SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss. 240.14a-11(c) orss. 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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(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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number, or the Form or Schedule and the date of its filing.
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TRIMBLE NAVIGATION LIMITED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 2001
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Trimble
Navigation Limited (the "Company") will be held at the Westin Hotel in Santa
Clara, located at 5101 Great America Parkway, Santa Clara, California 95054 in
the Magnolia Room, on Thursday, May 10, 2001, at 1:00 p.m. local time, for the
following purposes:
1. To elect directors to serve for the ensuing year and until their successors
are elected.
2. To approve an increase of 450,000 shares in the number of shares of
Common Stock reserved for issuance under the Company's 1993 Stock
Option Plan from 5,925,000 shares to an aggregate of 6,375,000 shares.
3. To ratify the appointment of Ernst & Young LLP as the independent auditors
of the Company for the current fiscal year ending December 28, 2001.
4. To act upon a proposed shareholder resolution (if it is properly presented at
the Annual Meeting).
5. 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 9, 2001, 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. This year, 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 5, 2001
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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 ASSURE 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 10, 2001
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 Westin Hotel in Santa Clara, located at 5101 Great America Parkway, Santa
Clara, California 95054 in the Magnolia Room, on Thursday, May 10, 2001, at 1:00
p.m. local time, and at any adjournment(s) or postponement(s) thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting of
Shareholders.
The Company's principal executive offices are located at 645 North Mary
Avenue, Sunnyvale, California 94088. The telephone number at that address is
(408) 481-8000.
These proxy solicitation materials were mailed on or about April 5, 2001,
to all shareholders entitled to vote at the Annual Meeting. A copy of the
Company's Annual Report and Letter to Shareholders for the last fiscal year
ended December 29, 2000 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 (including all exhibits thereto) as filed with the
Securities and Exchange Commission ("SEC") for the fiscal year ended December
29, 2000, 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 as filed with the SEC 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 9, 2001 (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 24,247,608 shares of
common stock ("Common Stock").
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the meeting and voting in person.
Voting
Each share of Common Stock outstanding on the Record Date is entitled to
one vote. In addition, every shareholder voting for the election of directors
may cumulate such shareholder's votes and give one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of
shares held by the shareholder as of the Record Date, or distribute such
shareholder's votes on the same principle among as many candidates as the
shareholder may select, provided that votes cannot be cast for more than the
number of directors to be elected. However, no shareholder shall be entitled to
cumulate votes unless the candidate's name has been placed in nomination prior
to the voting and the shareholder, or any other shareholder, has given notice at
the meeting prior to the voting of the intention to cumulate the shareholder's
votes. An automated system
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administered by the Company's transfer agent tabulates the votes.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting at the Annual Meeting and the presence or
absence of a quorum. The required quorum is a majority of the shares outstanding
on the Record Date. Abstentions are counted in tabulations of the votes cast on
proposals presented to shareholders, whereas broker non-votes are not counted
for purposes of determining whether a proposal has been approved.
Voting Via the Internet or By Telephone
This year, instead of completing the enclosed proxy card and submitting it
by mail, shareholders may 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.
The Internet and telephone voting procedures have been designed to
authenticate each shareholder's identity, in order to allow individual
shareholders to vote their shares and to confirm that their instructions have
been properly recorded. 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 InvestorCom, Inc. to solicit proxies,
for which general services the Company has agreed to pay $5,000. 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 2002 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 2002 Annual Meeting of Shareholders must be received by
the Company at its principal executive offices (Attn: Corporate
Secretary--Shareholder Proposals, Trimble Navigation Limited at 645 North Mary
Avenue, Sunnyvale, California 94088) no later than December 5, 2001.
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 and which is to be used in connection with
the Company's current 2001 Annual Meeting grants the proxy holders discretionary
authority to vote on any manner otherwise properly raised at such Annual
Meeting. The Company presently intends to use a similar form of proxy card for
its 2002 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 2002 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.
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ITEM I--ELECTION OF DIRECTORS
Nominees
A board of six directors is to be elected at the Annual Meeting. The Board
of Directors of the Company has authorized the nomination at the Annual Meeting
of the persons named below as candidates.
The names of the nominees and certain information about them are set forth
below:
Director
Name of Nominee Age Principal Occupation Since
- ------------------------------------- ------- ------------------------------------------------------------- ----------
Steven W. Berglund 49 President and Chief Executive Officer of the Company 1999
Robert S. Cooper 69 President, Chief Executive Officer and Chairman of the 1989
Board of Directors of Atlantic Aerospace Electronic
Corporation, Chairman of the Board of Directors of
the Company
John B. Goodrich 59 Member of the law firm of Wilson Sonsini Goodrich & 1981
Rosati, P.C., legal counsel to the Company
William Hart 60 General Partner, Technology Partners 1984
Ulf J. Johansson 55 Chairman and Founder of Europolitan Holdings AB 1999
Bradford W. Parkinson 66 Professor at Stanford University and current consultant 1984
to the Company
Steven W. Berglund joined the Company as President and Chief Executive
Officer in March 1999. Mr. Berglund was elected to the Company's Board of
Directors at the Annual Meeting of Shareholders held in June of 1999. Mr.
Berglund has a diverse background with experience in engineering, manufacturing,
finance, and global operations. Prior to joining the Company, Mr. Berglund was
President of Spectra Precision, Inc. which had global revenue of approximately
$200 million and develops and manufactures surveying instruments, laser based
construction alignment instruments, and construction machine control systems.
