SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
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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 ss. 240.14a-11(c) or ss. 240.14a-12
Trimble Navigation Limited
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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[X] No fee required.
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pursuant to Exchange Act Rule 0-11: N/A
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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paid previously. Identify the previous filing by registration statement
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TRIMBLE NAVIGATION LIMITED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 2005
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Trimble Navigation Limited (the "Company") will be held at the Sheraton Four
Points Hotel, located at 1250 Lakeside Drive, in Sunnyvale, California 94085, on
Thursday, May 19, 2005, at 6:00 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 amendment to the Company's 2002 Stock Plan to allow the
granting of stock awards thereunder.
3. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the current fiscal year ending December
30, 2005.
4. 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 21, 2005, will be entitled to notice of and to vote at the
Annual Meeting or any adjournment thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the meeting, you are urged to
mark, sign, date, and return the enclosed Proxy card as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. Alternatively, you may
also vote via the Internet or by telephone in accordance with the detailed
instructions on your Proxy card. Any shareholder attending the meeting may vote
in person even if such shareholder previously returned a Proxy.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
ROBERT S. COOPER
Chairman of the Board
Sunnyvale, California
April 8, 2005
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IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU
ARE REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD
IN THE POSTAGE-PREPAID ENVELOPE PROVIDED OR VOTE VIA THE INTERNET OR BY
TELEPHONE TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING.
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TRIMBLE NAVIGATION LIMITED
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PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
May 19, 2005
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 Sheraton Four Points Hotel located at 1250 Lakeside Drive in Sunnyvale
California, 94085, on Thursday, May 19, 2005, at 6:00 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 749 North Mary
Avenue, Sunnyvale, California 94085. The telephone number at that address is
(408) 481-8000.
These proxy solicitation materials are to be mailed on or about April
8, 2005, to all shareholders entitled to vote at the Annual Meeting. A copy of
the Company's Annual Report for the last fiscal year ended December 31, 2004,
accompanies this Proxy Statement but does not form any part of the proxy
solicitation materials. A full copy of the Company's annual report on Form 10-K,
as filed with the Securities and Exchange Commission ("SEC") for the fiscal year
ended December 31, 2004, is available via the Internet at the SEC's EDGAR web
site at http://www.sec.gov. In addition, a copy of the Company's annual report
on Form 10-K is also available via the Internet at the Company's web site at
http://www.trimble.com.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date and Shares Outstanding
Shareholders of record at the close of business on March 21, 2005 (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 52,656,508 shares of
common stock, without par value ("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
(Attention: Corporate Secretary) a written notice of revocation or a duly
executed proxy bearing a later date (including a proxy by telephone or over the
Internet) or by attending the meeting and voting in person. Attendance at the
meeting will not, by itself, revoke a proxy.
Voting
Each share of Common Stock outstanding on the Record Date is entitled
to one vote on all matters. An automated system administered by the Company's
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
as votes against proposals presented to the shareholders in tabulations of the
votes cast on proposals presented to shareholders, whereas broker non-votes are
not counted for purposes of determining whether a proposal has been approved.
Voting via the Internet or by Telephone
In addition to completing the enclosed proxy card and submitting it by
mail, shareholders may also vote by submitting proxies electronically either via
the Internet or by telephone. Please note that there are separate arrangements
for using the Internet and telephone depending on whether shares are registered
in the Company's stock records directly in a shareholder's name or whether
shares are held in the name of a brokerage firm or bank. Detailed electronic
voting instructions can be found on the individual Proxy card mailed to each
shareholder.
In order to allow individual shareholders to vote their shares and to
confirm that their instructions have been properly recorded, the Internet and
telephone voting procedures have been designed to authenticate each
shareholder's identity. Shareholders voting via the Internet should be aware
that there may be costs associated with electronic access, such as usage charges
from Internet access providers and telephone companies, that will be borne
solely by the individual shareholder.
Solicitation of Proxies
The entire cost of this proxy solicitation will be borne by the
Company. The Company has retained the services of Morrow & Co., Inc. to solicit
proxies, for which services the Company has agreed to pay approximately $8,000.
In addition, the Company will also reimburse certain out-of-pocket expenses in
connection with such proxy solicitation. The Company may reimburse brokerage
firms and other persons representing beneficial owners of shares for their
expenses in forwarding soliciting materials to such beneficial owners. Proxies
may also be solicited by certain of the Company's directors, officers, and
regular employees, without additional compensation, personally or by telephone,
telegram or facsimile.
Deadline for Receipt of Shareholder Proposals for 2006 Annual Meeting
Shareholders are entitled to present proposals for actions at
forthcoming shareholder meetings of the Company if they comply with the
requirements of the appropriate proxy rules and regulations promulgated by the
Securities and Exchange Commission. Proposals of shareholders which are intended
to be considered for inclusion in the Company's proxy statement and form of
proxy related to the Company's 2006 Annual Meeting of Shareholders must be
received by the Company at its principal executive offices (Attn: Corporate
Secretary--Shareholder Proposals, Trimble Navigation Limited at 749 North Mary
Avenue, Sunnyvale, California 94085) no later than December 9, 2005.
Shareholders interested in submitting such a proposal are advised to retain
knowledgeable legal counsel with regard to the detailed requirements of the
applicable securities laws. The timely submission of a shareholder proposal to
the Company does not guarantee that it will be included in the Company's
applicable proxy statement.
The Proxy card attached hereto, to be used in connection with the
Company's 2005 Annual Meeting, grants the proxy holders discretionary authority
to vote on any matter otherwise properly raised at such Annual Meeting. The
Company presently intends to use a similar form of proxy card for next year's
2006 Annual Meeting of Shareholders. If the Company is not notified at its
principal executive offices of a shareholder proposal at least 45 days prior to
the one year anniversary of the mailing of this Proxy Statement, then the proxy
holders for the Company's 2006 Annual Meeting of Shareholders will have the
discretionary authority to vote against any such shareholder proposal if it is
properly raised at such annual meeting, even though such shareholder proposal is
not discussed in the Company's proxy statement related to that shareholder
meeting.
ITEM I
ELECTION OF DIRECTORS
Nominees
A board of seven directors is to be elected at the Annual Meeting. The
Board of Directors of the Company has authorized the nomination at the Annual
Meeting of the persons named below as candidates. All nominees currently serve
on the Board of Directors. The Board has waived the recommended retirement age
for re-election as a Director with respect to Dr. Cooper because of his unique
qualification and ability to continue to serve the Company. The Board has
determined that a majority of the Directors are independent directors as defined
by Rule 4200(a)(15) of the National Association of Securities Dealers ("NASD")
listing standards.
The names of the nominees and certain information about them, as of the
Record Date, are set forth below:
Director
Name of Nominee Age Principal Occupation Since
--------------- --- -------------------- -----
Steven W. Berglund 53 President and Chief Executive Officer of the Company 1999
Robert S. Cooper (1) (3) 73 President, Aerospace Electronics Division, Titan 1989
Corporation, Chairman of the Board of Directors of
the Company
John B. Goodrich (1) (3) (4) 63 Business Consultant; Secretary of the Company 1981
William Hart (2) (3) (4) 64 Venture Capital Investor and Business Consultant 1984
Ulf J. Johansson (2) (4) 59 Chairman and Founder of Europolitan Vodafone AB 1999
Bradford W. Parkinson (2) 70 Professor (Emeritus), Stanford University 1984
Nickolas W. Vande Steeg (1) 62 President & Chief Operating Officer, Parker Hannifin 2003
Corporation
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of the Nominating and Governance Committee
(4) Member of the Finance Committee
Steven W. Berglund joined Trimble as president and chief executive
officer in March 1999. Prior to joining Trimble, Mr. Berglund was president of
Spectra Precision, a group within Spectra Physics AB, and a pioneer in the
development of laser systems. He spent 14 years at Spectra Physics in a variety
of senior leadership positions. In the early 1980s, Mr. Berglund spent a number
of years at Varian Associates in Palo Alto, where he held a variety of planning
and manufacturing roles. Mr. Berglund began his career as a process engineer at
Eastman Kodak in Rochester, New York. He attended the University of Oslo and the
University of Minnesota where he received a B.S. in chemical engineering in
1974. He later received his M.B.A. from the University of Rochester in New York
in 1977.
Robert S. Cooper was appointed Chairman of the Company's Board of
Directors in September 1998. Dr. Cooper has served as a Director of the Company
since December 1989. Since 2000, Dr. Cooper has been the President of the
Aerospace Electronics Division of Titan Corporation, an aerospace company. From
1985 to 2000, Dr. Cooper was president, chief executive officer, and chairman of
the board of directors of Atlantic Aerospace Electronics Corporation, an
aerospace company, until the company was acquired by Titan Corporation. Dr.
Cooper also serves on the board of directors of BAE Systems North America. From
1981 to 1985, he was Assistant Secretary of Defense for Research and Technology
and simultaneously held the position of Director for the Defense Advanced
Research Projects Agency (DARPA). Dr. Cooper received a B.S. degree in
Electrical Engineering from State University of Iowa in 1954, a M.S. degree in
Electrical Engineering from Ohio State University in 1958, and a Doctor of
Science degree in Electrical Engineering from the Massachusetts Institute of
Technology in 1963.
John B. Goodrich has served as a Director of the Company since January
1981. Mr. Goodrich retired from the law firm of Wilson Sonsini Goodrich &
Rosati, where he practiced from 1970 until 2002. Mr. Goodrich, currently a
business consultant, serves on the board of directors of Tessera Technology,
Inc., a developer of semiconductor packaging technology and on the boards of
several privately held corporations in high technology businesses. Mr. Goodrich
received a B.A. degree from Stanford University in 1963, a J.D. from the
University of Southern California in 1966, and an L.L.M. in Taxation from New
York University in 1970.
William Hart has served as a Director of the Company since December
1984. Mr. Hart is an advisor to early-stage technology and financial services
companies. Mr. Hart retired from Technology Partners, a Silicon Valley venture
capital firm, in 2001. As the founder and Managing Partner of Technology
Partners, he led the firm for 21 years. Mr. Hart was previously a senior officer
and director of Cresap, McCormick and Paget, management consultants, and held
positions in field marketing and manufacturing planning with IBM Corporation.
Mr. Hart has served on the boards of directors of numerous public and privately
held technology companies. Mr. Hart received a Bachelor of Management
Engineering degree from Rensselaer Polytechnic Institute in 1965 and an M.B.A.
from the Amos Tuck School of Business at Dartmouth College in 1967.
