SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Trimble Navigation Limited
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule, or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
TRIMBLE NAVIGATION LIMITED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 1998
To The Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Trimble
Navigation Limited (the "Company") will be held at the Company's facility at 749
North Mary Avenue, Sunnyvale, California 94088, on Thursday, May 5, 1998, at
4:00 p.m. local time, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve an increase of 600,000 shares in the number of shares of
Common Stock reserved for issuance under the Company's 1993 Stock
Option Plan from 3,200,000 to 3,800,000 shares.
3. To approve an amendment of the Company's 1993 Stock Option Plan
increasing the limitation on the number of shares of Common Stock
which may be granted to a current employee, in any fiscal year, pursuant
to options under the 1993 Stock Option Plan from 100,000 shares to a new
maximum of 150,000 shares.
4. To approve an increase of 650,000 shares in the number of shares of
Common Stock available for purchase by eligible employees under the
Company's 1988 Employee Stock Purchase Plan from 1,700,000 to 2,350,000
shares.
5. To approve an amendment of the Company's bylaws to provide that the
Company may, upon the approval of the board of directors alone and
without further shareholder approval, make loans to the Company's
officers for the purpose of assisting in the acquisition of their
primary residence in exceptional housing markets where such location
is for the Company's benefit, provided that such loans are secured by
such real property.
6. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the current fiscal year ending
January 1, 1999.
7. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on March 13, 1998,
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the meeting, you are urged to
mark, sign, date, and return the enclosed Proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if such shareholder returned a Proxy.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
Robert A. Trimble
Secretary
Sunnyvale, California
April 6, 1998
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU
ARE REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN
THE POSTAGE-PREPAID ENVELOPE PROVIDED TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING.
TRIMBLE NAVIGATION LIMITED
_______________
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 5, 1998
The enclosed Proxy is solicited on behalf of the Board of Directors of
Trimble Navigation Limited, a California corporation (the "Company"), for use at
the Company's Annual Meeting of Shareholders ("Annual Meeting") to be held at
the Company's facility at 749 North Mary Avenue, Sunnyvale, California 94088, on
Thursday, May 5, 1998, at 4:00 p.m. local time, and at any adjournment(s) or
postponement(s) thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders.
The Company's principal executive offices are located at 645 North Mary
Avenue, Sunnyvale, California 94088. The telephone number at that address is
(408) 481-8000.
These proxy solicitation materials were mailed on or about April 6, 1998,
to all shareholders entitled to vote at the Annual Meeting. A copy of the
Company's 1997 Annual Report on Form 10-K accompanies this Proxy Statement.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date and Shares Outstanding
Shareholders of record at the close of business on March 13, 1998 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting. At
the Record Date, the Company had issued and outstanding 23,243,748 shares of
common stock ("Common Stock").
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the meeting and voting in person.
Voting
Each share of Common Stock outstanding on the Record Date is entitled to
one vote. In addition, every shareholder voting for the election of directors
may cumulate such shareholder's votes and give one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of
shares held by the shareholder as of the Record Date, or distribute such
shareholder's votes on the same principle among as many candidates as the
shareholder may select, provided that votes cannot be cast for more than the
number of directors to be elected. However, no shareholder shall be entitled to
cumulate votes unless the candidate's name has been placed in nomination prior
to the voting and the shareholder, or any other shareholder, has given notice at
the meeting prior to the voting of the intention to cumulate the shareholder's
votes. An automated system administered by the Company's transfer agent
tabulates the votes. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting at the Annual Meeting
and the presence or absence of a quorum. The required quorum is a majority of
the shares outstanding on the Record Date. Abstentions are counted in
tabulations of the votes cast on proposals presented to shareholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
1
Solicitation of Proxies
The cost of this solicitation will be borne by the Company. The Company has
retained the services of Skinner & Co. to solicit proxies, for which services
the Company has agreed to pay $3,500 and will reimburse certain out-of-pocket
expenses. The Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
soliciting materials to such beneficial owners. Proxies may also be solicited by
certain of the Company's directors, officers, and regular employees, without
additional compensation, personally or by telephone, telegram or facsimile.
Deadline for Receipt of Shareholder Proposals for 1999 Annual Meeting
Proposals of shareholders of the Company intended to be presented by such
shareholders at the Company's 1999 Annual Meeting must be received by the
Company no later than December 5, 1998 in order that they may be included in the
proxy statement and form of proxy related to that meeting.
PROPOSAL I-ELECTION OF DIRECTORS
Nominees
A board of five directors is to be elected at the Annual Meeting. The Board
of Directors of the Company has authorized the nomination at the Annual Meeting
of the persons named below as candidates.
The names of the nominees and certain information about them are set forth
below:
Director
Name of Nominee Age Principal Occupation Since
- -------------------------------------------------------------------------------------------------------------------------
Charles R. Trimble 56 President and Chief Executive Officer of the Company 1981
John B. Goodrich 56 Member of the law firm of Wilson Sonsini Goodrich & 1981
Rosati, P.C., legal counsel to the Company
William Hart 57 General Partner, Technology Partners 1984
Bradford W. Parkinson 63 Professor, Stanford University 1984
Robert S. Cooper 66 President, Chief Executive Officer and Chairman of the 1989
Board of Directors of Atlantic Aerospace Electronic
Corporation
Charles R. Trimble has served as President, Chief Executive Officer, and a
director of the Company since 1981 and was one of the founders and the senior
executive officer of the predecessor limited partnership organized in November
1978. Prior to founding the Company, he was Manager of Integrated Circuit
Research and Development at the Santa Clara division of Hewlett-Packard Company,
an instrumentation and computer manufacturer. Mr. Trimble received a B.S. degree
in Engineering (Physics) in 1963 and an M.S. degree in Electrical Engineering in
1964 from the California Institute of Technology.
John B. Goodrich has served as a director of the Company since January
1981. Mr. Goodrich is a member of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, legal counsel to the Company. Mr. Goodrich received a B.A. degree
from Stanford University in 1963, a J.D. degree from the University of Southern
California in 1966, and an L.L.M. degree in Taxation from New York University in
1970.
2
William Hart has served as a director of the Company since December 1984.
Mr. Hart is a General Partner of Technology Partners, a venture capital
management firm that he founded in 1980. Mr. Hart previously held positions with
Cresap, McCormick and Paget, a management consulting firm, and with
International Business Machines Corporation. Mr. Hart is also currently a
director of CellNet Data Systems, Inc., The Qualix Group, Inc. and Silicon
Gaming, Inc. Mr. Hart received a Bachelor of Management Engineering degree from
Rensselaer Polytechnic Institute in 1965 and an M.B.A. degree from the Amos Tuck
School of Business Administration at Dartmouth College in 1967.
Bradford W. Parkinson has served as a director of the Company since 1984,
and as a consultant to the Company since 1982. Dr. Parkinson has been a
Professor of Aeronautics and Astronautics at Stanford University since 1984 and
Program Manager for several Federal Aviation Administration sponsored research
projects on the use of Global Positioning Systems for navigation. Dr. Parkinson
was the original Program Manager for the Global Positioning System at the
Department of Defense, where he directed development from 1972 to 1978. Dr.
Parkinson received a B.S. degree in General Engineering from the U.S. Naval
Academy in 1957, an M.S. degree in Aeronautics/Astronautics Engineering from the
Massachusetts Institute of Technology in 1961, and a Ph.D. degree in
Astronautics Engineering from Stanford University in 1966.
Robert S. 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. From 1981 to 1985, he was Assistant Secretary of Defense for
Research and Technology and simultaneously held the position of Director for the
Defense Advanced Research Projects Agency (DARPA). Dr. Cooper received a B.S.
degree in Electrical Engineering from State University of Iowa in 1954, an M.S.
degree in Electrical Engineering from Ohio State University in 1958, and a
Doctor of Science degree in Electrical Engineering from the Massachusetts
Institute of Technology in 1963.
Vote Required
The five nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected as directors. Votes withheld from
any director are counted for purposes of determining the presence or absence of
a quorum, but have no other legal effect under California law. While there is no
definitive statutory or case law authority in California as to the proper
treatment of abstentions and broker non-votes in the election of directors, the
Company believes that both abstentions and broker non-votes should be counted
solely for purposes of determining whether a quorum is present at the Annual
Meeting. In the absence of controlling precedent to the contrary, the Company
intends to treat abstentions and broker non-votes with respect to the election
of directors in this manner.
Unless otherwise directed, the proxy holders will vote the proxies received
by them for the five nominees named above, all of whom were elected by the
shareholders at the last annual meeting and are presently directors of the
Company. In the event that any such nominee is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. In the event that additional persons are nominated for election as
directors, the proxy holders intend to vote all proxies received by them in such
a manner as will ensure the election of as many of the nominees listed above as
possible. In such event, the specific nominees to be voted for will be
determined by the proxy holders. It is not expected that any nominee will be
unable or will decline to serve as a director. The directors elected will hold
office until the next annual meeting of shareholders and until their successors
are duly elected and qualified.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote FOR the
re-election of the above-named directors to the Board of Directors of the
Company.
3
Board Meetings and Committees
The Board of Directors held ten meetings during the fiscal year ended
January 2, 1998. No director attended fewer than 75% of the aggregate of all
meetings of the Board of Directors and the committees, if any, upon which such
director served.
The Board of Directors has a standing Audit Committee. The members of the
Audit Committee are directors Hart and Parkinson. The Audit Committee held two
meetings during fiscal year 1997. The purposes of the Audit Committee are to
make such examinations as are necessary to monitor the corporate financial
reporting and the internal and external audits of the Company, to provide to the
Board of Directors the results of its examinations and recommendations derived
therefrom, to outline to the Board of Directors improvements made, or to be
made, in internal accounting controls, to nominate independent auditors, and to
provide such additional information as the committee may deem necessary to make
the Board of Directors aware of significant financial matters which require the
Board's attention.
The Board of Directors has a standing Compensation Committee. The members
of the Compensation Committee are directors Cooper and Goodrich. The
Compensation Committee held one meeting during fiscal year 1997. The purpose of
the Compensation Committee is to review and make recommendations to the full
Board of Directors with respect to all forms of compensation to be paid or
provided to the Company's executive officers.
The Board of Directors does not have a standing nominating committee or any
committee performing the functions of such committee.