Spectra Precision was a subsidiary of Spectra-Physics AB. During his fourteen
years with Spectra-Physics, which was an early Silicon Valley pioneer in the
development of laser systems, Mr. Berglund held a variety of positions that
included four years based in Europe. Prior to Spectra-Physics, Mr. Berglund
spent a number of years in the early 1980's at Varian Associates in Palo Alto,
California where he held a number of planning and manufacturing roles. Varian is
a technology company specializing in microwave communications, semiconductor
manufacturing equipment, analytical instruments, and medical diagnostic
equipment. Mr. Berglund began his career as a process engineer at Eastman Kodak
in Rochester, New York. Mr. Berglund attended the University of Oslo and the
University of Minnesota where he received a B.S. degree in Chemical Engineering
in 1974 and received his M.B.A. from the University of Rochester in 1977.
Robert S. Cooper was appointed Chairman of the Company's Board of Directors
in August 1998. Dr. Cooper has served as a director of the Company since April
1989. Since 1985, Dr. Cooper has been President, Chief Executive Officer, and
Chairman of the Board of Directors of Atlantic Aerospace Electronics
Corporation, an aerospace company. Dr. Cooper also serves on the board of
directors of BAE Systems North America. From 1981 to 1985, he was Assistant
Secretary of Defense for Research and Technology and simultaneously held the
position of Director for the Defense Advanced Research Projects Agency (DARPA).
Dr. Cooper received a B.S. degree in Electrical Engineering from State
University of Iowa in 1954, a M.S. degree in Electrical Engineering from Ohio
State University in 1958, and a Doctor of Science in Electrical Engineering from
the Massachusetts Institute of Technology in 1963.
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John B. Goodrich has served as a director of the Company since January
1981. Mr. Goodrich is a member of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, a law firm based in Palo Alto, California. This law firm has served
as primary outside legal counsel to the Company. Mr. Goodrich received a B.A.
degree from Stanford University in 1963, a J.D. from the University of Southern
California in 1966, and a L.L.M. in Taxation from New York University in 1970.
William Hart has served as a director of the Company since December 1984.
Mr. Hart has been a venture capitalist in the area of information technology for
21 years. He is the founder of Technology Partners, a venture capital management
firm based in Palo Alto, California. Before founding Technology Partners in
1980, Mr. Hart was a senior officer and director of Cresap, McCormick and Paget,
management consultants. He previously held positions in field marketing and
manufacturing planning with IBM Corporation. Mr. Hart has served on the boards
of directors of numerous public and privately held technology companies. Mr.
Hart received a Bachelor of Management Engineering degree from Rensselaer
Polytechnic Institute in 1965 and a M.B.A. from the Amos Tuck School of Business
Administration at Dartmouth College in 1967.
Ulf J. Johansson has served as a director of the Company since December
1999. Dr. Johansson is a Swedish national with a distinguished career in
communications technology. He is a founder and Chairman of Europolitan Holdings
AB, a GSM mobile telephone operator in Sweden. Dr. Johansson currently serves as
Chairman of Frontec AB, an eBusiness consulting company, Zodiak Venture AB, a
venture fund focused on information technology, and the University Board of
Royal Institute of Technology in Stockholm. Dr. Johansson also currently serves
on the board of directors of Novo Nordisk A/S, a Danish pharmaceutical/life
science company, and Trio AB as well as several privately held companies. Dr.
Johansson formerly served as President and Chief Executive Officer of
Spectra-Physics, and Executive Vice President at Ericsson Radio Systems AB. Dr.
Johansson received a Master of Science in Electrical Engineering, and a Doctor
of Technology (Communication Theory) from the Royal Institute of Technology in
Sweden.
Bradford W. Parkinson has served as a director of the Company since 1984,
and as a consultant to the Company since 1982. Dr. Parkinson served as the
Company's President and Chief Executive Officer from August 1998 through March
1999. From 1980 to 1984 he was Group Vice President and General Manager for
Intermetrics, Inc. where he directed five divisions. He also served as President
of Intermetrics' industrial subsidiary, PlantStar. In 1979, Dr. Parkinson served
as Group Vice President for Rockwell International directing business
development and advanced engineering. Currently, Dr. Parkinson is the Edward C.
Wells Endowed Chair professor at Stanford University and has been a Professor of
Aeronautics and Astronautics at Stanford University since 1984. Dr. Parkinson
has also directed the Gravity Probe-B spacecraft development project at Stanford
University, sponsored by NASA, which is the largest program delegated by NASA to
a university and has been program manager for several Federal Aviation
Administration sponsored research projects on the use of Global Positioning
Systems for navigation. Dr. Parkinson was on leave of absence from Stanford
University while serving as Trimble's President and Chief Executive Officer. Dr.
Parkinson received a B.S. degree from the U.S. Naval Academy in 1957, a M.S.
degree in Aeronautics/Astronautics Engineering from Massachusetts Institute of
Technology in 1961 and a Ph.D. in Astronautics Engineering from Stanford
University in 1966.
Vote Required
The six nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected as directors. Votes withheld from
any director are counted for purposes of determining the presence or absence of
a quorum, but have no other legal effect under California law. While there is no
definitive statutory or case law authority in California as to the proper
treatment of abstentions and broker non-votes in the election of directors, the
Company believes that both abstentions and broker non-votes should be counted
solely for purposes of determining whether a quorum is present at the Annual
Meeting. In the absence of controlling precedent to the contrary, the Company
intends to treat abstentions and broker non-votes with respect to the election
of directors in this manner.
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Unless otherwise directed, the proxy holders will vote the proxies received
by them for the six 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. It is not expected that
any nominee will be unable or will decline to serve as a director. The directors
elected will hold office until the next annual meeting of shareholders and until
their successors are duly elected and qualified.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote FOR the election
of the above-named directors to the Board of Directors of the Company.
Board Meetings and Committees
The Board of Directors held 12 meetings during the fiscal year ended
December 29, 2000. 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.
The Board of Directors has a standing Audit Committee. The members of the
Audit Committee are directors Hart, Johansson and Parkinson and director
Johansson currently serves as the committee chairman. The Company believes that
at least two of the three members are independent directors as defined in Rule
4200(a)(14) of the listing standards of the National Association of the
Securities Dealers. The Audit Committee held five meetings during fiscal year
2000. 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.
