and which may be
subject to modification  every  two-three years by the World  Radiocommunication
Conference.  Any ITU reallocation of radio frequency bands,  including frequency
band  segmentation or sharing of spectrum,  may materially and adversely  affect
the utility and  reliability  of our  products,  which would,  in turn,  cause a
material adverse effect on our operating results. Many of our products use other
radio frequency  bands,  together with the GPS signal,  to provide  enhanced GPS
capabilities, such as real-time kinematic precision. The continuing availability
of these non-GPS radio frequencies is essential to provide enhanced GPS products
to our precision survey markets.  Any regulatory changes in spectrum  allocation
or in allowable  operating  conditions may  materially and adversely  affect the
utility and reliability of our products,  which would, in turn, cause a material
adverse effect on our operating  results.  In addition,  unwanted emissions from
mobile satellite  services and other equipment  operating in adjacent  frequency
bands or  inband  from  licensed  and  unlicensed  devices  may  materially  and
adversely affect the utility and reliability of our products, which could result
in a material  adverse  effect on our  operating  results.  The FCC  continually
receives proposals for novel  technologies and services,  such as ultra-wideband
technologies, which may seek to operate in, or across, the radio frequency bands
currently  used by the  GPS  SPS  and  other  public  safety  services.  Adverse
decisions by the FCC that result in harmful  interference to the delivery of the
GPS SPS and  other  radio  frequency  spectrum  also  used in our  products  may
materially  and adversely  affect the utility and  reliability  of our products,
which could result in a material  adverse  effect on our business and  financial
condition.

We Are Subject to the Adverse Impact of Radio Frequency Congestion.

     We have certain real-time kinematic products, such as our Land Survey 5700,
that use  integrated  radio  communication  technology  that requires  access to
available radio frequencies  allocated by the FCC. In addition,  access to these
frequencies by state agencies is under management by state radio  communications
coordinators.  Some  bands  are  experiencing  congestion  that  excludes  their
availability for access by state agencies in some states, including the state of
California.  An inability to obtain access to these radio frequencies could have
an adverse effect on our operating results.

We Are Reliant on the GPS Satellite Network.

     The GPS satellites and their ground support systems are complex  electronic
systems subject to electronic and mechanical failures and possible sabotage. The
satellites were  originally  designed to have lives of 7.5 years and are subject
to damage by the hostile space  environment in which they operate.  However,  of
the current  deployment  of 28  satellites  in place,  some have already been in
place for 12 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 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,  or that the policies of the U.S.  Government for
the use of GPS without charge will remain

                                       40

<PAGE>

unchanged.  However, a 1996 Presidential Decision Directive marks the first time
in the evolution of GPS that access for civilian use free of direct user fees is
specifically  recognized  and  supported by  Presidential  policy.  In addition,
Presidential policy has been complemented by corresponding  legislation,  signed
into law. Because of ever-increasing  commercial applications of GPS, other U.S.
Government  agencies may become involved in the administration or the regulation
of the  use of GPS  signals.  Any of the  foregoing  factors  could  affect  the
willingness  of buyers of our products to select  GPS-based  systems  instead of
products based on competing technologies.  Any resulting change in market demand
for GPS products could have a material adverse effect on our financial  results.
For  example,  European  governments  have  expressed  interest  in  building an
independent  satellite navigation system, known as Galileo.  Depending on the as
yet undetermined design and operation of this system,  there may be interference
to the  delivery  of the GPS SPS and may  materially  and  adversely  affect the
utility  and  reliability  of our  products,  which  could  result in a material
adverse effect on our business and operating results.

We Are Reliant on a Continuous Power Supply.

     California recently experienced an energy crisis that threatened to disrupt
our operations and resulted in increased expenses for our California facilities.
In the event of an acute power  shortage,  that is, when power  reserves for the
State of California fall below certain critical  levels,  California has on some
occasions  implemented,  and may in the future  continue to  implement,  rolling
blackouts  throughout  the  state.  We  currently  do not have  adequate  backup
generators  or  alternate  sources of power in the event of a blackout,  and our
current  insurance does not provide coverage for any damages we or our customers
may suffer as a result of any  interruption  in our power  supply.  If blackouts
interrupt our power supply or Solectron's  power supply, we would be temporarily
unable  to  continue   operations  at  our  California   facilities.   Any  such
interruption  in  our  ability  to  continue  operations  at our  facilities  or
Solectron's  ability to manufacture  product at its facilities  could damage our
reputation,  harm our  ability to retain  existing  customers  and to obtain new
customers,  and could result in lost revenue,  any of which could  substantially
harm our business and results of operations.

We Must Carefully Manage Our Future Growth.

     Any continued  growth in our sales or any continued  expansion in the scope
of our operations could strain our current management, financial,  manufacturing
and other  resources  and may require us to  implement  and improve a variety of
operating, financial and other systems, procedures and controls. Specifically we
have  experienced  strain in our financial  and order  management  system,  as a
result of our  acquisitions.  While we plan to  expand  our  sales,  accounting,
manufacturing, and other information systems to meet these challenges, there can
be no assurance  that these  efforts will  succeed,  or that any existing or new
systems  over time,  procedures  or  controls  will be  adequate  to support our
operations  or that our  systems,  procedures  and  controls  will be  designed,
implemented or improved in a cost  effective and timely  manner.  Any failure to
implement,  improve and expand such systems, procedures and controls in a timely
and efficient  manner could harm our growth  strategy and  adversely  affect our
financial condition and ability to achieve our business objectives.

New Accounting Standards

     In August 2001,  the Financial  Accounting  Standards  Board issued FAS No.
144,  "Accounting for the Impairment or Disposal of Long-lived Assets".  FAS No.
144 supercedes FAS No. 121,  "Accounting for the Impairment of Long-lived Assets
and Assets to be Disposed of" and the  accounting  and  reporting  provisions of
Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations
-Reporting   the  Effects  of   Disposal  of  a  Segment  of  a  Business,   and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions." FAS
No. 144 also amends Accounting Research Bulletin No. 51, "Consolidated Financial
Statements,"  to eliminate the exception to  consolidation  for a subsidiary for
which control is likely to be temporary.  The  provisions of FAS No. 144 will be
effective  for fiscal years  beginning  after  December 15, 2001.  The effect of
adopting  FAS No. 144 has been  evaluated  by the  Company,  and does not have a
material  adverse  effect  on  Trimble's   financial   position  or  results  of
operations.

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting  Standards No. 141,  Business  Combinations,  and No. 142,
Goodwill and Other Intangible  Assets.  Statement 141 requires that the purchase
method of accounting be used for all business combinations  initiated after June
30, 2001.  Statement 141 also includes  guidance on the initial  recognition and
measurement of goodwill and other intangible

                                       41

<PAGE>

assets  arising  from  business  combinations  completed  after  June 30,  2001.
Statement 142 prohibits the amortization of goodwill and intangible  assets with
indefinite  useful  lives.  Statement 142 requires that these assets be reviewed
for  impairment  at least  annually.  Intangible  assets with finite  lives will
continue  to be  amortized  over their  estimated  useful  lives.  Additionally,
Statement 142 requires that  goodwill  included in the carrying  value of equity
method investments no longer be amortized.

     The Company will apply  Statement  142  beginning  in the first  quarter of
2002.  Application  of the  nonamortization  provisions  of  Statement  142 will
significantly  reduce amortization expense which was approximately $26.8 million
in fiscal 2001. The Company will reclassify  identifiable intangible assets with
indefinite  lives,  as defined by  Statement  142,  to  goodwill  at the date of
adoption.  The Company  will test  goodwill  for  impairment  using the two-step
process  prescribed  in Statement  142. The first step is a screen for potential
impairment, while the second step measures the amount of the impairment, if any.
The Company  expects to perform the first of the  required  impairment  tests of
goodwill and  indefinite  lived  intangible  assets as of January 1, 2002 in the
first quarter of 2002. Any impairment  charge resulting from these  transitional
impairment  tests  will be  reflected  as the  cumulative  effect of a change in
accounting  principle  in the first  quarter of 2002.  Based on the  preliminary
unaudited  analysis completed to date, we do not believe that the application of
these  statements  will have an  adverse  material  impact on the  earnings  and
financial position of the Company.


I
tem 7A. Quantitative and Qualitative Disclosure about Market Risk

     We are  exposed to market  risk  related to changes in  interest  rates and
foreign  currency  exchange  rates.  Trimble uses certain  derivative  financial
instruments  to manage these risks.  Trimble does not use  derivative  financial
instruments for speculative or trading purposes.  All financial  instruments are
used in accordance with polices approved by Trimble's board of directors.

Market Interest Rate Risk

     The  Company is exposed to market risk due to the  possibility  of changing
interest rates under its senior secured credit facilities.  The Company's credit
facilities are comprised of a three-year US dollar-only  revolver,  a three-year
Multi-Currency  revolver, and a five-year term loan. Borrowings under the credit
facility have interest  payments based on a floating rate of LIBOR plus a number
of basis points tied to a formula based on the Company's  leverage  ratio. As of
December  28,  2001,  our  senior  debt to EBITDA  (senior  leverage  ratio) was
approximately  2.25. At this  leverage  ratio our pricing will be LIBOR plus 225
basis points. The U.S. dollar and the Multi-Currency  revolvers run through July
2003 and have  outstanding  principal  balances  at  December  28, 2001 of $30.0
million and $10.0 million, respectively. As of December 28, 2001 the Company has
borrowed from the  Multi-Currency  revolver in U.S. currency only. The term loan
runs through July 2005 and has an outstanding principal balance of $61.3 million
at December 28, 2001. The three-month  LIBOR effective rate at December 28, 2001
was 1.9%. A hypothetical ten percent  increase in three-month  LIBOR rates could
result in  approximately  $193,000  annual  increase in interest  expense on the
existing principal balances.

     In order to reduce variable  interest rate exposure on borrowings under its
existing  credit  facility,  Trimble had an interest  rate swap  agreement  on a
portion of the variable rate debt,  which fixes the rate on the notional  amount
of $25.0 million at 5.195%.  This agreement expired in February 2002 and was not
renewed.

     The Company also has $3.3 million of Euro-denominated debt, classified as a
current  liability  at the  end of  fiscal  2001.  The  interest  rate  on  this
instrument  is fixed at six  percent.  A  hypothetical  ten percent  decrease in
interest rates would not have a material  impact on the results of operations of
the Company as related to this debt.

     In  addition,  the Company has a $1.9  million  promissory  note,  of which
$87,000 was  classified  as a current  liability at the end of fiscal 2001.  The
note is payable in monthly  installments,  bearing a variable  interest  rate of
7.14% as of December 28, 2001. A hypothetical  ten percent  increase in interest
rates  would not have a  material  impact on the  results of  operations  of the
Company.

     * 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  Trimble's  management,  should  

                                       42

<PAGE>

the hypothetical  market changes  actually occur over time. As a result,  actual
earnings effects in the future will differ from those quantified above.

Foreign Currency Exchange Rate Risk

     Trimble  hedges   identified   risks   associated  with  foreign   currency
transactions  in order to  minimize  the impact of  changes in foreign  currency
exchange rates on earnings.  Trimble utilizes forward contracts to hedge certain
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.  Certain  intercompany  transactions  such as the
sale  of  products  between  our  Spectra   Precision  Group  entities  are  not
specifically  hedged utilizing forward  contracts,  because the Company believes
that it has a natural  hedge  through its  worldwide  operating  structure.  The
Company's  practice is to settle  these  intercompany  transactions  on a timely
basis which reduces our exposure to fluctuations in exchange rate movements.

     *  Trimble  does  not  anticipate  any  material   adverse  effect  on  its
consolidated financial position utilizing our current hedging strategy.

     All forward  contracts  have a maturity of less than six months,  and we do
not defer any gains and losses with respect to such  contracts,  as they are all
accounted for through earnings in each period.

     The following table provides  information  about Trimble's foreign exchange
forward contracts outstanding as of December 28, 2001:


<TABLE>
<CAPTION>
                                               Foreign Currency       Contract Value        Fair Value in
                                                    Amount                 USD                   USD
       Currency               Buy/Sell          (in thousands)        (in thousands)       (in thousands)
----------------------- --------------------- -------------------- --------------------- --------------------
<S>                    <C>                               <C>                   <C>                  <C>    
EURO                    Sell                                3,769               $ 3,365              $ 3,332
EURO                    Buy                                   800               $   716              $   712
STERLING                Buy                                   298               $   423              $   433
YEN                     Sell                              225,000               $ 1,903              $ 1,714
YEN                     Buy                                44,000               $   363              $   335
</TABLE>


     The  following  table  provides  information  about the  Company's  foreign
exchange forward contracts outstanding as of December 29, 2000:


<TABLE>
<CAPTION>
                                               Foreign Currency       Contract Value        Fair Value in
                                                    Amount                 USD                   USD
       Currency               Buy/Sell          (in thousands)        (in thousands)       (in thousands)
----------------------- --------------------- -------------------- --------------------- --------------------
<S>                    <C>                               <C>                   <C>                  <C>    
YEN                     Sell                              125,600               $ 1,136              $ 1,106
NZD                     Buy                                 4,619               $ 1,934              $ 2,045
NZD                     Sell                                  200               $    80              $    89
EURO                    Sell                                4,109               $ 3,569              $ 3,863
STERLING                Buy                                 1.665               $ 2,416              $ 2,489
</TABLE>


                                       43

<PAGE>



Item 8.           Financial Statements and Supplementary Data

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       December 28,      December 29,
                                                                           2001              2000
--------------------------------------------------------------------- ---------------- ------------------
(In thousands)

ASSETS
<S>                                                                       <C>              <C>    
Current assets:
   Cash and cash equivalents                                               $   31,078        $    40,876
    Accounts receivable, less allowance for doubtful accounts of
       $8,540 and $6,538, respectively                                         71,680             83,600
   Inventories                                                                 51,810             58,970
   Other current assets                                                         6,536              8,017
                                                                      ---------------- ------------------
Total current assets                                                          161,104            191,463

Property and equipment, at cost less accumulated depreciation                  27,542             34,059
Goodwill and other purchased intangible assets, less accumulated
    amortization                                                              220,304            249,832
Deferred income taxes                                                             383                531
Other assets                                                                   10,062             12,743
                                                                      ---------------- ------------------
Total long-term assets                                                        258,291            297,165
                                                                      ---------------- ------------------
Total assets                                                              $   419,395        $   488,628
                                                                      ================ ==================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Bank and other short-term borrowings                                    $   40,025        $    62,000
   Current portion of long-term debt                                           23,443             51,721
   Accounts payable                                                            21,494             26,448
   Accrued compensation and benefits                                           13,786             16,771
   Accrued liabilities                                                         24,138             26,660
   Accrued interest expense                                                     3,616              3,957
   Accrued warranty expense                                                     6,827              7,749
   Income taxes payable                                                         7,403              5,005
   Deferred gain on sale of assets                                              1,068              1,591
                                                                      ---------------- ------------------
Total current liabilities                                                     141,800            201,902

Noncurrent portion of long-term debt and other liabilities                    127,097            137,341
Deferred  income tax                                                            7,347              8,230
Other noncurrent liabilities                                                    4,662              6,212
                                                                      ---------------- ------------------
Total liabilities                                                             280,906            353,685
                                                                      ---------------- ------------------

Commitments and Contingencies

Shareholders' equity:
   Preferred stock no par value; 3,000 shares authorized; none
       outstanding                                                                 --                 --
   Common stock, no par value; 40,000 shares authorized;
        26,862, and 24,162 shares outstanding, respectively                   191,224            154,846
   Accumulated deficit                                                       (33,819)           (10,940)
   Accumulated other comprehensive loss                                      (18,916)            (8,963)
                                                                      ---------------- ------------------
Total shareholders' equity                                                    138,489            134,943

                                                                      ---------------- ------------------
Total liabilities and shareholders' equity                                $   419,395        $   488,628
                                                                      ================ ==================
</TABLE>


See accompanying notes to consolidated financial statements.


                                       44

<PAGE>


CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                      December 28,     December 29,      December 31,
Fiscal Years Ended                                        2001             2000              1999
---------------------------------------------------- ---------------- ---------------- ------------------
(In thousands, except per share data)
<S>                                                      <C>              <C>                <C>    
Revenue                                                   $  475,292       $  369,798         $  271,364
Cost of sales                                                238,057          173,237            127,117
                                                     ---------------- ---------------- ------------------
Gross Margin                                                 237,235          196,561            144,247

Operating expenses
   Research and development                                   62,881           46,520             36,493
   Sales and marketing                                       103,778           79,901             53,543
   General and administrative                                 37,407           30,514             33,750
   Restructuring charges                                       3,599               --                 --
   Amortization of goodwill and other
      purchased intangibles                                   29,389           13,407                 --
                                                     ---------------- ---------------- ------------------
Total operating expenses                                     237,054          170,342            123,786
                                                     ---------------- ---------------- ------------------
Operating income  from continuing
     operations                                                  181           26,219             20,461
Nonoperating income (expense), net
   Interest income                                             1,118            4,478              3,857
   Interest expense                                         (22,224)         (14,438)            (3,394)
   Foreign exchange gain (loss)                                (237)            (376)                 28
  Other income (expense)                                       (430)            (123)              (217)
                                                     ---------------- ---------------- ------------------
Total nonoperating income (expense), net                    (21,773)         (10,459)                274
                                                     ---------------- ---------------- ------------------
Income (loss) before income taxes from
     continuing operations                                  (21,592)           15,760             20,735
Income tax provision                                           1,900            1,575              2,073
                                                     ---------------- ---------------- ------------------
Net income (loss) from continuing operations                (23,492)           14,185             18,662
                                                     ---------------- ---------------- ------------------
Gain on disposal of discontinued
      operations (net of tax)                                    613               --              2,931
                                                     ---------------- ---------------- ------------------
Net income (loss)                                        $  (22,879)       $   14,185         $   21,593
                                                     ================ ================ ==================
Basic net income (loss) per share from
      continuing operations                               $   (0.95)        $    0.60          $    0.83
Basic net income per share from
        discontinued operations                                0.02                --               0.13
                                                     ---------------- ---------------- ------------------
Basic net income (loss) per share                         $   (0.93)        $    0.60          $    0.96
                                                     ================ ================ ==================
        Shares used in calculating basic
                earnings per share                            24,727           23,601             22,424
                                                     ================ ================ ==================

Diluted net income (loss) per share from
         continuing operations                            $   (0.95)        $    0.55          $    0.82
Diluted net income  per share from
         discontinued operations                               0.02                --               0.13
                                                     ---------------- ---------------- ------------------
Diluted net income (loss) per share                       $   (0.93)        $    0.55          $    0.95
                                                     ================ ================ ==================
         Shares used in calculating diluted
                earnings per share                            24,727           25,976             22,852
                                                     ================ ================ ==================
</TABLE>


See accompanying notes to consolidated financial statements.

                                       45

<PAGE>



CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                       Common stock
                                                       and warrants
                                                ----------------------------
                                                                                                Accumulative
                                                                                 Retained           other            Total
                                                                                 earnings       comprehensive    shareholders'
                                                     Shares        Amount        (deficit)      income/(loss)        Equity
-------------------------------------------------- ------------ ------------- ---------------- ---------------- -----------------
(In thousands)
<S>                                                    <C>        <C>            <C>               <C>                <C>    
Balance at January 1, 1999                              22,247     $ 122,201      $  (46,718)       $    (792)         $  74,691
Components of comprehensive income (loss):
    Net income                                                                         21,593                             21,593
    Unrealized loss on short-term investments                                                            (142)             (142)
    Currency translation adjustments                                                                     (107)             (107)
                                                                                                                -----------------
Comprehensive income (loss)                                                                                               21,344
                                                                                                                -----------------
Subtotal                                                                                                                  96,035
                                                                                                                -----------------
Issuance of stock under employee plans                     495         4,468                                               4,468
Issuance of warrants                                        --           293                                                 293
                                                   ------------ ------------- ---------------- ---------------- -----------------
Balance at December 31, 1999                            22,742       126,962         (25,125)          (1,041)           100,796
Components of comprehensive income (loss):
    Net income                                                                         14,185                             14,185
    Unrealized gain on short-term investments                                                              123               123
    Currency translation adjustments                                                                   (8,045)           (8,045)
                                                                                                                -----------------
Comprehensive income (loss)                                                                                                6,263
                                                                                                                -----------------
Subtotal                                                                                                                 107,059
                                                                                                                -----------------
Issuance of stock under employee plans and
    exercise of warrants                                   843        12,043                                              12,043
Issuance of stock for acquisition                          577        14,995                                              14,995
Issuance of warrants                                        --           846                                                 846
                                                   ------------ ------------- ---------------- ---------------- -----------------
Balance at December 29, 2000                            24,162       154,846         (10,940)          (8,963)           134,943
Components of comprehensive income (loss):
    Net loss                                                                         (22,879)                           (22,879)
    Loss on interest rate swap                                                                           (203)             (203)
    Unrealized gain on  investments                                                                         16                16
    Currency translation adjustments                                                                   (9,766)           (9,766)
                                                                                                                -----------------
Comprehensive income (loss)                                                                                             (32,832)
                                                                                                                -----------------
Subtotal                                                                                                                 102,111
                                                                                                                -----------------
Issuance of stock under employee plans and
    exercise of warrants                                   917        11,344                                              11,344
Issuance of stock for private placement                  1,783        25,034                                              25,034
                                                   ------------ ------------- ---------------- ---------------- -----------------
Balance at December 28, 2001                            26,862     $ 191,244      $  (33,819)      $  (18,916)         $ 138,489   
                                                   ============ ============= ================ ================ =================
</TABLE>


See accompanying notes to consolidated financial statements.


                                       46

<PAGE>


CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                            December 28,      December 29,      December 31,
Fiscal Years Ended                                              2001              2000              1999
--------------------------------------------------------- ----------------- ----------------- -----------------
(In thousands)

<S>                                                          <C>                 <C>              <C>    
Cash flow from operating activities:
   Net income (loss)                                          $   (22,879)        $   14,185       $    18,662
Adjustments to reconcile net income (loss) to cash
  flows provided by operating activities:
   Depreciation expense                                             11,218             9,139             8,112                    
   Amortization expense                                             30,306            14,337               961
   Gain on sale of fixed assets                                      (135)                --                --
   Amortization of deferred gain                                   (1,584)           (2,555)             (651)
   Amortization of debt issuance cost                                  960               440                --
   Deferred income taxes                                             (887)             (908)                18
   Other                                                             (508)           (2,505)                56
Decrease (increase) in assets:
   Accounts receivable, net                                        11,919            (6,091)            (2,574)             
   Inventories                                                      7,442            (5,994)             6,653            
   Other current and noncurrent assets                              2,393            (3,743)              (354)           
   Effect of foreign currency translation adjustment               (4,538)           (1,116)              (107)
Increase (decrease) in liabilities:
   Accounts payable                                                (4,954)            7,554             (1,290)
   Accrued compensation and benefits                               (3,112)            (6,362)            2,315
   Customer advances                                                   --                 --              (808)
                                                                 
   Accrued liabilities                                             (2,946)             5,595            (8,193)
   Income taxes payable                                             2,398             (2,141)              825         
                                                          ----------------- ----------------- -----------------
Net cash provided by operating activities                           25,093            19,835            23,625
                                                          ----------------- ----------------- -----------------
Cash flow from investing activities:
   Equity investments                                                  --                 35              (748)
   Acquisition of property and equipment                           (7,254)            (7,555)           (6,411)
   Proceeds from sale of assets                                     1,177                --             26,863
   Acquisitions, net of cash acquired                              (4,430)          (211,488)               --
   Costs of capitalized patents                                      (934)              (900)           (1,127)
   Purchase of short-term investments                                  --             (6,458)          (54,809)
   Maturities/sales of short-term investments                          --             59,186            18,350
                                                          ----------------- ----------------- -----------------
Net cash used by investing activities                             (11,441)         (167,180)          (17,882)
                                                          ----------------- ----------------- -----------------
Cash flow from financing activities:
   Issuance of common stock and warrants                           36,378            12,043             4,468
   (Payment)/collection of notes receivable                           872               196              (540)
   Proceeds from long-term debt and revolving credit
       lines                                                       30,062           162,000                --
   Payments on long-term debt and revolving credit
       lines                                                      (90,762)          (35,282)            (1,272)
                                                          ----------------- ----------------- -----------------
Net cash provided (used) by financing activities                  (23,450)           138,957             2,656
                                                          ----------------- ----------------- -----------------

Increase (decrease) in cash and cash equivalents                   (9,798)           (8,388)            8,399
Cash and cash equivalents, beginning of period                     40,876            49,264            40,865
                                                          ----------------- ----------------- -----------------
Cash and cash equivalents, end of period                       $   31,078        $   40,876       $    49,264
                                                          ================= ================= =================
</TABLE>


See accompanying notes to consolidated financial statements.


                                       47

<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies:

Use of Estimates.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying  notes.  Due to the  inherent  nature  of those  estimates,  actual
results could differ from expectations.

Basis of Presentation.

     Trimble  Navigation  Limited  ("Trimble" or "the Company") has a 52-53 week
fiscal year,  ending on the Friday nearest to December 31, which for fiscal 2001
was December 28, 2001. The Company's  fiscal year normally  consists of 52 weeks
divided into four equal quarters of 13 weeks each. However, due to the fact that
there are not  exactly  52 weeks in a calendar  year and that there is  slightly
more than one  additional day per calendar year, as compared to a 52-week fiscal
year, the Company will have a fiscal year composed of 53 weeks in certain fiscal
years.