Compensation Committee Interlocks and Insider Participation
Robert S. Cooper and John B. Goodrich served as members of the Compensation
Committee during the fiscal year ended January 2, 1998. No past or present
members of the Compensation Committee are or have been employees or officers of
the Company. Mr. Goodrich is a member of the law firm of Wilson Sonsini Goodrich
& Rosati, P.C., which was retained by the Company during the past fiscal year as
general legal counsel and which the Company proposes to continue to retain
during the current fiscal year.
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. The compensation of the Chief Executive Officer was 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. A portion of the Chief Executive
Officer's compensation package was established as base salary and the balance is
variable and consists of an annual cash bonus and stock option grants. Within
the established range, the Committee set the Chief Executive Officer's base
salary according to the Company's historical performance compared to peer
companies and the challenges and opportunities available to the Company. Based
on these considerations, the Committee raised the Chief Executive Officer's base
salary to $350,000 from $330,000. In addition, the Committee determined to
continue the Company's practice of paying the Chief Executive Officer an
additional $12,000 per year as supplemental compensation.
4
The Committee adopted a cash bonus program for fiscal year 1997 for senior
executives of the Company (including the Chief Executive Officer) which provided
for an annual bonus based upon a fixed percentage of each executive's base
salary within a range of target incentives as reported by a professional
compensation survey. Such base bonus amount was then adjusted by factoring in an
evaluation of each individual's performance and the overall ability of the
Company to achieve targeted levels of profitability. Such bonus amounts, if any,
were calculated and paid quarterly to the eligible senior executives. The total
bonus paid and accrued to the Chief Executive Officer under the bonus program
adopted for fiscal 1997 was $95,779. In addition, based on 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
the Chief Executive Officer should receive an option grant to purchase 20,000
shares of the Company's Common Stock with an exercise price equal to the current
fair market value and vesting ratably over the next five years.
The Committee also adopted similar policies with respect to the
compensation of other senior executive officers of the Company. A portion of
each compensation package was established as base salary and the balance is
variable and consists of an annual cash bonus, paid pursuant to the program
described above, and stock option grants. Using salary survey data supplied by
outside consultants and other publicly available data, such as proxy data from
peer companies, the Committee established base salaries for each senior
executive within a range of salaries of similarly situated executive officers at
comparable companies. In addition, these base salaries of senior executive
officers were then adjusted by the Committee taking into consideration factors
such as the relative performance of the Company, the performance of the business
unit for which the senior executive is responsible and the individual's past
performance and future potential. The size of option grants to senior executive
officers was determined by the Committee's evaluation of the executive's ability
to influence the Company's long-term growth and profitability. Generally, these
options are granted at the then current market price and because the value of an
option bears a direct relationship to the Company's stock price, it is an
incentive for managers to create value for shareholders. The Committee therefore
views stock options as an important component of its long-term,
performance-based compensation philosophy.
Robert S. Cooper, Member John B. Goodrich, Member
Compensation Committee Compensation Committee
Compensation of Directors
Cash Compensation. The Company currently does not pay any cash compensation
to directors for serving on the Board of Directors or committees of the Board of
Directors. The Company does reimburse all non-employee directors for travel and
other necessary business expenses incurred in the performance of their services
as directors.
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. A total of 380,000
shares of the Company's Common Stock is currently reserved for issuance upon the
exercise of options issuable pursuant to the Director Plan ("Director Options").
The Director Plan provides for the annual granting of nonstatutory stock options
to non-employee directors of the Company ("Outside Directors"). All such options
vest over five years and have an exercise price equal to the fair market value
of the Company's Common Stock on the date of grant. In addition, all such grants
are automatic and are not subject to the discretion of any person upon
re-election of each such director. During the fiscal year ended January 2, 1998,
Directors Cooper, Goodrich, Hart and Parkinson were each granted Director
Options to purchase 5,000 shares at an exercise price of $12.50 per share.
Other Arrangements. Dr. Parkinson has served as a consultant to the Company
since 1982. He is currently paid $4,750 per month for such services.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the shares of Company's Common Stock
beneficially owned as of the Record Date by: (i) all persons known to the
Company to be the beneficial owners of more than 5% of the Company's outstanding
Common Stock, (ii) each director of the Company, (iii) the Chief Executive
Officer of the Company and other executive officers of the Company named in the
Summary Compensation Table contained in "COMPENSATION OF EXECUTIVE OFFICERS",
and (iv) all directors and executive officers of the Company as a group:
Shares
Beneficially Owned (2)
-------------------------------------
5% Shareholders, Directors and Executive Officers (1) Number Percent (%)
------------------------------------------------------ -------------------------------------
Mellon Bank Corporation(3).......................................................... 1,357,623 5.84
c/o Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Charles R. Trimble(4)............................................................... 1,574,486 6.77
Robert S. Cooper(5)................................................................. 71,333 *
John B. Goodrich(6)................................................................. 30,154 *
William Hart(7)..................................................................... 69,375 *
Bradford W. Parkinson(8)............................................................ 54,317 *
James L. Sorden(9).................................................................. 225,616 *
David E. Vaughn(10)................................................................. 30,308 *
Michael P. Gagliardi(11)............................................................ 14,638 *
Dennis R. Ing(12)................................................................... 13,498 *
All Directors and Executive Officers as a group
(14 persons)(4)-(13)........................................................... 2,541,058 10.80
- ---------------------------
* Less than 1%
(1) Except as otherwise noted, 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 Bank Corporation is as reported by Mellon Bank Corporation pursuant to
a Schedule 13G, filed with the Securities and Exchange Commission on January 23, 1998. As reported by Mellon Bank
Corporation as a holding company, such beneficially owned shares include: 1,261,695 shares with sole voting power,
1,339,700 shares with sole dispositive power and 12,800 shares with shared dispositive power. In addition, as reported, such
shares are beneficially owned by Mellon Bank Corporation and direct or indirect subsidiaries including: Boston Safe Deposit
and Trust Company, Mellon Bank, N.A., Mellon Capital Management Corporation, The Boston Company Asset Management,
Inc., The Dreyfus Corporation, Boston Group Holdings, Inc., The Boston Company, Inc. and MBC Investment Corporation.
(4) Includes 1,552,341 shares held in a family limited partnership and 6,478 shares held pursuant to the Company's 401(k) Plan.
(5) Includes 38,333 shares subject to stock options exercisable within 60 days of the Record Date.
(6) Includes 11,666 shares subject to stock options exercisable within 60 days of the Record Date.
(7) Includes 1,106 shares held by TPW Management III, L.P., a venture capital fund of which Mr. Hart is a general partner. Also
includes 38,333 shares subject to stock options exercisable within 60 days of the Record Date.
(8) Includes 3 shares held by Dr. Parkinson's spouse, 2,515 shares held in a charitable remainder trust and 50,333 shares subject
to stock options exercisable within 60 days of the Record Date.
(9) Includes 2,941 shares subject to stock options exercisable within 60 days of the Record Date and 4,747 shares held pursuant
to the Company's 401(k) Plan.
(10) Includes 30,308 shares subject to stock options exercisable within 60 days of the Record Date.
(11) Includes 12,500 shares subject to stock options exercisable within 60 days of the Record Date.
(12) Includes 12,750 shares subject to stock options exercisable within 60 days of the Record Date.
(13) Includes 279,526 shares subject to stock options exercisable within 60 days of the Record Date.
6
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the cash compensation, including bonuses,
paid to the Chief Executive Officer of the Company and the four other most
highly compensated executive officers of the Company during fiscal years 1997,
1996 and 1995:
Summary Compensation Table
Long-term
Annual Compensation(1) Compensation (2)
----------------------------- -----------------
Securities
Underlying All Other
Salary Bonus Options Compensation (3)
Name and Principal Position Year ($) ($) (#) ($)
- ------------------------------- -------- -------------------------------------------------------------------------
Charles R. Trimble 1997 358,376 95,779 20,000 12,200(4)
President and Chief Executive Officer 1996 320,942 0 20,000 16,600(5)
1995 282,000 8,460 0 900
James L. Sorden 1997 246,513 45,501 20,000 1,200
Executive Vice President, 1996 221,583 0 20,000 1,200
Commercial Products 1995 203,333 6,100 0 700
David E. Vaughn 1997 224,283 47,118 20,000 47,821(6)
Executive Vice President, 1996 206,641 0 20,000 49,590(7)
Business Development 1995 192,500 5,775 0 49,358(8)
Michael P. Gagliardi 1997 186,418 80,142(9) 70,000(10) 139,581(11)
Vice President, Aerospace 1996 - - - -
1995 - - - -
Dennis R. Ing 1997 181,425 33,134 100,000(12) 1,200
Executive Vice President and 1996 90,880 0 45,000 800
Chief Financial Officer 1995 - - - -
- ---------------------------
(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 of the Company are eligible to participate in the Company's
401(k) plan.
(4) Includes $11,000 paid by the Company for tax planning services provided to Mr. Trimble.
(5) Includes $15,400 paid by the Company for tax planning services provided to Mr. Trimble.
(6) Includes $36,871 in connection with a loan made to Mr. Vaughn by the Company that was forgiven and related taxes paid
by the Company and an automobile allowance of $9,750.
(7) Includes $39,390 in connection with a loan made to Mr. Vaughn by the Company that was forgiven and related taxes paid
by the Company and an automobile allowance of $9,000.
(8) Includes $39,158 in connection with a loan made to Mr. Vaughn by the Company that was forgiven and related taxes paid
by the Company and an automobile allowance of $9,000.
(9) Includes a one-time signing bonus of $40,000 in connection with hiring Mr. Gagliardi.
(10) Includes a one-time grant of an option to purchase 50,000 shares in connection with hiring Mr. Gagliardi.
(11) Includes $138,382 of relocation costs paid by the Company in connection with hiring Mr. Gagliardi.
(12) Includes a one-time grant of an option to purchase 80,000 shares in connection with Mr. Ing's promotion to Executive Vice
President during the year.