Ulf J. Johansson has served as a Director of the Company since December
1999. Dr. Johansson is a Swedish national with a distinguished career in
communications technology. He is a founder and has been chairman of Europolitan
Vodafone AB, a GSM mobile telephone operator in Sweden since 1990. Dr. Johansson
currently serves as chairman of Acando Frontec AB, a management an IT
consultancy company, and Zodiak Venture AB, a venture fund focused on
information technology. Dr. Johansson also currently serves on the boards of
directors of several privately held companies. During 1998-2003 Dr. Johansson
served as chairman of the University Board of Royal Institute of Technology in
Stockholm and formerly also served as president and chief executive officer of
Spectra-Physics AB, and executive vice president at Ericsson Radio Systems AB.
Dr. Johansson received a Master of Science in Electrical Engineering, and a
Doctor of Technology (Communication Theory) from the Royal Institute of
Technology in Sweden.
Bradford W. Parkinson has served as a Director of the Company since
1984. Currently, Dr. Parkinson is the Edward C. Wells Endowed Chair professor
(emeritus) at Stanford University and has been a Professor of Aeronautics and
Astronautics at Stanford University since 1984. Dr. Parkinson has also directed
the Gravity Probe-B spacecraft development project at Stanford University,
sponsored by NASA, and has been program manager for several Federal Aviation
Administration sponsored research projects on the use of Global Positioning
Systems for navigation. While on a leave of absence from Stanford University,
Dr. Parkinson served as the Company's President and Chief Executive Officer from
August 1998 through March 1999, while the Company searched for a Chief Executive
Officer. From 1980 to 1984 he was group vice president and general manager for
Intermetrics, Inc. where he directed five divisions. In 1979, Dr. Parkinson
served as group vice president for Rockwell International directing business
development and advanced engineering. In 2003, he was awarded the Draper Prize
by the National Academy of Engineering for the development of GPS. Dr. Parkinson
received a B.S. degree from the U.S. Naval Academy in 1957, an M.S. degree in
Aeronautics/Astronautics Engineering from Massachusetts Institute of Technology
in 1961 and a Ph.D. in Astronautics Engineering from Stanford University in
1966.
Nickolas W. Vande Steeg joined the Company's Board of Directors in July
2003. Mr. Vande Steeg is president and chief operating officer with Parker
Hannifin Corporation and has been with the company since 1971. Parker Hannifin
is a diversified manufacturer of motion and control technologies and systems
solutions for a wide variety of commercial, mobile, industrial and aerospace
markets. Currently, he is overseeing all industrial groups; Hydraulics, Fluid
Connectors and Automation, Seal Filtration, Instrumentation and Climate
Controls, two regional groups; Asia Pacific and Latin America, as well as the
"lean organization" element of Parker Hannifin's WIN Strategy, which is focused
on premier customer service, financial performance and profitable growth. Mr.
Vande Steeg currently serves on the boards of directors of Parker Hannifin, and
Azusa Pacific University. Mr. Vande Steeg began his career at John Deere
Corporation serving as an Industrial Engineer and Industrial Relations Manager
from 1965 to 1970. Mr. Vande Steeg received his B.S. in Industrial Technology
from the University of California, Irvine in 1968 and an M.B.A. from Pepperdine
University in Malibu, California in 1985.
Vote Required
The seven nominees receiving the highest number of affirmative votes of
the shares entitled to be voted shall be elected as directors. 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.
Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum, but have no other legal effect
under California law. While there is no definitive statutory or case law
authority in California as to the proper treatment of abstentions and broker
non-votes in the election of directors, the Company believes that both
abstentions and broker non-votes should be counted solely for purposes of
determining whether a quorum is present at the Annual Meeting. In the absence of
controlling precedent to the contrary, the Company intends to treat abstentions
and broker non-votes with respect to the election of directors in this manner.
Unless otherwise directed, the proxy holders will vote the proxies
received by them for the seven nominees named above. In the event that any such
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by
the present Board of Directors to fill the vacancy. In the event that additional
persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them in such a manner as will ensure the election
of as many of the nominees listed above as possible. In such event, the specific
nominees to be voted for will be determined by the proxy holders. As of the date
of this Proxy Statement, the Board of Directors has no reason to believe that
any nominee will be unable or will decline to serve as a director. The directors
elected will hold office until the next annual meeting of shareholders and until
their successors are duly elected and qualified.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote FOR the
election of the above-named persons to the Board of Directors of the Company.
Board Meetings and Committees
The Board of Directors held 8 meetings during the fiscal year ended
December 31, 2004. No director attended fewer than 75% of the aggregate of all
the meetings of the Board of Directors and the meetings of the committees, if
any, upon which such director also served during the fiscal year ended December
31, 2004. It is the Company's policy to encourage directors to attend the
Company's Annual Meeting of Shareholders. Six out of seven members of the board
of directors attended the 2004 Annual Meeting.
Shareholder Communications with Directors
The Board of Directors has established a process to receive
communications from shareholders. Shareholders of the Company may communicate
with one or more of the Company's Directors (including any board committee or
group of directors) by mail in care of Board of Directors, Trimble Navigation
Limited, 749 North Mary Avenue, Sunnyvale, California 94085. Such communications
should specify the intended recipient or recipients.
Audit Committee
The Board of Directors has a separately-designated, standing Audit
Committee, established in accordance with Section 3(a)(58)(A) of the Securities
Exchange Act of 1934. The current members of the Audit Committee are directors
Hart, Johansson and Parkinson, and director Johansson currently serves as the
committee chairman. The Audit Committee held eight meetings during the 2004
fiscal year. The purpose of the Audit Committee is 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.
All Audit Committee members are independent directors as defined by
applicable Nasdaq National Market Rules and listing standards.
All members of the Audit Committee are financially sophisticated and are able to
read and understand fundamental financial statements, including a balance sheet,
income statement and cash flow statement. The Board of Directors has determined
that Director Hart is a "financial expert" as that term is defined in the rules
promulgated by the Securities and Exchange Commission, serving on the Audit
Committee. In addition to serving as CEO and CFO of a venture capital firm,
Director Hart has reviewed and analyzed numerous companies' financial statements
in managing venture capital investment funds for more than 20 years. During his
career he has served on the board of directors of numerous public and privately
held companies.
Compensation Committee
The Board of Directors has a standing Compensation Committee. The
current members of the Compensation Committee are directors Cooper, Goodrich and
Vande Steeg, and director Goodrich currently serves as the committee chairman.
The Compensation Committee held eight meetings during the 2004 fiscal year. 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.
Nominating and Corporate Governance Committee
The Company has a standing Nominating and Corporate Governance
Committee (the "Nominating/Governance Committee"). The functions of the
Nominating/Governance Committee include the following:
o identifying and recommending to the Board individuals qualified to
serve as directors of the Company;
o recommending to the Board directors to serve on committees of the
Board;
o advising the Board with respect to matters of Board composition and
procedures;
o developing and periodically reviewing the corporate governance
principles adopted by the Board; and
o overseeing the evaluation of the Board and the Company's management.
The Nominating/Governance Committee is governed by a charter, a current
copy of which is available on our corporate website at www.trimble.com. The
current members of the Nominating/Governance Committee are director Cooper, who
serves as the chairman, and director Goodrich, each of whom is an independent
director under the Nasdaq listing standards. The Nominating/Governance Committee
met two times during the fiscal year 2004.
The Nominating/Governance Committee will consider director candidates
recommended by shareholders. In considering candidates submitted by
shareholders, the Nominating/Governance Committee will take into consideration
the needs of the Board and the qualifications of the candidate. To have a
candidate considered by the Nominating/Governance Committee, a shareholder must
submit the recommendation in writing and must include the following information:
o The name of the shareholder and evidence of the person's ownership of
Company stock, including the number of shares owned and the length of
time of ownership; and
o The name of the candidate, the candidate's resume or a listing of his
or her qualifications to be a director of the Company and the person's
consent to be named as a director if selected by the
Nominating/Governance Committee and nominated by the Board.
The shareholder recommendation and information described above must be
sent to the Committee Chairman in care of Corporate Secretary at Trimble
Navigation Limited, 749 North Mary Avenue, Sunnyvale, California 94085 and must
be received by the Corporate Secretary not less than 120 days prior to the
anniversary date of the Company's most recent proxy statement issued in
connection with the annual meeting of shareholders.
The Nominating/Governance Committee believes that the minimum
qualifications for serving as a director of the Company are that a nominee
demonstrate, by significant accomplishment in his or her field, an ability to
make a meaningful contribution to the Board's oversight of the business and
affairs of the Company and have an impeccable record and reputation for honest
and ethical conduct in both his or her professional and personal activities. In
addition, the Nominating/Governance Committee will examine a candidate's
specific experiences and skills, time availability in light of other
commitments, potential conflicts of interest and independence from management
and the Company.
The Nominating/Governance Committee identifies potential nominees by
asking current directors and executive officers to notify the Committee if they
become aware of persons, meeting the criteria described above, who have had a
change in circumstances that might make them available to serve on the Board.
The Nominating/Governance Committee also, from time to time, may engage firms
that specialize in identifying director candidates and pay any corresponding
fees for such services. As described above, the Committee will also consider
candidates recommended by shareholders.
Once a person has been identified by the Nominating/Governance
Committee as a potential candidate, the Committee may collect and review
publicly available information regarding the person to assess whether the person
should be considered further. If the Nominating/Governance Committee determines
that the candidate warrants further consideration, the Chairman or another
member of the Committee contacts the person. Generally, if the person expresses
a willingness to be considered and to serve on the Board, the
Nominating/Governance Committee requests information from the candidate, reviews
the person's accomplishments and qualifications, including in light of any other
candidates that the Committee might be considering, and conducts one or more
interviews with the candidate. In certain instances, Committee members may
contact one or more references provided by the candidate or may contact other
members of the business community or other persons that may have greater
first-hand knowledge of the candidate's accomplishments. The Committee's
evaluation process does not vary based on whether or not a candidate is
recommended by a shareholder.
Finance Committee
The Board of Directors formed a Finance Committee in October 2001 for
the purpose of assisting the Board of Directors and the management of the
Company with certain matters involving the financing of the Company's business
but not with respect to matters relating to budgeting or to financial or
managerial accounting decisions for the Company. The current members of the
Finance Committee are directors Goodrich, Hart and Johansson, and director Hart
currently serves as the committee chairman. The Finance Committee did not meet
during the fiscal year 2004. Since being established, the Finance Committee has
assisted the Company with assessing the adequacy of the Company's financial
resources to meet current and anticipated strategic and operating needs,
understanding the economic and financial issues and risks facing the Company as
well as the overall financial soundness of the Company, finding programs for
obtaining additional financial resources, determining the appropriateness and
risks of proposed financing arrangements and participating in the discussions
and negotiations related to proposed financing arrangements.