     In those resulting fiscal years that have 53 weeks,  Trimble will record an
extra week of revenues,  costs and related financial  activity.  Therefore,  the
financial results of those fiscal years and the associated  quarter,  having the
extra week, will not be exactly  comparable to the prior and subsequent  52-week
fiscal years and the associated  quarters having only 13 weeks. Thus, due to the
inherent  nature of  adopting  a 52-53  week  fiscal  year,  Trimble,  analysts,
shareholders,  investors and others will have to make appropriate adjustments to
any analysis  performed when  comparing the Company's  activities and results in
fiscal years that contain 53 weeks, to those that contain the standard 52 weeks.
Fiscal  years  2001,  2000 and 1999 were all  comprised  of 52  weeks.  The next
53-week year will be fiscal year 2002.

     The consolidated  financial  statements  include the results of Trimble and
its subsidiaries.  Intercompany  accounts and transactions have been eliminated.
Certain  amounts  from  prior  years  have been  reclassified  to conform to the
current year presentation.

Foreign Currency Translation.

     Assets and  liabilities of Trimble's  foreign  subsidiaries  are translated
into U.S.  dollars at year-end  exchange  rates,  and  revenues and expenses are
translated at average rates  prevailing  during the year.  Local  currencies are
considered  to  be  the  functional   currencies  for  the  Company's   non-U.S.
subsidiaries.  Translation  adjustments are included in shareholders'  equity in
the consolidated  balance sheet caption  "Accumulated other comprehensive income
(loss)." Foreign currency  transaction  gains and losses are included in results
of  operations  as  incurred,  and have not been  significant  to the  Company's
operating  results in any fiscal  year.  The  effect of  foreign  currency  rate
changes on cash and cash equivalents is not material.

Cash and Cash Equivalents.

     Cash and cash  equivalents  include all cash and highly liquid  investments
with insignificant interest rate risk and original maturities of three months or
less. The carrying amount of cash and cash equivalents  approximates  fair value
because of the short maturity of those instruments.

Concentration of Risk.

     In entering into forward foreign  exchange  contracts,  Trimble has assumed
the risk that might arise from the possible  inability of counterparties to meet
the terms of their contracts.  The  counterparties  to these contracts are major
multinational  commercial  banks,  and  Trimble  does not expect any losses as a
result of counterparty  defaults (see Note 6). Trimble is also exposed to credit
risk in its trade receivables, which are derived from sales to end user

                                       48

<PAGE>


customers in diversified industries,  as well as various resellers.  The Company
performs ongoing credit  evaluations of its customers'  financial  condition and
limits the amount of credit  extended when deemed  necessary but generally  does
not require collateral.

     With the selection of Solectron  Corporation in August 1999 as an exclusive
manufacturing  partner for many of the Company's  GPS  products,  the Company is
substantially  dependent  upon  a  sole  supplier  for  the  manufacture  of its
products. In addition,  The Company relies on sole suppliers for a number of its
critical components.

     The  majority  of  Trimble   product  sales  use  GPS  as  the  positioning
technology.  GPS is a system of 28 orbiting Navstar  satellites  established and
funded by the U.S.  government,  which has been fully  operational  since  March
1995. A significant reduction in the number of operating satellites would impair
the current  utility of the GPS system and the growth of current and  additional
market  opportunities.  In  addition,  there can be no  assurance  that the U.S.
government  will  remain  committed  to the  operation  and  maintenance  of GPS
satellites over a long period,  or that the policies of the U.S.  Government for
the use of GPS without charge will remain unchanged.

Allowance for Doubtful Accounts.

     Trimble  maintains  allowances for doubtful  accounts for estimated  losses
resulting from the inability of its customers to make required payments.  If the
financial condition of the Company's customers were to deteriorate, resulting in
an impairment of their ability to make  payments,  additional  allowances may be
required.  The expenses recorded for doubtful accounts were  approximately  $5.1
million in fiscal 2001,  $1.2 million in fiscal 2000, and $1.9 million in fiscal
1999.

Inventories.

     Inventories  are  stated  at the  lower of  standard  cost or  market  (net
realizable value).  Standard costs approximate average actual costs. The Company
uses a standard cost  accounting  system to value  inventory and these standards
are reviewed at a minimum of once a year and  multiple  times a year in the most
active  manufacturing  plants.  The Company writes down the inventory  value for
estimated  excess and obsolete  inventory,  based on management's  assessment of
future  demand  and  market  conditions.  If  actual  future  demand  or  market
conditions  are less favorable  than those  projected by management,  additional
inventory write-downs may be required.

Intangible and Long-lived Assets.

     Intangible  assets  include  goodwill,  assembled  workforce,  distribution
channels, patents, licenses, technology and trademarks, which are capitalized at
cost and amortized on the straight-line basis over their estimated useful lives.
Useful lives generally  range from 2 to 10 years.  Goodwill is amortized over 20
years, except for goodwill from the Grid Data purchase,  which is amortized over
5 years.

     If facts and  circumstances  indicate that the goodwill,  other  intangible
assets or property and  equipment  may be impaired,  an evaluation of continuing
value would be performed.  If an evaluation  is required,  the estimated  future
undiscounted  cash flows associated with these assets would be compared to their
carrying  amount to determine if a write down to fair market value or discounted
cash flow value is required.

     Starting in fiscal 2002,  Trimble  will adopt FAS 142 (see "New  accounting
standards" section below). Intangible assets relating to assembled workforce and
distribution  channels  will be  reclassified  as goodwill and goodwill  will no
longer be amortized.

Revenue Recognition.

     The Company  designs,  markets,  and  distributes  products that  determine
precise   geographic   location  or  position,   sometimes  combined  with  data
communications and applications  software.  Trimble sells its products through a
network of direct salespeople, OEMs, VARs, independent dealers, distributors and
authorized  sales  representatives  supported by sales  offices  throughout  the
world.

                                       49

<PAGE>

     Trimble's  revenues  are recorded in  accordance  with the  Securities  and
Exchange  Commission's  (SEC) Staff Accounting  Bulletin (SAB) No. 101, "Revenue
Recognition."  Trimble  requires  the  following:  (i)  execution  of a  written
customer  order,  (ii)  delivery  of  the  product,   (iii)  fee  is  fixed  and
determinable,  and (iv) collectibility of the proceeds is probable.  The Company
recognizes  revenue  from  product  sales when the  products  are shipped to the
customer,  title has transferred,  and no significant  obligations  remain.  The
Company  defers  revenue  if there is  uncertainty  about  customer  acceptance.
Deferred revenue is included in accrued liabilities on the consolidated  balance
sheet. The Company reduces product revenue for estimated  customer returns,  and
any discount  which may occur under  programs the Company has with its customers
and partners.

     The Company's shipment terms for domestic orders are typically FOB shipping
point.   International  orders  are  typically  shipped  FOB  destination,   and
accordingly international orders are not recognized as revenue until the product
is delivered and title has transferred.

     Revenues  from  purchased  extended  warranty  and support  agreements  are
deferred and recognized  ratably over the term of the  warranty/support  period.
Substantially  all  technology  licenses and research  revenue have consisted of
initial license fees and royalties,  which were recognized when earned, provided
Trimble has no remaining obligations.

     Sales to distributors and resellers are recognized upon shipment  providing
that there is evidence of the  arrangement  through a distribution  agreement or
purchase order,  title has  transferred,  no remaining  performance  obligations
exist,  the price and terms of the sale are fixed and  collection  is  probable.
Distributors and resellers do not have a right of return.

     The  Company's  software  arrangements  consist  of a license  fee and post
contract  customer  support (PCS).  The Company has established  vendor specific
objective evidence (VSOE) of fair value for its PCS contracts based on the price
of the  renewal  rate.  The  remaining  value  of the  software  arrangement  is
allocated to license fee using the residual  method,  which revenue is primarily
recognized  when the  software  has been  delivered  and there are no  remaining
obligations.  Revenue from PCS is recognized  ratably over the period of the PCS
agreement.

Product Warranty.

     Trimble  provides for the estimated cost of product  warranties at the time
revenue is  recognized.  The warranty  period is generally  between one to three
years from date of shipment.  In addition,  select military programs may require
extended  warranty periods and certain products sold by Tripod Data Systems have
a 90 day warranty period. While the Company engages in extensive product quality
programs and processes, including actively monitoring and evaluating the quality
of component suppliers, the Company's warranty obligation is affected by product
failure rates,  material usage and service delivery costs incurred in correcting
a product  failure.  Should actual  product  failure  rates,  material  usage or
service  delivery  costs differ from the  estimates,  revisions to the estimated
warranty accrual and related costs may be required.

Advertising Costs.

     Trimble expenses  advertising costs as incurred.  Advertising expenses were
approximately  $6.8 million,  $7.9 million and $4.2 million in fiscal 2001, 2000
and 1999, respectively.

Research and Development Costs.

     Research  and  development  costs are  charged  to expense  when  incurred.
Trimble has received  third party funding of  approximately  $4.1 million,  $4.8
million and $7.1  million in fiscal  2001,  2000,  and 1999,  respectively.  The
Company offsets  research and development  expenses with any third party funding
received. Trimble retains the rights to any technology developed.

                                       50

<PAGE>


Stock Compensation.

     In  accordance  with the  provisions  of Statement of Financial  Accounting
Standards  (SFAS) No. 123,  "Accounting for Stock-Based  Compensation,"  Trimble
applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees" (APB 25) and related  interpretations  in accounting for its stock
option  plans  and  stock  purchase  plan.  Accordingly,  it does not  recognize
compensation  cost for stock options granted at or above market.  Note 16 to the
Consolidated  Financial  Statements describes the plans operated by Trimble, and
contains a summary of the pro forma  effects to reported  net income  (loss) and
earnings  (loss) per share for  fiscal  2001,  2000 and 1999 as if  Trimble  had
elected to  recognize  compensation  cost based on the fair value of the options
granted at grant date, as prescribed by SFAS No. 123.

Depreciation.

     Depreciation of property and equipment owned or under capitalized leases is
computed using the straight-line method over the shorter of the estimated useful
lives or the lease terms.  Useful  lives  include a range from two to four years
for machinery and equipment,  four to five years for furniture and fixtures, and
four to five years for leasehold improvements.

Income Taxes.

     Income taxes are accounted for under the liability  method whereby deferred
tax asset or liability account balances are calculated at the balance sheet date
using current tax laws and rates in effect for the year in which the differences
are  expected to affect  taxable  income.  A valuation  allowance is recorded to
reduce the carrying amounts of deferred tax assets if it is more likely than not
that such assets will not be realized.

Earnings (Loss) Per Share.

     Number of shares used in calculation of basic earnings per share represents
the weighted  average common shares  outstanding  during the period and excludes
any dilutive  effects of options,  warrants,  and  convertible  securities.  The
dilutive effects of options,  warrants,  and convertible securities are included
in diluted earnings per share.

New Accounting Standards.

     In August 2001,  the Financial  Accounting  Standards  Board issued FAS No.
144,  "Accounting for the Impairment or Disposal of Long-lived  Assets." FAS No.
144 supercedes FAS No. 121,  "Accounting for the Impairment of Long-lived Assets
and Assets to be Disposed of" and the  accounting  and  reporting  provisions of
Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently  Occurring Events and  Transactions."  FAS No. 144 also
amends Accounting Research Bulletin No. 51, "Consolidated Financial Statements,"
to eliminate the exception to  consolidation  for a subsidiary for which control
is likely to be temporary.  The  provisions of FAS No. 144 will be effective for
fiscal years  beginning  after December 15, 2001. The effect of adopting FAS No.
144 has been  evaluated  by the  Company,  and does not have a material  adverse
effect on Trimble's financial position or results of operations.

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting  Standards No. 141,  Business  Combinations,  and No. 142,
Goodwill and Other Intangible  Assets.  Statement 141 requires that the purchase
method of accounting be used for all business combinations  initiated after June
30, 2001.  Statement 141 also includes  guidance on the initial  recognition and
measurement  of goodwill  and other  intangible  assets  arising  from  business
combinations  completed  after  June  30,  2001.  Statement  142  prohibits  the
amortization  of goodwill and intangible  assets with  indefinite  useful lives.
Statement  142 requires  that these assets be reviewed for  impairment  at least
annually. Intangible assets with finite lives will continue to be amortized over
their estimated useful lives. Additionally, Statement 142 requires that goodwill
included  in the  carrying  value of  equity  method  investments  no  longer be
amortized.

                                       51

<PAGE>

     The Company will apply  Statement  142  beginning  in the first  quarter of
2002.  Application  of the  nonamortization  provisions  of  Statement  142 will
significantly  reduce amortization expense which was approximately $26.8 million
in fiscal 2001. The Company will reclassify  identifiable intangible assets with
indefinite  lives,  as defined by  Statement  142,  to  goodwill  at the date of
adoption.  The Company  will test  goodwill  for  impairment  using the two-step
process  prescribed  in Statement  142. The first step is a screen for potential
impairment, while the second step measures the amount of the impairment, if any.
The Company  expects to perform the first of the  required  impairment  tests of
goodwill and  indefinite  lived  intangible  assets as of January 1, 2002 in the
first quarter of 2002. Any impairment  charge resulting from these  transitional
impairment  tests  will be  reflected  as the  cumulative  effect of a change in
accounting  principle  in the first  quarter of 2002.  Based on the  preliminary
unaudited  analysis  completed  to date,  the Company  does not believe that the
application  of these  statements  will have an adverse  material  impact on the
earnings and financial position of the Company.

     Trimble adopted Statement of Financial  Accounting Standards No. 133, (SFAS
133)  "Accounting  for Derivative  Instruments  and Hedging  Activities," at the
beginning  of  fiscal  2001.  The  effect  of  adopting  SFAS 133 did not have a
material impact on the Company's financial position or results of operations.

Note 2 - Acquisitions:

     The  following  is a summary of  acquisitions  made by the  Company  during
fiscal 2001 and fiscal 2000, all of which were accounted for as purchases:


<TABLE>
<CAPTION>
            Acquisition                       Primary Service or Product               Acquisition Date
------------------------------------- -------------------------------------------- --------------------------
<S>                                  <C>                                                  <C>    
Spectra Precision Group               Optical and laser products                               July 14, 2000
Tripod Data Systems                   Software for data collection applications            November 14, 2000
Grid Data                             Wireless Application Service Provider                    April 2, 2001
</TABLE>


     The  Company's  consolidated  financial  statements  include the results of
operations  of acquired  companies  commencing on the date of  acquisition.  The
total purchase consideration for each of the above acquisitions was allocated to
the assets acquired and liabilities assumed based on their estimated fair values
as of the date of acquisition. The Grid Data transaction was an asset purchase.

     Goodwill  represents  the excess of  purchase  consideration  over the fair
value of the assets,  including identifiable  intangible assets, net of the fair
value of  liabilities  assumed.  Goodwill and  intangible  assets related to the
acquisitions  are  amortized  to  expense  on a  straight-line  basis over their
estimated  useful  lives.  Useful  lives  range  generally  from 3 to 10  years.
Goodwill is amortized  over 20 years,  except for goodwill on Grid Data which is
amortized over 5 years

                                       52

<PAGE>

Allocation of Purchase Consideration

     The  following  is a  summary  of  purchase  price,  acquisition  costs and
purchase price allocation of the Spectra  Precision Group,  Tripod Data Systems,
and Grid Data acquisitions:


<TABLE>
<CAPTION>
                                                 Spectra Precision Group     Tripod Data Systems        Grid Data
                                                --------------------------- ---------------------- -----------------------
(In thousands)
<S>                                                    <C>                     <C>                      <C>    
Purchase price                                          $293,800                $14,995                  $3,504
Acquisition costs                                          7,719                    391                      50
Restructuring costs                                        7,851                      -                       -
                                                      -----------               ---------               ---------
   Total purchase price                                 $309,370                $15,386                  $3,554
                                                      ===========               =========               =========
Purchase Price Allocation:
    Fair value of tangible net assets acquired           65,913                   4,261                     204     
    Deferred tax                                         (9,138)                      -                       -
    Identified intangible assets:
      Distribution Channel                               78,600                       -                       -
      Existing Technology                                25,200                       -                       -
      Assembled Workforce                                18,300                       -                       -
      Trade names, trade marks, patents, and
         other intellectual properties                   10,800                       -                       -
    Goodwill                                            119,695                  11,125                   3,350
                                                     -----------                ---------              ----------
          Total                                        $309,370                 $15,386                  $3,554
                                                     ===========                =========              ==========
</TABLE>


Spectra Precision Group

     Spectra Precision,  a group of wholly-owned  businesses,  formerly owned by
Thermo  Electron  Corporation,  collectively  known  as the  "Spectra  Precision
Group," was acquired on July 14, 2000.  The  acquisition  was  completed  for an
aggregate  purchase price,  excluding  acquisition and  restructuring  costs, of
approximately  $293.8 million.  Subsequently,  in March 2002, the purchase price
was adjusted by $1.1 million as a result of the completion of final negotiations
with Thermo Electron relating to certain assets and liabilities  acquired.  This
adjustment  subsequently  decreased the purchase price to  approximately  $292.7
million and goodwill to approximately  $118.6 million.  The acquisition included
100% of the stock of Spectra  Precision  Inc., a Delaware  corporation,  Spectra
Precision SRL, an Italian  corporation,  Spectra Physics Holdings GmbH, a German
corporation,   and  Spectra  Precision  BV,  a  Netherlands   corporation.   The
acquisition  also included  certain assets and liabilities of Spectra  Precision
AB, a Swedish corporation, including 100% of the shares of Spectra Precision SA,
a French corporation,  Spectra Precision  Scandinavia AB, a Swedish corporation,
Spectra Precision of Canada Ltd., a Canadian corporation,  and Spectra Precision
Handelsges mbH, an Austrian corporation.

     The acquisition was financed with $80 million in seller  subordinated debt,
$140 million of cash provided  through a syndicate of banks,  and  approximately
$74 million of Trimble's then available cash on hand.

Tripod Data Systems

     Tripod Data Systems,  Inc., an Oregon corporation was purchased on November
14, 2000 for an aggregate final purchase price of approximately $14.995 million.
The purchase price consisted of 576,726 shares of Trimble's  common stock valued
at the average  closing price for the five trading days  proceeding  the closing
date.

Grid Data

     On April 2, 2002,  Trimble acquired certain assets of Grid Data, an Arizona
corporation,  for  approximately  $3.5  million  in cash and the  assumption  of
certain liabilities. In addition, Trimble may make certain earn-out

                                       53

<PAGE>

payments based upon the completion of certain business milestones.  If the first
milestone is achieved by April 2, 2002,  218,352  shares of Trimble common stock
will be paid out. If the first  milestone is achieved and a second  milestone is
completed by October 2, 2003, an  additional  141,928  shares of Trimble  common
stock will be paid out. However, if at the time the second milestone is achieved
Trimble's  common stock is at a price less than an undisclosed  price per share,
then  Trimble,  at its option,  may pay $3.25  million in cash or $3.25  million
worth of Trimble common stock,  valued on the date that the second  milestone is
achieved.  The additional  consideration,  if earned,  will result in additional
goodwill.

Spectra Precision Group Restructuring Activities

     At the time the Company  acquired the Spectra  Precision Group, the Company
formulated  a  restructuring  plan and provided  approximately  $9.0 million for
costs  to  close  certain  duplicative  office  facilities,  combine  operations
including  redundant  domestic and foreign legal entities,  reduce  workforce in
overlapping areas, and relocate certain employees.  These costs were accrued for
as part of the allocation of the purchase price.  Included in the total cost was
approximately $2.7 million related to the discontinuance of overlapping  product
lines which was included in our reserve for excess and obsolete  inventory.  The
facility   consolidation  and  employee   relocations  resulted  primarily  from
combining  certain  office  facilities  and  duplicative  functions,   including
management  functions,  of the Spectra  Precision Group. As of the end of fiscal
2001,  the Company had charged  against the reserve  approximately  $3.3 million
which consisted of $0.9 million for legal and tax consulting  expenses  relating
to consolidation of legal entities,  $1.3 million for severance  expenses,  $0.7
million for  facilities and direct sales offices  closures,  $0.3 million for an
underfunded pension plan, and other costs of $0.1 million.

     The Company revised its final estimates for costs to complete the remaining
planned  activities  and  accordingly  reduced  its  restructuring   reserve  by
approximately $1.1 million,  with a corresponding  adjustment to Goodwill in the
fourth  quarter of fiscal  2001.  The  reserve  balance was  approximately  $1.9
million at  December  28,  2001,  and the  Company  anticipates  completing  the
majority of its remaining  restructuring  activities  during fiscal 2002.  These
activities  consist  principally of legal costs and other  expenses  required to
combine redundant legal entities.

     The  elements of the reserve at December  28,  2001,  on the balance  sheet
(included in accrued liabilities) are as follows:



<TABLE>
<CAPTION>
                                Employee Severance and    Facility Closure, Legal
                                      Relocation              and Tax Expense             Total
(In thousands)
<S>                                   <C>                        <C>                   <C>   
Total reserve                          $ 1,945                    $ 4,370               $ 6,315
Amounts paid/written off                (1,685)                    (1,610)               (3,295)
Revision to estimates                    (260)                       (812)               (1,072)
                                ------------------------------------------------------------------------
Balance as of December 28, 2001        $    -                     $ 1,948               $ 1,948
                                ========================================================================
</TABLE>


                                       54

<PAGE>


Note 3 - Unaudited Pro Forma Information:

     The consolidated  statements of operations of Trimble presented  throughout
this report  include the operating  results of the acquired  companies  from the
date of the respective  acquisitions.  The following pro forma  information  for
fiscal 2000 and fiscal  1999  presents  net  revenue,  net loss from  continuing
operations,  and net loss for each of these periods as if the transactions  with
the Spectra  Precision Group were  consummated on January 2, 1999. The following
pro forma  information  does not include  Tripod Data Systems and Grid Data,  as
these  acquisitions  were not material to the Company.  This unaudited pro forma
data does not purport to represent  the Company's  actual  results of operations
had the Spectra  Precision  Group  acquisition  occurred on January 2, 1999, and
should not serve as a forecast of the Company's operating results for any future
periods.


<TABLE>
<CAPTION>
                                                             December 28,    December 29,     December 31,
Fiscal Years Ended                                               2001            2000             1999
----------------------------------------------------------- --------------- ---------------- ----------------
(In thousands, except for per share amounts)
<S>                                                            <C>             <C>              <C>   
Net revenue                                                     $ 475,292       $  491,436       $  488,728
Net loss from continuing operations                               (23,492)          (1,920)         (17,661)
Net loss                                                          (22,879)          (1,920)         (14,730)

Basic net loss per share from  continuing  operations           $   (0.95)       $   (0.08)       $   (0.79)
Basic net income per share from discontinued
   operations                                                        0.02               --             0.13
                                                            --------------- ---------------- ----------------
Basic net  loss per share                                       $   (0.93)       $   (0.08)       $   (0.66)

Diluted net loss per share from  continuing  operations         $   (0.95)       $   (0.08)       $   (0.79)
Diluted net income per share from discontinued
   operations                                                        0.02               --             0.13
                                                            --------------- ---------------- ----------------
Diluted net loss per share                                      $   (0.93)       $   (0.08)       $   (0.66)
</TABLE>


Note 4 - Goodwill and Intangible Assets:

     Goodwill and purchased intangible assets consisted of the following:


<TABLE>
<CAPTION>
                                                                               December 28,          December 29,
                                                                                   2001                  2000
-------------------------------------------------------------------------- --------------------- ----------------------
(In thousands)
<S>                                                                     <C>                   <C>    
Intangible assets with indefinite life:
   Distribution channel                                                  $         73,363      $          76,408
   Assembled workforce                                                             17,773                 18,081
                                                                         -----------------     ------------------
Total intangible assets with indefinite life                                       91,136                 94,489
Intangible assets with definite life:
   Existing technology                                                            23,907                  24,657
   Trade names, trade marks, patents, and other intellectual properties           18,394                  17,859
                                                                         -----------------     ------------------
Total intangible assets with definite life                                        42,301                  42,516
Goodwill, Spectra Precision acquisition                                          116,001                 119,013
Goodwill, other acquisitions                                                      14,710                  10,812
                                                                         -----------------     ------------------
                                                                                 264,148                 266,830
Less accumulated amortization                                                    (43,844)                (16,998)
                                                                         -----------------     ------------------
                                                                         $       220,304       $         249,832
                                                                         ================      ==================
</TABLE>


     Intangible  assets with an indefinite life consist of distribution  channel
and  assembled  workforce.  Intangible  assets with a definite  life  consist of
existing technology, trade names, trademarks, patents and other intellectual

                                       55

<PAGE>


properties.  The decrease in value of distribution channel, existing technology,
and assembled workforce from date of acquisition of the Spectra Precision Group,
to  year  end  of  2000  and  2001,  was  principally  due to  foreign  currency
translation  differences  related  to  foreign  subsidiaries.  The  increase  in
goodwill for other acquisitions is mainly due to the Grid Data asset acquisition
completed in April 2001.

     Upon  adoption  of FAS 142 in  fiscal  2002,  the  Company  will no  longer
amortize   goodwill  and  intangible   assets  with  indefinite  lives  will  be
reclassified to goodwill.