7
The following table sets forth the number and terms of options granted to
the persons named in the Summary Compensation Table during the fiscal year ended
January 2, 1998:
Option Grants in Last Fiscal Year
Individual Grants
- ------------------------------------------------------------------------------------------------- Potential Realizable
Number of Value at Assumed
Securities % of Total Annual Rates of Stock
Underlying Options Price Appreciation
Options Granted to Exercise for Option Term (3)
Granted Employees in Price Expiration ---------------------------
Name (#) Fiscal Year (1) ($/Share) (2) Date 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------------------------
Charles R. Trimble.............. 20,000 2.04 17.50 11/7/02 102,200 227,150
James L. Sorden................. 20,000 2.04 17.50 11/7/02 102,200 227,150
David E. Vaughn................. 20,000 2.04 17.50 11/7/02 102,200 227,150
Michael P. Gagliardi............ 50,000 5.09 12.00 4/17/02 175,200 389,400
20,000 2.04 17.50 11/7/02 102,200 227,150
Dennis R. Ing................... 20,000 2.04 17.50 11/7/02 102,200 227,150
80,000 8.15 21.00 2/26/03 490,560 1,090,320
- ---------------------------
(1) The Company granted options to purchase an aggregate of 961,841 shares to employees and non-employee directors during
fiscal year 1997 pursuant to the Company's 1993 Stock Option Plan, the 1992 Management Discount Plan and the Company's
1990 Director Stock Option Plan.
(2) All options presented in this table were granted at an exercise price equal to the then fair market value of a share of the
Company's Common Stock on the date of grant, as quoted on the Nasdaq National Market System.
(3) 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 such
grants vest over five years and have a five-year three-month option term which, assuming the specified rates of annual
compounding, results in total appreciation of 29.2% (at 5% per year) and 64.9% (at 10% per year).
The following table provides information on option exercises by the persons
named in the Summary Compensation Table during the fiscal year ended January 2,
1998:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Shares Value Fiscal Year-End (#) at Fiscal Year-End ($)(1)
Acquired on Realized ----------------------------------------------------------------
Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------
Charles R. Trimble.......... - - 4,000 36,000 25,500 187,000
James L. Sorden............. 12,059 138,495 40,333 49,667 431,872 328,129
David E. Vaughn............. 20,833 191,300 25,307 49,667 247,710 328,129
Michael P. Gagliardi........ - - 0 70,000 0 572,500
Dennis R. Ing............... - - 9,000 136,000 57,375 374,500
- ---------------------------
(1) Represents the market value of the Common Stock underlying the options at fiscal year end, less the exercise price of "in-the-
money" options. The closing price of the Company's Common Stock on January 2, 1998 as quoted on the Nasdaq National
Market System was $21.75.
8
Changes to Compensation Plans
The Company has proposed amendments to increase the number of shares
reserved for issuance and sale under the Company's 1993 Stock Option Plan and
its 1988 Employee Stock Purchase Plan. Because all grants under the 1993 Stock
Option Plan are made at the discretion of the Board of Directors, future grants
under the 1993 Stock Option Plan are not yet determinable. Similarly, because
each employee's participation in the Company's 1988 Employee Stock Purchase Plan
is purely voluntary, the future benefits under such plan are also not yet
determinable. Accordingly, the following table summarizes the number of stock
options granted under the 1993 Stock Option Plan and the number of shares
purchased under the 1988 Employee Stock Purchase Plan during the fiscal year
ended January 2, 1998 by (i) the persons named in the Summary Compensation
Table, (ii) all current executive officers as a group, (iii) all current
directors who are not executive officers as a group, and (iv) all employees
(excluding executive officers) as a group.
New Plan Benefits
1988 Employee Stock
1993 Stock Option Plan (1) Purchase Plan (3)
---------------------------------------------------------------------------
Exercise
Price Number of Purchase Price Number of
($ per Share) Options ($ per Share) Shares
Name and Position (2) Granted (4) Purchased
- ------------------------------------------------------------------------------------------------------------- ----------------
Charles R. Trimble
President and Chief Executive Officer........ 17.50 20,000 - 0(5)
James L. Sorden
Executive Vice President,
Commercial Products.......................... 17.50 20,000 10.20 2,083
David E. Vaughn
Executive Vice President,
Business Development......................... 17.50 20,000 - 0
Michael P. Gagliardi
Vice President, Aerospace.................... 13.57 70,000 12.88 1,418
Dennis R. Ing
Executive Vice President and
Chief Financial Officer...................... 20.30 100,000 12.01 748
Executive Officer Group........................... 16.66 322,500 11.67 7,846
Non-Executive Director Group...................... - 0 - 0(6)
Non-Executive Officer Employee Group.............. 17.03 619,341 11.96 216,012
- ---------------------------
(1) Only employees and consultants (including officers and directors) of the Company are eligible to participate in the 1993 Stock
Option Plan.
(2) Exercise prices for the options granted during the fiscal year ended January 2, 1998 under the 1993 Stock Option Plan are
presented on a weighted-average basis. Future benefits under the 1993 Stock Option Plan are not determinable, as grants
of options are at the discretion of the Company's Board of Directors.
(3) Only Company employees (including officers) whose customary employment with the Company is at least 20 hours per week
and more than five months in any calendar year are eligible to participate in the 1988 Employee Stock Purchase Plan.
(4) Under the terms of the 1988 Employee Stock Purchase Plan, eligible employees may purchase shares of the Company's
Common Stock through payroll deductions at a purchase price not less than 85% of the fair market value of the Company's
Common Stock on the first or last day of each applicable six-month offering period. See "Proposal IV-Amendment to the
1988 Employee Stock Purchase Plan."
(5) As a holder of more than 5% of the Company's voting stock, Mr. Trimble is not eligible to purchase shares under the 1988
Employee Purchase Plan pursuant to its terms. See "Proposal IV-Amendment to the 1988 Employee Stock Purchase Plan."
(6) Non-employee directors are not eligible to participate in the 1998 Employee Stock Purchase Plan.
9
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 1997
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
written representations from its officers and directors and certain reporting
persons that no Forms 5 were required for such persons, the Company believes
that, during the fiscal year ended January 2, 1998, all Section 16(a) filing
requirements applicable to its officers, directors and 10% shareholders were
complied with, although in connection with the initial filing of a Form 3 by
David M. Hall, upon becoming an executive officer of the Company, an amended
Form 3 had to be refiled with the SEC due to incomplete information which was
inadvertently omitted from the original filing.
Certain Relationships and Related Transactions
During fiscal year 1996, the Company invested $80,000 in the Series A
Preferred Stock of IntegriNautics, a privately held California corporation. In
developing and producing its products for sales to others, IntegriNautics
purchases the Company's products and uses them as component parts. During fiscal
year 1997, IntegriNautics purchased and paid for approximately $320,000 worth of
the Company's products for use as component parts. In addition, the Company has
granted IntegriNautics a licence to internally use certain of the Company's
software technologies to create derivatives of such technologies, under which
the Company retains all rights to such software technologies and derivatives
developed but which the Company may from time to time permit IntegriNautics to
sublicense to IntegriNautics' customers, subject to the Company's approval in
each instance. Bradford W. Parkinson, who is a member of the Company's Board of
Directors, is also a member of the board of directors and a significant
shareholder of IntegriNautics. As one of the factors that was originally
considered in approving the Company's initial equity investment in
IntegriNautics, the Company's Board of Directors specifically reviewed the
fairness of the transaction to the Company in light of Dr. Parkinson's
investment and participation in IntegriNautics.
During fiscal year 1995, the Company approved an equity investment of
approximately $800,000 in the Series A Preferred Stock of ProShot Golf, Inc.
("ProShot"), a privately held California corporation. During fiscal year 1997,
the Company invested approximately an additional $200,000 in the Series B
Preferred Stock of ProShot and separately loaned ProShot $1,500,000 which was
fully secured by a letter of credit. Such Series B Preferred Stock was
subsequently converted into shares of Series D Preferred Stock of ProShot and
approximately $1,044,000 of the outstanding balance on the loan from the
Company, including accrued interest, was converted to shares of common stock of
ProShot, leaving an unpaid principal balance of approximately $497,000 to the
Company at fiscal year end which remains fully secured by a letter of credit. In
developing and producing its products for sales to others, ProShot purchases the
Company's products and uses them as component parts. During fiscal year 1997,
ProShot purchased approximately $496,000 worth of the Company's products for use
in its products and development processes. At fiscal year end, ProShot had an
outstanding accounts payable balance of approximately $204,000 owed to the
Company. Ralph F. Eschenbach, who is the Company's Vice President, Chief
Technical Officer, serves as the Company's designated member on the board of
directors of ProShot in connection with the Company's equity investments in
ProShot. In addition, Mr. Eschenbach serves a member of ProShot's Audit and
Compensation Committees and is an individual shareholder of ProShot. During
fiscal year 1997, Mr. Eschenbach also served as an executive officer of ProShot,
including as co-Chief Executive Officer for a number of months. As one of the
factors that it considered in approving the Company's equity investments in, and
loans to, ProShot, the Company's Board of Directors reviewed the fairness of the
contemplated transactions to the Company in light of Mr. Eschenbach's investment
and participation in ProShot.
See also "Compensation of Directors."
10
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 High Technology Composite Index: (1)
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS*
AMONG TRIMBLE NAVIGATION LTD.,
NASDAQ COMPOSITE TOTAL RETURN INDEX (U.S.)
SOURCE: CRSP, AND THE STANDARD & POOR'S
TECHNOLOGY SECTOR INDEX
[The performance graph has been omitted. Performance Graph. The performance
graph required by Item 402(l) of Regulation S-K is set forth in the paper copy
of the Proxy Statement immediately following the caption "COMPARISON OF
FIVEYEAR CUMULATIVE TOTAL RETURN".
The performance graph plots the data points listed below the graph for the
data sets (i) Trimble Navigation Limtied, (ii) Nasdaq Composite Total Return
Index (US) and (iii) the Standard & Poor's Technology Sector Index. The graph
has a horizontal axis at its bottom which lists from left to right the dates 93,
94, 95, 96, and 97. The graph has a vertical axis at its left which lists from
bottom to top the numbers 0, 100, 200, 300, and 400. The data points for each
data set are plotted on the graph and are connected by a line. The line
connecting the data points in the Trimble Navigation Limited data set is bold
with square to mark data points, while the lines connecting the data points in
the Nasdaq Composite Total Return Index (US) data set and the S&P Technology
Sector Index data set are dashed with triangle to mark data point and small
sqaure dashes with circle to mark data points, respectively.]