Compensation Committee Report
The Compensation Committee of the Board of Directors (the "Compensation
Committee") establishes the general compensation policies of the Company and the
compensation plans and specific compensation levels for executive officers of
the Company. The Compensation Committee believes that the compensation of the
Chief Executive Officer should be primarily influenced by the overall financial
performance of the Company.
The Compensation Committee also believes that the compensation of the
Chief Executive Officer should be established within a range of compensation for
similarly situated chief executive officers of comparable companies in the high
technology and related industries in the Standard & Poor's High Technology
Composite Index ("peer companies") and their performance according to data
obtained by the Compensation Committee from independent outside consultants and
publicly available data, such as proxy data from peer companies as adjusted by
the Compensation Committee's consideration of the particular factors influencing
the Company's performance and current situation. The Standard & Poor's High
Technology Composite Index is not the same index used for purposes of the
Company performance graph. A portion of the Chief Executive Officer's
compensation package is established as base salary and the balance is variable
and consists of an annual cash bonus and/or stock option grants.
Within these established ranges and guidelines, and taking into account
the Company's historical performance compared to peer companies, the
Compensation Committee and Board of Directors also carefully considered the
current risks and challenges facing the Company as well as the individual
qualifications, skills and past performance of Mr. Berglund. Based on these
considerations, the Compensation Committee and Board of Directors approved a
base annual salary of $543,840 for Mr. Berglund effective January 1, 2004. See
also "Employment Contracts and Termination of Employment and Change-in-Control
Arrangements."
The Compensation Committee carefully reviewed and considered its cash
bonus program for fiscal year 2004 for senior executives of the Company. Such
program provided for an annual cash bonus, based upon a maximum eligible
percentage of each executive's base salary within a range of target incentives
as reported by professional compensation surveys. The percentage for each
executive was then adjusted by factoring in an evaluation of such individual's
performance as related to the Company's financial performance. The total size of
the Company's bonus pool for all employees, including executives, was determined
with respect to the Company's performance in meeting certain goals for both
revenue and income for fiscal year 2004. The total bonus pool for all employees,
including all executives, was approximately $7,359,509 for fiscal year 2004. Mr.
Berglund earned a bonus of $684,617 out of the total bonus pool.
Based on the Board of Directors' and the Compensation Committee's
evaluation of the Chief Executive Officer's ability to influence the long-term
growth and profitability of the Company, and in connection with his performance
review during the 2004 fiscal year, the Compensation Committee and the Board of
Directors approved a new option grant for Mr. Berglund to purchase an additional
65,000 shares of the Company's Common Stock at the then current fair market
value of $32.47 per share. Such options vest 20% after the first year and
monthly thereafter such that the option is vested entirely after five years.
Upon a change of control of the Company, the options would become fully
exercisable.
The Compensation Committee also adopted similar policies with respect
to the overall compensation of other senior executive officers of the Company. A
portion of each compensation package was established as base salary, and the
balance is variable and consists of an annual cash bonus and stock option
grants. Using salary survey data supplied by outside consultants and other
publicly available data, such as proxy data from peer companies, the
Compensation 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 Compensation Committee taking into
consideration factors such as the relative performance of the Company, the
performance of the business unit for which the senior executive is responsible
and the individual's past performance and future potential.
The size of option grants, if any, to other senior executive officers
was determined by the Compensation Committee's evaluation of each executive's
ability to influence the Company's long-term growth and profitability. The
Company also has a metric measurement system in place with respect to option
grants made to all new employees under the Company's option plans in order to
ensure consistency among grants and competitiveness in the marketplace.
Generally, these options are granted at the then current market price, and
because the value of an option bears a direct relationship to the Company's
stock price, it is an incentive for managers to create value for shareholders.
The Compensation Committee therefore views stock options as an important
component of its long-term, performance-based compensation philosophy.
In general, the Company reviews all employees and executive officers of
the Company, other than the Chief Executive Officer, as part of a single
worldwide program (exclusive of geographic sites where work collectives or
unions govern this activity). This single review plan was adopted to provide a
common, annual review date for all employees and executive officers. Under the
single review plan, the total compensation of all employees of the Company,
including executive officers, will be reviewed annually in accordance with the
same common criteria. Base salary guidelines have been established and will be
revised periodically based upon market conditions, the economic climate and the
Company's financial position. Merit increases, if any, for all employees and
executive officers of the Company will be based upon the following criteria: the
individual employee's performance for the year as judged against his/her job
goals and responsibilities, the individual employee's salary, individual skill
set and performance as compared to other employees in the same or similar
department, the individual employee's position in the salary grade, the
employee's salary relative to market data for the position and the Company's
fiscal budget and any associated restrictions. The annual review for fiscal year
2005 is set for April 2005.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") generally limits the deductibility by the Company of compensation in
excess of $1,000,000 paid to certain executive officers to the extent the
compensation is not considered performance-based for purposes of Section 162(m).
A portion of the compensation paid by the Company to its Chief Executive Officer
during 2004 was not fully deductible for federal income tax purposes because the
Company's stock options previously granted by the Company are not considered
performance-based for purposes of Section 162(m). To the extent that
non-performance based compensation received by certain executive officers in a
future year would exceed $1,000,000, the amount in excess of $1,000,000 would
not be deductible by the Company. The Compensation Committee and the Board of
Directors believe that it is essential to reward and motivate executives based
on the assessment of an individual's performance and contribution to the success
of the Company, even though some or all of any such compensation may not be
deductible due to the requirements of Section 162(m).
Submitted by the Compensation Committee of the Company's Board of Directors,
Robert S. Cooper, John B Goodrich, Nickolas W. Vande Steeg,
Member Chairman Member
Compensation Committee Compensation Committee Compensation Committee
Compensation Committee Interlocks and Insider Participation
Robert S. Cooper, John B. Goodrich and Nickolas Vande Steeg are the current
members of the Company's Compensation Committee. Director Vande Steeg replaced
Director Hart on the Compensation Committee in April 2004. In August 1998, Dr.
Cooper was appointed to serve as the Company's Chairman of the Board of
Directors. Since 1998, Mr. Goodrich has served as the Company's corporate
secretary; however, he is not, and has never been an employee of the Company.
Compensation of Directors
All non-employee directors receive an annual cash retainer of $20,000
to be paid quarterly in addition to a fee of $2,000 for each board meeting
attended in person and $500 for each board or committee meeting attended via
telephone conference. Members of designated committees of the Board of Directors
receive $1,000 per meeting which is not held on the same day as a meeting of the
full Board of Directors. Non-employee directors are also reimbursed for local
travel expenses or paid a fixed travel allowance based on the distance to the
meeting, and reimbursed for other necessary business expenses incurred in the
performance of their services as directors of the Company.
The Company's 2002 Stock Plan provides for the annual granting of
nonstatutory stock options to each non-employee director of the Company (the
"Outside Directors"). Pursuant to the terms of the Stock Plan, Outside Directors
are granted an option to purchase 15,000 shares of the Company's Common Stock
upon initially joining the Board of Directors. Thereafter, each year, each
Outside Director receives an additional option grant to purchase 7,500 shares if
re-elected at the annual meeting of shareholders. All such Outside Director
Options have an exercise price equal to the fair market value of the Company's
Common Stock on the date of grant, vest monthly over a period of three years,
and have a ten year term of exercise.
As of the Record Date, Outside Directors held options to purchase an
aggregate of 307,500 shares, having an average exercise price of $15.62 per
share and expiring from April 2005 to May 2014. During the fiscal year ended
December 31, 2004, directors Cooper, Goodrich, Hart, Johansson, Parkinson and
Vande Steeg were each granted Director Options to purchase 7,500 shares of the
Company's Common Stock at an exercise price of $22.99 per share.
Audit Committee Report
The information contained in this report shall not be deemed to be
"soliciting material" or "filed" or incorporated by reference in future filings
with the SEC, or subject to the liabilities of Section 18 of the Securities
Exchange Act of 1934, except to the extent that it is specifically incorporated
by reference into a document filed under the Securities Act of 1933 or the
Securities Exchange Act of 1934.
The Audit Committee is a separately-designated standing committee of
the Board of Directors, established in accordance with Section 3(a)(58)(A) of
the Securities Exchange Act of 1934, and operates under a written charter
adopted by the Board of Directors. Among its other functions, the Audit
Committee recommends to the Board of Directors, subject to shareholder
ratification, the selection of the Company's independent auditor.
The Audit Committee has reviewed and discussed the Company's
consolidated financial statements and financial reporting process with the
Company's management, which has the primary responsibility for the Company's
consolidated financial statements and financial reporting processes, including
establishing and maintaining adequate internal controls over financial reporting
and evaluating the effectiveness of such internal controls. Ernst & Young LLP
("Ernst & Young"), the Company's current independent auditor, is responsible for
performing an audit and expressing an opinion on the conformity of the Company's
audited financial statements to generally accepted accounting principles,
issuing an attestation report on management's assessment of the effectiveness of
the Company's internal controls over financial reporting and performing an audit
and expressing an opinion on the effectiveness of internal control over
financial reporting. The Audit Committee has reviewed and candidly discussed
with Ernst & Young the overall scope and plans of its audits, its evaluation of
the Company's internal controls, the overall quality of the Company's financial
reporting processes and accounting principles and judgment, and the clarity of
disclosures in the Company's consolidated financial statements.
The Audit Committee has discussed with Ernst & Young those matters
required to be discussed by Statement of Auditing Standards No. 61
("Communication With Audit Committees"). Ernst & Young has provided the Audit
Committee with the written disclosures and the letter required by the
Independence Standards Board Standard No. 1 ("Independence Discussions with
Audit Committee"), and has also discussed with Ernst & Young that firm's
independence from management and the Company. The Audit Committee has also
determined that Ernst & Young's provision of non-audit services (such as
tax-related services) to the Company and its affiliates is compatible with
maintaining the independence of Ernst & Young with respect to the Company and
its management.
Based on the Audit Committee's discussion with management and the
independent auditors, and the Audit Committee's review of the representation of
management and the report of the independent auditor to the Audit Committee, the
Audit Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2004.