Note 5 - Certain Balance Sheet Components:

     Inventories consisted of the following:

                                         December 28,            December 29,
                                             2001                    2000
------------------------------------------------------------ ------------------
(In thousands)

Raw materials                       $         25,790          $        27,878
Work-in-process                                7,177                    6,940
Finished goods                                18,843                   24,152
                                    ------------------       ------------------
                                    $         51,810          $        58,970
                                    ==================       ==================

     Property and equipment consisted of the following:

                                         December 28,            December 29,
                                             2001                    2000
------------------------------------------------------------ ------------------
(In thousands)

Machinery and equipment             $         66,265           $       67,245  
Furniture and fixtures                         6,367                    6,994
Leasehold improvements                         5,882                    5,633
Buildings                                      3,979                    7,948
Land                                           1,657                    1,905
                                    -----------------        ------------------
                                              84,150                   89,725
Less accumulated depreciation                (56,608)                 (55,666)
                                    -----------------        ------------------
                                    $         27,542           $       34,059
                                    =================        ==================

     Other current assets consisted of the following:

                                         December 28,            December 29,
                                             2001                    2000
------------------------------------------------------------ ------------------
(In thousands)

Notes receivable                    $          2,130           $        3,002   
Prepaid expenses                               4,150                    4,778
Other                                            256                      237
                                    ------------------        -----------------
                                    $          6,536           $        8,017
                                    ==================        =================

                                       56

<PAGE>

     Other noncurrent assets consisted of the following:

                                         December 28,            December 29,
                                             2001                    2000
------------------------------------------------------------ ------------------
(In thousands)

Debt issuance costs, net            $          3,046          $         4,008   
Other investments                              2,737                    3,438
Deposits                                       1,241                    1,405
Other                                          3,038                    3,892
                                    -----------------        ------------------
                                    $         10,062          $        12,743
                                    =================        ==================

Note 6 - Derivative Financial Instruments:

Interest Rate Swap

     In order to reduce variable  interest rate exposure on borrowings under its
existing  credit  facility,  Trimble has an interest  rate swap  agreement  on a
portion of the variable rate debt,  which fixes the rate on a notional amount of
$25.0  million at 5.195%.  In  accordance  with SFAS No.  133,  the  Company has
designated  its swap  agreements as a cash flow hedge and recorded the change in
fair value of this hedge agreement as part of other  comprehensive  income. (See
also Note 18) Hedge  interest  payments are based on the same  notional  amount,
have the same reset  dates and are based on the same  benchmark  interest  rate,
therefore the Company concludes there will be no  ineffectiveness  in the hedge.
For  fiscal  2001,  the  change in fair  value of this  derivative  amounted  to
$203,000 and is recorded as a reduction to other  liabilities and an addition to
other  comprehensive  income.  The fair value of this  derivative as a liability
amounted to $203,000 at December 28, 2001. In February  2002,  the interest rate
swap agreement expired and has not been renewed by the Company.

Forward foreign currency exchange contracts.

     Trimble's  policy is to hedge  identified  risks  associated  with  foreign
currency  transactions  in order to  minimize  the  impact of changes in foreign
currency exchange rates on earnings. Trimble utilizes forward contracts to hedge
certain trade and intercompany receivables and payables. The Company enters into
forward  foreign  exchange  contracts to either buy or sell  currency if the net
foreign  currency  exposure  exceeds  $400,000.  The  forward  foreign  exchange
contract  obligates  Trimble to  exchange  predetermined  amounts  of  specified
foreign currencies at specified exchange rates on specified dates, or to make an
equivalent  U.S.  dollar  payment  equal  to the  value  of such  exchange.  For
contracts  that are  designated  and effective as hedges,  discounts or premiums
(the difference  between the spot exchange rate and the forward exchange rate at
inception of the contract) are accreted or amortized to other operating expenses
over the contract  lives,  using the  straight-line  method,  while realized and
unrealized  gains and losses  resulting  from changes in the spot  exchange rate
(including those from open, matured,  and terminated  contracts) are included in
results of operations.  Contract  amounts are marked to market,  with changes in
market value recorded in earnings as foreign exchange gains or losses.  To date,
Trimble has entered into forward foreign currency  exchange  contracts to offset
the effects of changes in  exchange  rates on  foreign-denominated  intercompany
receivables. At December 28, 2001, Trimble had forward foreign currency exchange
contracts to sell  approximately  181.0 million Japanese yen,  approximately 3.0
million Euros, and to buy  approximately  0.3 million British pounds sterling at
contracted rates that mature over the next six months ending June 30, 2002.

NOTE 7 - Discontinued Operations:

     On October 2,  1998,  Trimble  adopted a plan to  discontinue  its  General
Aviation division.  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.  The estimated loss on disposal  recorded in fiscal 1998
was $20.3 million.

                                       57

<PAGE>

     In fiscal 1999,  the Company  revised its accrual for the  remaining  costs
expected  to be  incurred  based  on  the  status  of  the  related  liabilities
associated with the disposal of the discontinued General Aviation division. This
resulted in a reversal of  approximately  $2.9 million of prior amounts  accrued
related to the discontinued operations.

     During the fourth  quarter of fiscal  2001,  the Company  re-evaluated  the
adequacy of its accrual for the remaining obligations under the General Aviation
discontinued  product  line.  This  resulted in reversal of  approximately  $0.6
million of prior amounts accrued related to the discontinued operations.

     As of December 28, 2001, Trimble did not have any remaining accrual balance
nor any obligations  associated with the discontinuation of the General Aviation
division

NOTE 8 - Disposition of Line of Business and Assets:

Disposition of Line of Business:

     On March  6,  2001,  the  Company  sold  certain  product  lines of its Air
Transport  Systems,  to Honeywell Inc. for  approximately  $4.5 million in cash.
Under the asset purchase  agreement,  Honeywell  International,  Inc.  purchased
product  lines that  included the HT 1000,  HT 9000,  HT 9100 and  Trimble's TNL
8100. As part of a strategic  alliance that began in 1995, Trimble and Honeywell
jointly  developed,  manufactured,  marketed and sold the HT product line. These
products are installed in many commercial aircraft and major airlines around the
world for Global  Positioning  System  based  navigation.  As part of this sale,
during the third  quarter of fiscal 2001,  the Company  also sold other  product
lines and  discontinued its  manufacturing  operations in Austin,  Texas.  These
actions  resulted  in a loss on  disposal of  approximately  $113,000,  which is
included in  nonoperating  income  (expense)  for fiscal 2001.  The Company also
incurred  severance  costs of  approximately  $1,724,000  which is  included  in
restructuring  charges related to the  termination of employees  associated with
the product lines disposed of in fiscal 2001.

     At December  28,  2001,  the Company  has a provision  of $1.4  million for
related  liabilities  associated with the disposition of these product lines and
the discontinuance of its manufacturing operations.

Disposition of Assets:

     On August  10,  1999,  Trimble  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,  Trimble  transferred  to  Solectron  substantially  all  of  Trimble's
tangible manufacturing assets located at Trimble'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  Trimble's  manufacturing  floor space, and outstanding  purchase order
commitments. In addition, the agreement also provided for Solectron's subsequent
purchase,  on August 30, 1999, of Trimble's component  inventory,  on hand as of
August 13, 1999.

     The final  purchase  price  for these  assets  was $26.9  million.  Trimble
recorded a gain on the  transaction  of $11.0  million.  This gain was offset by
certain costs  incurred or accrued  resulting from the transition by the Company
and included payroll for specified individuals ($1.4 million), free rent assumed
by the Company for space subleased by Solectron ($0.3 million), idle capacity on
facilities  that will no longer be used ($2.9  million) and other  miscellaneous
expenses ($0.4 million),  netting to $5.9 million. The net gain was deferred and
is being  recognized  as a  reduction  to cost of  sales,  over  the  three-year
exclusive life of the supply agreement  described below. In fiscal 2000, certain
contingencies  were  finalized  relating to some  employee and facility  related
liabilities, and the deferred gain was reduced by $0.7 million.

     Concurrently  with the closing of the  transaction,  Trimble and  Solectron
also  entered into a supply  agreement.  The supply  agreement  provides for the
exclusive  manufacture by Solectron of a significant portion of Trimble products
for the three year period ending August 13, 2002.

                                       58

<PAGE>



NOTE 9 - The Company, Industry Segment, Geographic, and Customer Information:

     Trimble  is  a  designer  and  distributor  of  positioning   products  and
applications  enabled  by  GPS,  optical,  laser,  and  wireless  communications
technology.  The Company designs and markets products,  which deliver integrated
information solutions,  such as collecting,  analyzing,  and displaying position
data to its end-users. The Company offers an integrated product line for diverse
applications in its targeted markets.

     To achieve distribution,  marketing,  production, and technology advantages
in Trimble's targeted markets,  the Company currently manages itself within five
segments:

     o    Engineering and Construction -- Consists of products currently used by
          construction   professionals   in  the  field  for  positioning   data
          collection,  field computing,  data management,  and automated machine
          guidance and control.  These products  provide  solutions for numerous
          construction applications,  including surveying; general construction;
          site  preparation and excavation;  road and runway  construction;  and
          underground construction.

     o    Agriculture  -- Consists of products that provide key  advantages in a
          variety of agriculture applications, primarily in the areas of precise
          land leveling,  machine  guidance,  yield monitoring and variable-rate
          applications of fertilizers and chemicals.

     o    Fleet and  Asset  Management  --  Consists  of  products  that  enable
          end-users  to monitor  and  manage  their  mobile and fixed  assets by
          communicating  location-relevant  information  from  the  field to the
          office.  The Company  offers a range of products that address a number
          of  sectors  of  this  market   including   truck  fleets,   security,
          telematics,  public safety  vehicles,  and fixed asset data collection
          for a variety of governmental and private entities. This segment is an
          aggregation  of the  Company's  Mapping  and  GIS  operation  and  the
          Company's Mobile  Solutions  operation.  The Mobile Solutions  (Mobile
          Positioning and Communications)  operation represents 5.5% and 2.7% of
          consolidated  revenue in fiscal  years 2000 and 2001.  The Company has
          aggregated this business with its Mapping and GIS operation because of
          the  strong   similarities  in  customers,   production   process  and
          distribution methods as well as complementary products.

     o    Component Technologies -- Currently, the Company markets its component
          products  through an  extensive  network of OEM  relationships.  These
          products  include  proprietary  chipsets,  modules  and a  variety  of
          intellectual property. The applications into which end-users currently
          incorporate  the  Company's   component   products   include:   timing
          applications  for   synchronizing   wireless  and  computer   systems;
          in-vehicle  navigation  and  telematics   (tracking)  systems;   fleet
          management;  security systems;  data collection systems;  and wireless
          handheld consumer products.

     o    Portfolio  Technologies  -- The various  operations that comprise this
          segment  were  aggregated  on  the  basis  that  no  single  operation
          accounted  for more  than 10% of the  total  revenue  of the  Company.
          Consists of various markets that use accurate position,  velocity, and
          timing  information.  These  markets  include  the  operations  of the
          Military Advanced Systems division and Tripod Data Systems.

     Trimble  evaluates  each  of  these  segment's  performance  and  allocates
resources based on profit and loss from operations before income taxes, and some
corporate allocations.

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

     The  following  table  presents  revenues,  operating  income  (loss),  and
identifiable  assets for Trimble's five segments.  The information  includes the
operations  of the  Spectra  Precision  Group after July 14,  2000,  Tripod Data
Systems  after  November  14, 2000 and Grid Data after April 2, 2001.  Operating
income  (loss)  is  net  revenue  less  operating  expenses,  excluding  general
corporate expenses, goodwill amortization,  restructuring charges,  nonoperating
income (expense), and income taxes. The identifiable assets that Trimble's Chief
Operating Decision Maker views by segment are accounts receivable and inventory.

                                       59

<PAGE>


<TABLE>
<CAPTION>

                           -------------------------------------------------------------------------------------------
                                                               Fiscal Year Ended
                                                               December 28, 2001
                           -------------------------------------------------------------------------------------------
                                                                 (in thousands)
                           -------------------------------------------------------------------------------------------

                            Engineering                   Fleet and      Component       Portfolio
                                and       Agriculture       Asset       Technologies    Technologies       Total
                            Construction                 Management
                           -------------------------------------------------------------------------------------------
<S>                            <C>          <C>            <C>            <C>             <C>            <C>
External net revenue            $ 303,944    $ 24,632       $  57,678      $  58,083       $  30,955      $  475,292
Inter-segment net revenue           2,080           -               -              -          (2,080)              -
Operating income (loss)
   before corporate
   allocations                     51,625        (617)          4,810         10,882              803         67,503
Corporate allocations (1)               -           -               -              -                -              -
                              -----------   ----------     -----------   ------------      -----------    ------------    
Operating income (loss)        $  51,625    $   (617)      $    4,810    $    10,882        $     803     $   67,503
                              -----------   ----------     -----------   ------------      -----------    ------------

Assets:
   Accounts receivable(2)     $   62,471    $   2,241      $   12,224    $    7,392         $   7,249     $   91,577
   Inventory                      37,246        2,513           4,118         2,490             5,463         51,830
</TABLE>



<TABLE>
<CAPTION>
                           -------------------------------------------------------------------------------------------
                                                               Fiscal Year Ended
                                                               December 29, 2000
                           -------------------------------------------------------------------------------------------
                                                                 (in thousands)
                           -------------------------------------------------------------------------------------------

                            Engineering                   Fleet and      Component       Portfolio
                                and       Agriculture       Asset       Technologies    Technologies       Total
                            Construction                 Management
                           -------------------------------------------------------------------------------------------
<S>                            <C>           <C>            <C>            <C>            <C>            <C>
External net revenue            $ 195,150     $ 26,024       $  65,099      $ 60,230       $ 23,295       $ 369,798
Inter-segment net revenue               -            -               -             -              -               -
Operating income (loss)
   before corporate
   allocations                     43,937        4,254          15,211        14,850         (1,540)         76,712
Corporate allocations (1)         (15,120)      (2,724)         (8,232)       (4,788)        (2,687)        (33,551)
                               -----------   ----------     -----------   -----------     -----------    ------------ 
Operating income (loss)        $  28,817      $  1,530       $   6,979     $  10,062      $  (4,227)      $  43,161
                               -----------   ----------     -----------   ------------    -----------    ------------ 
Assets:
   Accounts receivable(2)      $  58,693      $  4,649       $  12,164     $  11,892      $    8,522      $  95,920
   Inventory                      39,146         1,774           5,775         2,360           8,074         57,129
</TABLE>



<TABLE>
<CAPTION>

                           -------------------------------------------------------------------------------------------
                                                               Fiscal Year Ended
                                                               December 31, 1999
                           -------------------------------------------------------------------------------------------
                                                                 (in thousands)
                           -------------------------------------------------------------------------------------------

                            Engineering                   Fleet and      Component       Portfolio
                                and       Agriculture       Asset       Technologies    Technologies       Total
                            Construction                 Management
                           -------------------------------------------------------------------------------------------
<S>                            <C>           <C>            <C>            <C>            <C>           <C>
External net revenue            $ 108,536     $ 12,837       $  67,271      $ 58,660       $  24,060     $  271,364
Inter-segment net revenue               -            -               -             -               -              -
Operating income (loss)
   before corporate
   allocations                     37,223        2,407          14,677        15,055          (2,598)        66,764
Corporate allocations (1)         (16,067)      (2,204)         (8,108)       (5,261)         (3,422)       (35,062)
                               -----------   ----------     -----------   -----------     -----------    ------------ 
Operating income (loss)        $  21,156      $    203       $   6,569      $  9,794       $  (6,020)     $  31,702
                               -----------   ----------     -----------   -----------     -----------    ------------ 
Assets:
   Accounts receivable(2)      $  22,304      $  1,510       $  11,009      $  9,273       $   5,313      $  49,409
   Inventory                       6,653             2           2,180         2,392           5,208         16,435
</TABLE>


---------------------------

(1)  In fiscal  2001,  the Company did not  allocate  corporate  expenses to its
     individual  business  segments.  In  fiscal,  2000 and  1999,  the  Company
     determined  the  amount of  corporate  allocations  charged  to each of its
     segments  based on a percentage of the  segments'  monthly  revenue,  gross
     profit,  and controllable  spending  (research and  development,  sales and
     marketing, and general and administrative).

                                       60

<PAGE>

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


     The  following  are   reconciliations   corresponding   to  totals  in  the
accompanying consolidated financial statements:

<TABLE>
<CAPTION>
                                                   December 28,    December 29,     December 31,
Fiscal Years Ended                                     2001            2000             1999
------------------------------------------------- --------------- ---------------- ---------------
(in thousands)
<S>                                                 <C>               <C>            <C>    
Operating income from continuing operations:
   Total for reportable divisions                    $ 67,503          $  43,161      $ 31,702
   Unallocated corporate expenses                     (65,598)           (16,942)      (11,241)
                                                     ---------        -----------     ---------
       Operating income from continuing operations   $ 1,905           $  26,219      $ 20,461
                                                     =========        ===========     =========
</TABLE>

  

                                                 December 28,    December 29,
                                                    2001            2000
---------------------------------------------- --------------- ----------------
(in thousands)
Assets:
   Accounts receivable total for reportable
       segments                                    $  91,577    $       95,920
   Unallocated (1)                                   (19,897)          (12,320)
                                                   ----------   ---------------
       Total                                       $  71,680    $       83,600
                                                   ==========   ===============

   Inventory total for reportable segments         $  51,830    $       57,129
   Common inventory (2)                                  330             3,717
                                                   ----------   ---------------
       Total                                       $  52,160    $       60,846
                                                   ==========   ===============
--------------------------
(1)  Includes cash in advance and reserves that are not allocated by segment.
(2)  Consists of inventory  that is common  between the  segments.  Parts can be
     used by more than one segment.

 The following table presents revenues by product groups.

                            December 28,     December 29,        December 31,
Fiscal Years Ended              2001             2000                1999
-------------------------- ----------------- ----------------- -----------------
(in thousands)

GPS products                    $274,439          $274,215         $ 271,364
Laser and optical products       186,948            93,879                 -
Other                             13,905             1,704                 -
                            ---------------- ------------------ ----------------
Total revenue                   $475,292          $369,798          $271,364
                            ================ ================== ================

                                       61

<PAGE>

     The geographic  distribution of Trimble's revenues and identifiable  assets
is summarized in the table below.  Other foreign  countries  include  Canada and
countries within South and Central America. Identifiable assets indicated in the
table below  exclude  intercompany  receivables,  investments  in  subsidiaries,
goodwill and intangibles assets.

<TABLE>
<CAPTION>

                                                         Geographic Area
                                    -----------------------------------------------------------
                                                                                      Other
                                                        Europe/                      Foreign
                                           U.S.       Middle East       Asia        Countries     Eliminations      Total
-------------------------------------- ------------- -------------- ------------- -------------- ---------------- -----------
(In thousands)
<S>                                    <C>            <C>              <C>         <C>           <C>               <C>
Fiscal 2001
Sales to unaffiliated customers (1)     $ 236,665      $ 143,051        $ 54,710    $ 40,866      $        -        $475,292
Intergeographic transfers                  57,481         49,940           2,137           -        (109,558)              -
                                       ------------- -------------- ------------- -------------- ---------------- -----------
Total revenue                           $ 294,146      $ 192,991        $ 56,847     $ 40,866     $ (109,558)       $475,292
                                       ------------- -------------- ------------- -------------- ---------------- -----------
Identifiable assets                     $ 120,403      $  71,081        $ 10,048     $  3,829     $   (5,494)       $199,867
                                                                              
Fiscal 2000
Sales to unaffiliated customers (1)     $ 175,993      $ 103,455        $ 43,922     $ 46,428     $        -        $369,798
Intergeographic transfers                  65,117         12,108           8,320            -        (85,545)              -
                                       ------------- -------------- ------------- -------------- ---------------- -----------
Total revenue                           $ 241,110      $ 115,563       $  52,242     $ 46,428     $  (85,545)       $369,798
                                       ------------- -------------- ------------- -------------- ---------------- -----------
Identifiable assets                     $ 146,821      $  84,358       $  12,016     $  4,588     $   (6,274)       $241,509
   
Fiscal 1999
Sales to unaffiliated customers (1)     $ 131,395      $ 68,301        $  37,707     $ 33,961     $        -        $271,364
Intergeographic transfers                  56,024             -            1,480            -        (57,504)              -
                                       ------------- -------------- ------------- -------------- ---------------- -----------
Total revenue                           $ 187,419      $ 68,301        $  39,187     $ 33,961     $  (57,504)       $271,364
                                       ------------- -------------- ------------- -------------- ---------------- -----------
Identifiable assets                     $ 155,163      $ 16,119        $  10,550     $     92     $     (173)       $181,751
</TABLE>

--------------------------------------                                     
(1)  Sales attributed to countries based on the location of the customer.

     Transfers  between  U.S.  and foreign  geographic  areas are made at prices
based on total costs and  contributions  of the supplying  geographic  area. The
Company's  subsidiaries  in Asia,  except for Japan which is a buy/sell  entity,
have derived revenue from  commissions  from domestic  operations in each of the
periods  presented.  These  commission  revenues and expenses are excluded  from
total revenue and operating  income (loss) in the preceding  table. The Japanese
entity's revenue and expenses are included in total revenue and operating income
(loss) in the preceding table.

     No single customer accounted for 10% or more of Trimble's total revenues in
fiscal years 2001, 2000, and 1999.

NOTE 10 -- Restructuring Charges:

     Restructuring  charges of $3.6 million were recorded in fiscal 2001,  which
related to severance  costs. As a result of these actions,  Trimble's  headcount
decreased in fiscal 2001 by 232 individuals. As of December 28, 2001, all of the
restructuring  charges  except for  approximately  $80,000  have been paid.  The
remaining amounts are expected to be paid in fiscal 2002.


                                       62

<PAGE>

NOTE 11 - Long-term Debt:

     Trimble's long-term debt consists of the following:


<TABLE>
<CAPTION>
                                                            December 28,           December 29,
                                                                2001                  2000
--------------------------------------------------------------------------------------------------
 (In thousands)
<S>                                                              <C>                 <C>   
 Credit Facilities:
    Five Year Term Loan                                           $  61,300           $   100,000
    U.S. and Multi-Currency Revolving Credit Facility                40,000                62,000
 Subordinated note                                                   84,000                80,000
 Promissory notes                                                     5,189                 9,037
 Other                                                                   76                    25 
                                                         -------------------    ------------------
                                                                    190,565               251,062
 Less current portion                                                63,468               113,721
                                                         -------------------    ------------------
 Noncurrent portion                                              $  127,097           $   137,341
                                                         ===================    ==================
</TABLE>


     The  following  summarizes  the  Company's  future  repayment   obligations
(excluding interest):

<TABLE>
<CAPTION>
                                                                                                          2006 and
December 28, 2001                         Total       2002       2003       2004      2005      2006       Beyond
----------------------------------------------------------------------------------------------------------------------
 (In thousands)
<S>                                      <C>          <C>       <C>       <C>          <C>      <C>            <C> 
 Credit Facilities:
    Five Year Term Loan                   $ 61,300     $20,000   $24,000   $ 17,300      $ -    $     -        $    -
    U.S. and Multi-Currency                                                                          
      Revolving Credit Facility             40,000     $40,000         -          -        -          -             -
 Subordinated note                          84,000           -         -     84,000        -          -             -
 Promissory notes                            5,189       3,392        84         91      101        110         1,411
 Other                                          76          76         -          -        -          -             -
                                       -------------------------------------------------------------------------------
Total contractual cash obligations        $190,565     $63,468  $ 24,084  $ 101,391    $ 101     $  110      $  1,411
                                       ===============================================================================
</TABLE>


Credit Facilities

     In July 2000,  Trimble  obtained  $200  million of senior,  secured  credit
facilities  (the "Credit  Facilities")  from a syndicate of banks to support the
acquisition of the Spectra  Precision  Group and the Company's  ongoing  working
capital  requirements  and to refinance  certain  existing debt. At December 28,
2001,  Trimble  has  approximately  $101  million  outstanding  under the Credit
Facilities, comprised of $61.3 million under a $100 million five-year term loan,
$30 million under a $50 million  three-year  U.S.  dollar only revolving  credit
facility   ("revolver"),   and  $10  million  under  a  $50  million  three-year
multi-currency revolver. The Company has access to $60 million of cash under the
terms of its three year revolver  loans.  The Company has commitment fees on the
unused  portion  of  0.5%  if  the  leverage  ratio  (which  is  defined  as all
outstanding debt,  excluding the seller  subordinated note, over Earnings before
Interest,  Taxes,  Depreciation  and  Amortization  (EBITDA),  as defined in the
related  agreement)  is 2.0 or greater and 0.375% if the leverage  ratio is less
than 2.0.

     Pricing for any  borrowings  under the Credit  Facilities was fixed for the
first six months at LIBOR  plus 275 basis  points  and is  thereafter  tied to a
formula,  based on the Company's  leverage ratio.  The weighted average interest
rate under the Credit Facilities was 5.7% for the month of December 28, 2001.

     The Credit  Facilities  are secured by all material  assets of the Company,
subject  to foreign  tax  considerations.  If  Trimble  is able to  achieve  and
maintain a leverage  ratio  (Debt/EBITDA)  of 2.0x or less for four  consecutive
quarters,  the security for the Credit  Facilities  will be released.  Financial
covenants of the Credit

                                       63

<PAGE>

Facilities include leverage,  fixed charge, and minimum net worth tests.  Should
the Company default on one or more covenants, the Company will attempt to obtain
either waivers or amendments to the Facilities.