DATA POINTS FOR PERFORMANCE GRAPH
1992 1993 1994 1995 1996 1997
----------------------------------------------------
Trimble Navigation
Limited TRMB 100.00 104.41 194.12 219.12 135.29 256.62
NASDAQ Stock Market
(U.S.) INAS 100.00 114.80 112.21 158.70 195.19 239.53
S&P Technology
Sector ITES 100.00 123.01 143.37 206.51 292.98 369.42
- ---------------------------
(1) The data in the above graph is presented on a calendar year basis
through December 31, 1997 which is the most currently available data
from the indicated sources. However, the Company adopted a 52-53
week fiscal year effective upon the end of fiscal year 1997 such
that the actual date of the Company's fiscal year end for 1997 was
January 2, 1998. Any differences due to the change in fiscal year end
dates are not expected to be material.
* Assumes an investment of $100 on December 31, 1992 in the Company's
Common Stock, the Nasdaq Composite Total Return Index (U.S.), and
the Standard & Poor's High Technology Composite 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.
11
PROPOSAL II-AMENDMENT INCREASING THE SIZE OF THE 1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "Option Plan") was adopted by the
Board of Directors in October 1992 and approved by the shareholders in April
1993. Since then, the Board of Directors has approved amendments to the Option
Plan increasing the shares reserved for issuance thereunder to 3,200,000 shares,
all of which increases were also approved by the shareholders. At the Record
Date, options to purchase an aggregate of 2,548,430 shares, having an average
exercise price of $15.23 per share and expiring from March 1998 to August 2007,
were outstanding and 222,922 shares remained available for future grant under
the Option Plan.
On December 18, 1997, the Board of Directors approved an amendment to the
Option Plan to increase the number of shares reserved for issuance thereunder by
an additional 600,000 shares to 3,800,000 shares. The increase in the number of
shares under the Option Plan is necessary in order to allow the Company to
provide additional equity incentives to eligible employees and independent
contractors. The Company believes that its ability to grant stock options is
critical to its success in attracting and retaining experienced and qualified
employees and independent contractors. At the Annual Meeting, the shareholders
are being asked to approve an increase of 600,000 shares of Common Stock
available for issuance under the Option Plan.
The essential features of the Option Plan are outlined below:
Purpose
The purposes of the Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility and to provide
additional incentives to employees and consultants of the Company to promote the
success of the Company's business.
Administration
The Option Plan provides for administration by the Board of Directors of
the Company or by a Committee of the Board of Directors. The Option Plan is
currently being administered by the Board of Directors. The interpretation and
construction of any provision of the Option Plan by the Board of Directors or
its Committee is final and binding. Members of the Board of Directors or its
Committee receive no additional compensation for their services in connection
with the administration of the Option Plan.
Eligibility
The Option Plan provides for grants to employees (including officers) of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, and for grants of nonstatutory stock options
to employees and consultants. The Board of Directors or its Committee selects
the optionees and determines the number of shares to be subject to each option.
Currently, under the terms of the Option Plan, no employee may be granted, in
any fiscal year, options under the plan to acquire more than 100,000 shares of
the Common Stock of the Company; however, as part of this Proxy Statement and at
the Annual Meeting, the shareholders are being asked to approve an amendment to
the Option Plan increasing this limitation to 150,000 shares. See
"Proposal III-Amendment of the 1993 Stock Option Plan." Notwithstanding such
limitation, however, an additional one-time grant to purchase up to 250,000
shares may be made to any newly-hired officer or employee. These limits are
subject to appropriate adjustments in the case of stock splits, reverse stock
splits and the like. In addition, there is a limit of $100,000 on the aggregate
fair market value of shares which constitute incentive stock options which
become exercisable for the first time in any one calendar year; options in
excess of this limit are nonstatutory stock options.
12
Terms of Options
Each option is evidenced by a written stock option agreement between the
Company and the optionee and is generally subject to the terms and conditions
listed below, but specific terms may vary:
(a) Exercise of the Option. The Board of Directors or its Committee
determines when options granted under the Option Plan may be exercised. The
current form of the option agreement generally used under the Option Plan
provides that options will be exercisable cumulatively to the extent of 20% of
the option shares on the date 12 months after the vesting commencement date of
the option and 1.67% of the option shares at the end of each month thereafter.
An option is exercised by giving written notice of exercise to the Company,
specifying the number of shares of Common Stock to be purchased and tendering
payment to the Company of the purchase price. The Option Plan specifies that the
permissible form of payment for shares issued upon exercise of an option shall
be set forth in the option agreement and may consist of cash, check, promissory
note, exchange of shares of the Company's Common Stock held for more than six
months or such other consideration as determined by the Board of Directors or
its Committee and as permitted by the California Corporations Code. The current
form of option agreement only permits payment by cash, check or exchange of
shares.
(b) Option Price. The exercise price of the options granted under the
Option Plan is determined by the Board of Directors or its Committee in
accordance with the Option Plan, but the option price of incentive stock options
and nonstatutory stock options may not be less than 100% and 85%, respectively,
of the fair market value of the Company's Common Stock. The Option Plan provides
that, because the Company's Common Stock is currently traded on the Nasdaq
National Market, the fair market value per share shall be the closing price on
such system on the date of the grant of the option. With respect to any
participant who owns stock representing more than 10% of the voting power of the
Company's capital stock, the exercise price of any incentive or nonstatutory
stock option must equal at least 110% of the fair market value per share on the
date of the grant.
(c) Termination of Employment. The Option Plan provides that if the
optionee's employment by the Company is terminated for any reason, other than
death or disability, options may be exercised not later than 30 days after the
date of such termination and may be exercised only to the extent the options
were exercisable on the date of termination.
(d) Disability. If the optionee terminates his employment with the Company
as a result of his total or permanent disability, options may be exercised
within 6 months after the date of such termination and may be exercised only to
the extent the options were exercisable on the date of termination.
(e) Death. If an optionee should die while an employee or a consultant of
the Company or during the 30 day period following termination of the optionee's
employment or consultancy, the optionee's estate may exercise the options at any
time within 12 months after the date of death but only to the extent that the
options were exercisable on the date of death or termination of employment.
(f) Termination of Options. The terms of options granted under the Option
Plan may not exceed ten years from the date of grant. However, any option
granted to any optionee who, immediately before the grant of such option, owned
more than 10% of the total combined voting power of all classes of stock of the
Company or a parent or subsidiary corporation, may not have a term of more than
5 years. Under the current form of option agreement, each option has a term of 5
years and 3 months from the date of grant. No option may be exercised by any
person after such expiration.
(g) Nontransferability of Options. All options are nontransferable by the
optionee, other than by will or the laws of descent and distribution, and,
during the lifetime of the optionee, may be exercised only by the optionee.
13
Adjustment Upon Changes in Capitalization
In the event any change, such as a stock split or dividend, is made in the
Company's capitalization which results in an increase or decrease in the number
of outstanding shares of Common Stock without receipt of consideration by the
Company, an appropriate adjustment shall be made in the option price and in the
number of shares subject to each option. In the event of the proposed
dissolution or liquidation of the Company, all outstanding options automatically
terminate. In the event of a merger of the Company with or into another
corporation where the Company is not the successor entity, options outstanding
shall be assumed or an equivalent option shall be substituted by the successor
entity, unless the Board of Directors accelerates the exercisability of the
options such that the optionee shall have the right to exercise his or her
option on or before the effective date of such merger. Should an option be
assumed or substituted upon a merger, the exercisability of the option will also
be accelerated if the successor entity terminates the employment of the optionee
within one year of the merger.
Amendment and Termination
The Board of Directors may, at any time, amend or terminate the Option
Plan, but no amendment or termination may be made which would impair the rights
of any participant under any grant theretofore made, without his or her consent.
In addition, in any event, the Option Plan will terminate in 2003.
Certain Federal Income Tax Information
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of
(i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director, or 10% shareholder of the Company. The Company will be
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee. Any gain recognized on such a premature disposition of the shares
in excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain, depending on the holding period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the time he is granted a nonstatutory option. However, upon its
exercise, the optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over the purchase
price. Any taxable income recognized in connection with an option exercise by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. Upon resale of such shares by the optionee, any
difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the Optionee with respect to shares acquired upon
exercise of a nonstatutory option.
14
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Option Plan and does not purport to be complete. Reference
should be made to the applicable provisions of the Code. In addition, this
summary does not discuss the tax consequences of the optionee's death or the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
Vote Required
Approval of the increase of 600,000 shares of Common Stock reserved for
issuance under the Option Plan requires the affirmative vote of the holders of a
majority of the shares present at the Annual Meeting in person or by proxy and
entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR an increase of
600,000 shares in the number of shares of Common Stock reserved for issuance
under the Option Plan from 3,200,000 to 3,800,000 shares.
15
PROPOSAL III-AMENDMENT OF THE 1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan was adopted by the Board of Directors
in October 1992 and approved by the shareholders in April 1993 for the purposes
of attracting and retaining the best available personnel for positions of
substantial responsibility and to provide additional incentives to employees and
consultants of the Company to promote the success of the Company's business.
Currently, under the terms of the Company's 1993 Stock Option Plan, no employee
may be granted, in any fiscal year, options under such Option Plan to acquire
more than 100,000 shares of the Company's Common Stock; provided, however, that
an additional one-time grant to purchase up to 250,000 shares may be made to a
newly-hired employee. These limits are subject to appropriate adjustments in the
case of stock splits, reverse stock splits and the like.
On December 18, 1997, the Board of Directors approved an amendment to the
Option Plan to increase the limitation on the number of shares which may be
granted to a current employee, in any fiscal year, pursuant to options under the
terms of the Option Plan from 100,000 shares to 150,000 shares. The increase in
the maximum number of shares which may be granted to a current employee, in any
fiscal year, as options under the Option Plan is necessary in order to give the
Board of Directors additional capacity to retain the Company's key experienced
and qualified employees who are critical to the immediate and long-term success
of the Company. Although the Company has no present intentions, plans,
understandings or agreements to issue options for such new maximum number of
shares, the Board of Directors believes that the proposed increase is desirable
so that the Company can make such option grants if the need arises, without the
additional expense and delay of a special shareholder's meeting. The essential
features of the Company's Option Plan are outlined above in
"Proposal III-Amendment Increasing the Size of the 1993 Stock Option Plan."
At the Annual Meeting, the shareholders are being asked to approve the
increase in the limitation on the number of shares of Common Stock which may be
granted to a current employee, in any fiscal year, pursuant to options under the
terms of the Option Plan from 100,000 shares to a new maximum of 150,000 shares.