Submitted by the Audit Committee of the Company's Board of Directors,
William Hart, Member Ulf J. Johansson, Chairman Bradford W. Parkinson, Member
Audit Committee Audit Committee Audit Committee
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The following table sets forth the shares of the Company's Common Stock
beneficially owned as of the Record Date (unless otherwise noted below) by: (i)
all persons known to the Company to be the beneficial owners of more than 5% of
the Company's outstanding Common Stock, (ii) each director of the Company
(including nominees), (iii) the executive officers of the Company named in the
Summary Compensation Table presented in this Proxy Statement, and (iv) all
directors and executive officers of the Company, as a group:
Shares
Beneficially Owned (2)
5% Shareholders, Directors and Nominees, and Executive Officers (1) Number Percent (%)
------------------------------------------------------------------- ------ -----------
PRIMECAP Management Company 3,732,372 7.30%
225 South Lake Avenue #400, Pasadena, CA 91101 (3)
FMR Corp.
82 Devonshire Street, Boston, MA 02109 (4) 3,633,580 7.009%
Franklin Resources, Inc.
One Franklin Parkway, San Mateo, CA 94403 (5) 2,782,949 5.40%
Steven W. Berglund (6)................................................ 609,640 1.14%
Robert S. Cooper (7).................................................. 132,667 *
John B. Goodrich (8).................................................. 68,085 *
William Hart (9)...................................................... 114,780 *
Ulf J. Johansson (10)................................................. 44,167 *
Bradford W. Parkinson (11)............................................ 50,445 *
Nickolas W. Vande Steeg (12) ......................................... 15,625 *
Alan Townsend (13) ................................................... 130,166 *
Irwin L. Kwatek (14) ................................................. 38,151 *
Joseph F. Denniston (15) ............................................. 76,003 *
Mark Harrington (16).................................................. 14,120 *
All Directors and Executive Officers, as a group
(18 persons) (6)-(16)............................................ 1,897,573 3.48%
----------
* Indicates less than 1%
(1) Except as otherwise noted in the table, the business address of each of the
persons named in this table is: c/o Trimble Navigation Limited, 749 North
Mary Avenue, Sunnyvale, California 94085.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC"). In computing the number of
shares beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options or warrants held by that
person that are exercisable within 60 days of the Record Date are deemed
outstanding. Such shares, however, are not deemed outstanding for purposes
of computing the ownership of any other person. To our knowledge, except as
indicated in the footnotes to this table and pursuant to applicable
community property laws, the shareholder named in the table has sole voting
and investment power with respect to the shares set forth opposite such
shareholder's name.
(3) The information is based upon Schedule 13G/A as filed with the SEC on
November 16, 2004.
(4) The information is based upon Schedule 13G as filed with the SEC on
February 14, 2005. Fidelity Growth Company Fund, an investment company
registered under Section 8 of the Investment Company Act of 1940 is under
the control of FMR Corp. Fidelity Growth Company Fund has its principal
business office at 82 Devonshire Street, Boston, MA 02109, and owned
2,942,500 shares, or 5.676% of the Company's Common Stock at December 31,
2004.
(5) The information is based upon Schedule 13G as filed with the SEC on
February 14, 2005.
(6) Includes 566,125 shares subject to options exercisable on or prior to May
20, 2005.
(7) Includes 59,167 shares subject to options exercisable on or prior to May
20, 2005.
(8) Includes 31,667 shares subject to options exercisable on or prior to May
20, 2005.
(9) Includes 51,667 shares subject to options exercisable on or prior to May
20, 2005.
(10) Includes 44,167 shares subject to options exercisable on or prior to May
20, 2005.
(11) Includes 4 shares held by Dr. Parkinson's spouse, 3,772 shares held in a
charitable remainder trust and 41,667 shares subject to options exercisable
on or prior to May 20, 2005.
(12) Includes 15,625 shares subject to options exercisable on or prior to May
20, 2005.
(13) Includes 119,075 shares subject to options exercisable on or prior to May
20, 2005.
(14) Includes 38,151 shares subject to options exercisable on or prior to May
20, 2005.
(15) Includes 74,645 shares subject to options exercisable on or prior to May
20, 2005.
(16) Includes 14,002 shares subject to options exercisable on or prior to May
20, 2005.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires that 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
the fiscal year ended December 31, 2004 file reports of initial ownership on
Form 3 and changes in ownership on Form 4 or 5 with 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.
To the Company's knowledge, based solely on its review of the copies of
such forms received by it, the Company believes that, during the last fiscal
year ended December 31, 2004, all Section 16(a) filing requirements applicable
to its officers, directors and 10% shareholders were complied with on a timely
basis.
EXECUTIVE COMPENSATION
The following table sets forth the compensation, including bonuses,
earned during each of the Company's last three fiscal years ending January 3,
2003, January 2, 2004, and December 31, 2004, respectively, by (i) all persons
who served as the Company's Chief Executive Officer during the last completed
fiscal year, and (ii) the four other most highly compensated executive officers
of the Company serving at the end of the last completed fiscal year:
Summary Compensation Table
Long-term
Compensation
Annual Compensation(1) (2)
---------------------- ---
Other Annual Securities All Other
Salary Bonus Compensation Underlying Options Compensation
Name and Principal Position Year ($) ($) ($) (#) (3) ($)
--------------------------- ---- --- --- --- --- -------
Steven W. Berglund 2004 543,840 648,716 65,000 51,707 (4)
President and Chief Executive 2003 445,990 464,667 150,000 88,640 (4)
Officer 2002 440,000 34,086 45,000 91,160 (4)
Alan Townsend (5) 2004 232,794 218,083 7,445 20,000 59,782 (6)
Vice President and General Manager
Field Solutions 2003 208,416 88,028 12,000 19,632 (7)
2002 166,601 34,086 15,000 15,687 (7)
Irwin L. Kwatek 2004 218,937 185,849 5,246 15,000 2,500
Vice President and General 2003 212,021 138,054 3,595 18,000 2,500
Counsel 2002 206,000 7,485 6,335 15,000 2,500
Joseph F. Denniston 2004 236,830 149,174 15,000 2,500
Vice President, Operations 2003 229,932 119,888 12,000 2,500
2002 225,000 34,086 22,500 2,500
Mark Harrington (8) 2004 219,048 159,245 102,501 2,500
Vice President of Strategy and
Business Development
----------
(1) Compensation deferred at the election of an executive is included in the
applicable 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) Represents Company matching contributions pursuant to Section 401(k) of the
Code, unless otherwise noted, for the periods in which they accrued. All
full-time employees are eligible to participate in the Company's 401(k)
plan.
(4) Represents only the portion of a loan, including related accrued interest
that was forgiven by the Company during the year. The loan was originally
made in connection with hiring Mr. Berglund for the purpose of assisting
him with relocating to California and obtaining a primary residence. See
"Certain Relationships and Related Transactions."
(5) Mr. Townsend relocated to the United States from New Zealand in March 2004.
Until his relocation, Mr. Townsend was employed by Trimble Navigation New
Zealand and compensated in New Zealand dollars. All compensation amounts
shown for Mr. Townsend are displayed in U.S. dollars using currency
exchange rates in effect at the end of each fiscal year for the year in
which such compensation was earned.
(6) Includes Company matching contributions of $1,712 pursuant to Section
401(k) of the Code, $4,783 in matching contributions for the Trimble
Navigation New Zealand retirement plan, and $53,286 of reimbursement for
relocation expenses paid to Mr. Townsend for assistance with his relocation
to Colorado.
(7) Represents matching contributions for the Trimble Navigation New Zealand
retirement plan. (8) Mr. Harrington joined the Company on January 5, 2004.
Option Grants in Last Fiscal Year
The following table sets forth the number and terms of options granted
to the persons named in the Summary Compensation Table during the last fiscal
year ended December 31, 2004:
Individual Grants
-----------------
Number of % of Total Potential Realizable
Securities Options Value at Assumed
Underlying Granted to Annual Rates of Stock
Options Employees in Exercise Expiration Price Appreciation
Granted Fiscal Year Price Date for Option Term (5)
Name (#) (2) ($/Share) (3) (4) 5% ($) 10% ($)
---- --- --- ------------- --- ------ -------
Steven W. Berglund 65,000 6.5% $32.47 12/17/2014 1,327,536 3,364,216
---------------------------------------------------------------------------------------------------------------------------
Alan Townsend 20,000 2.0% $29.06 10/22/2014 365,575 926,433
---------------------------------------------------------------------------------------------------------------------------
Irwin L. Kwatek 15,000 1.5% $29.06 10/22/2014 274,181 694,825
---------------------------------------------------------------------------------------------------------------------------
Joseph F. Denniston 15,000 1.5% $29.06 10/22/2014 274,181 694,825
---------------------------------------------------------------------------------------------------------------------------
Mark Harrington 52,501 5.3% $25.33 1/5/2014 836,585 2,120,058
50,000 5.0% $32.47 12/17/2014 1,021,182 2,587,859
---------------------------------------------------------------------------------------------------------------------------
(2) The Company granted options to purchase an aggregate of 998,156 shares of
the Company's Common Stock to employees, consultants and non-employee
directors during fiscal year 2004 pursuant to the Company's 2002 Stock
Plan.
(3) All options presented in this table were granted at an exercise price equal
to the 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.
(4) All options presented in this table may terminate before the stated
expiration following the termination of the optionee's status as an
employee, consultant or director, including upon the optionee's death or
disability.
(5) The assumed 5% and 10% compound rates of annual stock appreciation are
mandated by the rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future Common Stock
prices. All grants listed in the table vest 20% after the first year and
monthly thereafter such that full vesting occurs five years from the date
of the grant. All options listed have a ten-year term of exercise which,
assuming the specified rates of annual compounding, results in total
appreciation of 62.9% (at 5% per year) and 159.4% (at 10% per year) for the
ten-year option term. All options listed would accelerate upon a change of
control of the Company, if not assumed by the successor to the Company. In
any event, upon change of control stock options held by Mr. Berglund and
Mr. Kwatek would accelerate and become fully vested.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table provides information on option exercises by the
persons named in the Summary Compensation Table during the last fiscal year
ended December 31, 2004:
Number of Securities Underlying Value of Unexercised
Shares Unexercised Options at Fiscal In-the-Money Options at Fiscal
Acquired on Value Year-End (#) Year-End ($) (1)
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ----------- ------------- ----------- -------------
Steven W. Berglund 61,000 $1,375,799 561,750 213,250 $14,853,229 $2,699,616
Alan Townsend 18,250 $ 295,831 109,500 67,000 $ 2,330,363 $1,034,548
Irwin L. Kwatek 28,000 $ 522,050 39,776 50,725 $ 1,798,129 $1,089,838
Joseph F. Denniston 7,000 $ 101,803 80,155 62,847 $ 746,980 $ 742,917
Mark Harrington - - - 102,501 - $ 433,282
(1) Represents the market value of the Common Stock underlying the options at
fiscal year end, less the exercise price of "in-the-money" options. The
closing price of the Company's Common Stock on December 31, 2004 as quoted
on the Nasdaq National Market System was $33.04 per share.