     Two of the Company's financial covenants, minimum fixed charge coverage and
maximum  leverage  ratios are  sensitive to EBITDA.  EBITDA is correlated to the
Company's  results  of  operations.  Due to  uncertainties  associated  with the
downturn in the worldwide economy and other factors,  future revenues by quarter
are difficult to forecast.  New cost cutting  measures have been put in place by
the management team;  however,  if revenues should decline at a higher rate than
cost cutting measures on a quarter to quarter basis, the Company may violate the
two above mentioned financial covenants.

Subordinated Note

     In July 2000, as part of the  acquisition of the Spectra  Precision  Group,
Trimble issued  Spectra  Physics  Holdings USA, Inc. a subordinated  seller note
that has a stated two year  maturity ($40 million was due in fiscal 2001 and $40
million in fiscal 2002). On March 20, 2002, the Company  renegotiated  the terms
of the  subordinated  note and  under the  revised  agreement,  Spectra  Physics
Holdings,  Inc., a subsidiary  of Thermo  Electron,  will extend the term of the
note until July 14, 2004, at the current  interest rate of  approximately  10.4%
per year. As a result of the amendment,  the outstanding  balance of the note at
December 28, 2001 of $84,000 was reclassified as long-term.

     In  addition,  on March 20,  2002,  the Company  used $21.2  million of net
proceeds  from its private  placement to retire  accrued  interest and principal
under the subordinated note, reducing the outstanding  principal amount to $68.7
million.  To the extent that  interest and  principal  due on the maturity  date
becomes  delinquent,  an  additional  4%  interest  rate per annum  will  apply.
Currently, the note bears interest at a weighted average rate of 10.4%.

     The Credit  Facilities  allow  Trimble to repay the seller note at any time
(in  part or in  whole),  provided  that  (a)  Trimble's  leverage  ratio  (Debt
(excluding  the seller  note)/EBITDA)  prior to such repayment is less than 1.0x
and (b) after giving effect to such repayment  Trimble would have (i) a leverage
ratio (Debt (excluding any remaining portion of the seller note)/EBITDA) of less
than 2.0x and (ii) cash and  unused  availability  under  the  revolvers  of the
Credit  Facilities  of at  least  $35  million.  The  note,  by  its  terms,  is
subordinated to the Credit Facilities.

Promissory Notes

     The  promissory  notes at the end of fiscal  2001  include  a $3.3  million
obligation  to the former  owners of ZSP Geodetic  Systems GmbH, a subsidiary of
Trimble,  assumed by the Company when it acquired the Spectra  Precision  Group.
The $3.3 million debt  obligation  has a stated  maturity of September  2002 and
bears interest at 6%.

     In addition,  these notes  include a $1.9 million  promissory  note arising
from the purchase of a building for the Company's  Corvallis,  Oregon site.  The
note is payable in monthly  installments  through  April 2015 bearing a variable
interest rate (7.140% at December 28, 2001).

     The  Company's  weighted  average  cost of debt is  approximately  8.0% for
fiscal 2001 and 9.5% for fiscal 2000.

                                       64

<PAGE>


Note 12 - Lease Obligations and Commitments:

     Trimble's  principal  facilities  in the United  States  are  leased  under
noncancelable  operating  leases  that  expire at various  dates  through  2011.
Trimble  has options to renew  certain of these  leases for an  additional  five
years.  The Company also leases  facilities under operating leases in the United
Kingdom, Sweden and Germany that expire in 2005.

Future minimum payments required under noncancelable operating leases areas
follows:

                                                 Operating
                                               Lease Payments
------------------------------------------- ---------------------------
(In thousands)

2002 *                                                       $   9,616
2003 *                                                           9,833
2004                                                             6,251
2005                                                             5,843
2006                                                               784
Thereafter                                                       2,089
                                                            ------------     
Total                                                       $   34,416
                                                            ============

     Rent expense under operating leases was $13.1 million in fiscal 2001, $10.6
million in fiscal 2000 and $8.1 million in fiscal 1999.

     Fiscal  2002 and 2003 are net of sublease  income of $3.1  million and $1.3
million, respectively.

Note 13 - Fair Value of Financial Instruments:

     Statement of Financial  Accounting  Standards No. 107,  "Disclosures  about
Fair  Value of  Financial  Instruments"  requires  disclosure  of the  following
information about the fair value of certain  financial  instruments for which it
is currently practicable to estimate such value. None of the Company's financial
instruments are held or issued for trading  purposes.  The carrying  amounts and
fair values of Trimble's financial instruments are as follows:

<TABLE>
<CAPTION>
                                                      Carrying              Fair         Carrying          Fair
                                                       Amount               Value         Amount          Values
                                                  ------------------    ------------  -------------- ----------------
                                                          December 28, 2001                December 29, 2000           
---------------------------------------------------------------------------------------------------------------------
  (In thousands)
<S>                                                         <C>            <C>             <C>              <C>    
Assets:
Cash and Cash equivalents (See Note 1)                       $ 31,078       $ 31,078        $40,876          $40,876
Forward foreign  currency  exchange  contracts (See
Note 6)                                                           191            191             50               50
Accounts Receivable                                            71,680         71,680         83,600           83,600

Liabilities:
Subordinated notes (See Note 11)                             $ 84,000       $ 81,290        $80,000          $69,698
Credit Facilities (See Note 11)                               101,300        101,300        162,000          162,000
Promissory notes (See Note 11)                                  5,189          4,958          9,037            7,876
Accounts Payable                                               21,494         21,494         26,448           26,448
</TABLE>


     The fair value of the subordinated notes, bank borrowings,  promissory note
and the  long-term  commitment  have been  estimated  using an  estimate  of the
interest  rate  Trimble  would have had to pay on the  issuance  of notes with a
similar  maturity,  and discounting the cash flows at that rate. The fair values
do not give an indication of the amount that Trimble would currently have to pay
to extinguish any of this debt.

                                       65

<PAGE>

     The fair value of forward foreign exchange contracts is estimated, based on
quoted market prices of comparable  contracts,  and these contracts are adjusted
to the fair value at the end of every month.

Note 14 - Income Taxes:

     Trimble's income tax provision consists of the following:

                                  December 28,    December 29,    December 31,
Fiscal Years Ended                   2001             2000            1999
---------------------------- ------------------ --------------- ----------------
(In thousands)

Federal:
      Current                        $-              $1,408         $1,089
      Deferred                        -                   -              -
                             ------------------ --------------- ----------------
                                     -                1,408          1,089
                             ------------------ --------------- ----------------

State:
      Current                       58                 144             196
      Deferred                       -                   -               -
                             ------------------ --------------- ----------------
                                    58                 144             196
                             ------------------ --------------- ----------------

Foreign:
       Current                     2,729               931             770
       Deferred                     (887)             (908)             18
                             ------------------ --------------- ----------------
                                   1,842                23             788
                             ------------------ --------------- ----------------
Income tax provision              $1,900           $ 1,575          $2,073
                             ================== =============== ================

     The domestic (loss) income from continuing  operations  before income taxes
(including   royalty   income   subject  to  foreign   withholding   taxes)  was
approximately  ($29.3 million),  $14.4 million and $19.7 million in fiscal years
2001, 2000 and 1999, respectively.

     The income tax provision  differs from the amount  computed by applying the
statutory  federal  income tax rate to income before taxes.  The sources and tax
effects of the differences are as follows:

<TABLE>
<CAPTION>
                                                        December 28,     December 29,    December 31, 1999
Fiscal Years Ended                                          2001             2000
----------------------------------------------------- ----------------- --------------- --------------------
(Dollars in thousands)
<S>                                                       <C>                <C>             <C>    
Expected tax from  continuing  operations  at 35% in
all years                                                  $   (7,557)        $5,516          $7,258

Operating loss not utilized (utilized)                          9,704         (5,115)         (6,176)
 
Foreign withholding taxes                                         115            141             299

Foreign tax rate differential                                    (970)           307             109

Goodwill amortization                                             747            370               -

Other                                                            (139)           356             583
                                                      ----------------- --------------- --------------------
Income tax provision                                        $   1,900        $ 1,575          $2,073
                                                      ================= =============== ====================
       Effective tax rate                                         (9%)           10%             10%
                                                      ================= =============== ====================
</TABLE>


                                       66

<PAGE>



     The components of deferred taxes consist of the following:

                                                   December 28,     December 29,
                                                       2001             2000
------------------------------------------------------------------ -------------
(In thousands)

Deferred tax liabilities:
     Purchased intangibles                              $ 6,933       $ 8,230
    Other individually immaterial items                     300           288
                                                   --------------- -------------
           Total deferred tax liabilities                 7,233         8,518
                                                   --------------- -------------
Deferred tax assets:
   Inventory valuation differences                       11,741         8,836
   Expenses not currently deductible                      5,103         5,656
   Federal credit carryforwards                           7,300         8,686
   Deferred revenue                                         808         2,674
   State credit carryforwards                             5,377         4,725
   Warranty                                               2,596         2,455
   Depreciation                                           6,091         1,724
   Federal net operating loss (NOL) carryforward         11,086         1,028
   Other individually immaterial items                    1,147         2,751
                                                   --------------- -------------
Total deferred tax assets                                51,249        38,535

Valuation allowance                                     (50,974)      (37,861)
                                                   --------------- -------------
Total deferred tax assets                                   275           674
                                                   --------------- -------------
Total net deferred tax liabilities                   $   (6,958)      $(7,844)
                                                   =============== =============

     The federal NOL  carryforwards  listed above expire  beginning in 2018. The
federal  credit  carryforwards  expire  beginning  in  2004.  The  state  credit
carryforwards do not expire.

     Valuation  allowances  reduce the  deferred tax assets to that amount that,
based upon all available evidence,  is more likely than not to be realized.  The
valuation  allowance  increased by $13.1  million in 2001 and  increased by $2.6
million in 2000.  Approximately  $11.9  million of the  valuation  allowance  at
December 28, 2001 relates to the tax benefits of stock option deductions,  which
will be credited to equity if and when realized.

Note 15 - Shareholder's Equity:

Common Stock

     On December 21, 2001,  Trimble  completed a private  placement of 1,783,337
shares of its common  stock at a price of $15.00 per share to certain  qualified
investors,  resulting in gross  proceeds of  approximately  $26.8 million to the
Company.  On January  15,  2002,  Trimble  had a second  closing of the  private
placement issuing 1,280,004 shares of common stock at $15.00 per share resulting
in gross proceeds of an additional $19.2 million.

1993 Stock Option Plan

     In 1992,  Trimble's  Board of Directors  adopted the 1993 Stock Option Plan
("1993 Plan").  The 1993 Plan, as amended to date and approved by  shareholders,
provides for the granting of incentive and nonstatutory  stock options for up to
6,375,000  shares of Common Stock to  employees,  consultants  and  directors of
Trimble.  Incentive stock options may be granted at exercise prices that are not
less than 100% of the fair  market  value of Common  Stock on the date of grant.
Employee  stock options  granted under the 1993 Plan have 120-month  terms,  and
vest at a rate of 20% at the first anniversary of grant, and monthly  thereafter
at an annual rate of 20%, with full vesting  occurring at the fifth  anniversary
of grant. The exercise price of nonstatutory stock options issued under the 1993
Plan must be at least 85% of the fair market  value of Common  Stock on the date
of grant. As of December 28, 2001,

                                       67

<PAGE>

options to purchase  4,297,981 shares were outstanding,  and 436,348 shares were
available for future grant under the 1993 Plan.

1990 Director Stock Option Plan.

     In December 1990,  Trimble adopted a Director Stock Option Plan under which
an aggregate of 380,000  shares of Common Stock have been  reserved for issuance
to non-employee  directors as approved by the  shareholders to date. At December
28, 2001,  options to purchase 198,333 shares were outstanding and 60,416 shares
were available for future grants under the Director Stock Option Plan.

1992 Management Discount Stock Option Plan.

     In 1992, Trimble's Board of Directors approved the 1992 Management Discount
Stock  Option  Plan  ("Discount   Plan").   Under  the  Discount  Plan,  300,000
nonstatutory  stock options were  reserved for grant to management  employees at
exercise prices that may be significantly  discounted from the fair market value
of Common Stock on the dates of grant.  Options are  generally  exercisable  six
months from the date of grant. As of December 28, 2001,  there were 4,974 shares
available for future grants. For accounting purposes, compensation cost on these
grants is measured by the excess over the discounted exercise prices of the fair
market  value of  Common  Stock on the  dates of  option  grant.  There  were no
discounted  options  granted in the plan in fiscal  2001,  2000 and 1999.  As of
December 28, 2001, options to purchase 125,000 shares were outstanding under the
1992 Management Discount Stock Option Plan.

1988 Employee Stock Purchase Plan.

     In 1988, Trimble established an employee stock purchase plan under which an
aggregate  of 3,150,000  shares of Common  Stock have been  reserved for sale to
eligible  employees as approved by the  shareholders  to date.  The plan permits
full-time  employees to purchase Common Stock through payroll  deductions at 85%
of the lower of the fair market value of the Common Stock at the beginning or at
the end of each  six-month  offering  period.  In fiscal 2001 and 2000,  208,154
shares  and  131,657  shares,  respectively,  were  issued  under  the  plan for
aggregate   proceeds  to  the  Company  of  $3.1   million  and  $1.2   million,
respectively.  At December  28, 2001,  the number of shares  reserved for future
purchases by eligible employees was 545,812.

SFAS 123 Disclosures

     As stated in Note 1,  Trimble  has  elected  to follow  APB 25 and  related
interpretations  in accounting for its employee stock options and stock purchase
plans.  The  alternative  fair  value  accounting  provided  for under  SFAS 123
requires use of option pricing models that were not developed for use in valuing
employee  stock  options.  Under APB 25, because the exercise price of Trimble's
employee stock options  equals the market price of the underlying  stock on date
of grant, no compensation expense is recognized.

     Pro forma  information  regarding net income (loss) and earnings (loss) per
share  is  required  by SFAS  123 and has  been  determined  as if  Trimble  had
accounted for its employee stock options and purchases  under the employee stock
purchase  plan using the fair value method of SFAS 123. The fair value for these
options was estimated at the date of grant using a Black-Scholes  option-pricing
model with the following weighted-average  assumptions for fiscal 2001, 2000 and
1999:

<TABLE>
<CAPTION>
                                            December 28,     December 29,     December 31,
                                                2001             2000             1999
                                           ---------------- --------------- -----------------
<S>                                             <C>             <C>              <C>  
Expected dividend yield                              -                -               -
Expected stock price volatility                  69.59%          66.41%            59.58%
Risk free interest rate                           4.15%           6.21%             6.34%
Expected life of options after vesting             1.20            1.22              1.21
</TABLE>


     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating  the fair value of traded  options that have no vesting  restrictions
and are fully transferable. In addition, option valuation models require the

                                       68

<PAGE>


input of highly  subjective  assumptions,  including  the  expected  stock price
volatility.  Because  Trimble's  employee  stock  options  have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is  amortized  to expense  over the  options'  vesting  period,  and the
estimated  fair value of purchases  under the employee  stock  purchase  plan is
expensed  in the year of  purchase.  The  effects  on pro  forma  disclosure  of
applying  SFAS 123 are not  likely to be  representative  of the  effects on pro
forma disclosure of future years. Trimble's pro forma information is as follows:

<TABLE>
<CAPTION>
                                                      December 28,     December 29,   December 31, 1999
Fiscal Years Ended                                        2001             2000
--------------------------------------------------- ----------------- --------------- ------------------
(Dollars in thousands)
<S>                                                      <C>                <C>               <C>    
Net income (loss) - as reported                           $ (22,879)         $14,185            $21,593

Net income (loss) - proforma                              $ (35,597)         $ 5,898            $16,377

Basic income (loss) per share - as reported               $   (0.93)         $  0.60            $  0.96

Basic income (loss) per share - proforma                  $   (1.44)         $  0.25            $  0.73
 
Diluted income (loss) per share - as reported             $   (0.93)         $  0.55            $  0.95

Diluted income (loss) per share - proforma                $   (1.44)         $  0.23            $  0.72
</TABLE>


     Exercise  prices for options  outstanding  as of December 28, 2001,  ranged
from $8.00 to $51.69.  The weighted average remaining  contractual life of those
options is 7.49  years.  In view of the wide range of exercise  prices,  Trimble
considers it  appropriate  to provide the following  additional  information  in
respect of options outstanding:

<TABLE>
<CAPTION>
                                                                                            Currently exercisable
                                                                                    ---------------------------------------
                                                  Total           Weighted-average                       Weighed-average
                              Number        Weighted-average          Remaining             Number         Exercise price
         Range            (in thousands)     Exercise price       contractual life      (in thousands)
------------------------- ---------------- -------------------- ---------------------- ----------------- --------------------
<S>                             <C>                  <C>                        <C>           <C>                 <C>    
$8.0000  - $8.3125                493,673              $8.0401                   7.07           273,704              $8.0427
$8.3700  - $10.1250               488,077              $9.5614                   4.61           370,785              $9.5164
$10.6875 - $11.9375               528,049             $11.7003                   7.35           248,201             $11.6736
$12.0000 - $15.3750               491,852             $14.1806                   5.14           455,663             $14.2705
$15.4500 - $17.1500               573,750             $16.6946                   9.36            41,696             $17.0605
$17.4700 - $17.4700               488,188             $17.4700                   9.53                 -            $ 0.00000
$17.5000 - $19.5000               477,223             $18.4347                   6.83           293,025             $18.2598
$19.5625 - $34.1250               338,922             $24.7012                   8.16           122,867             $25.1293
$41.1250 - $41.1250               712,753             $41.1250                   8.65           190,292             $41.1250
$51.6875 - $51.6875                33,100             $51.6875                   8.55             9,893             $51.6875
------------------------- ----------------    -----------------  --------------------  ----------------   -------------------
$8.0000 - $51.6875              4,625,587             $19.0437                   7.49         2,006,126             $16.2584
</TABLE>


                                       69

<PAGE>

Activity during fiscal 2001, 2000, and 1999 under the combined plans was as
follows:

<TABLE>
<CAPTION>

                                          December 28, 2001             December 29, 2000           December 31, 1999
                                    ------------------------------- --------------------------- ---------------------------
                                                    Weighted average                Weighted                    Weighted
                                                     exercise price                 average                      average
Fiscal Years Ended                       Options                      Options    exercise price   Options    exercise price
-------------------------------------- ------------ ----------------- ---------- --------------- ----------- ----------------
(In  thousands,  except for per share
data)
<S>                                         <C>              <C>         <C>            <C>          <C>             <C>
Outstanding at beginning of year             4,260            $19.09      4,009          $12.36       3,026           $13.64
     Granted                                 1,070             17.08      1,379           34.39       1,813            10.22
     Exercised                               (291)             12.91      (706)           13.08       (135)            11.64
     Cancelled                               (418)             18.55      (422)           15.51       (695)            14.03
                                        ------------                   ----------                 -----------
Outstanding at end of year                   4,621            $19.04      4,260          $19.07       4,009           $12.36

Exercisable at end of year                   2,006            $16.26      1,429          $12.94       1,334           $13.68

Weighted-average    fair   value   of
options granted during year                                    $9.58                     $19.04                        $5.51
</TABLE>


Non-statutory Options.

     On May 25, 2000, Trimble entered into an agreement to grant a non-statutory
option to purchase up to 40,000  shares of common stock at an exercise  price of
$13.44 per share. On October 29, 2001, the non-statutory option holder exercised
their rights to acquire  10,090 shares of common stock at an effective  price of
$13.44  per share  based on  netting  provisions,  with no net  proceeds  to the
Company.

     On May 3, 1999,  Trimble entered into an agreement to grant a non-statutory
option to purchase up to 30,000  shares of common stock at an exercise  price of
$9.75 per share, with an expiration date of March 29, 2004.

     As of  December  28,  2001,  these  non-statutory  options  have  not  been
exercised.

Warrants.

     On May 31, 2001, a warrant holder exercised their rights to acquire 400,000
shares of common stock at an effective  price of $10.95 per share for  aggregate
net proceeds to the Company of $4.4 million.

     On December 21, 2001,  Trimble  granted  five-year  warrants to purchase an
additional 356,670 shares of common stock at an exercise price of $19.475. These
warrants  were granted as part of a private  placement of the  Company's  common
stock.

     On January 15, 2002, in connection  with the second closing of the December
21, 2001 private  placement,  Trimble granted five-year  warrants to purchase an
additional 256,002 shares of common stock, subject to certain adjustments, at an
exercise price of $19.475 per share. Common Stock Reserved for Future Issuances.

     As of December 28, 2001,  Trimble had reserved  6,025,534 common shares for
issuance upon exercise of options and warrants outstanding and options available
for grant under the 1993 Plan,  the 1990 Director  Plan,  and the Discount Plan,
and available for issuance under the 1988 Employee Stock Purchase Plan.


                                       70

<PAGE>



Note 16 - Benefit Plans:

401(k) Plans:

     Under Trimble's  401(k) Plan,  U.S.  employee  participants  may direct the
investment of contributions to their accounts among certain mutual funds and the
Trimble  Navigation  Limited  Common Stock Fund. The Trimble Fund sold net 3,608
shares of Common Stock for an aggregate of $113,000 in fiscal 2001.  Trimble, at
its discretion, matched individual employee 401(k) Plan contributions up to $100
per month  for the  first  six  months  of  fiscal  2001.  Trimble  changed  its
discretionary  match effective July 1, 2001, to fifty cents of every dollar that
the employee contributes to the plan up to 5% of the employee's annual salary to
an annual maximum of $2,500. Trimble's matching contributions to the 401(k) Plan
were $1.2 million in fiscal  2001,  $0.8 million in fiscal 2000 and $1.0 million
in fiscal 1999.  Certain of the Company's  subsidiaries  participate in a 401(k)
Plan in which the Company  matched fifty cents of every dollar that the employee
contributes to the plan up to 5 % of the employees  annual  contribution for the
first six months of fiscal 2001.  From July 1, 2001 they matched  Fifty cents of
every  dollar  that  the  employee  contributes  to  the  plan  up to 5% of  the
employee's annual salary to an annual maximum of $2,500. During fiscal 2001, the
Company  contributed $0.5 million to the plan. The Company's Tripod Data Systems
subsidiary  matches one dollar for every three  dollars that the  employee  puts
into the plan up to 8% of their annual  salary  through  December 5, 2001. As of
December 5, 2001,  employees of Tripod Data Systems were  converted  over to the
Trimble plan. Through December 5, 2001, the Company  contributed $67,000 to this
plan. Certain of the Company's  subsidiaries merged into the Trimble 401(k) plan
on March 9, 2002.

Profit-Sharing Plan:

     In 1995,  Trimble introduced an employee  profit-sharing  plan in which all
employees,  excluding executives and certain levels of management,  participate.
The plan  distributes to employees  approximately  5% of quarterly income before
taxes.  Payments  under the plan  during  fiscal  2001,  2000 and 1999 were $0.9
million, $2.1 million, and $1.2 million, respectively.

Defined Contribution Pension Plans:

     Certain  of  the  Company's  subsidiaries  participate  in  European  state
sponsored  pension plans.  Contributions  are based on specified  percentages of
employee  salaries.  For these  plans,  the Company  contributed  and charged to
expense  $40,000 as of December 28, 2001 and $275,000 from July 14, 2000 through
December 29,2000.

Defined Benefit Pension Plan:

     The  Company's  Swedish and German  subsidiaries  have an unfunded  defined
benefit pension plan that covered  substantially all of its full-time  employees
through  1993.  Benefits are based on a  percentage  of eligible  earnings.  The
employee must have had a projected period of pensionable  service of at least 30
years as of 1993. If the period was shorter,  the pension  benefits were reduced
accordingly.  Active  employees  do not accrue any future  benefits;  therefore,
there is no service cost and the liability will only increase for interest cost.

     Net periodic benefit costs in fiscal 2001 were not material.


                                       71

<PAGE>


     The fair value of the plan assets were as follows:

                                                  December 28,      December 29,
                                                      2001              2000
--------------------------------------------------------------------------------
(In thousands)

Fair value of plan assets at beginning of year       $ 465               $ 404
Actual return on plan assets                            56                  63
Employer contribution                                    -                   -
Plan participants' contributions                        33                  30
Benefits paid                                            -                   -
Translation adjustment                                (51)                (32)
                                                -------------- -----------------
Fair value of plan assets at end of year             $ 503               $ 465
                                                ============== =================

     The Company's defined benefit plan activity was as follows:

                                                   December 28,     December 29,
                                                      2001              2000
--------------------------------------------------------------------------------
(In thousands)

Change in Benefit Obligation:
  Benefit obligation at beginning of year           $  4,811        $    3,927
   Interest Cost                                         134               233
   Translation adjustment                              (312)                15
   Actuarial (gain) loss                                  73                 - 
                                               --------------- ----------------
Benefit obligation at end of year                    $ 4,706        $    4,175

Unrecognized Prior Service Cost                            -                 -
Unrecognized Net Actuarial Gain                            -                 -
                                               -------------- -----------------
Accrued Pension Costs (included in accrued
    liabilities)                                     $ 4,706        $    4,175
                                               ============== =================

     Actuarial  assumptions used to determine the net periodic pension costs for
the year ended December 28, 2001 were as follows:

                                Swedish Subsidiary      German Subsidiaries
                               ----------------------- ----------------------
Discount Rate                             5.5%                  6.25%
Rate of Compensation Increase             2.5%                   1.5%

Note 17 - Earnings Per Share:

     The following data show the amounts used in computing  earnings  (loss) per
share and the  effect  on the  weighted-average  number  of  shares of  dilutive
potential Common Stock.