Vote Required
Approval of the amendment to the Company's Option Plan increasing the
limitation on the number of shares of Common Stock which may be granted to a
current employee, in any fiscal year, pursuant to options under the terms of the
Option Plan from 100,000 shares to a new maximum of 150,000 shares requires the
affirmative vote of the holders of a majority of the shares present at the
Annual Meeting in person or by proxy and entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR the amendment of the
Company's Option Plan increasing the limitation on the number of shares of
Common Stock which may be granted to a current employee, in any fiscal year,
pursuant to options under the Option Plan from 100,000 shares to a new maximum
of 150,000 shares.
16
PROPOSAL IV-AMENDMENT OF THE 1988 EMPLOYEE STOCK PURCHASE PLAN
The Company's 1988 Employee Stock Purchase Plan (the "Purchase Plan"), was
adopted by the Board of Directors in September 1988 and approved by the
shareholders in April 1988, initially reserving 400,000 shares for purchase
thereunder by eligible employees. Since then, the Board of Directors has
approved amendments to the Purchase Plan increasing the shares available for
purchase thereunder to 1,700,000 shares, all of which increases were also
approved by the shareholders. As of the Record Date, eligible employees have
purchased an aggregate of 1,617,852 shares of the Company's Common Stock under
the Purchase Plan and 82,148 shares remained available for future sales under
the Purchase Plan.
On December 18, 1997, the Board of Directors approved an amendment to the
Purchase Plan to increase the number of shares of Common Stock available for
future purchase by Company's eligible employees by 650,000 shares to 2,350,000
shares. The Board believes that the amendment to the Purchase Plan will enable
the Company to continue its policy of widespread employee stock ownership as a
means to motive high levels of performance and to recognize key employee
accomplishments. At the Annual Meeting, the shareholders are being asked to
approve an increase of 650,000 shares Common Stock available for future purchase
by eligible employees under the Purchase Plan.
The essential features of the Purchase Plan are outlined below:
Purpose
The purpose of the Purchase Plan is to provide employees with an
opportunity to purchase Common Stock of the Company through payroll deductions
in a manner that qualifies under Section 423 of the Internal Revenue Code of
1986, as amended.
Administration
The Purchase Plan is administered by the Board of Directors or a Committee
of the Board of Directors (collectively, the "Administrator").
Eligibility
Only employees employed by the Company or its subsidiaries on the first day
of an offering period may participate in the Purchase Plan. For this purpose, an
"employee" is any person who has been continually employed for at least two
consecutive months and is regularly employed at least twenty hours per week and
at least five months per calendar year by the Company or any of its
subsidiaries. No employee may be granted an option under the Purchase Plan if:
(i) immediately after the grant of the option, the employee (or any other person
whose stock would be attributed to the employee pursuant to Section 424(d) of
the Code) would own five percent or more of the total combined voting power or
value of the stock of the Company or any of its subsidiaries; or (ii) which
permits such participant's rights to purchase stock under all employee stock
purchase plans of the Company and its subsidiaries to accrue at a rate which
exceeds $25,000 worth of stock (determined with reference to the fair market
value of the Common Stock at the time of grant) in a calendar year. Subject to
these eligibility criteria, the Purchase Plan permits eligible employees to
purchase Common Stock through payroll deductions subject to certain limitations
described below. See "Payment of Purchase Price; Payroll Deductions."
17
Offering Period
The Purchase Plan is implemented by offering periods lasting six months
with a new offering period commencing every six months, on or about January 1st
and July 1st of each year. Normally, a participant's payroll deductions are
accumulated throughout an offering period and, at the end of the offering
period, shares of the Company's Common Stock are purchased with the accumulated
payroll deductions.
Purchase Price
The purchase price per share at which shares will be sold in an offering
under the Purchase Plan is the lower of (i) 85% of the fair market value of a
share of Common Stock on the first day of an offering period or (ii) 85% of the
fair market value of a share of Common Stock on the last day of each offering
period. The fair market value of the Common Stock on a given date is generally
the closing sale price of the Common Stock as reported on the Nasdaq National
Market for such date.
Payment of Purchase Price; Payroll Deductions
The purchase price of the shares is accumulated by payroll deductions over
the offering period. The Purchase Plan provides that the aggregate of such
payroll deductions during the offering period shall not exceed 10% of the
participant's compensation during any offering period, nor $21,250 for all
offering periods which end in the same calendar year. During an offering period,
a participant may discontinue his or her participation in the Purchase Plan, and
may decrease, but not increase, the rate of payroll deductions in an offering
period within limits set by the Administrator.
All payroll deductions made for a participant are credited to the
participant's account under the Purchase Plan, are withheld in whole percentages
only and are included with the general funds of the Company. Funds received by
the Company pursuant to exercises under the Purchase Plan are also used for
general corporate purposes. A participant may not make any additional payments
into his or her account.
Withdrawal
A participant may terminate his or her participation in the Purchase Plan
at any time by giving the Company a written notice of withdrawal. In such event,
all of the payroll deductions credited to the participant's account will be
returned, without interest, to such participant. Payroll deductions will not
resume unless a new subscription agreement is delivered in connection with a
subsequent offering period.
Termination of Employment
Termination of a participant's employment for any reason, including
retirement or death, cancels his or her participation in the Purchase Plan
immediately. In such event the payroll deductions credited to the participant's
account but not used to exercise the option will be returned without interest to
such participant, his or her designated beneficiaries or the executors or
administrators of his or her estate.
Adjustments Upon Changes in Capitalization
In the event of any changes in the capitalization of the Company effected
without receipt of consideration by the Company, such as a stock split, stock
dividend, combination or reclassification of the Common Stock, resulting in an
increase or decrease in the number of shares of Common Stock, proportionate
adjustments will be made by the Board of Directors in the shares subject to
purchase and in the price per share under the Purchase Plan. In the event of
liquidation or dissolution of the Company, the offering periods then in progress
will terminate immediately prior to the consummation of such event unless
otherwise provided by the Board of Directors. In the
18
event of a sale of all or substantially all of the assets of the Company,
or the merger of the Company with or into another corporation, any offering
periods then in progress shall be shortened by the setting of a new exercise
date to be held before the Company's proposed sale or merger. At least ten days
before the new exercise date, the Board of Directors will notify each
participant that the exercise date has been changed and that the participant's
option will automatically exercise on the new exercise date, unless the
participant withdraws from the Purchase Plan.
Amendment and Termination
The Board of Directors may at any time and for any reason amend or
terminate the Purchase Plan, except that (i) no such termination shall affect
options previously granted unless the Board of Directors determines that
terminating an Offering Period is in the best interests of the Company and
(ii) no amendment shall make any change in an option granted prior thereto which
adversely affects the rights of any participant.
Certain Federal Income Tax Information
The following brief summary of the effect of federal income taxation upon
the participant and the Company with respect to the shares purchased under the
Purchase Plan does not purport to be complete, and does not discuss the tax
consequences of a participant's death or the income tax laws of any state or
foreign country in which the participant may reside.
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
until the shares purchased under the Purchase Plan are sold or otherwise
disposed of. Upon sale or other disposition of the shares, the participant will
generally be subject to tax in an amount that depends upon the holding period.
If the shares are sold or otherwise disposed of more than two years from the
Enrollment Date and one year from the applicable Exercise Date, the participant
will recognize ordinary income measured as the lesser of (a) the excess of the
fair market value of the shares at the time of such sale or disposition over the
purchase price, or (b) an amount equal to 15% of the fair market value of the
shares as of the Enrollment Date. Any additional gain will be treated as
long-term capital gain. If the shares are sold or otherwise disposed of before
the expiration of these holding periods, the participant will recognize ordinary
income generally measured as the excess of the fair market value of the shares
on the date the shares are purchased over the purchase price. Any additional
gain or loss on such sale or disposition will be long-term or short-term capital
gain or loss, depending on the holding period. The Company generally is not
entitled to a deduction for amounts taxed as ordinary income or capital gain to
a participant except to the extent of ordinary income recognized by participants
upon a sale or disposition of shares prior to the expiration of the holding
periods described above.
Vote Required
Approval of the increase of 650,000 shares of Common Stock available for
purchase by eligible employees under the Purchase Plan requires the affirmative
vote of the holders of a majority of the shares present at the Annual Meeting in
person or by proxy and entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR an increase of
650,000 shares in the number of shares of Common Stock available for purchase by
eligible employees under the Purchase Plan from 1,700,000 to 2,350,000 shares.
19
PROPOSAL V-AMENDMENT OF THE COMPANY'S BYLAWS
Section 315 of the California Corporations Code of 1968, as amended (the
"California Code"), provides that if a corporation (i) has outstanding shares
held of record by 100 or more persons on the date of approval by the board of
directors and (ii) has a bylaw approved by the affirmative vote of the
outstanding shares of the corporation authorizing the board of directors to
approve a loan of money or property to, or guarantee the obligations of, any
director or officer of such corporation, then such a loan or guaranty by the
Company to such director or officer may be approved by the sufficient vote of
the board of directors alone (without counting the vote of an interested
director in such transaction), if the board of directors determines that such
loan or guaranty may reasonably be expected to benefit the corporation.
The Company's current bylaws do not contain such a provision; however, on
February 10, 1998, the Board of Directors approved an amendment to Article III
of the Company's bylaws in accordance with the California Code to add a new
provision, to read in its entirety, as follows:
"3.14 APPROVAL OF LOANS TO OFFICERS
The board of directors is authorized, without further shareholder
approval, to approve loans from this corporation to officers of
this corporation for the purpose of assisting in the
acquisition of their primary residence in exceptional housing
markets where such location is for the benefit of this
corporation; provided that such loans are secured by such real
property."
The amendment of the Company's bylaws is necessary in order to give the
Board of Directors additional power and flexibility in attracting and retaining
key qualified personnel critical to the immediate and long-term success of the
Company. Given the high housing prices that the Company's employees face in many
of the markets in which the Company operates, the Board of Directors believes
that the proposed amendment to the Company's bylaws is necessary so that the
Company will have flexibility in attracting and retaining key employees, without
the additional expense and delay of a special shareholder's meeting.
At the Annual Meeting, the shareholders are being asked to approve this
amendment to the Company's bylaws, to provide that the approval of a
disinterested majority of the Company's Board of Directors will be sufficient to
approve loans from the Company to the Company's officers for the purpose of
assisting such officers in the acquisition of their primary residence in
exceptional housing markets where such location is for the benefit of the
Company and provided that such loans by the Company are secured by such real
property.