Changes to Compensation Plans
As described further in this Proxy Statement, the Company has proposed an
amendment to the 2002 Stock Plan to authorize grants of stock awards. Please see
"Item II - Amendment of 2002 Stock Plan."
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
On March 17, 1999, Mr. Berglund entered into an employment agreement
with the Company to serve as the Company's Chief Executive Officer. This
agreement provides that, among other things, in the event of Mr. Berglund's
involuntary termination or termination for other than defined cause, he will
receive severance equal to his then current annual base salary plus one half of
any accrued bonus to date.
In connection with hiring Mr. Berglund and his original relocation to
California and pursuant to the terms of his employment agreement, the Company
provided him with a loan of $400,000 to assist in the purchase of a new primary
residence in California. Such loan was secured by a second deed of trust on the
residence and was made at the lending rate at which the Company is able to
borrow, as adjusted from time to time. Such loan was forgiven by the Company
ratably over a period of five years, with the final balance of $46,667 being
forgiven during the fiscal year ended December 31, 2004.
In a Letter of Assignment, dated November 12, 2003, as supplemented by
letter dated January 19, 2004, the Company agreed to certain terms and
conditions relating to Mr. Townsend's relocation from New Zealand to
Westminster, Colorado. Among other things, upon the termination of Mr.
Townsend's employment while in the United States, in addition to receiving
severance benefits in accordance with the Company's standard severance policy,
Mr. Townsend will receive repatriation benefits to cover the costs of moving his
family and household effects back to New Zealand. In addition, in the event that
Mr. Townsend returns to New Zealand after four years or his employment is
terminated by the Company and he loses money on the sale of his primary
residence in the United States, the Company has agreed to pay Mr. Townsend the
difference between the net sales price and the purchase price he paid for it.
On July 22, 2004, Mr. Berglund and Mr. Kwatek entered into the
Company's standard executive officer change in control severance agreement. The
agreement provides that each of their then unvested stock options will vest upon
a Change in Control (as defined in the agreement). The standard agreement also
provides that, if the executive's employment is terminated other than by reason
of a Nonqualifying Termination (as defined in the agreement) within the period
commencing with the change in control and ending one year following the change
in control, (i) the executive shall receive a severance payment equal to one
year base salary plus bonus (each calculated in accordance with the terms of the
agreement), (ii) the Company shall continue to provide the executive with
medical and other insurance for a period of one year following the date of
termination of his employment on the same basis as provided prior to
termination, and (iii) the executive may exercise any then outstanding stock
options for a period of one year following the date of termination of his
employment, unless such options expire earlier.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 15, 2001 the Company made a loan to Irwin Kwatek, an
executive officer of the Company, for the purpose of assisting him in the
acquisition of his primary residence. The note was for a term of five years,
secured by a second deed of trust on the residence and bearing interest at the
rate of 4.99% per annum. The largest amount outstanding during fiscal year 2004
was $150,000. Mr. Kwatek prepaid the loan in full in 2004 and at the record date
there was no outstanding principal balance on the loan.
Since 2002 both the daughter and son-in law of Dennis Workman, an
executive officer of the Company, have performed consulting services for the
Company. The aggregate fees paid to both of them were $53,875 in 2002, $95,875
in 2003 and $99,500 in 2004. The Audit Committee reviewed the nature of the
services and the relationship and has approved the continuation of the
consulting services.
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 Information Technology Sector Index: (1)
[The performance graph has been omitted. Performance Graph. The performance
graph required by Item 402(1) of Regulation S-K is set forth in the paper copy
of the Proxy Statement immediately following the caption "COMPARISON OF FIVE
YEAR CUMULATIVE TOTAL RETURN."
The peformance graph plots the data points listed below the graph for the
data sets (i) Trimble Navigation Limited, (ii) Nasdaq Stock Market (US) Index
and (iii) the Standard & Poor's Information Technology Index. The graph has a
horizontal axis at its bottom which lists from left to right the dates 12/99,
12/00, 12/01, 12/02 , 12/03 and 12/04. The graph has a vertical axis at its left
which lists from bottom to top numbers 0, 50, 100, 150, 200 and 250. The data
points for each data set are plotted on the graph and are connected by line. The
line connecting the data points in the Trimble Navigation Limited data set is
bold with square to mark the points, while the lines connecting the data points
in the Nasdaq Stock Market (US) Index data set and the S&P Information
Technology Index data set are dashed with triangle to mark data points and small
square dashes with circle to mark data points, respectively.]
DATA POINTS FOR PERFORMANCE GRAPH
TRIMBLE NAVIGATION LIMITED
Cumulative Total Return
12/99 12/00 12/01 12/02 12/03 12/04
----- ----- ----- ----- ----- -----
TRIMBLE NAVIGATION LIMITED 100.00 110.98 74.96 57.76 172.21 229.18
NASDAQ STOCK MARKET (U.S.) 100.00 60.30 45.49 26.40 38.36 40.51
S & P INFORMATION TECHNOLOGY 100.00 59.10 43.81 27.42 40.37 41.40
(1) The data in the above graph is presented on a calendar year basis through
December 31, 2004 which is the most currently available data from the
indicated sources. The Company adopted a 52-53 week fiscal year effective
upon the end of fiscal year 1997 and the actual date of the Company's 2004
fiscal year end was December 31, 2004. Any variations due to any
differences between the actual date of a particular fiscal year end and the
calendar year end for such year are not expected to be material.
* Assumes an investment of $100 on December 31, 1999 in the Company's Common
Stock, the Nasdaq Composite Total Return Index (U.S.), and the Standard &
Poor's Information Technology Sector Index. Total returns assume the
reinvestment of dividends for the indexes. The Company has never paid
dividends on its Common Stock and has no present plans to do so.
Copyright 2002, Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved.
ITEM II
AMENDMENT OF THE 2002 STOCK PLAN
The Company's 2002 Stock Plan was originally adopted by the Company's
Board of Directors in March 2002 and approved by the shareholders in May 2002.
In May 2004, the shareholders approved an increase in the number of shares of
the Company's Common Stock reserved for issuance under the 2002 Stock Plan to
4,500,000 shares plus any shares reserved but unissued under the Company's 1993
Stock Option Plan (the "1993 Plan") together with any shares subsequently
returned to the 1993 Plan as the result of the termination of any options
originally granted under the 1993 Plan. As described below, if the proposed
amendment to permit the grant of stock awards under the 2002 Stock Plan is
approved by shareholders, then no more than 10% of the shares available under
the 2002 Stock Plan may be granted in the form of stock awards. As of the Record
Date, options to purchase an aggregate of 3,146,707 shares, having an average
exercise price of $19.6303 per share and expiring from June 21, 2012 to January
20, 2015, were outstanding and 2,156,633 shares remained available for future
grant under the 2002 Stock Plan.
The Board of Directors is proposing the addition of stock awards to
help the Company continue to attract and retain the best employees. Recent
accounting changes related to the expensing of stock options have been a factor
for the Board of Directors in their evaluation of providing alternate methods of
non-cash, stock-based compensation to certain employees. The Board of Directors
amended the 2002 Stock Plan in January 2005 to allow for the granting of stock
awards thereunder, subject to shareholder approval. The Board has granted an
award of 20,000 shares of restricted stock to Mr. Berglund, the Company's
President and CEO, as part of the evaluation of his overall compensation. Such
award is subject to shareholder approval of the proposed amendment to the 2002
Stock Plan.
The use of stock options as equity incentives in hiring, retaining and
motivating the most talented people within the available human resource pool has
been critical to the Company's past overall growth and success by encouraging
and motivating high levels of performance from its employees and consultants.
Stock awards will offer employees the opportunity to earn shares of Company
stock over time, rather than options that give employees the right to purchase
stock at a set price. The proposed amendment to the 2002 Stock Plan reflects the
Company's philosophy that stock incentives are an important and meaningful
component of employee compensation, which enables the Company to attract the
best available candidates and to ensure that its experienced and qualified
employees, the Company's most significant asset, are appropriately recognized,
rewarded, and are encouraged to stay with the Company and help it grow, thereby
increasing shareholder value. The Board of Directors believes that the proposed
amendment is in the best interests of the Company, its shareholders, and its
employees and at the Annual Meeting, the shareholders are being asked to approve
the proposed amendment to allow the granting of stock awards under the 2002
Stock Plan.
The essential features of the 2002 Stock Plan, including this proposed
amendment, are summarized below. This summary does not purport to be a complete
description of all the provisions of the 2002 Stock Plan, and is subject to and
qualified in its entirety by reference to the complete text of the amended 2002
Stock Plan, a copy of which is attached to this Proxy Statement as Appendix A.
General
The purpose of the 2002 Stock Plan is to help the Company attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to the Company's employees, directors and
consultants and the employees and consultants of the Company's parent and
subsidiary companies and to promote the success of the Company's business.
Options granted under the 2002 Stock Plan may be either "incentive stock
options" or nonstatutory stock options. As part of the proposed amendment, the
2002 Stock Plan will also allow the granting of stock awards either in
connection with an option grant or as a stand-alone award.
Administration
The 2002 Stock Plan may generally be administered by the Company's
Board of Directors or a committee appointed by the Board of Directors, referred
to as the administrator. The administrator may make any determinations deemed
necessary or advisable for the 2002 Stock Plan.
Eligibility
Nonstatutory stock options and stock awards may be granted to the
Company's employees, directors and consultants and to employees and consultants
of any of the Company's parent or subsidiary companies. Incentive stock options
may be granted only to the Company's employees and to employees of any of the
Company's parent or subsidiary companies. The administrator, in its discretion,
selects which of the Company's employees, directors and consultants to whom
options or awards may be granted, the time or times at which such options or
awards shall be granted, and the exercise or purchase price, number of shares
and other terms and conditions subject to each such grant.
Terms of Options and Awards
Each option or award under the 2002 Stock Plan is evidenced by an
agreement between the Company and the optionee or awardee, as applicable, and is
subject to the following terms and conditions, but other specific terms may
vary:
(a) Exercise Price of Options. The administrator determines the exercise
price of options at the time the options are granted. The exercise price of
options may not be less than 100% of the fair market value of the Company's
Common Stock on the date such option is granted; provided, however, that the
exercise price of an incentive stock option granted to a 10% shareholder may not
be less than 110% of the fair market value on the date such option is granted.