Dr. Parkinson, who currently serves on the Company's Audit Committee,
served as the Company's interim President and Chief Executive Officer beginning
in August 1998 through March 1999 and remains as a consultant to the Company.
The Board of Directors has determined that Dr. Parkinson's membership on the
Audit Committee is currently required in the best interests of the Company and
its shareholders due to his unique background, skills and overall experience
with the Company in accordance with Rule 4350(d)(2)(B) of the listing standards
of the National Association of the Securities Dealers.
The Board of Directors has a standing Compensation Committee. The current
members of the Compensation Committee are directors Cooper, Goodrich and Hart
and director Goodrich currently serves as the committee chairman. Such
Compensation Committee held two meetings during fiscal year 2000. 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.
In 1998, the Board of Directors formed a standing Nominating Committee for
the purpose of evaluating the size and composition of the Board of Directors as
well as considering potential additional candidates to serve as members of the
Board of Directors. The current members of the Nominating Committee are
directors Berglund, Cooper and Goodrich and director Cooper serves as the
committee chairman. The Nominating Committee held a number of various informal
meetings during fiscal year 2000. The Nominating Committee will consider
nominees proposed by shareholders of the Company. Any shareholder who wishes to
recommend a
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suitably qualified prospective nominee for the Company's Board of Directors
should do so in writing by providing such candidate's name, qualifications
(including a resume, if available) and appropriate contact information to the
Company at its principal executive offices, Attn: Corporate
Secretary--Nominating Committee, Trimble Navigation Limited at 645 North Mary
Avenue, Sunnyvale, California 94088.
Compensation Committee Report
The Compensation Committee of the Board of Directors (the "Committee")
establishes the general compensation policies of the Company and the
compensation plans and specific compensation levels for executive officers of
the Company. The Committee believes that the compensation of the Chief Executive
Officer should be primarily influenced by the overall financial performance of
the Company.
The Committee believes that the compensation of the Chief Executive Officer
should be established within a range of compensation for similarly situated
chief executive officers of comparable companies in the high technology and
related industries in the Standard & Poor's High Technology Composite Index
("peer companies") and their performance according to data obtained by the
Committee from independent outside consultants and publicly available data, such
as proxy data from peer companies as adjusted by the Committee's consideration
of the particular factors influencing the Company's performance and current
situation. A portion of the Chief Executive Officer's compensation package is
established as base salary and the balance is variable and consists of an annual
cash bonus and/or stock option grants.
Within these established ranges and guidelines, and taking into account the
Company's historical performance compared to peer companies, the Committee and
Board of Directors also carefully considered the risks and challenges facing the
Company in offering a complete compensation package in recruiting Mr. Berglund
to serve as the Company's new President and Chief Executive Officer as well as
the individual qualifications and skills that Mr. Berglund possesses. Based on
these considerations, the Committee and Board of Directors approved a base
annual salary of $400,000 for Mr. Berglund beginning in March 1999. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements."
The Committee carefully reviewed and considered its cash bonus program for
fiscal year 2000 for senior executives of the Company. Such program provided for
an annual cash bonus, a portion of which is paid quarterly, based upon a maximum
eligible percentage of each executive's base salary within a range of target
incentives as reported by professional compensation surveys. The percentage for
each executive was then adjusted by factoring in an evaluation of such
individual's performance. The total size of the Company's bonus pool for all
employees, including executives, was determined with respect to the Company's
performance in meeting certain goals for both revenue and income for fiscal year
2000. For fiscal year 2000 the total bonus pool for all employees, including
executives, was approximately $1.6 million. In connection with Dr. Parkinson
serving as the Company's interim President and Chief Executive Officer during
the first quarter of fiscal year 1999, in January 2000 the Board of Directors
approved a special bonus to Dr. Parkinson of approximately 50% of the base
salary paid to him for such time period. Pursuant to the terms of his employment
agreement, Mr. Berglund is eligible for a cash bonus of up to 50% of his base
salary for fiscal year 2000 and he was guaranteed this bonus amount on a pro
rata basis for fiscal year 1999. In 2000, Mr. Berglund was paid a bonus of
$154,500 for meeting the goals set forth in his offer letter for the prior
fiscal year 1999. The Committee and the Board of Directors have not yet approved
a bonus for Mr. Berglund for fiscal year 2000.
Based on the Board of Directors' and the Committee's evaluation of the new
Chief Executive Officer's ability to influence the long-term growth and
profitability of the Company, the Board of Directors determined that Mr.
Berglund should receive an option grant to purchase 400,000 shares of the
Company's Common Stock upon his starting with the Company in March 1999. Such
options have an exercise price equal to the then current fair market value at
the date of grant, vest ratably over the five years and have partial
acceleration provisions in certain change of control situations.
6
The 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 Committee established base
salaries for each senior executive within a range of salaries of similarly
situated executive officers at comparable companies. In addition, these base
salaries of senior executive officers were then adjusted by the Committee taking
into consideration factors such as the relative performance of the Company, the
performance of the business unit for which the senior executive is responsible
and the individual's past performance and future potential.
The size of option grants, if any, to other senior executive officers was
determined by the Committee's evaluation of each executive's ability to
influence the Company's long-term growth and profitability. The Company also has
a metric measurement system in place with respect to option grants made to all
new employees under the Company's option plans in order to ensure consistency
among grants and competitiveness in the marketplace. Generally, these options
are granted at the then current market price and because the value of an option
bears a direct relationship to the Company's stock price, it is an incentive for
managers to create value for shareholders. The Committee therefore views stock
options as an important component of its long-term, performance-based
compensation philosophy.