Vote Required
Approval of such amendment to the Company's bylaws authorizing the Board of
Directors to approve loans from the Company to its officers for the purpose of
assisting in the acquisition of their primary residence in exceptional housing
markets where such location is for the benefit of the Company, provided that
such loans are secured by such real property, requires the affirmative vote of
the holders of a majority of the shares present at the Annual Meeting in person
or by proxy and entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR the amendment of the
Company's bylaws to provide that the Company may, upon the approval of the Board
of Directors alone and without further shareholder approval, make loans to the
Company's officers for the purpose of assisting in the acquisition of their
primary residence in exceptional housing markets where such location is for the
Company's benefit, provided that such loans are secured by such real property.
20
PROPOSAL VI-RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Ernst & Young LLP
("Ernst & Young"), independent auditors, to audit the financial statements of
the Company for the current fiscal year ending January 1, 1999. Ernst & Young
has been the Company's independent auditors since their appointment in 1986. The
Company expects that a representative of Ernst & Young will be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to answer any appropriate questions.
Vote Required
Approval of the appointment of Ernst & Young as the Company's independent
auditors for the current fiscal year ending January 1, 1999, will require the
affirmative vote of the holders of a majority of the shares present at the
Annual Meeting in person or by proxy and entitled to vote as of the Record Date.
In the event that such ratification by the shareholders is not obtained, the
Board of Directors will reconsider such selection.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR the ratification of
the selection of Ernst & Young LLP as the independent auditors for the Company
for the current fiscal year ending January 1, 1999.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed Proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to mark, sign,
date, and return the accompanying Proxy as promptly as possible in the envelope
which has been enclosed.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
Robert A. Trimble
Secretary
Dated: April 6, 1998
21
APPENDIX A
PROXY TRIMBLE NAVIGATION LIMITED PROXY
PROXY FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned shareholder of TRIMBLE NAVIGATION LIMITED, a California
corporation, hereby acknowledges reciept of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each Dated April 6, 1998, and hereby
appoints Charles R. Trimble and Robert A. Trimble, and each of them, proxies and
attorneys-in-fact, with full power to each of subsitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 1998 Annual Meeting
of Shareholders of TRIMBLE NAVIGATION LIMITED, to be held on Thursday, May 5,
1998 at 4:00 p.m., local time, at 749 North Mary Avenue, Sunnyvale, California
94088, and at any adjournment(s) thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if then and there personally
present, on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, IT
WILL BE VOTED FOR THE LISTED NOMINEES IN THE ELECTION OF DIRECTORS, FOR THE
APPROVAL OF AN INCREASE OF 600,000 SHARES IN THE NUMBER OF SHARES AVAILABLE FOR
ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION PLAN, FOR AMMENDING THE COMPANY'S
1993 STOCK OPTION PLAN TO INCREASE THE NUMBER OF SHARES WHICH MAY BE GRANTED TO
A CURRENT EMPLOYEE, IN ANY FISCAL YEAR FROM 100,000 SHARES TO 150,000 SHARES,
FOR THE APPROVAL OF AN INCREASE OF 650,000 SHARES IN THE NUMBER OF SHARES
AVAILABLE FOR PURCHASE UNDER THE COMPANY'S 1988 EMPLOYEE STOCK PURCHASE PLAN,
FOR AMMENDING THE COMPANY'S BYLAWS TO MAKE LOANS TO THE COMPANY'S OFFICERS FOR
THE PURPOSE OF ASSISTING IN THE ACQUISITION OF THEIR PRIMARY RESIDENCE IN
EXCEPTIONAL HOUSING MARKETS, FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST &
YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JANUARY 1, 1999,
AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
Both of such attorneys or substitutes (if both are present and acting at
said meeting or any ajournment(s) thereof, or, if only one shall be present and
acting, then that one) shall have and may exercise all of the powers of said
attorneys-in-fact hereunder.
(Continued, and to be signed on the other side)
FOLD AND DETACH HERE
22
Please mark
[X] your votes
as this
1. Elections of Directors WITHHOLD
FOR FOR All
(INSTRUCTION: If you wish to FOR AGAINST ABSTAIN
withhold authority to vote for [ ] [ ] 2. Proposal to approve an increase of
any individual nominee, strike 600,000 shares in the number of shares
a line through that nominee's of Common Stock reserved for issuance [ ] [ ] [ ]
name in the list below:) under the Comapny's 1993 Stock Option
Plan from 3,200,000 to 3,800,000 shares.
Robert S. Cooper, John B. Goodrich, William Hart,
Bradford W. Parkinson, and Charles R. Trimble 3. Proposal to approve an amendment of the
Company's 1993 Stock Option Plan increasing
_______________ _____________________________ the limitation on the number of shares of [ ] [ ] [ ]
Common Stock which may be granted to a current
employee, in any fiscal year, pursuant to
options under the 1993 Stock Option Plan from
100,000 to a new maximum of 150,000 shares.
I PLAN TO ATTEND THE MEETING [ ]
4. Proposal to approve an increase of 650,000
shares in the number of shares of Common Stock
available for purchase by eligible employees
under the Company's 1988 Employee Stock [ ] [ ] [ ]
Purchase Plan from 1,700,000 to 2,350,000
shares.
5. Proposal to approve an amendment of the
Company's bylaws to provide that the Company
may, upon approval of the board of directors
alone and without further shareholder approval,
make loans to the Company's officers for the
purpose of assisting in the acquistion of [ ] [ ] [ ]
their primary residence in exceptional housing
markets where such location is for the Company's
benefit, provided that such loans are secured
by such real property.
6. Proposal to ratify
_ _ _ _ _ _ the appointment of
| Ernst & Young LLP
| as the independent [ ] [ ] [ ]
| auditors of the Company
| for the current fiscal year
| ending January 1, 1999.
|
COMMENTS/ADDRESS CHANGE
Please mark this box if you
have written comments/address [ ]
change on the reverse side.
Signature(s)______________________________________________ Dated _______, 1998
(This Proxy should be marked, dated, signed by the shareholder(s) exactly as his
or her name appears hereon, an returned promptly in the enclosed envelope. If
signing for estates, trusts, corporations, or partnerships title or capacity
should be stated. If shares are held jointly each holder should sign.)
FOLD AND DETACH HERE
23
APPENDIX B
TRIMBLE NAVIGATION LIMITED ANNUAL MEETING TO BE HELD ON 5/05/98 AT 4:00 P.M.
PDT FOR HOLDERS AS OF 3/13/98 * ISSUER CONFIRMATION COPY - INFO ONLY*
6 1-0001 THIS FORM IS PROVIDED FOR INFORMATIONAL
PURPOSES ONLY. PLEASE DO NOT USE IT FOR
VOTING PURPOSES.
CUSIP: 896239100
DIRECTORS CONTROL NO.
- ---------- |-------
DIRECTORS RECOMMENDED: A VOTE FOR ELECTION OF THE FOLLOWING |
DIRECTORS 0010100|
1- 01-ROBERT S. COOPER, 02-JOHN B. GOODRICH, 03-WILLIAM HART, |
04-BRADFORD W. PARKINSON, 05-CHARLES R. TRIMBLE |
DIRECTORS
PROPOSALS RECOMMENDED
- ---------- ------------
2 - PROPOSAL TO APPROVE AN INCREASE OF 600,000 SHARES FOR
IN THE NUMBER OF SHARES OF COMMON STOCK RESERVED 0020702
FOR ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION
PLAN FROM 3,200,000 TO 3,800,000 SHARES.
3 - PROPOSAL TO APPROVE AN AMENDMENT OF THE COMPANY'S FOR
1993 STOCK OPTION PLAN INCREASING THE LIMITATION ON 0020702
THE NUMBER OF SHARES OF COMMON STOCK WHICH MAY BE
GRANTED TO A CURRENT EMPLOYEE, IN ANY FISCAL YEAR,
PURSUANT TO OPTIONS UNDER THE 1993 STOCK OPTION PLAN
FROM 100,000 TO A NEW MAXIMUM OF 150,000 SHARES.
4 - PROPOSAL TO APPROVE AN INCREASE OF 650,000 SHARES IN FOR
THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR 0020802
PURCHASE BY ELIGIBLE EMPLOYEES UNDER THE COMPANY'S
1988 EMPLOYEE STOCK PURCHASE PLAN FROM 1,700,000 TO
2,350,000 SHARES.
5 - PROPOSAL TO APPROVE AN AMENDMENT OF THE COMPANY'S FOR
BYLAWS TO PROVIDE THAT THE COMPANY MAY, UPON APPROVAL 0029909
OF THE BOARD OF DIRECTORS ALONE AND WITHOUT FURTHER
SHAREHOLDER APPROVAL, MAKE LOANS TO THE COMPANY'S
OFFICERS FOR THE PURPOSE OF ASSISTING IN THE ACQUISTION
OF THEIR PRIMARY RESIDENCE IN EXCEPTIONAL HOUSING
MARKETS WHERE SUCH LOCATION IS FOR THE COMPANY'S
BENEFIT, PROVIDED THAT SUCH LOANS ARE SECURED
BY SUCH REAL PROPERTY.
6 - PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP FOR
AS INDEPENDENT AUDTIORS OF THE COMPANY FOR THE CURRENT 0010200
FISCAL YEAR ENDING JANUARY 1, 1999.
*NOTE* IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTER(S) AS SAID PROXIES DEEM ADVISABLE AS MAY PROPERLY
COME BEFORE THE MEETING AND AT ANY ADJOURNMENT(S) THEREOF.
24
FOLD AND DETACH HERE
TRIMBLE NAVIGATION LIMITED
05/05/98 AT 4:00 P.M. PDT
6 ITEM(S) SHARE(S)
DIRECTORS
---------
(MARK 'X' FOR ONLY ONE BOX)
1 [ ] FOR ALL NOMINEES
|------
[ ] WITHHOLD ALL NOMINEES |
|
[ ] WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE. WRITE
NUMBER(S) OF NOMINEE(S) BELOW.