The fair market value of the Company's Common Stock is generally determined with
reference to the closing sale price for the Company's Common Stock (or the
closing bid if no sales were reported) on the date the option is granted.
(b) Exercise of Options; Form of Consideration. The administrator
determines when options become exercisable, and may, in its discretion,
accelerate the vesting of any outstanding option. The means of payment for
shares issued upon exercise of an option is specified in each option agreement.
The 2002 Stock Plan permits payment to be made by cash, check, promissory note,
other shares of the Company's Common Stock (with some restrictions), cashless
exercises, reduction in any Company liability the Company may owe to an
optionee, any other form of consideration permitted by applicable law, or any
combination thereof.
(c) Awards. The administrator determines the time or times at which a stock
award vests. Awardees are entitled to receive stock awards without payment of
any consideration to the Company, unless otherwise required by applicable law.
Unless otherwise provided in the award agreement, awardees will have full voting
rights and be entitled to regular cash dividends with respect to the shares
subject to an award.
(d) Term of Option. The term of an option under the 2002 Stock Plan may be
no more than ten (10) years from the date of grant; provided, however, that in
the case of an incentive stock option granted to a 10% shareholder, the term of
the option may be no more than five (5) years from the date of grant. No option
may be exercised after the expiration of its term.
(e) Termination of Service. If an optionee's service relationship with the
Company terminates for any reason (excluding death or disability), then, unless
the administrator provides otherwise, the optionee may generally exercise the
option within three (3) months of such termination to the extent that the option
is vested on the date of termination, (but in no event later than the expiration
of the term of such option as set forth in the option agreement). If an
optionee's service relationship with the Company terminates due to the
optionee's death or disability, then, unless the administrator provides
otherwise, the optionee or the optionee's personal representative, estate, or
the person who acquires the right to exercise the option by bequest or
inheritance, as the case may be, generally may exercise the option, to the
extent the option was vested on the date of termination, within twelve (12)
months from the date of such termination. If an awardee's service relationship
with the Company is terminated for any reason, all unvested shares covered by
the award are forfeited.
(f) Non-transferability. Unless otherwise determined by the administrator,
options and awards granted under the 2002 Stock Plan are not transferable other
than by will or the laws of descent and distribution, and options may be
exercised during the optionee's lifetime only by the optionee.
(g) Other Provisions. The stock option or award agreement may contain other
terms, provisions and conditions not inconsistent with the 2002 Stock Plan as
may be determined by the administrator.
Outside Director Options
The 2002 Stock Plan provides for an automatic grant of a nonstatutory
stock option to purchase 15,000 shares of the Company's Common Stock to a
non-employee director upon being first elected to the Board of Directors.
Thereafter, each non-employee director automatically receives an additional
nonstatutory stock option grant to purchase 7,500 shares upon re-election to the
Board of Directors at an annual meeting of shareholders. The outside directors'
options have a purchase price equal to the fair market value on the date of
grant and become exercisable in installments cumulatively with respect to 1/36
of the shares for each complete calendar month after the date of grant.
Limitations
The 2002 Stock Plan provides that no service provider may be granted,
in any Company fiscal year, options or awards covering more than 300,000 shares
of the Company's Common Stock. Notwithstanding this limit, however, in
connection with such individual's initial service with the Company, he or she
may be granted options or awards covering up to an additional 450,000 shares of
the Company's Common Stock. These limits are subject to appropriate adjustments
in the case of stock splits, reverse stock splits and the like.
Adjustment Upon Changes in Capitalization
In the event that any dividend or other distribution (whether in the
form of cash, common stock, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Common Stock or other of the Company's securities, or other change in the
Company's corporate structure affecting the Company's Common Stock occurs, the
administrator, in order to prevent diminution or enlargement of the benefits or
potential benefits intended to be made available under the 2002 Stock Plan, may
(in its sole discretion) adjust the number and class of shares that may be
delivered under the 2002 Stock Plan and/or the number, class, and price of
shares covered by each outstanding option or award.
In the event of a liquidation or dissolution, any unexercised options
and unvested awards will terminate. The administrator may, in its sole
discretion, provide that each optionee shall have the right to exercise all or
any part of an option, including shares as to which the option would not
otherwise be exercisable. The administrator may provide that the vesting of an
award will accelerate at any time prior to such transaction.
In connection with the merger of the Company with or into another
corporation or the Company's "change of control", as defined in the 2002 Stock
Plan, each outstanding award or option shall be assumed or an equivalent award
or option substituted by the successor corporation. If the successor corporation
refuses to assume the options or awards or to substitute substantially
equivalent options or awards, the optionee shall have the right to exercise the
option as to all the optioned stock, including shares not otherwise vested or
exercisable, and in the case of an award, the administrator shall provide for
the acceleration of the award. In such event, with respect to options, the
administrator shall notify the optionee that the option is fully exercisable for
fifteen (15) days from the date of such notice and that the option terminates
upon expiration of such period. If, in such a merger or Change in Control, an
award or option is assumed or an equivalent award or option is substituted by
such successor corporation, and if during a one-year period after the effective
date of such merger or Change in Control, the optionee's or awardee's status as
a service provider is terminated for any reason other than the optionee's or
awardee's voluntary termination of such relationship, then (i) in the case of an
option, the optionee shall have the right within three (3) months 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 and (ii) in the case of an award, the award shall be fully
vested as of the date of such termination.
Amendment and Termination of the 2002 Stock Plan
The Company's Board of Directors may amend, alter, suspend or terminate
the 2002 Stock Plan, or any part thereof, at any time and for any reason.
However, the Company will obtain shareholder approval for any amendment to the
2002 Stock Plan to the extent necessary and desirable to comply with applicable
laws. Additionally, unless the Company obtains prior shareholder approval, the
administrator will not amend any option to reduce its exercise price or agree to
grant options in exchange for optionees agreeing to cancel outstanding options
where the economic effect would be the same as reducing the exercise price of
the cancelled option. No such action by the Board of Directors or shareholders
may alter or impair any option or award previously granted under the 2002 Plan
without the written consent of the optionee or awardee. Unless terminated
earlier, the 2002 Stock Plan shall terminate by its terms ten (10) years from
the date that the 2002 Stock Plan was adopted by the Board of Directors.
Certain U.S. Federal Income Tax Information
Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise is an adjustment item for alternative
minimum tax purposes and may subject the optionee to the alternative minimum
tax. Upon a disposition of the shares more than two (2) years after grant of the
option and one (1) year after exercise of the option, any gain or loss is
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee recognizes ordinary income at the time of disposition
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. Any gain or loss recognized on such a premature disposition
of the shares in excess of the amount treated as ordinary income is treated as
long-term or short-term capital gain or loss, depending on the holding period. 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. Unless limited by Section 162(m) of the Code, the Company is
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by the Company's
employee is subject to tax withholding by the Company. Unless limited by Section
162(m) of the Code, the Company is entitled to a deduction in the same amount as
the ordinary income recognized by the optionee. Upon a disposition of such
shares by the optionee, any difference between the sale price and the optionee's
exercise price, to the extent not recognized as taxable income as provided
above, is treated as long-term or short-term capital gain or loss, depending on
the holding period.
Stock Awards. Generally, unless the recipient has elected otherwise,
the grant of a stock award will not result in income for the awardee, assuming
the shares transferred are subject to restrictions resulting in a "substantial
risk of forfeiture" as intended by the Company. At the time the Company's common
stock associated with the stock award is vested the recipient of a stock award
will recognize ordinary compensation income in an amount equal to the fair
market value of the stock received. Unless limited by Section 162(m) of the
Code, the Company will be entitled to a deduction for federal income tax
purposes equal to the amount of ordinary income that the recipient is required
to recognize.
The recipient's basis for determination of gain or loss upon the
subsequent disposition of shares acquired as stock awards will be the amount of
any ordinary income recognized when the stock becomes vested. Upon the
disposition of any stock received as a stock award under the 2002 Stock Plan,
the difference between the sale price and the recipient's basis in the shares
will be treated as a capital gain or loss and generally will be characterized as
long-term capital gain or loss if, at the time of disposition, the shares have
been held for more than one year since the recipient recognized compensation
income with respect to such shares.
The foregoing is only a summary of the effect of federal income
taxation upon the Company and optionees or awardees with respect to the grant
and exercise of options or the grant or vesting of awards under the 2002 Stock
Plan. It does not purport to be complete, and does not discuss the tax
consequences of the employee's, director's or consultant's death or the
provisions of the income tax laws of any municipality, state or foreign country
in which the employee, director or consultant may reside.
New Plan Benefits
In January 2005 the Board of Directors granted a stock award of 20,000
shares of the Company's Common Stock to Steven W. Berglund, President and Chief
Executive Officer. The award vests 20% on June 30, 2005 and an additional 20%
each June 30 thereafter, so long as Mr. Berglund remains employed with the
Company through each such vesting date. As of March 21, 2005, the fair market
value of the shares of stock subject to the award was $731,400. The award will
be effective upon the approval of the proposed amendment to the 2002 Stock Plan
by the shareholders of the Company.
Upon their re-election at the Annual Meeting, pursuant to the terms of
the 2002 Stock Plan, each non-executive officer director will automatically
receive a grant of nonstatutory stock options to purchase 7,500 shares (45,000
shares, as a group) of the Company's Common Stock at a purchase price equal to
the fair market value on the date of grant. These options become exercisable in
installments cumulatively with respect to 1/36 of the shares for each complete
calendar month after the date of grant.
Additional future benefits under the 2002 Stock plan are not
determinable, as grants of options and awards are at the discretion of the Board
of Directors and are dependent upon the price of the Company's Common Stock in
the future.
Vote Required
The approval of the proposed amendment to the 2002 Stock Plan to allow
granting of stock awards of the Company's Common Stock, 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 proposed
amendment of the 2002 Stock Plan to allow granting of stock awards of the
Company's Common Stock under the plan.
PROPOSAL III
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP ("Ernst &
Young") as the Company's independent auditors, to audit the financial statements
of the Company for the current fiscal year ending December 30, 2005. Ernst &
Young has been the Company's independent auditor since 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.
Fees Paid to Ernst & Young LLP
Audit Fees and Non-Audit Fees:
The following table presents fees billed by Ernst & Young for professional audit
services rendered for the audit of the Company's annual financial statements for
the years ended January 2, 2004 and December 31, 2004, and fees billed by Ernst
& Young for other services rendered during those periods.