During fiscal year 2000 the Compensation Committee and the Board of
Directors reviewed all employees and executive officers of the Company as part
of a single worldwide program. The purpose of this single review plan is to
provide a common, annual review date for all levels of managers to review all
employees of the Company. All executive officers, including the Chief Executive
Officer, will be reviewed by the Compensation Committee at the same time. The
annual review period for this new plan was established as the month of April;
however, due to various factors facing the Company including potential
short-term economic uncertainty in the marketplace, the annual review process
and merit awards have been postponed for at least three months for fiscal year
2001.
Under the new review plan, the total compensation of all employees of the
Company, including executive officers, will be reviewed annually in accordance
with the same common criteria. Base salary guidelines have been established and
will be revised periodically based upon market conditions, the economic climate
and the Company's financial position. Merit increases, if any, for all employees
of the Company, including executive officers, will be based upon the following
criteria: the individual employee's performance for the year as judged against
his/her job goals and responsibilities, the individual employee's salary and
performance as compared to other employees in the same or similar department,
the individual employee's position in the salary grade, the employee's salary
relative to market data for the position and the Company's fiscal budget and any
associated restrictions.
Robert S. Cooper, Member John B. Goodrich, Chairman William Hart, Member
Compensation Committee Compensation Committee Compensation Committee
Steven W. Berglund, Ulf J. Johansson, Bradford W. Parkinson,
Board of Directors Board of Directors Board of Directors
Compensation Committee Interlocks and Insider Participation
Robert S. Cooper, John B. Goodrich and William Hart served as the members
of the Company's Compensation Committee during the 2000 fiscal year. In August
1998, Dr. Cooper was appointed to serve as the Company's Chairman of the Board
of Directors and became an employee of the Company through August 1999 pursuant
to an agreement approved by a majority of the disinterested members of the Board
of Directors. In
7
December 1998, Mr. Goodrich was appointed to serve as the Company's
corporate secretary; however; he is not, and has never been an employee of the
Company. In addition, Mr. Goodrich is a member of the law firm of Wilson Sonsini
Goodrich & Rosati, P.C., which was retained by the Company during the past
fiscal year as general primary outside legal counsel and which the Company
currently retains. Mr. Hart is not, and has never been, an employee or officer
of the Company. See "Compensation of Directors," "Employment Contracts and
Termination of Employment and Change-in-Control Arrangements" and "Certain
Relationships and Related Transactions."
Compensation of Directors
Cash Compensation. In order to help attract additional new outside
candidates to serve on the Company's Board of Directors, the Board of Directors
carefully considered and adopted a cash compensation policy effective January 2,
1999. Under this cash compensation plan, all non-employee directors receive an
annual cash retainer of $15,000 to be paid quarterly in addition to a fee of
$1,500 for each board meeting attended in person and $375 for each board meeting
attended via telephone conference. Members of designated committees of the Board
of Directors receive $750 per meeting which is not held on the same day as a
meeting of the full Board of Directors. Non-employee directors are also
reimbursed for travel, including a per diem for international travel, and other
necessary business expenses incurred in the performance of their services as
directors of the Company.
1990 Director Stock Option Plan. The Company's 1990 Director Stock Option
Plan (the "Director Plan") was adopted by the Board of Directors on December 19,
1990 and approved by the shareholders on April 24, 1991. An aggregate of 380,000
shares of the Company's Common Stock has been previously reserved for grants
issuable pursuant to the Director Plan ("Director Options"). The Director Plan
provides for the annual granting of nonstatutory stock options to each
non-employee director of the Company (the "Outside Directors"). Pursuant to the
terms of the Director Plan, new Outside Directors are granted a one-time option
to purchase 15,000 shares of the Company's Common Stock upon initially joining
the Board of Directors. Thereafter, each year, each Outside Director receives an
additional option grant to purchase 5,000 shares if re-elected at the annual
meeting of shareholders. All such Director Options have an exercise price equal
to the fair market value of the Company's Common Stock on the date of grant,
vest over three years, and have a ten year term of exercise. In addition, all
such grants are automatic and are not subject to the discretion of any person
upon the re-election of each such Outside Director.
At the Record Date, options to purchase an aggregate of 173,333 shares,
having an average exercise price of $17.5691 per share and expiring from April
2002 to May 2010 were outstanding and 85,416 shares remained available for
future grant under the Director Plan. During the fiscal year ended December 29,
2000, directors Cooper, Goodrich, Hart and Parkinson were each granted Director
Options to purchase 5,000 shares of the Company's Common Stock at an exercise
price of $34.125 per share. Director Johansson was granted a Director Option to
purchase 15,000 shares of the Company's Common Stock at an exercise price of
$19.3125 under the Director Plan upon joining the Board of Directors at the end
of 1999.
Other Arrangements. Dr. Parkinson has served as a consultant to the Company
since 1982. He currently receives $6,000 per month for such consulting services
that he provides to the Company.
In the past, Dr. Parkinson and Dr. Cooper were also directly employed by
the Company in connection with serving as the Company's President and Chief
Executive Officer and Chairman of the Board, respectively, and in providing
transitional services to the Company through August 1999. As part of such
agreements, each also entered into certain standby consulting agreements with
the Company. See "Employment Contracts and Termination of Employment and
Change-in-Control Arrangements" and "Compensation Committee Report." Dr. Cooper
has continued as the Company's Chairman of the Board of Directors since that
time but has not received any special compensation for such services.
8
In June 2000, the Company entered into an agreement for professional
services with Bjursund Invest AB, a company which is wholly-owned by Ulf J.
Johansson. Pursuant to the terms of this agreement, Mr. Johansson will provide
certain consulting and advisory services to the Company in Sweden and Europe in
addition to his serving on the Company's Board of Directors. The Company will
pay $4,000 per day for such services with an annual guaranteed minimum payment
of $24,000 together with expenses invoiced at cost, but in no event will
payments during any one year exceed $60,000. Such agreement has a one-year term
and is subject to automatic renewals in one-year extensions unless previously
terminated with one month advance notice. The Company paid a total of $28,000
under this agreement for services rendered during fiscal year 2000.