<TABLE>
<CAPTION>
                                                     December 28,     December 29,    December 31,
Fiscal Years Ended                                       2001             2000            1999
--------------------------------------------------- ---------------- --------------- ---------------
(In thousands, except per share data)
<S>                                                     <C>              <C>             <C>   
Numerator:
  Income available to common shareholders:
    Used in basic and diluted income (loss)
       per share from continuing operations             $  (23,492)       $  14,185       $  18,662
    Used in basic and diluted income
       per share from discontinued operations                  613                -           2,931
                                                        ------------      ---------      ----------
    Used in basic and diluted income (loss)
       per share                                        $  (22,879)       $  14,185       $  21,593
                                                        ===========       =========       =========

                                       72

<PAGE>

Denominator:
  Weighted-average number of common shares
      used in based income (loss) per share                                  23,601          22,424
                                                        24,727

   Effect of dilutive securities(using Treasury 
      stock method):
      Common stock options                                 -                  2,098             382
      Common stock warrants                                -                    277              46
                                                       ------------       ---------      ----------
  Weighted-average number of common shares
      and dilutive potential common shares used
      in diluted income (loss) per share                    24,727           25,976          22,852
                                                       ===========        =========       =========

Basic income (loss) per share from continuing
  operations                                             $   (0.95)        $   0.60        $   0.83
Basic income per share from discontinued
   operations                                                 0.02                -            0.13
                                                       ------------       ---------      ----------
Basic income (loss) per share                            $   (0.93)       $    0.60        $   0.96
                                                       ============       =========       =========

Diluted income (loss) per share from
  continuing operations                                  $   (0.95)        $   0.55        $   0.82
Diluted  income per share from discontinued
   operations                                                 0.02                -            0.13
                                                       ------------       ---------      ----------
Diluted income (loss) per share                          $   (0.93)       $    0.55        $   0.95
                                                       ============       =========       =========
</TABLE>


     Options and warrants were not included in the  computation  of earnings per
share in 2001 because the Company reported a net loss in fiscal 2001. If Trimble
had reported net income in 2001,  additional  938,000 common  equivalent  shares
related to  outstanding  options and  warrants  would have been  included in the
calculation of diluted loss per share.

Note 18 - Comprehensive Income (Loss):

     The components of other comprehensive  income (loss), net of related tax as
follows:

                                        December 28,  December 29,  December 31,
Fiscal Years Ended                          2001          2000          1999
--------------------------------------------------------------------------------
(In thousands)

Cumulative foreign currency translation
   adjustments                           $   (9,766)   $  (8,045)     $   (107)
Net loss on interest rate swap                 (203)           -             -
Net unrealized gain (loss) on investments        16          123      $   (142)
                                         -----------   ----------     ---------
   Other comprehensive income (loss)     $   (9,953)   $  (7,922)     $   (249)
                                         ===========   ==========     =========

                                       73

<PAGE>

     Accumulated other comprehensive  income (loss) on the consolidated  balance
sheets  consists of  unrealized  gains on  available  for sale  investments  and
foreign currency translation adjustments.

The components of accumulated other comprehensive income (loss), net of related
tax as follows:

<TABLE>
<CAPTION>
                                                         December 28,       December 29,
                                                             2001               2000
------------------------------------------------------------------------- -----------------
(In thousands)
<S>                                                   <C>                <C>    
Cumulative foreign currency translation adjustments    $       (18,729)   $        (8,963)
Net loss on interest rate swap                                    (203)                 -
Net unrealized gain on investments                                  16                  -
                                                       ------------------ -----------------
   Accumulated other comprehensive loss                $       (18,916)   $        (8,963)
                                                       ================== =================
</TABLE>


Note 19 - Related-Party Transactions:

Related-Party Lease

     The Company  currently  leases office space in Ohio from an  association of
three  individuals,  two of whom  are  employees  of one of the  Company's  U.S.
operating units, under a noncancelable  operating lease arrangement  expiring in
2011.  The annual rent is  $345,000  and is subject to  adjustment  based on the
terms of the lease. The Consolidated  Statements of Operations  include expenses
from this  operating  lease of $345,405  for fiscal 2001 and $172,702 for fiscal
2000.


Related -Party Notes Receivable

     The Company has notes receivable from officers and employees of $955,000 as
of December 28, 2001 and $1.3  million as of December  29, 2000.  The notes bear
interest from 4.75% to 6.62% and have an average remaining life of 3 years.

Note 20 - Statement of Cash Flow Data:

<TABLE>
<CAPTION>
                                                       December 28, 2001   December 29, 2000    December 31,
Fiscal Years Ended                                                                                  1999
------------------------------------------------------ ------------------ -------------------- ----------------
(In thousands)

Supplemental disclosure of cash flow information:
<S>                                                      <C>                  <C>                 <C>    
Interest paid                                             $ 17,363             $  9,037            $ 3,391
                                                          --------             --------            -------
Income taxes paid                                         $    825             $  3,835            $  866
                                                          --------             --------            -------
</TABLE>


                                       74

<PAGE>

Note 21 - Litigation:

     In January 2001,  Philip M. Clegg instituted a lawsuit in the United States
District   Court  for  the   District  of  Utah,   Central   Division,   against
Spectra-Physics  Laserplane,  Inc.,  Spectra Precision AB and Trimble Navigation
Limited.  The  complaint  alleges  claims of  infringement  of U.S.  Patent  No.
4,807,131,  breach of contract and unjust enrichment. The suit seeks damages and
an  accounting  for moneys  alleged to be owed under a license  agreement,  plus
interest and attorney fees.

     In August 2001,  Lockheed Martin  Corporation  served a complaint  alleging
patent  infringement  of U.S.  Patent  No.  4,949,089  on the  Company,  Spectra
Precision, Inc., Leica Geosystems, Inc., Sokkia Corporation and Carl Zeiss, Inc.
The  lawsuit  was filed in the  United  States  District  Court for the  Eastern
District  of  Texas,  Marshall  Division.  Lockheed  seeks  treble  damages,  an
injunction and attorney fees.

     In November 2001,  Qualcomm Inc. filed a lawsuit against the Company in the
Superior Court of the State of California.  The complaint  alleges claims for an
unspecified amount of money damages arising out of Qualcomm's  perceived lack of
assurances in early 1999 that the Company's products purchased by Qualcomm would
work properly  after a scheduled  week number  rollover event that took place in
August,  1999. Qualcomm is the only customer to make a claim against the Company
based on the week number rollover event.

     In the opinion of management, the resolutions of the foregoing lawsuits are
not expected to have a material adverse effect on the overall financial position
of the  Company.  However,  depending on the amount and timing,  an  unfavorable
resolution  in any one of these matters  could  materially  affect the Company's
future operations or cash flow in a particular period.

     The Company is also a party to other  disputes  incidental to its business.
The Company believes that the ultimate liability of the Company as a
result of such disputes, if any, would not be material to its overall financial
position, results of operations, or liquidity.

                                       75

<PAGE>

Note 22 - Selected Quarterly Financial Data (unaudited):

<TABLE>
<CAPTION>
                                                 First           Second            Third           Fourth
                                                Quarter          Quarter          Quarter          Quarter
------------------------------------------- ---------------- ---------------- ---------------- ----------------
(In thousands, except per share data)
<S>                                             <C>              <C>              <C>              <C>   
Fiscal 2001
     Total revenue                               $ 117,863        $ 133,587        $ 117,437        $ 106,405
     Gross margin                                   57,500           65,531           60,315           53,889
     Net loss from continuing  operations          (11,587)          (1,974)          (2,686)          (7,245)
     Net income from discontinued
       operations                                        -                -                -              613
     Net loss                                      (11,587)          (1,974)          (2,686)          (6,632)

     Basic net  loss per share from
        continuing operations                    $   (0.48)       $   (0.08)       $   (0.11)       $   (0.28)
     Basic net  income per share from
        discontinued operations                         -                -                -              0.02
                                            ---------------- ---------------- ---------------- ----------------
     Basic net loss per share                    $   (0.48)       $   (0.08)       $   (0.11)       $   (0.26)
                                            ================ ================ ================ ================

     Diluted net loss per share from
        continuing operations                    $   (0.48)       $   (0.08)       $   (0.11)       $   (0.28)
     Diluted net income per share from
        discontinued operations                          -                -                -             0.02
                                            ---------------- ---------------- ---------------- ----------------
     Diluted net loss per share                  $   (0.48)       $   (0.08)       $   (0.11)       $   (0.26)
                                            ================ ================ ================ ================

Fiscal 2000
     Total revenue                               $ 65,140         $ 71,264         $ 109,227        $ 124,167
     Gross margin                                  37,045           41,885            55,932           61,699 
     Net income (loss)                              8,712           12,357            (4,268)          (2,616)
                                            ---------------- ---------------- ---------------- ----------------
     Basic net income (loss) per share           $   0.38         $   0.53         $   (0.18)       $   (0.11)
                                            ================ ================ ================ ================
                                            ---------------- ---------------- ---------------- ----------------
     Diluted net income (loss) per share         $   0.35         $   0.48         $   (0.18)       $   (0.11)
                                            ================ ================ ================ ================
</TABLE>


     Significant quarterly items include the following: (i) in the first quarter
of 2001 a $2.0  million  charge or $0.08 per diluted  share  relating to loss on
sale of Air Transport business and the exiting of certain product lines; (ii) in
the second  quarter of 2001 a $0.9 million  charge,  or $0.04 per diluted  share
relating  to work  force  reduction;  and $0.2  million  in  income or $0.01 per
diluted share relating to a gain on the sale of a minority investment;  (iii) in
the third  quarter of 2001 a $0.4  million  charge,  or $0.01 per diluted  share
relating  to work force  reduction;  (iv) in the  fourth  quarter of 2001 a $0.5
million charge,  or $0.02 per diluted share relating to work force reduction;  a
$0.1 million gain,  or $0.01 per diluted  share on sale of business;  and a $0.1
million  charge,  or $0.01 per diluted  share  relating to the  write-down of an
investment.

     Significant quarterly items include the following: (i) in the third quarter
of 2000, net income includes an $2.9 million charge, or $0.11 per diluted share,
for an inventory purchase accounting adjustment; a $1.1 million charge, or $0.05
per diluted share relating to a debt  extinguishment;  a $0.7 million charge, or
$0.03 per diluted share for relocation  costs related to opening a new office in
Boulder,  Colorado;  and $1.0  million in  income,  or $0.04 per  diluted  share
relating  to a gain on the sale of a  minority  investment;  (ii) in the  fourth
quarter of 2000, net income includes a $1.7 million charge, or $0.07 per diluted
share, for an inventory purchase accounting  adjustment;  $0.3 million, or $0.01
per diluted share,  of a gain on the sale of a minority  investment;  and a $0.2
million  charge,  or $0.01 per diluted  share,  of  relocation  costs related to
opening a new office in Boulder, Colorado.

                                       76

<PAGE>


Note 23 - Subsequent Event:

     On March 20, 2002,  the Company used $21.2 million of net proceeds from its
private   placement  to  retire  accrued   interest  and  principal   under  its
subordinated  note with Spectra Physics  Holdings,  Inc., a subsidiary of Thermo
Electron,  reducing  the  outstanding  principal  amount  to $68.7  million.  In
addition, the Company renegotiated the terms of the subordinated note. Under the
revised agreement, the maturity of the note was extended until July 14, 2004, at
the current  interest rate of  approximately  10.4% per year. In connection with
the amendment, on March 20, 2002, the Company agreed to issue to Thermo Electron
a five-year  warrant to purchase  200,000 shares of Trimble's common stock at an
exercise price of $15.11.  Under the terms of the  agreement,  beginning on July
14, 2002,  Trimble will also issue five-year  warrants to purchase 250 shares of
common stock on a quarterly basis for every $1 million of principal and interest
outstanding  until the note is paid off. These warrants will be exercisable at a
price equal to Trimble's  closing price on the last trading day of each quarter.
Under the five-year warrant, the total number of warrants issued will not exceed
376,233 shares.

                                       77

<PAGE>



REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Shareholders, Trimble Navigation Limited

     We have audited the  accompanying  consolidated  balance  sheets of Trimble
Navigation  Limited as of  December  28, 2001 and  December  29,  2000,  and the
related consolidated  statements of operations,  shareholders'  equity, and cash
flows for each of the three years in the period ended  December  28,  2001.  Our
audits also included the  financial  statement  schedule  listed in the index at

I
tem 14(a)(2). These financial statements and schedule are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and schedule, based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial  statements  and schedule  referred to above
present fairly, in all material respects, the consolidated financial position of
Trimble  Navigation  Limited at December 28, 2001 and December 29, 2000, and the
consolidated  results of its operations and its cash flows for each of the three
years in the period ended  December  28, 2001,  in  conformity  with  accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
related financial statement  schedule,  when considered in relation to the basic
consolidated  financial  statements  taken as a whole,  presents  fairly  in all
material respects the information set forth therein.



                                        /s/ Ernst & Young LLP



Palo Alto, California
January 25, 2002, except for the paragraphs under the caption "Subordinated

Note" of Note 11 and Note 23, as to which the date is March 20, 2002


                                       78

<PAGE>



Item 9.           Changes in and Disagreements with Accountants on Accounting 
                  Financial Disclosure

     Not applicable.


                                    PART III


Item 10. Directors and Executive Officers of the Registrant

     The  information  with  respect to the  executive  officers  of the Company
required by this item is included in Part I hereof under the caption  "Executive
Officers of the Company."

Board of Directors

     The names of the current  members of the  Company's  Board of Directors and
certain information about them, are set forth below:

<TABLE>
<CAPTION>
Name of Board Member       Age                     Principal Occupation                      Director Since
-----------------------   ---------  -----------------------------------------------------   ---------------  
<S>                           <C>   <C>                                                          <C>    
Steven W. Berglund             50    President and Chief Executive Officer of the Company         1999
Robert S. Cooper               70    President, Chief Executive Officer and Chairman of the       1989
                                        board of directors of Atlantic Aerospace
                                        Electronic Corporation, Chairman of the Board of
                                        Directors of the Company
John B. Goodrich               60    Business Consultant                                          1981
William Hart                   61    Venture Capital Investor and Business Consultant             1984
Ulf J. Johansson               56    Chairman and Founder of Europolitan Holdings AB              1999
Bradford W. Parkinson          67    Professor at Stanford University and current                 1984
                                          consultant to the Company
</TABLE>



Steven W. Berglund joined the Company as President and Chief  Executive  Officer
in March 1999. Mr.  Berglund was elected to the Company's  Board of Directors at
the Annual  Meeting  of  Shareholders  held in June of 1999.  Mr.  Berglund  has
experience in engineering,  manufacturing, finance, and global operations. Prior
to joining the Company, Mr. Berglund was president of Spectra Precision, Inc., a
subsidiary  of   Spectra-Physics.   Spectra  Precision  had  global  revenue  of
approximately $200 million and developed and manufactured surveying instruments,
laser based construction  instruments,  and machine control systems.  During his
fourteen years with  Spectra-Physics,  which was a pioneer in the development of
lasers,  Mr. Berglund held a variety of positions that included four years based
in Europe.  Prior to  Spectra-Physics,  Mr.  Berglund spent a number of years at
Varian  Associates in Palo Alto,  California  where he held a number of planning
and manufacturing  roles. Mr. Berglund began his career as a process engineer at
Eastman Kodak in Rochester,  New York. Mr.  Berglund  attended the University of
Oslo and the University of Minnesota where he received a B.S. degree in Chemical
Engineering in 1974 and received his M.B.A.  from the University of Rochester in
1977.

Robert S. Cooper was appointed  Chairman of the Company's  Board of Directors in
August  1998.  Dr.  Cooper has served as a Director of the  Company  since April
1989. Since 1985, Dr. Cooper has been president,  chief executive  officer,  and
chairman  of  the  board  of   directors  of  Atlantic   Aerospace   Electronics
Corporation,  an  aerospace  company.  Dr.  Cooper  also  serves on the board of
directors of BAE Systems  North  America.  From 1981 to 1985,  he was  Assistant
Secretary of Defense for Research and  Technology  and  simultaneously  held the
position of Director for the Defense Advanced  Research Projects Agency (DARPA).
Dr.  Cooper  received  a  B.S.  degree  in  Electrical  Engineering  from  State
University of Iowa in 1954, a M.S.  degree in Electrical  Engineering  from Ohio
State University in 1958, and a Doctor of Science in Electrical Engineering from
the Massachusetts Institute of Technology in 1963.

                                       79

<PAGE>

John B. Goodrich has served as a Director of the Company since January 1981. Mr.
Goodrich retired from the law firm of Wilson Sonsini Goodrich & Rosati, where he
practiced from 1970 until February of 2002. Mr. Goodrich serves on the boards of
several  privately  held  corporations  in high  technology  businesses and as a
business  consultant.   Mr.  Goodrich  received  a  B.A.  degree  from  Stanford
University in 1963, a J.D. from the  University of Southern  California in 1966,
and a L.L.M. in Taxation from New York University in 1970.

William Hart has served as a Director of the Company since  December  1984.  Mr.
Hart has been a venture capitalist in the area of information  technology for 22
years. He was the founder of Technology  Partners,  a venture capital management
firm based in Palo Alto,  California.  Before  founding  Technology  Partners in
1980, Mr. Hart was a senior officer and director of Cresap, McCormick and Paget,
management  consultants.  He previously  held  positions in field  marketing and
manufacturing  planning with IBM Corporation.  Mr. Hart has served on the boards
of directors of numerous  public and privately held  technology  companies.  Mr.
Hart  received a Bachelor  of  Management  Engineering  degree  from  Rensselaer
Polytechnic Institute in 1965 and a M.B.A. from the Amos Tuck School of Business
Administration at Dartmouth College in 1967.

Ulf J.  Johansson has served as a Director of the Company since  December  1999.
Dr.   Johansson  is  a  Swedish   national  with  a   distinguished   career  in
communications  technology. He is a founder and chairman of Europolitan Holdings
AB, a GSM mobile telephone operator in Sweden. Dr. Johansson currently serves as
chairman of Frontec AB, an eBusiness  consulting  company,  Zodiak Venture AB, a
venture fund focused on  information  technology,  and the  University  Board of
Royal Institute of Technology in Stockholm.  Dr. Johansson also currently serves
on the board of  directors  of Novo  Nordisk  A/S, a Danish  pharmaceutical/life
science  company as well as several  privately  held  companies.  Dr.  Johansson
formerly served as president and chief executive officer of Spectra-Physics, and
executive vice president at Ericsson Radio Systems AB. Dr. Johansson  received a
Master  of  Science  in  Electrical  Engineering,  and a  Doctor  of  Technology
(Communication Theory) from the Royal Institute of Technology in Sweden.

Bradford W. Parkinson has served as a Director of the Company since 1984, and as
a consultant to the Company since 1982.  Dr.  Parkinson  served as the Company's
President and Chief Executive  Officer from August 1998 through March 1999. From
1980 to 1984 he was group vice president and general  manager for  Intermetrics,
Inc.  where  he  directed  five  divisions.  He  also  served  as  president  of
Intermetrics' industrial subsidiary, PlantStar. In 1979, Dr. Parkinson served as
group vice president for Rockwell  International  directing business development
and  advanced  engineering.  Currently,  Dr.  Parkinson  is the  Edward C. Wells
Endowed  Chair  professor  (emeritus)  at  Stanford  University  and has  been a
Professor of Aeronautics and Astronautics at Stanford University since 1984. Dr.
Parkinson has also directed the Gravity Probe-B spacecraft  development  project
at  Stanford  University,  sponsored  by  NASA,  which  is the  largest  program
delegated  by NASA to a  university  and has been  program  manager  for several
Federal Aviation Administration sponsored research projects on the use of Global
Positioning  Systems for navigation.  Dr. Parkinson was on leave of absence from
Stanford University while serving as the Company's President and Chief Executive
Officer.  Dr.  Parkinson  received a B.S.  degree from the U.S. Naval Academy in
1957, a M.S. degree in  Aeronautics/Astronautics  Engineering from Massachusetts
Institute of  Technology in 1961 and a Ph.D. in  Astronautics  Engineering  from
Stanford University in 1966.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities during fiscal year 2001
to file reports of initial  ownership on Form 3 and changes in ownership on Form
4 or 5 with the Securities and Exchange  Commission (the "SEC").  Such officers,
directors  and 10%  shareholders  are also  required by SEC rules to furnish the
Company with copies of all Section 16(a) reports they file.

     Based  solely on its review of the copies of such forms  received by it and
on written  representations  from its officers and  directors  and certain other
reporting  persons that no Forms 5 were required for such  persons,  the Company
believes that,  during the last fiscal year ended December 28, 2001, all Section
16(a)  filing  requirements  applicable  to  its  officers,  directors  and  10%
shareholders were complied with on a timely basis.

                                       80

<PAGE>


Item 11. Executive Compensation

     The following table sets forth the  compensation,  including  bonuses,  for
each of the Company's  last three fiscal years ending  December 28, 2001 paid to
(i) all persons who served as the Company's Chief Executive  Officer during last
completed fiscal year, and (ii) the four other most highly compensated executive
officers of the Company.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                Long-term
                                                  Annual Compensation(1)     Compensation(2)
                                                  ------------------------   ----------------
                                                                               Securities
                                                                               Underlying         All Other
                                                  Salary        Bonus            Options         Compensation
Name and Principal Position             Year       ($)           ($)               (#)             (3) ($)
----------------------------------      ----      --------  ---------------  -----------------  -----------------
<S>                                    <C>        <C>       <C>                  <C>             <C>    
Steven W. Berglund (4)                  2001       440,000   166,523 (5)           25,000          97,298 (6)
    President and Chief Executive
    Officer                             2000       400,000   154,500 (7)                -         101,192 (8)
                                        1999       320,000         0              400,000 (9)     137,016 (10)

Mary Ellen Genovese                     2001       243,202    40,266 (11)          40,000           2,658 (12)
    Chief Financial Officer and         2000       183,574    74,726 (13)          90,000 (14)      2,592 (15)
    Vice President Finance              1999       180,366         0               26,000           1,939 (16)


Ronald C. Hyatt (17)                    2001       222,115    36,495(18)                            1,000
    Senior Vice President and
    General                             2000       260,637   102,264 (19)           5,000           1,200
    Manager, Agriculture Division       1999       250,000         0                    0           1,200

Karl G. Ramstrom (20)                   2001       206,934         0               35,000         131,850 (21)
    Senior Vice President and
    General                             2000        85,254         0               80,000 (22)     35,000 (23)
    Manager, E and C Division           1999             -         -                 -                  -

Dennis L. Workman                       2001       200,070    41,414 (24)          25,000           2,073
    Vice President and General
    Manager,                            2000       197,359    62,402 (25)          10,000           1,200
    Component Technologies Division     1999       175,934         0               20,000           1,200
------------------------------------------                        
<FN>
(1)   Compensation deferred at the election of executive is included in the category and in the year earned
(2)   The Company has not issued stock appreciation rights or restricted stock
      awards. The Company has no "long-term incentive plan" as the term is
      defined in the applicable rules.
(3)   Includes amounts contributed by the Company pursuant to Section 401(k) of
      the Internal Revenue Code of 1986, as amended, for the periods in which
      they accrued. All full-time employees are eligible to participate in the
      Company's 401(k) plan.
(4)   Mr. Berglund has served as the Company's President and Chief Executive Officer since March 1999.
(5)   Represents a performance bonus earned for 2000, which was paid to Mr. Berglund during the 2001 year.
(6)   Includes $95,840 as the portion of a loan,  including  related accrued  interest,  that was forgiven by the Company during the
      year. The loan was originally made in connection with hiring Mr. Berglund
      for the purpose of assisting him with relocating to California and
      obtaining a primary residence. See "Certain Relationships and Related
      Transactions" in Item 13. Also includes $1,458 paid by the Company for
      fitness center dues provided to Mr. Berglund.