Year Ended Year Ended
Category December 31, 2004 January 2, 2004
-------- ----------------- ---------------
$ 1,780,150 $ 1,058,150
Audit Fees
Audit-Related Fees $ 0 $ 0
Tax Fees
Tax Compliance $ 750,275 $ 863,000
Tax Planning & Tax Advice $ 647,300 $ 485,000
Total Tax Fees $ 1,397,575 $ 1,348,000
All Other Fees None None
Audit Committee Pre-Approval of Policies and Procedures
The Audit Committee is responsible for appointing, setting
compensations, and overseeing the work of the independent auditor. The Audit
Committee has established a pre-approval procedure for all audit and permissible
non-audit services to be performed by Ernst & Young. The pre-approval policy
requires that requests for services by the independent auditor be submitted to
the Company's Chief Financial Officer (CFO) for review and approval. Any
requests that are approved by the CFO are then aggregated and submitted to the
Audit Committee for approval of services at a meeting of the Audit Committee.
Requests may be made with respect to either specific services or a type of
service for predictable or recurring services. All permissible non-audit
services performed by Ernst & Young were approved by the Audit Committee.
The Audit Committee has concluded that the provision of the non-audit
services listed above is compatible with maintaining Ernst & Young's
independence.
Vote Required
Ratification of the appointment of Ernst & Young as the Company's
independent auditors for the current fiscal year ending December 30, 2005, will
require the affirmative vote of the holders of a majority of the shares present
and voting at the Annual Meeting either in person or by proxy. In the event that
such ratification by the shareholders is not obtained, the Audit Committee and
the Board of Directors will reconsider such selection.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR the ratification
of the appointment of Ernst & Young LLP as the independent auditors for the
Company for the current fiscal year ending December 30, 2005.
HOUSEHOLDING
As permitted by the Exchange Act, we may deliver only one copy of this
Proxy Statement to shareholders residing at the same address, unless such
shareholders have notified the Company of their desire to receive multiple
copies of the Proxy Statement. Shareholders residing at the same address may
request delivery of only one copy of the Proxy Statement by directing a notice
to the Company's Investor Relations department at the address below.
The Company will promptly deliver, upon oral or written request, a
separate copy of this Proxy Statement to any shareholder residing at an address
to which only one copy was mailed. Requests for additional copies should be
directed to the Company at its principal executive offices, Attention: Investor
Relations, at 749 North Mary Avenue, Sunnyvale, California 94085, (408)
481-8000.
OTHER MATTERS
The Company knows of no other matters to be submitted for consideration
at the Annual Meeting. If any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the enclosed Proxy to vote
the shares they represent as the Board of Directors may recommend. Discretionary
authority with respect to such other matters is granted by the execution of the
enclosed Proxy.
It is important that your shares be represented at the meeting,
regardless of the number of shares which you hold. You are, therefore, urged to
mark, sign, date, and return the accompanying Proxy as promptly as possible in
the postage-prepaid envelope which has been enclosed for your convenience or
vote electronically via the Internet or by telephone in accordance with the
detailed instructions on your individual Proxy card.
For the Board of Directors
TRIMBLE NAVIGATION LIMITED
ROBERT S. COOPER
Chairman of the Board
Dated: April 8, 2005
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APPENDIX A
TRIMBLE NAVIGATION LIMITED
2002 STOCK PLAN
(as amended and restated January 20, 2005)
1. Purposes of the Plan. The purposes of this 2002 Stock Plan are:
o to attract and retain the best available personnel for positions of
substantial responsibility,
o to provide additional incentive to Employees, Directors and
Consultants, and
o to promote the success of the Company's business.
Grants under the Plan may be Awards, Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock incentive plans under U.S. state corporate laws,
U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options are,
or will be, granted under the Plan.
(c) "Award" means a grant of Shares or of a right to receive Shares
pursuant to Section 7 of the Plan.
(d) "Award Agreement" means a written or electronic form of notice or
agreement between the Company and an Awardee evidencing the terms and
conditions of an individual Award. The Award Agreement is subject to the
terms and conditions of the Plan.
(e) "Awarded Stock" means the Common Stock subject to an Award.
(f) "Awardee" means the holder of an outstanding Award.
(g) "Board" means the board of directors of the Company.
(h) "Change in Control" means the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of
the total voting power represented by the Company's then outstanding
voting securities; or
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(ii) The consummation of the sale or disposition by the Company
of all or substantially all of the Company's assets;
(iii) A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" means
directors who either (A) are Directors as of the effective date of the
Plan, or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection
with an actual or threatened proxy contest relating to the election of
directors to the Company); or
(iv) The consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the
total voting power represented by the voting securities of the Company
or such surviving entity or its parent outstanding immediately after
such merger or consolidation.
(i) "Code" means the Internal Revenue Code of 1986, as amended.
(j) "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.
(k) "Common Stock" means the common stock of the Company.
(l) "Company" means Trimble Navigation Limited, a California
corporation.
(m) "Consultant" means any natural person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity. (n) "Director" means a member of the Board.
(o) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(p) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so
guaranteed, then three (3) months following the 91st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute
"employment" by the Company.
(q) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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(r) "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
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, 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 exchange or system on the day of determination, as
reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high
bid and low asked prices for the Common Stock on the day of
determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Board.
(s) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder. (t) "Nonstatutory Stock Option"
means an Option not intended to qualify as an Incentive Stock Option. (u)
"Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(v) "Option" means a stock option granted pursuant to the Plan.
(w) "Option Agreement" means a written or electronic form of notice or
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Option grant. The Option Agreement is subject
to the terms and conditions of the Plan.
(x) "Optioned Stock" means the Common Stock subject to an Option.
(y) "Optionee" means the holder of an outstanding Option.
(z) "Outside Director" means a Director who is not an Employee.
(aa) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(bb) "Plan" means this 2002 Stock Plan, as amended.
(cc) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.
(dd) "Section 16(b) " means Section 16(b) of the Exchange Act.
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(ee) "Service Provider" means an Employee, Director or Consultant.
(ff) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(gg) "Subsidiary" means 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 13 of
the Plan, the maximum aggregate number of Shares that may be awarded or optioned
and delivered under the Plan is 4,500,000 Shares plus (a) any Shares which have
been previously reserved but not issued under the Company's 1993 Stock Option
Plan (the "1993 Plan") as of the date of shareholder approval of this Plan, and
(b) any Shares returned to the 1993 Plan as a result of termination of options
granted under the 1993 Plan. The Shares may be authorized, but unissued, or
reacquired Common Stock, all of which Shares may be granted as Incentive Stock
Options and 10% of which may be granted as Awards.
If an Award or Option expires, is cancelled, forfeited or becomes
unexercisable without having been exercised in full, the undelivered Shares
which were subject thereto shall, unless the Plan has terminated, become
available for future Awards or Options under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees with
respect to different groups of Service Providers may administer the
Plan.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Awards or 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.
(iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to select the Service Providers to whom Awards or Options may
be granted hereunder;
(ii) to determine the number of shares of Common Stock to be
covered by each Award or Option granted hereunder;
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(iii) to approve forms of agreement for use under the Plan;
(iv) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Award or Option granted hereunder. Such
terms and conditions include, but are not limited to, the exercise
price, the time or times when Options may be exercised (which may be
based on performance criteria), the time or times when Awards vest
(which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Award or Option or the shares of Common Stock
relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(v) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(vi) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying applicable foreign
laws;
(vii) to modify or amend each Award or Option (subject to Section
15(c) of the Plan), including the discretionary authority to extend
the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan; provided, however, that the
Administrator shall not reduce the exercise price of Options or cancel
any outstanding Option and replace it with a new Option with a lower
exercise price, where the economic effect would be the same as
reducing the exercise price of the cancelled Option, without the
approval of the Company's shareholders;
(viii) to allow Awardees or Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares
to be issued upon exercise of an Option or vesting of an Award that
number of Shares having a Fair Market Value equal to the minimum
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. All elections by an Awardee or
Optionee to have Shares withheld for this purpose shall be made in
such form and under such conditions as the Administrator may deem
necessary or advisable;
(ix) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Award or Option
previously granted by the Administrator; and
(x) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all
Awardees and Optionees and any other holders of Awards or Options.
5. Eligibility. Nonstatutory Stock Options and Awards may be granted to
Service Providers. Incentive Stock Options may be granted only to Employees.
A-6
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Award or Option shall confer upon an Awardee
or Optionee any right with respect to continuing that individual's relationship
as a Service Provider with the Company, nor shall they interfere in any way with
the Awardee's or Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Awards and Options:
(i) No Service Provider shall be granted, in any fiscal year of the
Company, Options and Awards covering more than 300,000 Shares.
(ii) In connection with his or her initial service, a Service Provider
may be granted Options and Awards covering an additional 450,000 Shares,
which shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as described in
Section 13. (iv) If an Award or Option is cancelled in the same fiscal year
of the Company in which it was granted (other than in connection with a
transaction described in Section13), the cancelled Option or Award will be
counted against the limits set forth in subsections (i) and (ii) above.
7. Stock Awards. Awards may be granted either alone or in addition to
Options granted under the Plan. The Awardee shall be entitled to receive the
Award without payment of any consideration to the Company, unless otherwise
required by Applicable Law. Unless otherwise provided in the Award Agreement,
Awardees will have full voting rights and be entitled to regular cash dividends
with respect to the Shares subject to their Awards. An Award Agreement may
provide that certain restrictions will apply to the Award and any such
dividends.
8. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 15 of the Plan.
9. Term of Option. The term of each Option shall be ten (10) years from the
date of grant or such shorter term as may be provided in the Award Agreement or
Option Agreement. However, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.
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10. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock
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 per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described in
paragraph (A) immediately above, 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 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 consolidation of or by the
Company with or into another corporation, the purchase or acquisition of
property or stock by the Company of another corporation, any spin-off or
other distribution of stock or property by the Company or another
corporation, any reorganization of the Company, or any partial or complete
liquidation of the Company, if such action by the Company or other
corporation results in a significant number of Employees or employees being
transferred to a new employer or discharged, or in the creation or
severance of the Parent-Subsidiary relationship.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions that must be satisfied before the Option may
be exercised.
(c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note (to the extent permitted by Applicable Law);
(iv) other Shares which, in the case of Shares acquired directly or
indirectly from the Company, (A) have been owned by the Optionee for more
than six (6) months on the date of surrender, and (B) 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;
A-8
(v) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.
11. Exercise of Option; Vesting.
(a) Procedure for Exercise; Vesting; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Awards granted hereunder shall be subject to such
vesting requirements and other restrictions as determined by the Administrator.