Audit Committee Report
The Audit Committee of the Board of Directors is comprised of the three
Directors named below, none of whom are officers or employees of the Company;
however, Dr. Parkinson previously served as the Company's interim President and
Chief Executive Officer beginning in August 1998 through March 1999 and remains
as a consultant to the Company. The Audit Committee believes that at least two
of its three members are independent directors as defined by applicable Nasdaq
National Market rules and listing standards. The Audit Committee has adopted a
written charter which has been approved by the Board of Directors and which is
attached as an appendix to this Proxy Statement.
The Audit Committee has reviewed and discussed the Company's financial
statements and financial reporting process with the Company's management, which
has the primary responsibility for the financial statements and financial
reporting processes, including the system of internal controls. Ernst & Young
LLP, the Company's current independent auditors are responsible for performing
an independent audit of the consolidated financial statements of the Company and
for expressing an opinion on the conformity of those financial statements with
generally accept accounting principals. The Audit Committee reviews and monitors
these processes and receives reports from Ernst & Young and Company management.
The Audit Committee also discussed with Ernst & Young the overall scope and
plans of their audits, their evaluation of the Company's internal controls and
the overall quality of the Company's financial reporting processes.
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 considered whether Ernst & Young's
provision of non-audit services (such as internal audit assistance, tax-related
services and due diligence procedures, services and advice related to mergers
and acquisitions) to the Company and its affiliates is compatible with
maintaining the independence of Ernst & Young with respect to the Company and
its management.
Based upon the reviews, discussions and considerations referred to above,
the Audit Committee has recommended to the Board of Directors that the Company's
audited financial statements be included in the Company's Annual Report on Form
10-K for fiscal year 2000, and that Ernst & Young LLP be appointed as the
independent auditors for the Company for fiscal year 2001. The foregoing report
is provided by the following members of the Company's Board of Directors, who
constitute the Audit Committee:
William Hart, Member Ulf J. Johansson, Chairman Bradford W. Parkinson, Member
Audit Committee Audit Committee Audit Committee
9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the shares of Company's Common Stock
beneficially owned as of the Record Date (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 contained in "COMPENSATION OF EXECUTIVE OFFICERS",
and (iv) all directors and executive officers of the Company, as a group:
Shares
Beneficially Owned (2)
-------------------------------
5% Shareholders, Directors and Nominees, and Executive Officers (1) Number Percent (%)
- ---------------------------------------------------------------------------------------- ---------------- -------------
Capital Research and Management Company and
SMALLCAP World Fund, Inc. (3)........................................................... 2,663,300 10.98
333 South Hope Street
Los Angeles, California 90071
Steven W. Berglund (4).................................................................. 169,177 *
Robert S. Cooper (5).................................................................... 132,722 *
John B. Goodrich (6).................................................................... 28,055 *
William Hart (7)........................................................................ 84,264 *
Ulf J. Johansson (8).................................................................... 6,667 *
Bradford W. Parkinson (9)............................................................... 59,175 *
David M. Hall (10)...................................................................... 85,008 *
Patrick J. Hehir (11)................................................................... 38,845 *
Ronald C. Hyatt (12).................................................................... 268,874 1.10
Dennis L. Workman (13).................................................................. 17,311 *
All Directors and Executive Officers, as a group
(18 persons) (5)-(14).............................................................. 1,044,227 4.18
- ------------------
* Indicates less than 1%
(1) Except as otherwise noted in the table, the business address of each
of the persons named in this table is: c/o Trimble Navigation Limited,
645 North Mary Avenue, Sunnyvale, California 94088.
(2) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of stock shown
as beneficially owned by them.
(3) The information presented with respect to Capital Research and Management
Company ("CRMC") and SMALLCAP World Fund, Inc. ("SWFI") is as reported
pursuant to Amendment No. 3 to a Schedule 13G as jointly filed with the
Securities and Exchange Commission on February 12, 2001 by CRMC and SWFI.
As reported on such joint Schedule 13G, CRMC is an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940 and
was deemed to be the beneficial owner of all 2,663,300 shares as of the
filing date due to its sole dispositive power over such shares and as a
result of acting as investment adviser to various investment companies
registered under Section 8 of the Investment Company Act of 1940. CRMC
disclaims beneficial ownership of all such shares pursuant to Rule 13d-4
of the Exchange Act of 1934, as amended. SWFI is an investment company
registered under the Investment Company Act of 1940, which is advised by
CRMC, was the beneficial owner of 1,500,000 shares as of the filing date
due to its sole voting power over such shares; however, all such shares
beneficially owned by SWFI are included within the shares shown for CRMC.
(4) Includes 166,667 shares subject to stock options exercisable within 60
days of the Record.
(5) Includes 99,722 shares subject to stock options exercisable within 60 days
of the Record Date.
(6) Includes 28,055 shares subject to stock options exercisable within 60 days
of the Record Date.
(7) Includes 39,722 shares subject to stock options exercisable within 60 days
of the Record Date.
(8) Includes 6,667 shares subject to stock options exercisable within 60 days
of the Record Date.
(9) Includes 3 shares held by Dr. Parkinson's spouse, 2,515 shares held
in a charitable remainder trust and 53,322 shares subject to stock
options exercisable within 60 days of the Record Date.
(10) Includes 75,863 shares subject to stock options exercisable within 60 days
of the Record Date.
(11) Includes 38,333 shares subject to stock options exercisable within 60 days
of the Record Date. Mr. Hehir is no longer an executive officer of the
Company, effective as of February 12, 2001.
(12) Includes 147,501 shares subject to stock options exercisable within 60
days of the Record Date.
(13) Includes 16,457 shares subject to stock options exercisable within 60
days of the Record Date.