                                       81

<PAGE>

(7)   Represents a performance bonus earned for 1999, which was paid to Mr. Berglund during the 2000 year.
(8)   Includes $99,800 as the portion of a loan, including related accrued
      interest, that was forgiven by the Company during the year. The loan was
      originally made in connection with hiring Mr. Berglund for the purpose of
      assisting him with relocating to California and obtaining a primary
      residence. See "Certain Relationships and Related Transactions" presented
      in Item 13. Also includes $1,392 paid by the Company for fitness center
      dues provided to Mr. Berglund.
(9)   Mr. Berglund  received a  one-time  grant of an option to  purchase  400,000  shares in  connection  with  being  hired as the
      Company's President and Chief Executive Officer.
(10)  Includes $42,333 as the portion of a loan, including related accrued
      interest, that was forgiven by the Company during the year and $93,479 of
      relocation costs paid by the Company in connection with the hiring of Mr.
      Berglund. The loan was originally made in connection with hiring Mr.
      Berglund for the purpose of assisting him with relocating to California
      and obtaining a primary residence. See "Certain Relationships and Related
      Transactions" presented in Item 13. Also includes $1,204 paid by the
      Company for fitness center dues provided to Mr. Berglund.
(11)  Represents a performance bonus earned for 2000, which was paid to Mrs. Genovese during the 2001 year.
(12)  Includes $1,458 paid by the Company for fitness center dues provided to Mrs. Genovese.
(13)  Includes $61,326 as a performance bonus earned for 1999, which was paid to Mrs. Genovese during the 2000 year.
(14)  Ms.  Genovese  received a one-time  grant of an option to purchase  90,000  shares in  connection  with her  promotion  to the
      Company's Chief Financial Officer.
(15)  Includes $1,392 paid by the Company for fitness center dues provided to Mrs. Genovese.
(16)  Includes $739 paid by the Company for fitness center dues provided to Mrs. Genovese.
(17)  Mr. Hyatt retired as an executive officer of the Company  effective  February 2002 but has agreed to remain as a consultant to
      the Company through June 2002.
(18)  Represents a performance bonus earned for 2000, which was paid to Mr. Hyatt during the 2001 year.
(19)  Includes $83,960 as a performance bonus earned for 1999 which was paid to Mr. Hyatt during the 2000 year.
(20)  Mr. Ramstrom has served as the Company's  Senior Vice President and General  Manager,  Engineering and  Construction  Division
      since July 14, 2000.
(21)  Includes  $125,000 paid by the Company to a Swedish  pension fund provided to Mr.  Ramstrom and $6,850 paid to Mr. Ramstrom as
      an auto allowance.
(22)  Mr. Ramstrom received a one-time grant of an option to purchase 80,000
      shares in connection with being hired as the Company's Senior Vice
      President and General Manager, Engineering and Construction Division.
(23)  Includes $35,000 paid by the Company to a Swedish pension fund provided to Mr. Ramstrom.
(24)  Includes $21,397 as a performance bonus earned for 2000 which was paid to Mr. Workman during the 2001 year.
(25)  Includes $47,488 as a performance bonus earned for 1999 which was paid to Mr. Workman during the 2000 year.
</FN>
</TABLE>


     The following  table sets forth the number and terms of options  granted to
the persons named in the Summary  Compensation  Table presented above during the
last fiscal year ended December 28, 2001:

                        Option Grants in Last Fiscal Year


<TABLE>
<CAPTION>                                                                                         
                                Individual Grants                                      
-------------------------------------------------------------------------------------    Potential Realizable
                           Number of      % of Total                                      Value at Assumed
                           Securities       Options                                     Annual Rates of Stock
                           Underlying     Granted to        Exercise      Expiration      Price Appreciation
                            Options      Employees in       Exercise      Expiration       for Option Term (4)
                            Granted       Fiscal Year        Price           Date        ---------------------
          Name                (#)             (1)        ($/Share) (2)       (3)         5% ($)       10% ($)
----------------------    ----------    --------------   ---------------   ----------    ---------- ----------
<S>                         <C>              <C>             <C>          <C>             <C>        <C>
Steven W. Berglund           25,000           2.34            17.050       10/17/11        268,111    679,443

Mary Ellen Genovese          40,000           3.74            17.150         7/6/11        431,494  1,093,484

Ronald C. Hyatt                   -              -                 -              -              -          -

Karl G. Ramstrom             35,000           3.27            17.150         7/6/11        377,557    956,799

Dennis L. Workman            25,000           2.34            17.470        7/18/11        274,716    696,180
</TABLE>
                           
----------------------

(1)  The Company granted options to purchase an aggregate of 1,070,029 shares of
     the  Company's  Common Stock to  employees,  consultants  and  non-employee
     directors  during  fiscal year 2001  pursuant to the  Company's  1993 Stock
     Option Plan and the 1990 Director Stock Option Plan.
(2)  All options presented in this table were granted at an exercise price equal
     to the then fair market value of a share of the  Company's  Common Stock on
     the date of grant, as quoted on the Nasdaq National Market System.

                                       82

<PAGE>

(3)  All  options  presented  in this  table may  terminate  before  the  stated
     expiration  upon the  termination  of  optionee's  status  as an  employee,
     consultant or director, including upon the optionee's death or disability.
(4)  The assumed 5% and 10%  compound  rates of annual  stock  appreciation  are
     mandated by the rules of the Securities and Exchange  Commission and do not
     represent  the  Company's  estimate or  projection  of future  Common Stock
     prices.  All  grants  listed in the table  vest over five  years and have a
     ten-year term of exercise  which,  assuming the  specified  rates of annual
     compounding,  results in total  appreciation  of 62.9% (at 5% per year) and
     159.4% (at 10% per year) for the ten-year option term.

     The following table provides information on option exercises by the persons
named in the Summary  Compensation  Table presented above during the last fiscal
year ended December 28, 2001:

<TABLE>
<CAPTION>
                           Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
                                                       
                                                      Number of Securities
                                                      Underlying Unexercised        Value of Unexercised
                           Shares                          Options at               In-the-Money Options
                          Acquired       Value        Fiscal Year-End (#)         at Fiscal Year-End ($)(1)
                         on Exercise   Realized    -----------------------------  ----------------------------
          Name                (#)         ($)      Exercisable    Unexercisable   Exercisable    Unexercisable
----------------------  ------------  ----------   -----------    --------------  -----------    -------------
<S>                             <C>          <C>     <C>           <C>             <C>           <C>
Steven W. Berglund               -            -       220,000       205,000         1,806,200     1,477,800

Mary Ellen Genovese              -            -        61,234       120,766           116,998        81,088

Ronald C. Hyatt                  -            -       168,667         6,333         1,077,358        10,525

Karl G. Ramstrom                 -            -        24,980        90,020                 0             0

Dennis L. Workman                -            -        24,667        47,833            65,028        67,529
</TABLE>
                           
-------------------------
(1)  Represents  the market value of the Common Stock  underlying the options at
     fiscal year end, less the exercise  price of  "in-the-money"  options.  The
     closing price of the Company's  Common Stock on December 28, 2001 as quoted
     on the Nasdaq National Market System was $16.21.

Compensation of Directors

     Cash  Compensation.  In  order  to  help  attract  additional  new  outside
candidates to serve on the Company's Board of Directors,  the Board of Directors
carefully considered and adopted a cash compensation policy effective January 2,
1999. Under this cash compensation  plan, all non-employee  directors receive an
annual  cash  retainer of $15,000 to be paid  quarterly  in addition to a fee of
$1,500 for each board meeting attended in person and $375 for each board meeting
attended via telephone conference. Members of designated committees of the Board
of  Directors  receive  $750 per meeting  which is not held on the same day as a
meeting  of the  full  Board  of  Directors.  Non-employee  directors  are  also
reimbursed for travel,  including a per diem for international travel, and other
necessary  business  expenses  incurred in the  performance of their services as
directors of the Company.

     1990 Director  Stock Option Plan.  The Company's 1990 Director Stock Option
Plan (the "Director Plan") was adopted by the Board of Directors on December 19,
1990 and approved by the shareholders on April 24, 1991. An aggregate of 380,000
shares of the  Company's  Common Stock has been  previously  reserved for grants
issuable pursuant to the Director Plan ("Director  Options").  The Director Plan
provides  for  the  annual  granting  of  nonstatutory  stock  options  to  each
non-employee director of the Company (the "Outside Directors").  Pursuant to the
terms of the Director Plan, new Outside  Directors are granted a one-time option
to purchase 15,000 shares of the Company's  Common Stock upon initially  joining
the Board of Directors. Thereafter, each year, each Outside Director receives an
additional  option grant to purchase  5,000 shares if  re-elected  at the annual
meeting of shareholders.  All such Director Options have an exercise price equal
to the fair market  value of the  Company's  Common  Stock on the date of grant,
vest over three years,  and have a ten year term of exercise.  In addition,  all
such grants are  automatic  and are not subject to the  discretion of any person
upon the re-election of each such Outside Director.

     As of March 24, 2002,  options to purchase an aggregate of 198,333  shares,
having an average  exercise  price of $17.4722 per share and expiring from April
2002 to May 2011 were  outstanding  and 60,416  shares  remained  available  for
future grant under the Director Plan. During the last fiscal year ended December
28, 2001,

                                       83

<PAGE>

directors  Cooper,  Goodrich,  Hart,  Johansson and Parkinson  were each granted
Director  Options to purchase  5,000 shares of the Company's  Common Stock at an
exercise price of $16.80 per share.

     Other Arrangements. Dr. Parkinson has served as a consultant to the Company
since 1982. He currently receives $6,000 per month for such consulting  services
that he provides to the Company.

     In the past,  Dr.  Parkinson and Dr. Cooper were also directly  employed by
the Company in  connection  with serving as the  Company's  President  and Chief
Executive  Officer and  Chairman of the Board,  respectively,  and in  providing
transitional  services  to the  Company  through  August  1999.  As part of such
agreements,  each also entered into certain standby  consulting  agreements with
the Company.  See  "Employment  Contracts  and  Termination  of  Employment  and
Change-in-Control  Arrangements"  presented  below and  "Compensation  Committee
Report"  presented below. Dr. Cooper has continued as the Company's  Chairman of
the  Board of  Directors  since  that  time  but has not  received  any  special
compensation for such services.

     In June 2000,  the  Company  entered  into an  agreement  for  professional
services with  Bjursund  Invest AB, a company  which is  wholly-owned  by Ulf J.
Johansson.  Pursuant to the terms of this agreement,  Mr. Johansson will provide
certain  consulting and advisory services to the Company in Sweden and Europe in
addition to his serving on the Company's  Board of  Directors.  The Company will
pay $4,000 per day for such services with an annual  guaranteed  minimum payment
of  $24,000  together  with  expenses  invoiced  at cost,  but in no event  will
payments during any one year exceed $60,000.  Such agreement has a one-year term
and is subject to automatic  renewals in one-year  extensions  unless previously
terminated  with one month advance  notice.  The Company paid a total of $24,000
under this agreement for services rendered during fiscal year 2001.

Employment Contracts and Termination of Employment and Change-in-Control 
Arrangements

Steven W. Berglund 

     On March 17, 1999, Mr. Berglund  entered into an employment  agreement with
the Company to serve as the  Company's  President and Chief  Executive  Officer.
Such agreement provided that Mr. Berglund's base compensation would initially be
$33,333 per month and that he would be eligible  for a bonus of up to 50% of his
base  compensation  pro rata for  fiscal  years  1999 and 2000.  The  employment
agreement  guaranteed  one half of this bonus  amount  for fiscal  year 1999 and
specified that the other terms and conditions of such bonus payments would be as
negotiated with the Company's Board of Directors. In the event of Mr. Berglund's
involuntary  termination  or termination  for other than defined cause,  he will
receive 12 months of  severance  based upon his last annual base salary plus any
accrued bonus to date.


     In addition, pursuant to his employment agreement upon joining the Company,
Mr.  Berglund was granted  options to purchase an aggregate of 400,000 shares of
the Company's  Common Stock with an exercise  price of $8.00 per share which was
the fair market value on the date of grant in accordance  with the terms of such
agreement. Such options vest 20% at the first anniversary and monthly thereafter
for five  years  from the  original  date of grant  and have a ten year  term of
exercise.  In the event of a change-of-control of the Company, Mr. Berglund will
receive an additional 12 months of vesting with respect to such options.

     In  connection  with hiring Mr.  Berglund  and his original  relocation  to
California  and pursuant to the terms of his employment  agreement,  the Company
provided him with interim  housing and  reimbursed  him for certain moving costs
and expenses. The Company also provided him with a loan of $400,000 to assist in
the purchase of a new primary  residence.  Such loan is secured by a second deed
of trust on the  residence and was made at the lending rate at which the Company
is able to borrow, as adjusted from time to time. Such loan is to be forgiven by
the Company ratably over five years  contingent upon Mr. Berglund  continuing to
be  employed  by the  Company;  provided,  however,  that any  remaining  unpaid
obligation  would be due and payable to the Company upon the  anniversary of any
separation  if Mr.  Berglund's  employment  relationship  with the Company  ends
during such time period.

     Pursuant to the  employment  agreement,  Mr.  Berglund is also eligible for
other benefits and programs available to the Company's employees, including paid
vacation, medical, dental, life and disability insurance, and a

                                       84

<PAGE>

401(k)
Retirement Plan with a Company match and he will also be eligible to participate
in the Company's Executive Nonqualified Deferred Compensation Plan.

Robert S. Cooper 

     In connection with agreeing to serve as the Company's Chairman of the Board
of Directors  beginning in August 1998, Dr. Cooper  entered into  employment and
consulting agreements with the Company though August 31, 1999. At that time, Dr.
Cooper also entered  into a standby  consulting  agreement  with the Company for
which he will be paid on an hourly basis for consulting services on an as needed
basis as determined by the Company's Chief Executive  Officer through  September
1, 2003.

     Upon beginning  service as the Company's  Chairman of the Board, Dr. Cooper
was granted an option to purchase  60,000 shares of the  Company's  Common Stock
with an exercise  price of $10.125 per share which was the fair market  value on
the date of grant in accordance with the terms of such agreements.  Such options
vested  ratably over 12 months from the  original  date of grant and have a five
year term of exercise  contingent  upon Dr.  Cooper  remaining  as an  employee,
consultant or director to the Company.

Bradford W. Parkinson 

     In connection with agreeing to serve as the Company's interim President and
Chief Executive  Officer  beginning in August 1998, Dr.  Parkinson  entered into
employment and consulting agreements with the Company though August 31, 1999. At
that time,  Dr.  Parkinson  also entered into a  consulting  agreement  with the
Company  which  provides  Dr.  Parkinson  with a  payment  of  $6,000  per month
commencing  June 1, 1999 through June 1, 2002,  unless  terminated  earlier.  In
addition,  Dr. Parkinson also entered into a standby  consulting  agreement with
the Company for which he will be paid on an hourly basis for consulting services
on an as needed basis as  determined by the Company's  Chief  Executive  Officer
through September 1, 2003.


     Pursuant to his  employment  agreement  and upon  beginning  service as the
Company's  President and Chief Executive  Officer in August 1998, Dr.  Parkinson
was granted an option to purchase  100,000 shares of the Company's  Common Stock
with an exercise  price of $10.125 per share which was the fair market  value on
the date of grant in accordance with the terms of such agreements.  Such options
vested  ratably over six months from the original  date of grant and have a five
year term of exercise  contingent upon Dr.  Parkinson  remaining as an employee,
consultant or director to the Company.

Compensation Committee Interlocks and Insider Participation

     Robert S. Cooper,  John B.  Goodrich and William Hart served as the members
of the Company's  Compensation  Committee during the 2001 fiscal year. In August
1998,  Dr. Cooper was appointed to serve as the Company's  Chairman of the Board
of Directors and became an employee of the Company  through August 1999 pursuant
to an agreement approved by a majority of the disinterested members of the Board
of  Directors.  In December  1998,  Mr.  Goodrich was  appointed to serve as the
Company's  corporate  secretary;  however;  he is  not,  and has  never  been an
employee of the Company. In addition, Mr. Goodrich retired in February 2002 as a
member of the law firm of  Wilson  Sonsini  Goodrich  &  Rosati,  P.C.  where he
practiced  from 1970.  The law firm was retained by the Company  during the past
fiscal year as outside counsel to provide certain legal services to the Company.
Mr. Hart is not, and has never been, an employee or officer of the Company.  See
"Compensation  of  Directors"   presented  above,   "Employment   Contracts  and
Termination of Employment and  Change-in-Control  Arrangements"  presented above
and "Certain Relationships and Related Transactions" presented in Item 13.

Compensation Committee Report

     The  Compensation  Committee  of the Board of Directors  (the  "Committee")
establishes   the  general   compensation   policies  of  the  Company  and  the
compensation  plans and specific  compensation  levels for executive officers of
the Company. The Committee believes that the compensation of the Chief Executive
Officer should be primarily  influenced by the overall financial  performance of
the Company.

                                       85

<PAGE>

     The Committee believes that the compensation of the Chief Executive Officer
should be  established  within a range of  compensation  for similarly  situated
chief  executive  officers of comparable  companies in the high  technology  and
related  industries  in the Standard & Poor's High  Technology  Composite  Index
("peer  companies")  and their  performance  according  to data  obtained by the
Committee from independent outside consultants and publicly available data, such
as proxy data from peer companies as adjusted by the  Committee's  consideration
of the particular  factors  influencing  the Company's  performance  and current
situation.  A portion of the Chief Executive Officer's  compensation  package is
established as base salary and the balance is variable and consists of an annual
cash bonus and/or stock option grants.

     Within these established ranges and guidelines, and taking into account the
Company's historical  performance compared to peer companies,  the Committee and
Board of Directors  also  carefully  considered the current risks and challenges
facing the Company as well as the individual  qualifications,  skills,  and past
performance of Mr. Berglund.  Based on these  considerations,  the Committee and
Board of Directors  approved a base annual  salary of $440,000 for Mr.  Berglund
beginning effective as of January 1, 2001.

     The Committee  carefully reviewed and considered its cash bonus program for
fiscal year 2001 for executive  officers of the Company.  Such program  provided
for an annual cash  bonus,  a portion of which is paid  quarterly,  based upon a
maximum  eligible  percentage of each  executive's base salary within a range of
target  incentives  as  reported  by  professional   compensation  surveys.  The
percentage for each executive was then adjusted by factoring in an evaluation of
such  individual's  performance.  The total size of the Company's bonus pool for
all  employees,  including  executives,  was  determined  with  respect  to  the
Company's  performance in meeting  certain goals for both revenue and income for
fiscal year 2001.  For fiscal year 2001, the total bonus pool for all employees,
including  all  executives   other  than  the  Chief  Executive   Officer,   was
approximately  $400,000.  The Board of Director's  and Committee have approved a
similar cash bonus program for fiscal year 2002; however,  interim payments will
no longer be made on a  quarterly  basis and a single cash bonus will be paid at
the end of the year.

     Pursuant  to the  terms  of his  employment  agreement,  Mr.  Berglund  was
eligible  for a cash bonus of up to 50% of his base  salary for fiscal year 2000
and he was  guaranteed  this bonus  amount on a pro rata  basis for fiscal  year
1999. In 2001,  Mr.  Berglund was paid a bonus of $166,523 for meeting his goals
set by the Board of Directors  for the prior fiscal year 2000.  As also approved
by the Board of  Directors,  Mr.  Berglund will be eligible for a bonus of up to
70% of his base  salary for fiscal year 2001;  however,  the  Committee  and the
Board of Directors  have not yet determined a final bonus amount for fiscal year
2001.

     Based on the Board of  Directors'  and the  Committee's  evaluation  of the
Chief  Executive  Officer's  ability  to  influence  the  long-term  growth  and
profitability  of the  Company,  the  Board  of  Directors  determined  that Mr.
Berglund  should  receive  an option  grant to  purchase  400,000  shares of the
Company's  Common Stock upon his starting  with the Company in March 1999 at the
then fair market value of $8.00 per share.  In addition,  in connection with his
performance review during the last fiscal year 2001, the Committee and the Board
of  Directors  approved a new  option  grant for Mr.  Berglund  to  purchase  an
additional  25,000 shares of the Company's Common Stock at the then current fair
market  value of $17.050 per share.  Both such  options  vest  ratably over five
years and have  partial  acceleration  provisions  in certain  change of control
situations.

     The  Committee  also adopted  similar  policies with respect to the overall
compensation  of other  executive  officers  of the  Company.  A portion of each
compensation  package was established as base salary and the balance is variable
and  consists  of an annual cash bonus and stock  option  grants.  Using  salary
survey data supplied by outside  consultants and other publicly  available data,
such as proxy data from peer companies,  the Committee established base salaries
for each  executive  officer  within a range of salaries of  similarly  situated
executive officers at comparable companies. In addition, these base salaries for
executive officers were then adjusted by the Committee taking into consideration
factors such as the relative  performance of the Company, the performance of the
business  unit  for  which  the  executive   officer  is  responsible   and  the
individual's past performance and future potential.

     The  size of  option  grants,  if any,  to  other  executive  officers  was
determined  by  the  Committee's  evaluation  of  each  executive's  ability  to
influence the Company's long-term growth and profitability. The Company also has
a metric  measurement  system in place with respect to option grants made to all
new employees  under the Company's  option plans in order to ensure  consistency
among grants and  competitiveness in the marketplace.  Generally,  these options
are granted at the then current  market price and because the value of an option
bears a direct relationship to

                                       86

<PAGE>

the Company's  stock price,  it is an incentive for managers to create value for
shareholders.  The  Committee  therefore  views  stock  options as an  important
component of its long-term, performance-based compensation philosophy.

     During  fiscal  year  2001  the  Compensation  Committee  and the  Board of
Directors  reviewed all employees and executive  officers,  other than the Chief
Executive  Officer,  of the Company as part of a single worldwide  program.  The
purpose of this single  review plan is to provide a common,  annual  review date
for all levels of managers to review all  employees of the  Company.  Under this
plan, all executive officers can also be reviewed by the Compensation  Committee
at the same time.  The annual review period for this single plan was set as July
30 for fiscal year 2001 and has not yet been set for fiscal year 2002.

     Under the single review plan,  the total  compensation  of all employees of
the  Company,  including  executive  officers,  will  be  reviewed  annually  in
accordance  with the same  common  criteria.  Base salary  guidelines  have been
established and will be revised  periodically based upon market conditions,  the
economic climate and the Company's financial position.  Merit increases, if any,
for all employees of the Company,  including executive  officers,  will be based
upon the following criteria:  the individual employee's performance for the year
as  judged  against  his/her  job  goals and  responsibilities,  the  individual
employee's  salary and performance as compared to other employees in the same or
similar department,  the individual employee's position in the salary grade, the
employee's  salary  relative to market data for the position  and the  Company's
fiscal budget and any associated restrictions.


Robert S. Cooper, Member   John B. Goodrich, Chairman   William Hart, Member
Compensation Committee     Compensation Committee       Compensation Committee

Steven W. Berglund,             Ulf J. Johansson,       Bradford W. Parkinson,
Board of Directors             Board of Directors       Board of Directors

Company Performance

     The following  graph shows a five year  comparison of the cumulative  total
return for the Company's  Common Stock,  the Nasdaq Composite Total Return Index
(U.S.), and the Standard & Poor's Technology Sector Index: (1)

                                       87

<PAGE>


               COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS(2)
                        AMONG TRIMBLE NAVIGATION LIMITED,
                   NASDAQ COMPOSITE TOTAL RETURN INDEX (U.S.),
                            AND THE STANDARD & POOR'S
                             TECHNOLOGY SECTOR INDEX

[The performance graph has been omitted. Performance Graph. The performance 
graph required by Item 402(1) of Regulation S-K is set forth in the paper copy
of the Proxy Statement immediatley following the caption "COMPARISON OF
FIVEYEAR CUMMULATIVE TOTATL RETURNS."

The  peformance  graph plots the data points listed below the graph for the data
sets (i) Trimble  Navigation  Limited,  (ii) Nasdaq Composite Total Return Index
(US) and (iii) the Standard & Poor's  Technology  Sector Index.  The graph has a
horizontal  axis at its bottom  which lists from left to right the dates 96, 97,
98, 99, 00, and 01. The graph has a vertical  axis at its left which  lists from
bottom to top numbers 0, 50, 100,  150,  200,  250,  300, 350, 400, and 450. The
data  points  for each data set are  plotted on the graph and are  connected  by
line. The line connecting the data points in the Trimble Navigation Limited data
set is bold with square to mark the points,  while the lines connecting the data
points in the  Nasdaq  Composite  Total  Return  Index (US) data set and the S&P
Technology Sector Index data set are dashed with triangle to mark data point and
small  square  dashes with circle to mark data points,  respectively.]  

                       DATA POINTS FOR PERFORMANCE GRAPH

                             12/96   12/97   12/98  12/99  12/00  12/01
                            --------------------------------------------
Trimble Navigation
   Limited           TRMB     100     190     63     188    209    141

Nasdaq Stock Market
    (U.S.)           INAS     100     122     173    321    193    153

S&P Technology
   Sector            ITES     100     126     218    382    229    175
                       
--------------------------                  
(1)  The data in the above graph is presented on a calendar  year basis  through
     December  31,  2001  which is the most  currently  available  data from the
     indicated  sources.  The Company adopted a 52-53 week fiscal year effective
     upon the end of fiscal year 1997 and the actual date of the Company's  2001
     fiscal  year  end  was  December  28,  2001.  Any  variations  due  to  any
     differences between the actual date of a particular fiscal year end and the
     calendar year end for such year are not expected to be material.

(2)  Assumes an investment of $100 on December 31, 1996 in the Company's  Common
     Stock, the Nasdaq  Composite Total Return Index (U.S.),  and the Standard &
     Poor's  Technology  Sector Index.  Total returns assume the reinvestment of
     dividends  for the  indexes.  The Company has never paid  dividends  on its
     Common Stock and has no present plans to do so.