USE NUMBER ONLY __________________________
FOR AGAINST ABSTAIN
2 [ ] [ ] [ ] PLEASE INDICATE YOUR PROPOSAL SELECTION BY
FIRMLY PLACING AN 'X' IN THE APPROPRIATE [X]
NUMBERED BOX WITH BLUE OR BLACK INK ONLY
DO NOT USE SEE VOTING INSTRUCTIONS NO. 1 ON REVERSE
DO NOT USE ACCOUNT NO:
FOR AGAINST ABSTAIN CUSIP: 896239100
3 [ ] [ ] [ ]
CONTROL NO:
DO NOT USE CLIENT NO:
DO NOT USE PLEASE MARK HERE IF YOU PLAN TO ATTEND
AND VOTE YOUR SHARES AT THE MEETING [ ]
FOR AGAINST ABSTAIN
4 [ ] [ ] [ ]
DO NOT USE
51 MERCEDES WAY
DO NOT USE EDGEWOOD NY 17717
FOR AGAINST ABSTAIN
5 [ ] [ ] [ ]
DO NOT USE
TRIMBLE NAVIGATION LIMITED
DO NOT USE ATTN:BARBARA HALL
645 N MARY AVE
FOR AGAINST ABSTAIN SUNNYVALE, CA 94088
6 [ ] [ ] [ ]
DO NOT USE
_____________________________________ /____/____
FOLD AND DETACH HERE SIGNATURE(S) DATE
25
APPENDIX C
TRIMBLE NAVIGATION LIMITED
1993 STOCK OPTION PLAN
(as amended December 18, 1997)
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" shall mean the Committee, if one has been appointed, or the
Board of Directors of the Company, if no Committee is appointed.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(e) "Common Stock" shall mean the Common Stock of the Company.
(f) "Company" shall mean Trimble Navigation Limited, a California
corporation.
(g) "Consultant" shall mean any person who is engaged by the Company or
any Parent or Subsidiary to render consulting services and is compensated for
such consulting services, and any director of the Company whether compensated
for such services or not, provided that the term Consultant shall not
include directors who are not compensated for their services or are paid
only a director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Company or any Parent or Subsidiary of
the Company; provided that such leave is for a period of not more than
90 days or reemployment upon the expiration of such leave is guaranteed by
contract or statute.
26
(i) "Employee" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported, as quoted
on such system or exchange for the last market trading day prior to the time of
determination) as reported in the Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and low asked prices for the
Common Stock or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator.
(l) "Incentive Stock Option" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" shall mean an Option not intended
to qualify as an Incentive Stock Option.
(n) "Option" shall mean a stock option granted pursuant to the Plan.
(o) "Optioned Stock" shall mean the Common Stock subject to an Option.
(p) "Optionee" shall mean an Employee or Consultant who receives an
Option.
(q) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(r) "Plan" shall mean this 1993 Stock Option Plan.
(s) "Share" shall mean a share of the Common Stock, as adjusted
in accordance with Section 11 of the Plan.
27
(t) "Subsidiary" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 3,800,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. Notwithstanding any other provision of the Plan, shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant or sale under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups
of Employees and Consultants.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(b) Powers of the Administrator. Subject to the provisions of the Plan
and in the case of a Committee, the specific duties delegated by the Board to
such committee, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options
are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
28
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any Option and/
or the shares of Common Stock relating thereto, based in each case on such
factors as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(e) instead of Common Stock;
(viii) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the election of
the participant (including providing for and determining the amount, if
any, of any deemed earnings on any deferred amount during any deferral period);
(ix) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted; and
(c) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
(d) Grant Limits. The following limitations shall apply to grants of
Options under the Plan:
(i) No employee shall be granted, in any fiscal year of the
Company, Options under the Plan to purchase more than 150,000 Shares, provided
that the Company may make an additional one-time grant of up to 250,000
Shares to newly-hired Employees.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization
as described in Section 11.
(iii) If an Option is cancelled (other than in connection
with a transaction described in Section 11), the cancelled Option shall be
counted against the limits set forth in Section 4(d)(i). For this purpose,
if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted only to Employees,
Directors, and Consultants. Incentive Stock Options may be granted only to
Employees. An Employee, Director, or
29
Consultant who has been granted an Option may, if he is otherwise eligible,
be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be taken
into account in the order in which they were granted, and the Fair Market Value
of the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect
to continuation of employment or consulting relationship with the Company,
nor shall it interfere in any way with his right or the Company's right to
terminate his employment or consulting relationship at any time, with or without
cause.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company as described in Section 18 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 14 of the
Plan.
7. Term of Option. The term of each Option shall be ten (10) years from the
date of grant thereof or such shorter term as may be provided in the Option
Agreement. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Option Agreement.
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
30
(B) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined
by the Administrator and may consist entirely of (1) cash, (2) check,
(3) promissory note, (4) other Shares which (x) either have been owned by the
Optionee for more than six months on the date of surrender or were not
acquired, directly or indirectly, from the Company, and (y) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, (5) authorization from
the Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to
which the Option is exercised, (6) delivery of a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver
to the Company the amount of sale or loan proceeds required to pay the exercise
price, (7) delivery of an irrevocable subscription agreement for the Shares
which irrevocably obligates the option holder to take and pay for the Shares
not more than twelve months after the date of delivery of the subscription
agreement, (8) any combination of the foregoing methods of payment, (9) or
such other consideration and method of payment for the issuance of Shares to
the extent permitted under Applicable Laws. In making its determination
as to the type of consideration to accept, the Board shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Board, including performance criteria
with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
31
consideration and method of payment allowable under Section 8(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as an Employee or Consultant. In the event
of termination of an Optionee's Continuous Status as an Employee or Consultant
(as the case may be), such Optionee may, but only within thirty (30) days (or
such other period of time, not exceeding three (3) months in the case of an
Incentive Stock Option or six (6) months in the case of a Nonstatutory Stock
Option, as is determined by the Board) after the date of such termination
(but in no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), exercise his Option to the extent that he
was entitled to exercise it at the date of such termination. To the extent
that he was not entitled to exercise the Option at the date of such termination,
or if he does not exercise such Option (which he was entitled to exercise)
within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 9
(b) above, in the event of termination of an Optionee's Continuous Status
as an Employee or Consultant as a result of his total and permanent disability
(as defined in Section 22(e)(3) of the Code), he may, but only within six (6)
months (or such other period of time not exceeding twelve (12) months as is
determined by the Board) from the date of such termination (but in no event
later than the date of expiration of the term of such Option as set forth
in the Option Agreement), exercise his Option to the extent he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of termination, or if he does not
exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
(i) during the term of the Option who is at the time of his
death an Employee or Consultant of the Company and who shall have been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within twelve (12) months
following the date of death (but in no event later than the date of expiration
of the term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as an Employee or Consultant twelve (12) months
after the date of death, subject to the limitation set forth in Section 5(b); or
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(ii) within thirty (30) days (or such other period of time not
exceeding three (3) months as is determined by the Board) after the
termination of Continuous Status as an Employee or Consultant, the Option may
be exercised, at any time within twelve (12) months following the date of death
(but in no event later than the date of expiration of the term of such Option as
set forth in the Option Agreement), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent of the right to exercise that had accrued at the date of
termination.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 10.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the Optionee at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised, the Option
will terminate immediately prior to the consummation of such proposed action. In
the event of a merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
In the even the successor corporation does not agree to assume the option or the
substitute and equivalent option, the Board shall, in lieu of such assumption or
substitution, provide for the Optionee to have the right to vest in and exercise
the Option as to all of the
33
Optioned Stock, including Shares as to which the Option would not otherwise
be vested or exercisable. If the Board makes an Option fully vested and
exercisable in lieu of assumption or substitution in the event of a merger, the
Board shall notify the Optionee that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option will terminate upon the expiration of such period. If, in such a
merger, the Option is assumed or an equivalent option is substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
and if during a one-year period after the effective date of such merger, the
Optionee's Continuous Status as an Employee or Consultant is terminated for any
reason other than the Optionee's voluntary termination of such relationship,
then the Optionee shall have the right within thirty days thereafter to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not be otherwise exercisable, effective as of the date of such
termination.
12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined.
13. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent.
In addition, to the extent necessary and desirable to comply with Section
422 of the Code (or any other applicable law or regulation, including the
requirements of the NASD or an established stock exchange), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not
been amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by the
Optionee and the Company.
34
15. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws.
35
APPENDIX D
TRIMBLE NAVIGATION
1988 EMPLOYEE STOCK PURCHASE PLAN
(as amended December 18, 1997)
The following constitute the provisions of the Employee Stock Purchase Plan
of Trimble Navigation.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Trimble Navigation.
(e) "Compensation" shall mean all regular straight time gross
earnings, commissions, incentive bonuses, overtime, shift premium, lead pay and
other similar compensation, but excluding automobile allowances, relocation and
other non-cash compensation. Notwithstanding the foregoing, the Employee may
elect to exclude bonuses from the calculation of compensation.
(f) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(h) "Employee" shall mean any person, including an officer, whose
customary employment with the Company is at least twenty (20) hours per week by
the Company or one of its Designated Subsidiaries and more than five (5) months
in any calendar year.
(i) "Enrollment Date" shall mean the first day of each Offering
Period.
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(j) "Exercise Date" shall mean the last day of each Offering Period.
(k) "Offering Period" shall mean, except with respect to the first
Offering Period as described herein, a period of six (6) months during which an
option granted pursuant to the Plan may be exercised. The first Offering Period
shall commence August 15, 1988, and end December 31, 1988.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any Employee as defined in paragraph 2 who has been continuously
employed by the Company for at least two (2) consecutive months and who shall be
employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan. However, notwithstanding the foregoing, for purposes of
the first Offering Period only, any Employee defined in paragraph 2 who was
employed by the Company as of August 9, 1988 shall be eligible to participate in
the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 425(d) of the Code) would own stock and /or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) which permits his or her
rights to purchase stock under all employee stock purchase plans of the Company
and its subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the fair market value of the
shares at the time such option is granted) for each calendar year in which such
option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive Offering
Periods with a new Offering Period commencing on or about January 1 and July 1
of each year; provided, however, that the first Offering Period shall commence
on or about August 15, 1988. The Plan shall continue thereafter until terminated
in accordance with paragraph 19 hereof. Subject to the shareholder approval
requirements of paragraph 19, the Board of Directors of the Company shall have
the power to change the duration of Offering Periods with respect to future
offerings without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing
37
it with the Company's payroll office at least five (5) business days prior to
the applicable Enrollment Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given
Offering Period.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in paragraph 10.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each payday during the
Offering Period in an amount not exceeding ten percent (10%) of the Compensation
which he receives on each payday during the Offering Period, and the aggregate
of such payroll deductions during the Offering Period shall not exceed ten
percent (10%) of the participant's aggregate Compensation during said Offering
Period. (b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan. A participant may not make any additional
payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in paragraph 10, or may decrease, but not increase, the rate of his
or her payroll deductions during the Offering Period (within the limitations of
Section 6(a)) by completing or filing with the Company a new subscription
agreement authorizing a change in payroll deduction rate. The change in rate
shall be effective with the first full payroll period following five (5)
business days after the Company's receipt of the new subscription agreement. A
participant's subscription agreement shall remain in effect for successive
Offering Periods unless revised as provided herein or terminated as provided in
paragraph 10.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and paragraph 3(b) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year (the "Current
Offering Period") that the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in a prior Offering Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Offering Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Offering Period which is scheduled to
end in the following calendar year, unless terminated by the participant as
provided in paragraph 10.