(14) Includes 746,294 shares subject to stock options exercisable within 60
days of the Record Date.
10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation, including bonuses, for
each of the Company's last three fiscal years ending December 29, 2000 paid to
(i) all persons who served as the Company's Chief Executive Officer during last
completed fiscal year, and (ii) the four other most highly compensated executive
officers of the Company serving at the end of the last completed fiscal year:
Summary Compensation Table
Long-term
Annual Compensation(1) Compensation(2)
----------------------------- -------------------
Securities All Other
Salary Bonus Underlying Options Compensation
Name and Principal Position Year ($) ($) (#) (3) ($)
- --------------------------------------------- ------ ------------ -------------- --------------------- --------------
Steven W. Berglund (4) 2000 400,000 154,500 (5) - 101,192 (6)
President and Chief Executive Officer 1999 320,000 0 400,000 (7) 137,016 (8)
1998 - - - -
Ronald C. Hyatt 2000 260,637 102,264 (9) 5,000 1,200
Senior Vice President and General 1999 250,000 0 0 1,200
Manager, Agriculture Division 1998 139,399 0 90,000 1,200
David M. Hall 2000 248,257 103,889 (10) 30,000 9,452 (11)
Senior Vice President, Marketing 1999 268,404 0 60,000 9,273 (12)
and Business Development 1998 213,858 7,928 0 7,700 (13)
Patrick J. Hehir (14) 2000 205,119 41,100 (15) 10,000 8,418 (16)
Senior Vice President and 1999 176,927 57,500 (17) 100,000 (18) 16,574 (19)
Chief Manufacturing Officer 1998 - - - -
Dennis L. Workman 2000 197,359 62,402 (20) 10,000 1,200
Vice President and General Manager, 1999 175,934 0 20,000 1,200
Component Technologies Division 1998 143,366 21,003 10,000 1,200
- ------------------------------------
(1) Compensation deferred at the election of executive is included in the
category and in the year earned.
(2) The Company has not issued stock appreciation rights or restricted stock
awards. The Company has no "long-term incentive plan" as the term is
defined in the applicable rules.
(3) Includes amounts contributed by the Company pursuant to Section 401(k) of
the Internal Revenue Code of 1986, as amended, for the periods in which
they accrued. All full-time employees are eligible to participate in the
Company's 401(k) plan.
(4) Mr. Berglund has served as the Company's President and Chief Executive
Officer since March 1999.
(5) Represents a performance bonus earned for 1999 which was paid to
Mr. Berglund during the 2000 year.
(6) Includes $99,800 as the portion of a loan, including related accrued
interest, that was forgiven by the Company during the year. The loan was
originally made in connection with hiring Mr. Berglund for the purpose
of assisting him with relocating to California and obtaining a
primary residence. See "Certain Relationships and Related
Transactions". Also includes $1,392 paid by the Company for fitness center
dues provided to Mr. Berglund.
(7) Mr. Berglund received a one-time grant of an option to purchase
400,000 shares in connection with being hired as the Company's
President and Chief Executive Officer.
(8) Includes $42,333 as the portion of a loan, including related accrued
interest, that was forgiven by the Company during the year and $93,479 of
relocation costs paid by the Company in connection with the hiring of Mr.
Berglund. The loan was originally made in connection with hiring Mr.
Berglund for the purpose of assisting him with relocating to California
and obtaining a primary residence. See "Certain Relationships and Related
Transactions". Also includes $1,204 paid by the Company for fitness center
dues provided to Mr. Berglund.
(9) Includes $83,960 as a performance bonus earned for 1999 which was paid to
Mr. Hyatt during the 2000 year.
(10) Includes $83,484 as a performance bonus earned for 1999 which was paid to
Mr. Hall during the 2000 year.
(11) Includes $6,500 paid to Mr. Hall as an auto allowance and $1,752 paid
by the Company for fitness center dues provided to Mr. Hall.
(12) Includes $6,500 paid to Mr. Hall as an auto allowance and $1,573 paid by
the Company for fitness center dues provided to Mr. Hall.
(13) Includes $6,500 paid to Mr. Hall as an auto allowance.
11
(14) Mr. Hehir is no longer an executive officer of the Company, effective as
of February 12, 2001.
(15) Includes $14,717 as an additional bonus paid by the Company to Mr. Hehir,
which was used to offset the interest costs associated with a loan
previously made by him to the Company.
(16) Includes $6,000 paid to Mr. Hehir as an auto allowance and $2,418 paid by
the Company for fitness center dues provided to Mr. Hehir.
(17) Includes $25,000, representing a one-time sign-on bonus, and a $10,000
relocation bonus in connection with being hired as the Company's Chief
Manufacturing Officer.
(18) Mr. Hehir received a one-time grant of an option to purchase 100,000
shares in connection with being hired as the Company's Chief Manufacturing
Officer.
(19) Includes $11,267 of relocation costs paid by the Company in connection
with hiring Mr. Hehir and an auto allowance and $5,308 paid to Mr. Hehir
as an auto allowance.
(20) Includes $47,488 as a performance bonus earned for 1999 which was paid to
Mr. Workman during the 2000 year.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities during fiscal year 2000
to file reports of initial ownership on Form 3 and changes in ownership on Form
4 or 5 with the Securities and Exchange Commission (the "SEC"). Such officers,
directors and 10% shareholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such forms received by it and
on written representations from its officers and directors and certain other
reporting persons that no Forms 5 were required for such persons, the Company
believes that, during the fiscal year ended December 29, 2000, all Section 16(a)
filing requirements applicable to its officers, directors and 10% shareholders
were complied with on a timely basis.