Item 12. Security Ownership of Certain Beneficial Owners and Management

     The  following  table  sets  forth the  shares of  Company's  Common  Stock
beneficially  owned as of the March 24, 2002 (unless  otherwise noted below) by:
(i) all persons known to the Company to be the beneficial owners of more than 5%
of the Company's  outstanding  Common  Stock,  (ii) each director of the Company
(including  nominees),  (iii) the executive officers of the Company named in the
Summary  Compensation  Table  presented in Item 13, and (iv) all  directors  and
executive officers of the Company, as a group:


                                       88

<PAGE>


<TABLE>
<CAPTION>
                                                                                               Shares
                                                                                       Beneficially Owned (2)
                                                                                     -----------------------------   
     5% Shareholders, Directors and Nominees, and Executive Officers (1)               Number          Percent (%)
------------------------------------------------------------------------------       ---------        ------------
<S>                                                                                 <C>                 <C>    
Mellon Financial Corporation, The Boston Company, Inc. and The Boston Company        3,021,071           10.72
Asset Management, LLC (3).....................................................
     One Mellon Bank Center
     500 Grant Street
     Pittsburgh, Pennsylvania   15258-0001
Capital Research and Management Company (4)...................................       2,163,300            7.68
     333 South Hope Street, 55th Floor
     Los Angeles, California  90071

Steven W. Berglund (5)........................................................         255,843              *
Robert S. Cooper (6)..........................................................         137,861              *
John B. Goodrich (7)..........................................................          51,682              *
William Hart (8)..............................................................          86,803              *
Ulf J. Johansson (9)..........................................................          13,750              *
Bradford W. Parkinson (10)....................................................          67,514              *
Mary Ellen Genovese (11)......................................................          84,420              *
Ronald C. Hyatt (12)..........................................................         263,517              *
Karl G. Ramstrom (13).........................................................          35,397              *
Dennis L. Workman (14)........................................................          30,607              *
All Directors and Executive Officers, as a group
     (18 persons) (5)-(15)....................................................       1,286,062            4.41
</TABLE>
         
---------------------------
*    Indicates less than 1%
(1)  Except as otherwise noted in the table, the business address of each of the
     persons named in this table is: c/o Trimble Navigation  Limited,  645 North
     Mary Avenue, Sunnyvale, California 94088.
(2)  Except  as  indicated  in the  footnotes  to this  table  and  pursuant  to
     applicable  community  property  laws,  the persons named in the table have
     sole voting and investment  power with respect to all shares of stock shown
     as beneficially owned by them.
(3)  The  information  presented  with respect to Mellon  Financial  Corporation
     ("MFC"),  The Boston  Company,  Inc.  ("BC") and The Boston  Company  Asset
     Management,  LLC ("BCAM") is as reported  pursuant to Amendment  No. 1 to a
     Schedule 13G as jointly filed with the Securities  and Exchange  Commission
     on January 24, 2002 by MFC, BC and BCAM. As reported on such joint Schedule
     13G, MFC and BC are parent  holding  companies in  accordance  with Section
     240.13-d(1)(b)(1)(ii)(G)  of the  Exchange  Act and  BCAM is an  investment
     adviser  registered  under  Section 203 of the  Investment  Advisers Act of
     1940. MFC was deemed to be the beneficial  owner of all 3,021,071 shares as
     of the date of such  filing  due to its sole  dispositive  power  over such
     shares. In addition, as of the date of such filing, BC was deemed to be the
     beneficial owner of an aggregate of 2,583,680 shares and BCAM was deemed to
     be the beneficial owner of an aggregate of 1,991,280  shares.  According to
     the Schedule 13G, all of the reported shares are beneficially  owned by MFC
     and direct or indirect  subsidiaries in their various fiduciary  capacities
     and,  as a result,  another  entity in every  instance  is  entitled to any
     dividends  or  proceeds  from  the  sale of such  shares  and  none of such
     individual  accounts  hold an interest  of 5% or more.  The Company has not
     attempted to independently  verify any of the information  contained in the
     Schedule 13G as filed.
(4)  The information  presented with respect to Capital  Research and Management
     Company  ("CRMC") is as reported  pursuant to Amendment No. 4 to a Schedule
     13G as filed with the  Securities  and Exchange  Commission on February 11,
     2002 by CRMC.  As  reported on such  Schedule  13G,  CRMC is an  investment
     adviser registered under Section 203 of the Investment Advisers Act of 1940
     and was deemed to be the beneficial owner of all 2,163,300 shares as of the
     date of such filing due to its sole dispositive power over such shares as a
     result of acting as  investment  adviser  to various  investment  companies
     registered  under  Section 8 of the  Investment  Company Act of 1940.  CRMC
     disclaims beneficial ownership of all such shares pursuant to Rule 13d-4 of
     the  Exchange  Act of 1934,  as amended.  The Company has not  attempted to
     independently verify any of the information contained in the Schedule 13G.
(5)  Includes 253,333 shares subject to stock options exercisable within 60 days
     March 24, 2002.
(6)  Includes  104,861shares subject to stock options exercisable within 60 days
     March 24, 2002.
(7)  Includes 33,194 shares subject to stock options  exercisable within 60 days
     March 24, 2002.
(8)  Includes 44,861 shares subject to stock options  exercisable within 60 days
     of the Record Date.
(9)  Includes 13,750 shares subject to stock options  exercisable within 60 days
     March 24, 2002.

                                       89

<PAGE>

(10) Includes 3 shares held by Dr.  Parkinson's  spouse,  2,515 shares held in a
     charitable  remainder  trust and 61,661  shares  subject  to stock  options
     exercisable within 60 days of March 24, 2002.
(11) Includes 76,192 shares subject to stock options  exercisable within 60 days
     of the March 24, 2002.
(12) Includes 141,500 shares subject to stock options exercisable within 60 days
     of March 24, 2002.  Mr.  Hyatt  retired as an  executive  officer of the
     Company effective February 2002 but has agreed to remain as a consultant to
     the Company through June 2002.
(13) Includes 33,960 shares subject to stock options  exercisable within 60 days
     of March 24, 2002.
(14) Includes 28,666 shares subject to stock options  exercisable within 60 days
     of March 24, 2002.
(15) Includes  an  aggregate  of  969,232   shares   subject  to  stock  options
     exercisable within 60 days of March 24, 2002.


Item 13. Certain Relationships and Related Transactions

Certain Relationships and Related Transactions

     In May 2001, the Company entered into a settlement  agreement with David M.
Hall,  the  Company's  former  Senior Vice  President,  Marketing  and  Business
Development,  pursuant to which the  Company  agreed to make  monthly  severance
payments in the aggregate amount of $252,405,  provided that certain  conditions
continue to be met.  During fiscal year 2001,  Mr. Hall received an aggregate of
$171,826 under the agreement.

     The  following  table sets forth  information  with regard to loans made to
executive  officers  of the  Company  who had  outstanding  amounts of more than
$60,000 at any time since the beginning of the Company's last fiscal year.  Each
of these  loans  was made by the  Company  for the  purpose  of  assisting  such
executive  officer in the acquisition of his primary residence in an exceptional
housing  market in a location for the benefit of the Company in accordance  with
the Company's  Bylaws.  Each of these loans is secured by a second deed of trust
on such  residence,  has a term of five years and requires  that the interest on
such principal amounts be paid currently each year. The principal balance is due
in full at the end of such five  year  term,  but such  executive  officers  may
pre-pay all or any portion of such  balance  without a prepayment  penalty.  The
interest  rate for  each of  these  loans  was set  with  reference  to the then
applicable mid-term annual federal rate.

<TABLE>
<CAPTION>
                                                                                                Largest Amount
                                                                           Principal Amount       Outstanding
                                                              Annual        Outstanding at       During Fiscal
            Name and Position               Date of Loan   Interest Rate    Record Date ($)      Year 2000 ($)
-----------------------------------------   ------------   --------------  ----------------     ----------------
<S>                                          <C>              <C>               <C>                   <C>    
Steven W. Berglund                            6/25/99          5.40%             186,667               286,667
     President and Chief Executive
     Officer

Irwin L. Kwatek                               8/15/01          4.99%             150,000               150,000
     Vice President and General Counsel

</TABLE>



                                       90

<PAGE>


                                     PART IV


Item 14. Exhibits, Financial Statement Schedules, and Reports on form 8-K

(a)      1.       Financial Statements

     The following  consolidated  financial statements required by this item are
included in Part II Item 8 hereof under the caption  "Financial  Statements  and
Supplementary Data."

                                                                  Page In This
                                                                  Annual Report
                                                                  On Form 10-K

Consolidated Balance Sheets at December 28, 2001 and 
  December 29, 2000                                                      44

Consolidated Statements of Operations for each of the 
  three fiscal years in the period ended December 28, 2001               45

Consolidated Statement of Shareholders' Equity for the 
 three fiscal years in the period ended December 28, 2001                46

Consolidated Statements of Cash Flows for each of the 
 three fiscal years in the period ended December 28, 2001                47

Notes to Consolidated Financial Statements                            48-77

     2.  Financial Statement Schedules

     The following financial statement schedule is filed as part of this report:

                                                                  Page In This
                                                                  Annual Report
                                                                  On Form 10-K

         Schedule II - Valuation and Qualifying Accounts                S-1

     All other  schedules  have been  omitted as they are either not required or
not  applicable,  or the required  information  is included in the  consolidated
financial statements or the notes thereto.

     3.  Exhibits

Exhibit
Number 

3.1      Restated Articles of Incorporation of the Company filed June 25, 
         1986. (6)

3.2      Certificate of Amendment of Articles of Incorporation of the Company 
         filed October 6, 1988. (6)

3.3      Certificate of Amendment of Articles of Incorporation of the Company 
         filed July 18, 1990. (6)

3.4      Certificate of Determination of the Company filed February 19, 1999.(6)

3.8      Amended and Restated Bylaws of the Company. (21)

4.1      Specimen copy of certificate for shares of Common Stock of the 
         Company. (1)

                                       91

<PAGE>

4.2      Preferred Shares Rights Agreement dated as of February 18, 1999. (5)

4.3      First  Amended and Restated  Stock and Warrant  Purchase  Agreement  
         between and among the Company and the  investors  thereto dated 
         January 14, 2002.(12)

4.4      Form of Warrant to Purchase Shares of Common Stock dated January 14, 
         2002.(13)

10.4+    Form of Indemnification Agreement between the Company and its officers 
         and directors. (1)

10.32+   1990 Director Stock Option Plan, as amended, and form of Outside 
         Director Non-statutory Stock Option Agreement. (4)

10.35    Sublease Agreement dated January 2, 1991, between the Company,  Aetna 
         Insurance  Company,  and Poqet Computer  Corporation for property 
         located at 650 North Mary Avenue, Sunnyvale, California. (2)

10.40    Industrial Lease Agreement dated December 3, 1991,  between the Company
         and Aetna Life Insurance  Company for property located at 585 North 
         Mary Avenue, Sunnyvale, California. (3)

10.41    Industrial Lease Agreement dated December 3, 1991,  between the Company
         and Aetna Life Insurance  Company for property located at 570 Maude 
         Court, Sunnyvale, California. (3)

10.42    Industrial Lease Agreement dated December 3, 1991,  between the Company
         and Aetna Life Insurance  Company for property located at 580 Maude 
         Court, Sunnyvale, California. (3)

10.43    Industrial Lease Agreement dated December 3, 1991,  between the Company
         and Aetna Life Insurance  Company for property located at 490 Potrero 
         Avenue, Sunnyvale, California. (3)

10.46+   1992 Management Discount Stock Option and form of Nonstatutory Stock 
         Option Agreement (3).

10.59+   1993 Stock Option Plan, as amended May 11, 2000. (8)

10.60+   1988 Employee Stock Purchase Plan, as amended May 11, 2000. (8)

10.64+   Consulting Agreement between the Company and Bradford W. Parkinson 
         dated September 1, 1998. (6)

10.65+   Standby Consulting Agreement between the Company and Bradford W. 
         Parkinson dated September 1, 1998. (6)

10.66+   Consulting Agreement between the Company and Robert S. Cooper dated 
         September 1, 1998. (6)

10.67+   Employment Agreement between the Company and Steven W. Berglund dated 
         March 17, 1999. (6)

10.68+   Nonqualified deferred Compensation Plan of the Company effective 
         February 10, 1994. (6)

10.69***Asset  Purchase  Agreement  dated  August 10, 1999 by and among  Trimble
        Navigation  Limited  and  Solectron  Corporation  and Solectron Federal 
        Systems, Inc. (7)

10.70***Supply  Agreement  dated August 10, 1999 by and among  Trimble  
        Navigation  Limited and  Solectron  Corporation  and  Solectron Federal 
        Systems, Inc. (7)

                                       92

<PAGE>


10.72    Stock and Asset  Purchase  Agreement,  dated as of May 11,  2000,  
         between  Trimble  Acquisition  Corp.,  and Spectra  Physics Holdings 
         USA, INC., Spectra Precision AB, and Spectra Precision Europe 
         Holdings, BV. (9)

10.73    Asset Purchase Agreement dated May 11, 2000 between Trimble Acquisition
         Corp. and Spectra Precision AB. (9)
                                    .
10.74    Credit Agreement dated July 14, 2000 between Trimble  Navigation  
         Limited and ABN AMRO Bank N.V., Fleet National Bank, and The Bank of 
         Nova Scotia. (9)

10.75    Subordinated  Seller Note dated July 14, 2000, for the principal amount
         of $80,000,000  issued by Trimble  Navigation  Limited to Spectra 
         Precision Holdings, Inc. (9)

10.76+   Spectra Precision Supplement to the Trimble Navigation 1988 Employee 
         Stock Purchase Plan. (10)

10.77+   Australian Addendum to the Trimble Navigation 1988 Employee Stock 
         Purchase Plan. (11)

10.78    Credit Agreement - First Amendment. (14)

10.79    Credit Agreement - Second Amendment. (14)

21.1     Subsidiaries of the Company. (14)

23.1     Consent of Ernst & Young LLP, independent auditors

24.1     Power of Attorney (included on page 95).

***      Confidential treatment has been granted for certain portions of this
         exhibit pursuant to an order dated effective October 5, 1999.

+        Management contract or compensatory plan or arrangement required to be
         filed as an exhibit to this Annual Report on Form 10-K pursuant to Item
         14(c) thereof.

(1)      Incorporated by reference to identically numbered exhibits filed in
         response to Item 16(a), "Exhibits," of the registrant's Registration
         Statement on Form S-1, as amended (File No. 33-35333), which became
         effective July 19, 1990.

(2)      Incorporated by reference to identically numbered exhibits filed in
         response to Item 14(a), "Exhibits," of the registrant's Annual Report
         on Form 10-K for the fiscal year ended December 31, 1990.

(3)      Incorporated by reference to identically numbered exhibits filed in
         response to Item 16(a) "Exhibits," of the registrant's Registration
         Statement on Form S-1 (File No. 33-45990), which was filed February 18,
         1992.

(4)      Incorporated by reference to identically numbered exhibits filed in
         response to Item 14(a), "Exhibits," of the registrant's Annual Report
         on Form 10-K for the fiscal year ended December 31, 1993.

(5)      Incorporated  by  reference  to Exhibit  No. 1 to the  registrant's  
         Registration  Statement  on Form 8-A,  which was filed on 
         February 18,1999.

(6)      Incorporated by reference to identically numbered exhibits filed in
         response to Item 14(a), "Exhibits," of the registrant's Annual Report
         on Form 10-K for the fiscal year ended January 1, 1999.

                                       93

<PAGE>


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


(8)      Incorporated by reference to identically numbered exhibits filed in
         response to Item 8, "Exhibits," of the registrant's registration
         statement on Form S-8 filed on June 1, 2000.

(9)      Incorporated by reference to identically numbered exhibits filed in
         response to Item 7(c), "Exhibits," of the registrant's Current Report
         on Form 8-K filed on July 28, 2000.

(10)     Incorporated  by reference to  identically  numbered  exhibits filed in
         response to Item 6A,  "Exhibits," of the  registrant's Annual Report on
         Form 10-Q for the quarter ended September 29, 2000.

(11)     Incorporated by reference to identically numbered exhibits filed in
         response to Item 14(a), "Exhibits," of the registrant's Annual Report
         on Form 10-K for the fiscal year ended December 29, 2000.

(12)     Incorporated  by reference  to exhibit  number 4.1 filed in response to

         Item 7(c),  "Exhibits,"  of the  registrant's  Current Report on Form 
         8-K filed on January 16, 2002.

(13)     Incorporated  by reference  to exhibit  number 4.2 filed in response to
         Item 7(c),  "Exhibits,"  of the  registrant's  Current Report on Form 
         8-K filed on January 16, 2002.

(14)     Filed herewith.

(b)      Reports on Form 8-K.

     On December 21, 2001,  the Company filed a report on Form 8-K reporting the
Company  entered  into a Stock and Warrant  Purchase  Agreement  (the  "Purchase
Agreement")  with certain  accredited  investors (the  "Investors")  pursuant to
which the Company sold 1,783,337 shares of its common stock at a price of $15.00
per  share in a private  placement  transaction.  The  Investors  also  received
warrants  having  a  five-year  term  of  exercise  to  purchase  up to  356,670
additional  shares of the Company's common stock at an exercise price of $19.475
per share (the "Warrants").

     On January 14, 2002,  the Company  filed a report on Form 8-K reporting the
entered into the First Amended and Restated Stock and Warrant Purchase Agreement
(the "Purchase  Agreement") with certain accredited  investors (the "Investors")
pursuant to which the Company sold an additional  1,280,004 shares of its common
stock at a price of $15.00 per share in the second  closing  under a  previously
announced  private placement  transaction.  The Investors also received warrants
having a five-year term of exercise to purchase up to 256,002  additional shares
of the  Company's  common  stock at an exercise  price of $19.475 per share (the
"Warrants").


                                       94

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                               TRIMBLE NAVIGATION LIMITED


                                    By:/s/ Steven W. Berglund          
                                      ----------------------------------------
                                         Steven W. Berglund,
                                         President and Chief Executive Officer


                                          March 28, 2001


                                POWER OF ATTORNEY

     Know all  persons  by these  presents,  that each  person  whose  signature
appears   below   constitutes   and   appoints   Steven  W.   Berglund   as  his
attorney-in-fact,  with  the  power  of  substitution,  for  him in any  and all
capacities,  to sign any amendments to this Report on Form 10-K, and to file the
same, with exhibits  thereto and other documents in connection  therewith,  with
the Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact,  or his substitute or substitutes,  may do or cause to be
done by virtue hereof.

                                       95

<PAGE>



         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report on Form 10-K has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>

Signature                           Capacity in which Signed                                  Date              
-----------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                                       <C>    



/s/ Steven W. Berglund                               President, Chief Executive                 March 28, 2001        
---------------------------------------------------- Officer, Director                                                          
Steven W. Berglund                                     




/s/ Mary Ellen Genovese                              Chief Financial Officer and Assistant      March 27, 2001        
--------------------------------------------------   Secretary (Principal Financial Officer)    
Mary Ellen Genovese                                  





/s/ Anup V. Singh                                     Corporate Controller                       March 27, 2001        
--------------------------------------------------   (Principal Accounting Officer)                                          
Anup V. Singh                                         




/s/ Robert S. Cooper                                  Director                                   March 28, 2001 
---------------------------------------------------
Robert S. Cooper




                                                      Director                                   
----------------------------------------------------
John B. Goodrich




/s/ William Hart                                      Director                                   March 28, 2001
----------------------------------------------------
William Hart




/s/ Ulf J. Johansson                                 Director                                    March 28, 2001
---------------------------------------------------
Ulf J. Johansson




/s/ Bradford W. Parkinson                             Director                                   March 28, 2001
---------------------------------------------------
Bradford W. Parkinson
</TABLE>


                                       96

<PAGE>


                                   SCHEDULE II

                           TRIMBLE NAVIGATION LIMITED
                        VALUATION AND QUALIFYING ACCOUNTS
                            (IN THOUSANDS OF DOLLARS)


<TABLE>
<CAPTION>
                                              December 28,        December 29,      December 31, 
Allowance for doubtful accounts:                 2001                 2000             1999
--------------------------------          -------------------- ----------------- ------------------
<S>                                                 <C>               <C>                <C>   
Balance at beginning of  period                      $ 6,538           $ 2,949            $ 2,220
  Acquired allowance (1)                                   -             4,445                  -
  Bad debt expense                                     5,077             1,198              1,875
  Write-offs, net of recoveries                      (3,075)           (2,054)            (1,146)
                                         -------------------- ----------------- ------------------
Balance at end of period                              $8,540            $6,538            $ 2,949
                                         -------------------- ----------------- ------------------

Inventory Reserves:
Balance at beginning of  period                      $19,285          $14, 109           $ 14,119
  Acquired reserve  (2)                                    -             7,672                  -
  Additions to reserve                                 7,242               188              1,607
  Write-offs, net of recoveries                      (3,253)           (2,684)            (1,617)
                                         -------------------- ----------------- ------------------
Balance at end of period                             $23,274           $19,285            $14,109
                                         -------------------- ----------------- ------------------
</TABLE>


(1)  Includes $4,419,000 acquired at July 14, 2000 as part of the acquisition of
     the Spectra  Precision  Group and $26,000  acquired at November 14, 2000 as
     part of the acquisition of Tripod Data Systems.

(2)  Includes $7,659,000 acquired at July 14, 2000 as part of the acquisition of
     the Spectra  Precision  Group and $13,000  acquired at November 14, 2000 as
     part of the acquisition of Tripod Data Systems.



















                                       S-1




                                       97

<PAGE>



                                INDEX TO EXHIBITS


                                                           SEQUENTIALLY
                                                             NUMBERED
EXHIBIT                                                    ------------
NUMBER            EXHIBIT                                      PAGE       
-----------------------------------------------------------------------

10.78    Credit Agreement - First Amendment.                 99-104

10.79    Credit Agreement - Second Amendment.               105-109

21.1     Subsidiaries of the Company                        110-111

23.1     Consent of Ernst & Young LLP, Independent Auditors     112


                                       98

<PAGE>







                                  EXHIBIT 10.78

                 AMENDMENT NO. 1 AND WAIVER TO CREDIT AGREEMENT


     This  Amendment No. 1 and Waiver (this  "Amendment  and Waiver") is entered
into as of July 13, 2001 by and among TRIMBLE  NAVIGATION  LIMITED, a California
corporation (the "Company"),  the institutions  from time to time parties hereto
as Lenders,  ABN AMRO BANK,  N.V. in its capacity as  administrative  agent (the
"Administrative  Agent") for itself and the other Lenders,  FLEET NATIONAL BANK,
as Syndication Agent (the "Syndication  Agent"), and THE BANK OF NOVA SCOTIA, as
Documentation Agent (the "Documentation Agent").


                                    RECITALS


     A. The Company, the Agents and the Lenders are party to that certain Credit
Agreement dated as of July 14, 2000 (the "Credit  Agreement").  Unless otherwise
specified herein, capitalized terms used in this Amendment and Waiver shall have
the meanings ascribed to them by the Credit Agreement.

     B. The Company  wishes to issue  Capital  Stock for up to $40 million on or
before December 31, 2001 (the "Equity Issuance").

     C. On and  subject to the terms and  conditions  hereof,  the  Company  has
requested  that the Agents and the  Lenders,  and the Agents and the Lenders are
willing to, (i) waive compliance with certain financial covenants for the period
ended June 29, 2001, (ii) amend certain
 provisions of the Credit Agreement,  and
(iii) agree as to the  application  of the Net Proceeds of the Equity  Issuance,
all as set forth herein.

     Now,  therefore,  in consideration of the mutual execution hereof and other
good and valuable consideration, the parties hereto agree as follows:

     1. Amendments to Credit  Agreement.  Upon the "Effective  Date" (as defined
below), the Credit Agreement shall be amended as follows:

     (a)  The  definition  of  "Fixed  Charges"  in  Section  1.1 of the  Credit
Agreement  shall be amended by adding the following  phrase before the period at
the end thereof:

     "minus (e) for  purposes  of  calculating  "Fixed  Charges"  for the fiscal
quarter ending  September 30, 2001, any amounts paid by Seller or its affiliates
to reduce the purchase  price of the stock and assets  pursuant to the Stock and
Asset Purchase Agreement during such quarter."

     (b)  Section  2.15(d)(ii)  of the  Credit  Agreement  shall be  amended  by
deleting the table contained therein and replacing such table with the following
table:

<TABLE>
<CAPTION>
===================================== =================== ================================= ==========================
                                          APPLICABLE
                                        FLOATING RATE                                         APPLICABLE COMMITMENT
           LEVERAGE RATIO                   MARGIN         APPLICABLE EUROCURRENCY MARGIN        FEE PERCENTAGE
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
<S>                                        <C>                        <C>                           <C>            
Less than 1.50                              0.25%                      1.25%                         0.375%
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
1.50 or greater, but less than 2.00         0.75%                      1.75%                         0.375%
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
2.00 or greater, but less than 2.50         1.25%                      2.25%                         0.500%
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
</TABLE>


                                       99

<PAGE>

<TABLE>
<CAPTION>
===================================== =================== ================================= ==========================
                                          APPLICABLE
                                        FLOATING RATE                                         APPLICABLE COMMITMENT
           LEVERAGE RATIO                   MARGIN         APPLICABLE EUROCURRENCY MARGIN        FEE PERCENTAGE
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
<S>                                        <C>                        <C>                           <C>    
2.50 or greater, but less than 2.75         1.75%                      2.75%                         0.500%
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
2.75 or greater, but less than 3.00         2.00%                      3.00%                         0.500%
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
3.00 or greater                             2.25%                      3.25%                         0.500%
===================================== =================== ================================= ==========================
</TABLE>


     (c) Section 5.3(a) of the Credit Agreement shall be amended by inserting at
the end of such  Section  the text "and no Default or  Unmatured  Default  would
result after  giving  effect to the making of any Loan or issuance of any Letter
of Credit."