7. Grant of Option.
(a) On the Enrollment Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period up to a number of
shares of the Company's Common Stock determined by dividing such Employee's
payroll deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the lower of (i) eighty-five
percent (85%) of the fair market
38
value of a share of the Company's Common Stock on the Enrollment Date or (ii)
eighty-five percent (85%) of the fair market value of a share of the Company's
Common Stock on the Exercise Date; provided that in no event shall an Employee
be permitted to purchase during each Offering Period more than a number of
shares determined by dividing $12,500 by the fair market value of a share of the
Company's Common Stock on the Enrollment Date, and provided further that such
purchase shall be subject to the limitations set forth in Section 3(b) and 12
hereof. Exercise of the option shall occur as provided in Section 8, unless the
participant has withdrawn pursuant to Section 10, and shall expire on the last
day of the Offering Period. Fair market value of a share of the Company's Common
Stock shall be determined as provided in Section 7(b) herein.
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Enrollment Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion; provided, however, that
where there is a public market for the Common Stock, the fair market value per
share shall be the closing price of the Common Stock for such date, as reported
by the NASDAQ National Market System, or, in the event the Common Stock is
listed on a stock exchange, the fair market value per share shall be the closing
price on such exchange on such date, as reported in the Wall Street Journal.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in paragraph 10 below, his or her option for the purchase of shares
will be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable option price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased and any payroll deductions
accumulated in a participant's account which are not used to purchase shares
shall remain in the participant's account for the subsequent Offering Period,
subject to an earlier withdrawal as provided in paragraph 10. During a
participant's life time, a participant's option to purchase shares hereunder is
exercisable only by him or her.
9. Delivery. Unless a participant makes an election to delay the issuance
of Certificate representing purchased shares, as promptly as practicable after
each Exercise Date on which a purchase of shares occurs, the Company shall
arrange the delivery to each participant, as appropriate, of a certificate
representing the shares purchased upon exercise of his or her option. A
participant may make an election to delay the issuance of stock certificates
representing shares purchased under the Plan by giving written notice to the
Company the form of Exhibit D to this Plan. Any such election shall remain in
effect until it is revoked by the participant or, if earlier, upon the
termination of the participant's Continuous Status as an Employee. The Company
may limit the time or times during which participants may revoke such elections,
except that a participant shall automatically receive a certificate as soon as
practicable following termination of his or her Continuous Status as an Employee
and that participants shall be given the opportunity to revoke such elections at
least once each calendar year.
39
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company
in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account will be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Offering Period.
If a participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date for any reason, including retirement or
death, the payroll deductions credited to such participant's account during the
Offering Period but not yet used to exercise the option will be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under paragraph 14, and such participant's option will be
automatically terminated.
(c) In the event an Employee fails to remain in Continuous Status as
an Employee of the Company for at least twenty (20) hours per week during an
Offering Period in which the Employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the payroll deductions credited to
his or her account will be returned to such participant and such participant's
option terminated.
(d) A participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.
11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 2,350,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in paragraph 18. If on a given Exercise Date the number of shares with respect
to which options are to be exercised exceeds the number of shares then available
under the Plan, the Company shall make a pro rata allocation of the shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.
(b) The participant will have no interest or voting right in shares
covered by his option until such option has been exercised.
40
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
13. Administration. The Plan shall be administered by the Board of the
Company or a committee of members of the Board appointed by the Board. The
administration, interpretation or application of the Plan by the Board or its
committee shall be final, conclusive and binding upon all participants. Members
of the Board who are eligible Employees are permitted to participate in the
Plan.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in paragraph 14 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with paragraph 10.
16. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees
semi-annually promptly following the Exercise Date, which statements will set
forth the amounts of payroll deductions, the per share purchase price, the
number of shares purchased and the remaining cash balance, if any.
41
18. Adjustments Upon Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration". Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
19. Amendment or Termination. The Board of Directors of the Company may at
any time and for any reason terminate or amend the Plan. Except as provided in
paragraph 18, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board of Directors on
any Exercise Date if the Board determines that the termination of the Plan is in
the best interests of the Company and its shareholders. Except as provided in
paragraph 18, no amendment may make any change in any option theretofore granted
which adversely affects the rights of any participant. In addition, to the
extent necessary to comply with Section 423 of the Code (or any successor rule
or provision or any other applicable law or regulation), the Company shall
obtain shareholder approval in such a manner and to such a degree as so
required.
20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
42
21. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve months before or after
the date the Plan is adopted. Such shareholder approval shall be obtained in the
manner and degree required under the applicable state and federal tax and
securities laws.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company as described in para graph 21. It shall continue in effect for a
term of twenty (20) years unless sooner terminated under paragraph 19.
43
EXHIBIT A
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. ________________________hereby elects to participate in the Trimble
Navigation Employee Stock Purchase Plan (the "Stock Purchase Plan")
and subscribes to purchase shares of the Company's Common Stock
in accordance with this Subscription Agreement and the Stock
Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (not to exceed 10%) during
the Offering Period in accordance with the Stock Purchase Plan.
________ Include bonuses as part of Compensation subject to payroll
deduction.
________ Exclude bonuses from Compensation subject to payroll
deduction.
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price
determined in accordance with the Stock Purchase Plan. I understand
that if I do not withdraw from an Offering Period, any accumulated
payroll deductions will be used to automatically exercise my option.
4. I have received a copy of the complete "Trimble Navigation Employee
Stock Purchase Plan." I understand that my participation in the Stock
Purchase Plan is in all respects subject to the terms of the Plan. I
understand that the grant of the option by the Company under this
Subscription Agreement is subject to obtaining shareholder approval of
the Stock Purchase Plan.
5. Shares purchased for me under the Stock Purchase Plan should be issued
in the name(s) of:____________________________________________________
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares), I will be
treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the excess
of the fair market value of the shares at the time such shares were
delivered to me over the price which I paid for the shares.
44
I hereby agree to notify the Company in writing within 30 days after
the date of any such disposition. However, if I dispose of such shares
at any time after the expiration of the 2-year holding period, I
understand that I will be treated for federal income tax purposes as
having received income only at the time of such disposition, and that
such income will be taxed as ordinary income only to the extent of an
amount equal to the lesser of (1) the excess of the fair market value
of the shares at the time of such disposition over the purchase price
which I paid for the shares under the option, or (2) the excess of the
fair market value of the shares over the option price, measured as if
the option had been exercised on the Enrollment Date. The remainder of
the gain, if any, recognized on such disposition will be taxed as
capital gain.
7. I hereby agree to be bound by the terms of the Stock Purchase Plan. The
effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Stock Purchase Plan:
NAME: (Please print)
-----------------------------------------------------------
(First) (Middle) (Last)
- ------------------------------------ ---------------------------------------
Relationship
---------------------------------------
(Address)
NAME: (Please print)
-----------------------------------------------------------
(First) (Middle) (Last)
- ------------------------------------ ---------------------------------------
Relationship
---------------------------------------
(Address)
Employee's Social
Security Number: ---------------------------------------
45
Employee's Address: ---------------------------------------
---------------------------------------
---------------------------------------
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:--------------------------------------- ---------------------------------
Signature of Employee
46
EXHIBIT B
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Trimble
Navigation Employee Stock Purchase Plan which began on ____________, 19____ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as possible all the payroll deductions credited to his
or her account with respect to such Offering Period. The undersigned understands
and agrees that his or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement.
Name and Address of Participant
---------------------------------------
---------------------------------------
---------------------------------------
Signature
---------------------------------------
Date:----------------------------------
47
EXHIBIT C
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
NOTICE TO RESUME PAYROLL DEDUCTIONS
The undersigned participant in the Offering Period of the Trimble
Navigation Employee Stock Purchase Plan which began on ______________, 19___
hereby notifies the Company to resume payroll deductions for his or her account
at the beginning of the next Exercise Period within such Offering Period in
accordance with the terms of the Subscription Agreement executed by the
undersigned at the beginning of the Offering Period. The undersigned understands
that he or she may change the payroll deduction rate or the beneficiaries named
in such Subscription Agreement by submitting a revised Subscription Agreement.
Name and Address of Participant
---------------------------------------
---------------------------------------
---------------------------------------
Signature
---------------------------------------
Date:----------------------------------
48
EXHIBIT D
TRIMBLE NAVIGATION
EMPLOYEE STOCK PURCHASE PLAN
ELECTION/REVOCATION OF ELECTION
DELAY ISSUANCE OF CERTIFICATE
The undersigned participant in the 1988 Trimble Navigation Employee Stock
Purchase Plan (the "Stock Purchase Plan"), hereby elects to allow Trimble
Navigation (the "Company") or its agent to delay issuance of a certificate
representing shares purchased under the Plan in accordance with the provisions
of the Stock Purchase Plan. This election shall continue in effect until the
termination of the undersigned's Continuous Status as an Employee or until
revoked pursuant to such Stock Purchase Plan. This election shall not otherwise
affect the participant's rights as a shareholder of the Company.
-OR-
____________________ hereby revokes his or her prior election to allow
the Company to delay issuance of a certificate pursuant to the terms of the
Stock Purchase Plan. The Company shall deliver to participant as promptly as
practicable a certificate representing all shares purchased thereby.
Name and Address of Participant
---------------------------------------
---------------------------------------
---------------------------------------
Signature
---------------------------------------
Date:----------------------------------
49