12
The following table sets forth the number and terms of options granted to
the persons named in the Summary Compensation Table during the fiscal year ended
December 29, 2000:
Option Grants in Last Fiscal Year
Individual Grants
- -------------------------------------------------------------------------------------------- Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Price Appreciation
Options Employees in Exercise Expiration for Option Term (4)
Granted Fiscal Year Price Date -------------------------
Name (#) (1) ($/Share)(2) (3) 5% ($) 10% ($)
- ----------------------------- -------------- ---------------- --------------- ------------ -------------------------
Steven W. Berglund........... 0 - - - - -
Ronald C. Hyatt.............. 5,000 0.36 41.125 8/25/10 129,338 327,766
David M. Hall................ 20,000 1.45 19.500 4/19/10 245,310 621,660
10,000 0.73 41.125 8/25/10 258,676 655,533
Patrick J. Hehir............. 10,000 0.73 41.125 8/25/10 258,676 655,533
Dennis L. Workman............ 10,000 0.73 41.125 8/25/10 258,676 655,533
- --------------------------
(1) The Company granted options to purchase an aggregate of 1,378,900 shares
of the Company's Common Stock to employees, consultants and non-employee
directors during fiscal year 2000 pursuant to the Company's 1993 Stock
Option Plan and the 1990 Director Stock Option Plan.
(2) All options presented in this table were granted at an exercise price
equal to the then fair market value of a share of the Company's Common
Stock on the date of grant, as quoted on the Nasdaq National Market
System.
(3) All options presented in this table may terminate before the stated
expiration upon the termination of optionee's status as an employee,
consultant or director, including upon the optionee's death or disability.
(4) The assumed 5% and 10% compound rates of annual stock appreciation are
mandated by the rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future Common Stock
prices. All grants made to persons serving as employees and directors of
the Company listed in the table 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).
The following table provides information on option exercises by the persons
named in the Summary Compensation Table during the fiscal year ended December
29, 2000:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired on Fiscal Year-End (#) at Fiscal Year-End ($)(1)
Exercise Value Realized ---------------------------- ------------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------- ------------- --------------- ---------------------------- ------------------------------
Steven W. Berglund............. - - 140,000 260,000 2,240,000 4,160,000
Ronald C. Hyatt................ - - 131,667 43,333 1,860,235 551,948
David M. Hall.................. - - 64,627 85,373 623,825 721,175
Patrick J. Hehir............... 5,000 147,750 30,000 75,000 468,750 1,015,625
Dennis L. Workman.............. 10,000 241,426 12,500 35,000 130,010 288,866
- ------------------------
(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 29, 2000 as quoted
on the Nasdaq National Market System was $24.00.
13
Changes to Compensation Plans
The Company has proposed an amendment to increase the number of shares
reserved for issuance and sale under the Company's 1993 Stock Option Plan.
Because all grants under the 1993 Stock Option Plan are made at the discretion
of the Board of Directors, future grants under the 1993 Stock Option Plan are
not yet determinable. Accordingly, the following table summarizes the number of
stock options granted under the Company's 1993 Stock Option Plan during the last
fiscal year ended December 29, 2000 to (i) the persons named in the Summary
Compensation Table, (ii) all current executive officers as a group, (iii) all
current directors who are not executive officers as a group, and (iv) all
employees (excluding executive officers) as a group.
New Plan Benefits
1993 Stock Option Plan (1)
- -------------------------------------------------- -----------------------------------------
Exercise Price Number of
Name and Position ($ per Share) (2) Options Granted
- -------------------------------------------------- -------------------- -------------------
Steven W. Berglund
President and Chief Executive Officer..... - 0
Ronald C. Hyatt
Senior Vice President and General
Manager, Agriculture Division............. 41.125 5,000
David M. Hall
Senior Vice President, Marketing
and Business Development.................. 19.500 20,000
41.125 10,000
Patrick J. Hehir
Senior Vice President and
Chief Manufacturing Officer (3)........... 41.125 10,000
Dennis L. Workman
Vice President and General Manager,
Component Technologies Division........... 41.125 10,000
Current Executive Officers, as a group.......... 35.846 363,000
Non-Executive Officer Directors, as a group..... - -
Non-Executive Officer Employees, as a group..... 33.864 995,900
- ------------------
(1) Only employees and consultants (including officers and directors) of the
Company are eligible for option grants under the 1993 Stock Option Plan as
approved by the Company's Board of Directors.
(2) Exercise prices for the options granted during the fiscal year ended
December 29, 1999 under the 1993 Stock Option Plan are shown on a
weighted-average basis for the groups presented. Future benefits under the
1993 Stock Option Plan are not determinable, as grants of options are at
the discretion of the Company's Board of Directors and are dependent upon
the price of the Company stock in the future.
(3) Mr. Hehir is no longer an executive officer of the Company, effective as
of February 12, 2001.
14
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Steven W. Berglund
On March 17, 1999, Mr. Berglund entered into an employment agreement with
the Company to serve as the Company's President and Chief Executive Officer.
Such agreement provided that Mr. Berglund's base compensation is $33,333 per
month and that he would be eligible for a bonus of up to 50% of his base
compensation pro rata for fiscal years 1999 and 2000. The employment agreement
guaranteed one half of this bonus amount for fiscal year 1999 and specified that
the other terms and conditions of such bonus payments would be as negotiated
with the Company's Board of Directors. In the event of Mr. Berglund's
involuntary termination or termination for other than defined cause, he will
receive 12 months of severance based upon his last annual base salary plus any
accrued bonus to date.
In addition, upon joining the Company, Mr. Berglund was granted options to
purchase an aggregate of 400,000 shares of the Company's Common Stock with an
exercise price of $8.00 per share which was the fair market value on the date of
grant in accordance with the terms of such agreement. Such options vest 20% at
the first anniversary and monthly thereafter for five years from the original
date of grant and have a ten year term of exercise. In the event of a
change-of-control of the Company, Mr. Berglund will receive an additional 12
months of vesting with respect to such options; provided, however, if such event
occurs during his first year of service, he will receive ratable vesting for his
first year in addition to the 12 months of additional vesting.