Unless the Administrator provides otherwise, vesting of Awards and Options
granted hereunder shall be suspended during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option or such person's authorized agent,
and (ii) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the
Plan. Shares issued upon exercise of an Option shall be issued in the name of
the Optionee. Until the Shares are issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company), 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
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Sections 7 and 13 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for delivery under the
Award or Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If an Awardee ceases
to be a Service Provider, for any reason, all unvested Shares covered by his or
her Award shall be forfeited. If, on the date of termination, the Optionee or
Awardee is not vested as to his or her entire
A-9
Option or Award, the Shares covered by the unvested portion of the Option or
Award shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service Provider
as a result of the Optionee's Disability, the Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider or
within thirty (30) days (or such longer period of time not exceeding three (3)
months as is determined by the Administrator), the Option may be exercised
following the Optionee's death within such period of time as is specified in the
Option Agreement to the extent that the Option is vested on the date of death
(but in no event may the option be exercised later than the expiration of the
term of such Option as set forth in the Option Agreement), by the personal
representative of the Optionee's estate or by the person(s) to whom the Option
is transferred pursuant to the Optionee's will or in accordance with the laws of
descent and distribution. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
Optionee's death. If, at the time of death, Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
12. Transferability of Awards and Options. Unless determined otherwise by
the Administrator, an Award or Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and an Option may be exercised, during the
lifetime of the Optionee, only by the Optionee. If the Administrator makes an
Award or Option transferable, such Award or Option shall contain such additional
terms and conditions as the Administrator deems appropriate.
13. Adjustments; Dissolution; Merger or Change in Control.
(a) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, may (in its sole discretion)
adjust the number and class of Shares that may be delivered under the Plan
and/or the number, class, and price of Shares covered by each outstanding Award
and Option and the numerical limits of Section 6.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Awardee and
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to
A-10
all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. The Administrator in its discretion
may provide that the vesting of an Award accelerate at any time prior to such
transaction. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action, and
unvested Shares subject to an Award will be forfeited immediately prior to the
consummation of such proposed action.
(c) Merger or Change in Control. In the event of a merger of the Company
with or into another corporation, or a Change in Control, each outstanding Award
and Option shall be assumed or an equivalent award, option or right substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event the successor corporation does not agree to assume the
Award or Option, or substitute an equivalent option or right, the Administrator
shall, in lieu of such assumption or substitution, provide for the Awardee or
Optionee to have the right to vest in and exercise the Option as to all of the
Optioned Stock, including Shares as to which the Option would not otherwise be
vested or exercisable, and in the case of an Award, to accelerate the vesting of
the Award. If the Administrator makes an Option fully vested and exercisable in
lieu of assumption or substitution in the event of a merger or Change in
Control, the Administrator 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 or Change in Control, the Award or Option is assumed or an
equivalent award or option or right 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 or Change in Control,
the awardee's or Optionee's status as a Service Provider is terminated for any
reason other than the Awardee's or Optionee's voluntary termination of such
relationship, then (i) in the case of an Option, the Optionee shall have the
right within three (3) months 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 and (ii) in the case
of an Award, the Award shall be fully vested on the date of such termination.
For the purposes of this subsection (c), the Award or Option shall be
considered assumed if, following the merger or Change in Control, the option or
right confers the right to purchase or receive, for each Share of Awarded Stock
subject to the Award or Optioned Stock subject to the Option immediately prior
to the merger or Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the merger or Change in Control by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or Change
in Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Stock subject to the Option, and upon the vesting of
an Award, for each Share of Awarded Stock, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or Change in
Control.
14. Date of Grant. Except for Options granted to Outside Directors under
Section 15 hereof, the date of grant of an Award or Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Award or Option, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Awardee and
Optionee within a reasonable time after the date of such grant.
15. Option Grants to Outside Directors. All grants of Options to Outside
Directors shall be automatic and non-discretionary and shall be made strictly in
accordance with the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to
be covered by Options granted to Outside Directors.
A-11
(ii) Each Outside Director shall be automatically granted an Option to
purchase 15,000 Shares (the "First Option") upon the date on which such
person first becomes a Director, whether through election by the
shareholders of the Company or appointment by the Board of Directors to
fill a vacancy.
(iii) After a First Option has been granted to any Outside Director,
each Outside Director shall thereafter be automatically granted an Option
to purchase 7,500 Shares (a "Subsequent Option") on the day of each
subsequent annual shareholders meeting at which such Outside Director is
reelected to an additional term; provided, however, that no Subsequent
Option shall be granted for the first annual shareholders meeting following
the grant of a First Option to any director.
(iv) In the event that the number of Shares remaining available for
grant under the Plan is less than the number of Shares required for an
automatic grant pursuant to either subsection (ii) or (iii) hereof, then
each such automatic grant shall be for that number of Shares determined by
dividing the total number of Shares remaining available for grant by the
number of Outside Directors on the automatic grant date. Any further
automatic grants shall then be deferred until such time, if any, as
additional Shares become available for grant under the Plan through action
to increase the number of Shares which may be issued under the Plan or
through cancellation or expiration of Options previously granted under the
Plan.
(v) The terms of an Option granted hereunder shall be consistent with
the requirements set forth elsewhere in this plan, except that the Option
shall become exercisable in installments cumulatively with respect to 1/36
of the Shares for each complete calendar month after the date of grant of
such Option.
(vi) The number of Shares granted pursuant to subsections (ii) and
(iii) hereof shall be adjusted proportionately in connection with any
change in the Company's capitalization as described in Section 13.
16. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder approval of
any Plan amendment to the extent necessary or desirable to comply with
Applicable Laws and paragraph (c) below.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan or any Award or Option shall (i) impair
the rights of any Awardee or Optionee, unless mutually agreed otherwise between
the Awardee or Optionee and the Administrator, which agreement must be in
writing and signed by the Awardee or Optionee and the Company or (ii) permit the
reduction of the exercise price of an Option after it has been granted (except
for adjustments made pursuant to Section 13), unless approved by the Company's
shareholders. Neither may the Administrator, without the approval of the
Company's shareholders, cancel any outstanding Option and replace it with a new
Option with a lower exercise price, where the economic effect would be the same
as reducing the exercise price of the cancelled Option. Termination of the Plan
shall not affect the Administrator's ability
A-12
to exercise the powers granted to it hereunder with respect to Awards and
Options granted under the Plan prior to the date of such termination. Any
increase in the number of shares subject to the Plan, other than pursuant to
Section 13 hereof, shall be approved by the Company's shareholders.
17. Conditions Upon Issuance of Shares; Deferred Compensation Legislation.
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of an Option or the vesting of an Award unless the exercise of such Option and
the issuance and delivery of such Shares shall comply with Applicable Laws and
shall be further subject to the approval of counsel for the Company with respect
to such compliance. The Plan is intended to comply with the requirements of
Section 409A of the Code and Awards and Options granted under the Plan may be
amended for purposes of such compliance.
(b) Investment Representations. 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.
18. Inability to Obtain Authority. 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.
19. 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.
20. Shareholder Approval. The Plan has been approved by the shareholders of
the Company within twelve (12) months after the date the Plan was adopted. Such
shareholder approval has been obtained in the manner and to the degree required
under Applicable Laws.
Appendix B
Form of Proxy
PROXY TRIMBLE NAVIGATION LIMITED PROXY
PROXY FOR 2005 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 receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated April 8, 2005, and hereby appoints
Steven W. Berglund, and Rajat Bahri and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 2005 Annual Meeting
of Shareholders of TRIMBLE NAVIGATION LIMITED, to be held on Thursday, May 19,
2005, at 6:00 p.m. local time, at the Four Points Sheraton Hotel in Sunnyvale,
located at 1250 Lakeside Drive, Sunnyvale, California 94085, 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, TO APPROVE AN
AMENDMENT TO THE COMPANY'S 2002 STOCK PLAN TO ALLOW THE GRANTING OF STOCK AWARDS
THEREUNDER, AND FOR THE RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR THE CURRENT FISCAL YEAR ENDING DECEMBER 30, 2005,
AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT(S) THEREOF.
Both of such attorneys or substitutes (if both are present and acting at said
meeting or any adjournment(s) thereof, or, if only one shall be present and
acting, then that one) shall have and may exercise all of the powers of said
attorneys-in-fact hereunder.
(Continued, and to be signed on the other side)
FOLD AND DETACH HERE
YOU MAY VOTE IN ANY OF THE FOLLOWING THREE WAYS:
1. Vote via the Internet at http://www.proxyvote.com. You will
need the Control Number that appears in the box in the lower right
corner of this card.
2. Vote by telephone by calling 1-800-690-6903 from a
touch-tone telephone in the U.S. There is no charge for this call. You
will need the Control Number that appears in the box in the lower right
corner of this card.
3. Mark, sign and date this proxy form and return it in the
enclosed envelope.
[Company logo appears here]
Trimble Navigation Limited
745 N. Mary Ave.
Sunnyvale, CA 94085
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and
for electronic delivery of information up until 11:59 P.M.
Eastern Time the day before the cut-off date of meeting
date. Have your proxy card in hand when you access the web
site. You will be prompted to enter your 12-digit Control
Number which is located below to obtain your records and to
create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M Eastern Time the date before
the cut-off date or meeting date. Have your proxy card in
hand when you call. You will be prompted to enter your
12-digit Control Number which is located below and then
follow the simple instructions the Vote Voices provides you.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the
postage-paid envelope we have provided or return it to
Trimble Navigation Limited, c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
Note: If you vote by Internet or telephone, there is NO NEED
TO MAIL BACK YOUR PROXY CARD.
Thank you for voting.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
--------------------------------------------------------------------------------
KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
Trimble Navigation Limited
--------------------------------------------------------------------------------
Vote on Directors FOR WITHHOLD FOR
FOR ALL ALL
1. Elections of Directors to serve for the EXCEPT
ensuing year and until their successors are [ ] [ ] [ ]
elected.
Nominees: 01 Steven W. Berglund, 02 Robert S.
Cooper, 03 John B. Goodrich, 04 William Hart, 05
Ulf J. Johansson, 06 Bradford W. Parkinson and 07
Nickolas W. Vande Steeg
To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below.
______________________________
Vote on Proposals
2. To approve an amendment to the Company's 2002 Stock Plan to allow the
granting of stock awards thereunder.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To ratify the appointment of Ernst & Young LLP as
independent auditors of the Company for the current fiscal year ending December
30, 2005.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
(This Proxy should be marked, dated, signed by the shareholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope. If
signing for estates, trusts, corporations, or partnerships, title or capacity
should be stated. If shares are held jointly each holder should sign.)
Signature ______________________ Date ________
Signature (joint owners) ________________ Date________