     (d) Section 7.4(a) of the Credit Agreement shall be deleted in its entirety
and replaced with the following new Section 7.4(a):

          (a) Minimum Fixed Charge Coverage Ratio. The Company shall maintain as
     of the end of each  fiscal  quarter  set forth  below  (i) for each  fiscal
     quarter  ending on or after  September  30, 2002,  a Fixed Charge  Coverage
     Ratio for the four fiscal  quarter  period then  ending,  and (ii) for each
     fiscal quarter  ending on or before June 30, 2002, a Fixed Charge  Coverage
     Ratio for such fiscal  quarter,  of not less than the ratio set forth below
     opposite such period:


                         Fiscal Quarter Ending                       Ratio
                         ---------------------                       -----
        September 30, 2001                                         1.00:1.00
        December 31, 2001 through March 31, 2003                   1.20:1.00
        June 30, 2003                                              1.50:1.00
        September 30, 2003                                         1.75:1.00
        December 31, 2003                                          2.00:1.00
        March 31, 2004 and June 30, 2004                           2.25:1.00
        September 30, 2004 and thereafter                          2.50:1.00

     (e) Section 7.4(b) of the Credit Agreement shall be deleted in its entirety
and replaced with the following new Section 7.4(b):

          (b) Maximum  Leverage Ratio. The Company shall at all times during the
     periods  specified  below  maintain  a Leverage  Ratio for the four  fiscal
     quarter  period then  ending of not greater  than the ratio set forth below
     opposite such period:

                          Fiscal Quarter Ending                      Ratio
                          ---------------------                      -----
         September 30, 2001                                        3.90:1.00
         December 31, 2001                                         3.25:1.00
         March 31, 2002                                            2.50:1.00
         June 30, 2002                                             2.00:1.00
         September 30, 2002                                        1.75:1.00
         December 31, 2002 and thereafter                          1.50:1.00

     2. Waiver.  Subject to the conditions and  effectiveness  of this Agreement
and otherwise notwithstanding the provisions of any Loan Document, the Agent and
the Lenders hereby waive (a) any Default arising under Section  8.1(b)(i) of the
Credit Agreement  resulting solely from the Company's failure to comply with the
financial covenants set forth in Sections 7.4(a) and (b) of the Credit Agreement
for the period of four fiscal  quarters  ended June 29, 2001 and (b) solely with
respect to the  prepayment  referenced  in Section 6(d) of this  Agreement,  the
notice requirements set forth in Section 2.5(a) of the Credit Agreement.

                                      100

<PAGE>

     3. Agreement With Respect to Application of Certain Mandatory  Prepayments.
In addition to the prepayment referenced in Section 6(d) of this Agreement,  the
Company,  the  Agents  and the  Lenders  hereby  agree that 50% of the first $20
million of Net Proceeds of the Equity Issuance  immediately  shall be applied to
prepay  the Term Loans in the  manner  set forth in  Section  2.5(b)(ix)  of the
Credit Agreement. The Agents and the Lenders hereby waive any requirement in the
Credit  Agreement  that the  remaining  Net  Proceeds of the Equity  Issuance be
applied to repay the Term Loan;  provided  that no Default or Unmatured  Default
exists at the time of such Equity Issuance.

     4. Agreement With Respect to Equity  Issuance.  The Company agrees that the
Equity Issuance will be on terms and conditions  reasonably  satisfactory to the
Agents.

     5.  Representations  and Warranties of the Company.  The Company represents
and warrants that:

     (a) it has the requisite power and authority and legal right to execute and
deliver this Amendment and Waiver and to perform its obligations hereunder.  The
execution  and  delivery  by the  Company of this  Amendment  and Waiver and the
performance of its  obligations  hereunder  have been duly  authorized by proper
proceedings,  and this  Amendment  and  Waiver  constitutes  a legal,  valid and
binding obligation of the Company  enforceable against it in accordance with its
terms, except as enforceability may be limited by any bankruptcy,  insolvency or
similar law affecting the enforcement of creditors' rights generally;

     (b) Each of the  representations  and  warranties  contained  in the Credit
Agreement  and the other Loan  Documents  is true and  correct  in all  material
respects on and as of the date hereof as if made on the date hereof; and

     (c) After  giving  effect to this  Amendment  and  Waiver,  no  Default  or
Unmatured Default has occurred and
is continuing.

     6. Effective Date. This Amendment and Waiver shall become  effective on the
date (the "Effective Date") on which each of the following items shall have been
received by Administrative  Agent or satisfied,  as the case may be, all in form
and substance satisfactory to the Administrative Agent:

     (a) duly executed Amendment and Waiver, executed by the Company, the Agents
and the Required Lenders (without respect to whether it has been executed by all
the Lenders);

     (b) a reaffirmation  of guaranty in form and substance  satisfactory to the
Administrative Agent, duly executed by each Guarantor;

     (c)  payment  of an  amendment  fee to the  Administrative  Agent,  for the
ratable  benefit of each Lender  signatory to this  Amendment and Waiver,  in an
amount equal to 0.200% of the Aggregate Commitment as of June 30, 2001;

     (d)  permanent  prepayment  of the  Term  Loan in an  amount  equal  to $10
million,  which  shall be  applied to the  outstanding  balance of the Term Loan
against all  remaining  scheduled  principal  installments  in inverse  order of
maturity ; and

     (e) such other  documents  as the  Administrative  Agent or its counsel may
have reasonably requested.

     7. Reference to and Effect Upon the Credit Agreement.
                           

     (a) Except as  specifically  amended  above,  the Credit  Agreement and the
other  Loan  Documents  shall  remain in full  force and  effect  and are hereby
ratified and confirmed.

     (b) The execution,  delivery and effectiveness of this Amendment and Waiver
shall not operate as a waiver of any other  right,  power or remedy of any Agent
or Lender under the Credit Agreement or

                                      101

<PAGE>


any other Loan  Document,  or constitute a waiver of any provision of the Credit
Agreement or any Loan Document,  except as specifically  set forth herein.  Upon
the  effectiveness  of this  Amendment and Waiver,  each reference in the Credit
Agreement to "this Agreement",  "hereunder", "hereof" or words of similar import
shall mean and be a reference  to the Credit  Agreement as amended  hereby,  and
each  reference in the other Loan Documents to the Credit  Agreement  shall mean
and be a reference to the Credit Agreement as amended hereby.

     8. Costs and Expenses.  The Company  hereby  affirms its  obligation  under
Section 11.6 of the Credit Agreement to reimburse the  Administrative  Agent for
all reasonable costs and out-of-pocket expenses (including reasonable attorneys'
and  paralegals'  fees and time  charges of  attorneys  and  paralegals  for the
Administrative Agent) paid or incurred by the Administrative Agent in connection
with the preparation,  negotiation,  execution, delivery,  syndication,  review,
proposed or completed amendment,  waiver or modification,  and administration of
the Loan Documents.

     9.  GOVERNING LAW. ANY DISPUTE  BETWEEN THE COMPANY AND THE  ADMINISTRATIVE
AGENT,  ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS  ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED BETWEEN THEM IN
CONNECTION  WITH,  THIS AMENDMENT AND WAIVER OR ANY OF THE OTHER LOAN DOCUMENTS,
AND WHETHER ARISING IN CONTRACT,  TORT, EQUITY, OR OTHERWISE,  SHALL BE RESOLVED
IN  ACCORDANCE  WITH THE INTERNAL  LAWS (BUT WITHOUT  REGARD TO THE CONFLICTS OF
LAWS PROVISIONS) OF THE STATE OF ILLINOIS.

     10.  Headings.  Section  headings in this Amendment and Waiver are included
herein for convenience of reference only and shall not constitute a part of this
Amendment and Waiver for any other purposes.

     11.  Counterparts.  This Amendment and Waiver may be executed in any number
of counterparts,  each of which when so executed shall be deemed an original but
all of such counterparts shall constitute one and the same instrument.


                            [signature pages follow]


                                      102

<PAGE>

                                 
     IN WITNESS WHEREOF,  the Company,  the Lenders and the Agents have executed
this Amendment and Waiver of the date first above written.

                  TRIMBLE NAVIGATION LIMITED, as the Company



                  By: /s/ Mary Ellen Genovese
                     -------------------------------------------------------
                       Name: Mary Ellen Genovese
                       Title: CFO


                  ABN AMRO BANK N.V., as Administrative Agent, Issuing Bank, 
                  Swing Line Bank, Alternate Currency Bank, and Lender


                  By: /s/ Ruby P. Galang
                      -------------------------------------------------------
                       Name: Ruby P. Galang
                       Title: Vice President


                  By: /s/ John Hill
                      -------------------------------------------------------
                       Name: John Hill
                       Title: Assistant Vice President


                  FLEET NATIONAL BANK, as Syndication Agent and Lender



                  By: /s/ Lee A Merkle-Raymond
                      -------------------------------------------------------
                       Name: Lee A Merkle-Raymond
                       Title: Director


                  THE BANK OF NOVA SCOTIA, as
                  Documentation Agent and Lender


                  By: /s/ Chris Osborn
                      -------------------------------------------------------
                       Name: Chris Osborn
                       Title: Director


                  ERSTE BANK, NEW YORK BRANCH, as Lender


                  By: /s/ Robert L.Wagman
                      -------------------------------------------------------
                       Name: Robert L. Wagman
                       Title: Vice President


                  By: /s/ Ruth S. Burrton
                      -------------------------------------------------------
                      Name: Ruth S. Burrton

                                      103

<PAGE>

                  Title: Managing Director


                  WELLS FARGO BANK, as Lender


                  By: ---------------------------------------------------
                       Name:
                       Title:


                  MERITA BANK PLC, NEW YORK BRANCH, as Lender


                  By: /s/ Ulf Forstrom
                  -------------------------------------------------------
                    Name: Ulf Forstrom
                    Title: Vice President


                  By: /s/ Henrik Brink
                  -------------------------------------------------------
                    Name: Henrik Brink
                    Title: Vice President


                  BANK OF THE WEST, as Lender


                  By:----------------------------------------------------
                      Name:
                      Title:


                  BARCLAYS BANK PLC, as Lender


                   By: /s/ Sydney G. Dennis
                       -------------------------------------------------------
                         Name: Sydney G. Dennis
                         Title: Director


                   NATIONAL CITY BANK OF KENTUCKY, as Lender


                   By:-------------------------------------------------------
                        Name:
                        Title:


                   IBM CREDIT CORPORATION, as Lender


                   By: /s/ Thomas S. Curcio
                       -------------------------------------------------------
                          Name: Thomas S. Curcio
                          Title: Manager of Credit


                                      104

<PAGE>






                                 EXHIBIT 10.79

                 AMENDMENT NO. 2 AND WAIVER TO CREDIT AGREEMENT


     This  Amendment No. 2 and Waiver (this  "Amendment  and Waiver") is entered
into as of  December  18,  2001  by and  among  TRIMBLE  NAVIGATION  LIMITED,  a
California  corporation  (the  "Company"),  the  institutions  from time to time
parties hereto as Lenders, ABN AMRO BANK, N.V. in its capacity as administrative
agent (the  "Administrative  Agent")  for itself  and the other  Lenders,  FLEET
NATIONAL BANK, as Syndication Agent (the "Syndication  Agent"),  and THE BANK OF
NOVA SCOTIA,  as Documentation  Agent (the  "Documentation  Agent" and, together
with the Administrative Agent and the Syndication Agent, the "Agents").


                                    RECITALS


     A. The Company, the Agents and the Lenders are party to that certain Credit
Agreement dated as of July 14, 2000 (the "Credit  Agreement").  Unless otherwise
specified herein, capitalized terms used in this Amendment and Waiver shall have
the meanings ascribed to them by the Credit Agreement.

     B. The Company  wishes to issue common stock for cash  consideration  of at
least $25 million on or before January 31, 2002 (the "Equity Issuance").

     C. On and  subject to the terms and  conditions  hereof,  the  Company  has
requested that the Lenders,  and the Required  Lenders are willing to, (i) waive
compliance
 with the minimum Fixed Charge  Coverage Ratio financial  covenant for
the period ended December 31, 2001, (ii) amend certain  provisions of the Credit
Agreement,  and (iii)  agree as to the  application  of the Net  Proceeds of the
Equity Issuance, all as set forth herein.

     Now,  therefore,  in consideration of the mutual execution hereof and other
good and valuable consideration, the parties hereto agree as follows:

     1. Amendment to Credit  Agreement.  Upon the  "Effective  Date" (as defined
below),  the Credit Agreement shall be amended by adding a new Section 8.1(n) to
the Credit Agreement which reads as follows:
                        

     "(n) Failure to Issue Equity Interests. The Company shall not have received
on or prior to January 31, 2002 at least $25  million in Net  Proceeds  from the
issuance of common stock during the period from December 18, 2001 to such date."

     2. Waiver.  Subject to the conditions and  effectiveness  of this Amendment
and Waiver and otherwise  notwithstanding  the  provisions of any Loan Document,
and the Required  Lenders  hereby waive (a) any Default  arising  under  Section
8.1(b)(i) of the Credit Agreement resulting solely from the Company's failure to
comply with the  financial  covenant  set forth in Section  7.4(a) of the Credit
Agreement  for the fiscal  quarter  ended  December 31, 2001 and (b) solely with
respect  to the  prepayments  referenced  in  Sections  3(a)  and  5(d)  of this
Amendment and Waiver, the notice requirements set forth in Section 2.5(a) of the
Credit Agreement.

     3. Agreements by the Company and the Required Lenders.
                          

     (a)  Application  of Certain  Mandatory  Prepayments.  In  addition  to the
prepayment  referenced in Section 5(d) of this Amendment and Waiver, the Company
agrees that the Term Loans shall  immediately  upon  consummation  of the Equity
Issuance  be prepaid in an amount  equal to (i) 50% of the Net  Proceeds  of the
Equity  Issuance  less (ii) the amount of the  prepayment  received  pursuant to
Section 5(d) of this Amendment and Waiver,  such prepayment to be applied in the
manner set forth in Section  2.5(b)(ix)  of the Credit  Agreement.  The Required
Lenders hereby waive any requirement in the Credit  Agreement that the remaining
Net 

                                      105

<PAGE>


Proceeds of the Equity Issuance be applied to repay the Term Loan; provided that
no Default or Unmatured Default exists at the time of such Equity Issuance.

     (b) Terms and  Conditions of Equity  Issuance.  The Company agrees that the
Equity Issuance will be on terms and conditions  reasonably  satisfactory to the
Administrative Agent.

     (c) Fixed Charge Coverage Ratio. The Company and the Required Lenders agree
that solely for purposes of calculating compliance with the minimum Fixed Charge
Coverage Ratio covenant set forth in Section 7.4(a) of the Credit  Agreement for
the fiscal quarter ending March 31, 2002,  "Fixed Charge  Coverage  Ratio" shall
mean the ratio of (a) the sum of (i) EBITDA plus (ii) up to $4.7  million of Net
Proceeds  received  by the  Company  in  connection  with a joint  venture  with
Caterpillar Inc., an issuance of Equity Interests other than the Equity Issuance
or, with the Administrative Agent's prior approval of, any other transaction, to
(b) Fixed Charges.

     4.  Representations  and Warranties of the Company.  The Company represents
and warrants that:
                           

     (a) it has the requisite power and authority and legal right to execute and
deliver this Amendment and Waiver and to perform its obligations hereunder.  The
execution  and  delivery  by the  Company of this  Amendment  and Waiver and the
performance of its  obligations  hereunder  have been duly  authorized by proper
proceedings,  and this  Amendment  and  Waiver  constitutes  a legal,  valid and
binding obligation of the Company  enforceable against it in accordance with its
terms, except as enforceability may be limited by any bankruptcy,  insolvency or
similar law affecting the enforcement of creditors' rights generally;

     (b) Each of the  representations  and  warranties  contained  in the Credit
Agreement  and the other Loan  Documents  is true and  correct  in all  material
respects on and as of the date hereof as if made on the date hereof; and

     (c) After  giving  effect to this  Amendment  and  Waiver,  no  Default  or
Unmatured Default has occurred and is continuing.

     5. Effective Date. This Amendment and Waiver shall become  effective on the
date (the "Effective Date") on which each of the following items shall have been
received by the  Administrative  Agent or satisfied,  as the case may be, all in
form and substance satisfactory to the Administrative Agent:

     (a) duly  executed  Amendment  and  Waiver,  executed by the  Company,  the
Administrative Agent and the Required Lenders (without respect to whether it has
been executed by all the Lenders);

     (b) a reaffirmation  of guaranty in form and substance  satisfactory to the
Administrative Agent, duly executed by each Guarantor;

     (c)  payment  of an  amendment  fee to the  Administrative  Agent,  for the
ratable  benefit of each Lender  signatory to this  Amendment and Waiver,  in an
amount equal to 0.250% of the Aggregate Commitment as of the Effective Date;

     (d)  permanent  prepayment  of the  Term  Loan in an  amount  equal  to $10
million,  which the parties agree shall be applied to the outstanding balance of
the Term Loan against all remaining scheduled principal  installments in inverse
order of maturity; and

     (e) such other  documents  as the  Administrative  Agent or its counsel may
have reasonably requested.

     In the event the Effective Date has not occurred on or before  December 31,
2001,  this  Amendment and Waiver shall not become  operative and shall be of no
force or effect.

                                      106

<PAGE>


     6. Reference to and Effect Upon the Credit Agreement.
                          
     (a) Except as  specifically  amended  above,  the Credit  Agreement and the
other Loan Documents shall
remain in full force and effect and are hereby ratified and confirmed.

     (b) The execution,  delivery and effectiveness of this Amendment and Waiver
shall  not  operate  as a waiver  of any  other  right,  power or  remedy of the
Administrative  Agent or any Lender under the Credit Agreement or any other Loan
Document, or constitute a waiver of any provision of the Credit Agreement or any
Loan Document,  except as specifically set forth herein.  Upon the effectiveness
of this Amendment and Waiver,  each  reference in the Credit  Agreement to "this
Agreement", "hereunder", "hereof" or words of similar import shall mean and be a
reference to the Credit  Agreement as amended hereby,  and each reference in the
other Loan  Documents to the Credit  Agreement  shall mean and be a reference to
the Credit Agreement as amended hereby.

     7. Costs and Expenses.  The Company  hereby  affirms its  obligation  under
Section 11.6 of the Credit Agreement to reimburse the  Administrative  Agent for
all reasonable costs and out-of-pocket expenses (including reasonable attorneys'
and  paralegals'  fees and time  charges of  attorneys  and  paralegals  for the
Administrative Agent) paid or incurred by the Administrative Agent in connection
with the preparation,  negotiation,  execution, delivery,  syndication,  review,
proposed or completed amendment,  waiver or modification,  and administration of
the Loan Documents.

     8.  GOVERNING LAW. ANY DISPUTE  BETWEEN THE COMPANY AND THE  ADMINISTRATIVE
AGENT,  ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS  ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED BETWEEN THEM IN
CONNECTION  WITH,  THIS AMENDMENT AND WAIVER OR ANY OF THE OTHER LOAN DOCUMENTS,
AND WHETHER ARISING IN CONTRACT,  TORT, EQUITY, OR OTHERWISE,  SHALL BE RESOLVED
IN  ACCORDANCE  WITH THE INTERNAL  LAWS (BUT WITHOUT  REGARD TO THE CONFLICTS OF
LAWS PROVISIONS) OF THE STATE OF ILLINOIS.

     9.  Headings.  Section  headings in this  Amendment and Waiver are included
herein for convenience of reference only and shall not constitute a part of this
Amendment and Waiver for any other purposes.

     10.  Counterparts.  This Amendment and Waiver may be executed in any number
of counterparts,  each of which when so executed shall be deemed an original but
all of such counterparts shall constitute one and the same instrument.


                            [signature pages follow]


                                      107

<PAGE>

         IN WITNESS WHEREOF, the Company, the Required Lenders and the
Administrative Agent have executed this Amendment and Waiver as of the date
first above written.

              TRIMBLE NAVIGATION LIMITED, as the Company



              By:/s/ Mary Ellen Genovese
                 ----------------------------------------------------------
                   Name: Mary Ellen Genovese
                   Title: CFO


              ABN AMRO BANK N.V., as Administrative Agent, Issuing Bank, 
              Swing Line Bank, Alternate Currency Bank, and Lender


              By: /s/ David C. Carrington
                  ----------------------------------------------------------
                   Name: David C. Carrington
                   Title: Group Vice President


              By: /s/ Frances O'R. Logan
                  ----------------------------------------------------------
                   Name: Frances O'R. Logan
                   Title: Senior Vice President


              FLEET NATIONAL BANK, as Syndication Agent and Lender



              By: /s/ Lee A. Merkle-Raymond
                  ----------------------------------------------------------
                   Name: Lee A. Merkle-Raymond
                   Title: Director


              THE BANK OF NOVA SCOTIA, as
              Documentation Agent and Lender


              By: /s/ Liz Hanson
                  ----------------------------------------------------------
                   Name: Liz Hanson
                   Title: Director


              ERSTE BANK, NEW YORK BRANCH, as Lender


              By:----------------------------------------------------------
                   Name:
                   Title:


              WELLS FARGO BANK, as Lender

                                      108

<PAGE>


              By: /s/ Lisa M. Hippen
                  ----------------------------------------------------------
                    Name: Lisa M. Hippen
                    Title: Vice President


              MERITA BANK PLC, NEW YORK BRANCH, as Lender


              By: /s/ Ulf Forsstrom
                  ----------------------------------------------------------
                    Name: Ulf Forsstrom
                    Title: Vice President


              By: /s/ Henrik Brink
                  ----------------------------------------------------------
                   Name: Henrik Brink
                   Title: Vice President


              BANK OF THE WEST, as Lender


              By: /s/ David L. Chicca
                  ----------------------------------------------------------
                   Name: David L. Chicca
                   Title: Vice President


              BARCLAYS BANK PLC, as Lender


              By:/s/ Douglas Bernegger
                 ----------------------------------------------------------
                  Name: Douglas Bernegger
                  Title: Director
        

              NATIONAL CITY BANK OF KENTUCKY, as Lender


              By:----------------------------------------------------------
                   Name:
                   Title:


             IBM CREDIT CORPORATION, as Lender


             By:/s/ Thomas S. Curcio
                ----------------------------------------------------------
                 Name: Thomas S. Curcio
                 Title: Manager of Credit


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                                  EXHIBIT 21.1
                           TRIMBLE NAVIGATION LIMITED
                       LIST OF SUBSIDIARIES OF REGISTRANT

Name of Subsidiary                                Jurisdiction of Incorporation
------------------------------------------        ------------------------------

TR Navigation Corporation                                      California

Trimble Export Limited                                         California

Trimble Specialty Products, Inc.                               California

Jamestown Manufacturing Corporation                            California

Trimble Acquisition Corp.                                      California

Tripod Data Systems                                            Oregon

TNL Flight Services, Inc                                       Texas

Trimble Middle East WLL                                        Egypt

Trimble Navigation France S.A.                                 France

Trimble Navigation Australia Pty Limited                       Australia

Trimble Mexico S. de R.L                                       Mexico

Trimble Brasil Limitada                                        Brazil

Trimble Navigation Europe Limited                              United Kingdom

Trimble Navigation Deutschland GmbH                            Germany

Trimble Navigation New Zealand Limited                         New Zealand

Trimble Navigation Iberica S.L.                                Spain

Trimble Navigation Singapore PTE Limited                       Singapore

Datacom Software Limited                                       California

Datacom Software Research Limited                              New Zealand

Trimble Navigation Italia s.r.l                                Italy

Trimble Navigation International Limited                       California

Trimble International Holdings S.L.                            Spain

Trimble Holdings GmbH                                          Germany

Trimble AB                                                     Sweden

Trimble Belgium BVBA                                           Belgium



                                      110

<PAGE>






                            EXHIBIT 21.1 (continued)
                           TRIMBLE NAVIGATION LIMITED
                       LIST OF SUBSIDIARIES
 OF REGISTRANT

Name of Subsidiary                                Jurisdiction of Incorporation
------------------------------------------        ------------------------------
Trimble Japan K.K.                                            Japan

Spectra Precision Pty Ltd.                                    Australia

Spectra Precision Ltd.                                        United Kingdom

SPHM Inc.                                                     Delaware

Trimble Netherlands B.V.                                      Netherlands

Spectra Precision s.r.l                                       Italy

Trimble Canada Ltd.                                           Canada

Trimble France S.A.                                           France

Spectra Precision GesmbH                                      Austria

Spectra Precision Mexico, SA de CV                            Mexico

Spectra Precision GmbH                                        Germany

Spectra Precision Kaiserslautern GmbH                         Germany

Spectra Precision Scandinavia AB                              Sweden

ZSP Geodetic Systems GmbH                                     Germany

Trimble Information Services, Inc.                            California


                                      111

<PAGE>


                                  EXHIBIT 23.1
                           TRIMBLE NAVIGATION LIMITED

               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


     We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos.  33-37384,  33-39647,  33-45167,  33-45604,  33-46719,  33-50944,
33-57522,  33-62078,  33-78502,   33-84362,  33-91858,   333-04670,   333-28429,
333-53703,  333-84949,  333-38264,  333-65758,  and 333-65760) pertaining to the
1983 Stock Option Plan, the Trimble  Navigation Savings and Retirement Plan, the
1990  Director  Stock Option  Plan,  the  "Position  for Us for  Progress"  1992
Employee Stock Bonus Plan, the 1992  Management  Discount Stock Option Plan, and
the 1993 Stock Option Plan,  and the related  Prospectuses,  of our report dated
January 25,  2002,  except for the  paragraphs  under the caption  "Subordinated
Note" of Note 11 and  Note 23,  as to which  the date is March  20,  2002,  with
respect  to the  consolidated  financial  statements  and  schedule  of  Trimble
Navigation  Limited included in the Annual Report (Form 10-K) for the year ended
December 28, 2001.




                                       /s/ Ernst & Young LLP



Palo Alto, California
March 25 2002



                                      112

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