In connection with hiring Mr. Berglund and his original relocation to
California and pursuant to the terms of his employment agreement, the Company
provided him with interim housing and reimbursed him for certain moving costs
and expenses and provided him with a loan for $400,000 to assist in the purchase
of a new primary residence. Such loan is secured by a second deed of trust on
the residence and was made at the lending rate at which the Company is able to
borrow, as adjusted from time to time. Such loan is to be forgiven by the
Company ratably over five years contingent upon Mr. Berglund continuing to be
employed by the Company; provided, however, that any remaining unpaid obligation
would be due and payable to the Company upon the anniversary of any separation
if Mr. Berglund's employment relationship with the Company ends during such time
period.
Pursuant to the employment agreement, Mr. Berglund is also eligible for
other benefits and programs available to the Company's employees, including paid
vacation, medical, dental, life and disability insurance, and a 401(k)
Retirement Plan with a Company match and he will also be eligible to participate
in the Company's Executive Nonqualified Deferred Compensation Plan.
Robert S. Cooper
In connection with agreeing to serve as the Company's Chairman of the Board
of Directors beginning in August 1998, Dr. Cooper entered into employment and
consulting agreements with the Company though August 31, 1999. At that time, Dr.
Cooper also entered into a standby consulting agreement with the Company for
which he will be paid on an hourly basis for consulting services on an as needed
basis as determined by the Company's Chief Executive Officer through September
1, 2003.
Upon beginning service as the Company's Chairman of the Board, Dr. Cooper
was granted an option to purchase 60,000 shares of the Company's Common Stock
with an exercise price of $10.125 per share which was the fair market value on
the date of grant in accordance with the terms of such agreements. Such options
vested ratably over 12 months from the original date of grant and have a five
year term of exercise contingent upon Dr. Cooper remaining as an employee,
consultant or director to the Company.
15
Bradford W. Parkinson
In connection with agreeing to serve as the Company's interim President and
Chief Executive Officer beginning in August 1998, Dr. Parkinson entered into
employment and consulting agreements with the Company though August 31, 1999. At
that time, Dr. Parkinson also entered into a consulting agreement with the
Company which provides Dr. Parkinson with a payment of $6,000 per month
commencing June 1, 1999 through June 1, 2002, unless terminated earlier. In
addition, Dr. Parkinson also entered into a standby consulting agreement with
the Company for which he will be paid on an hourly basis for consulting services
on an as needed basis as determined by the Company's Chief Executive Officer
through September 1, 2003.
Pursuant to his employment agreement and upon beginning service as the
Company's President and Chief Executive Officer in August 1998, Dr. Parkinson
was granted an option to purchase 100,000 shares of the Company's Common Stock
with an exercise price of $10.125 per share which was the fair market value on
the date of grant in accordance with the terms of such agreements. Such options
vested ratably over six months from the original date of grant and have a five
year term of exercise contingent upon Dr. Parkinson remaining as an employee,
consultant or director to the Company.
Certain Relationships and Related Transactions
The following table sets forth information with regard to loans made to
executive officers of the Company who had outstanding amounts of more than
$60,000 at any time since the beginning of the Company's last fiscal year. Each
of these loans was made by the Company for the purpose of assisting such
executive officer in the acquisition of his primary residence in an exceptional
housing market in a location for the benefit of the Company in accordance with
the Company's Bylaws. Each of these loans is secured by a second deed of trust
on such residence, has a term of five years and requires that the interest on
such principal amounts be paid currently each year. The principal balance is due
in full at the end of such five year term, but such executive officers may
pre-pay all or any portion of such balance without a prepayment penalty. The
interest rate for each of these loans was set with reference to the then
applicable mid-term annual federal rate.
Principal Amount Largest Amount
Annual Outstanding at Outstanding During
Name and Position Date of Loan Interest Rate Record Date ($) Fiscal Year 2000 ($)
- ----------------------------------------------- -------------- -------------- -------------------- ----------------------
Charles E. Armiger, Jr. (1) 7/6/98 5.69% 150,000 150,000
Vice President, Distribution and Logistics
Steven W. Berglund 6/25/99 5.40% 273,334 366,667
President and Chief Executive Officer
Patrick J. Hehir (2) 2/26/99 4.75% 200,000 200,000
Senior Vice President and Chief
Manufacturing Officer
- --------------------------
(1) Mr. Armiger resigned from the Company effective as of February 23, 2001 and
such full principal amount of the loan, together with all accrued but
unpaid interest, is currently due and payable.
(2) Mr. Hehir is no longer an executive officer of the Company, effective as of
February 12, 2001.
16
Company Performance
The following graph shows a five year comparison of the cumulative total
return for the Company's Common Stock, the Nasdaq Composite Total Return Index
(U.S.), and the Standard & Poor's Technology Sector Index: (1)
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS*
AMONG TRIMBLE NAVIGATION LIMITED,
NASDAQ COMPOSITE TOTAL RETURN INDEX (U.S.),
AND THE STANDARD & POOR'S
TECHNOLOGY SECTOR INDEX
[The performance graph has been omitted. Performance Graph. The performance
graph required by Item 402(1) of Regulation S-K is set forth in the paper copy
of the Proxy Statement immediatley following the caption "COMPARISON OF
FIVEYEAR CUMMULATIVE TOTATL RETURNS."
The peformance graph plots the data points listed below the graph for the data
sets (i) Trimble Navigation Limited, (ii) Nasdaq Composite Total Return Index
(US) and (iii) the Standard & Poor's Technology Sector Index. The graph has a
horizontal axis at its bottom which lists from left to right the dates 95, 96,
97, 98, 99, and 00. The graph has a vertical axis at its left which lists from
bottom to top numbers 0, 100, 200, 300, 400, 500, and 600. The data points for
each data set are plotted on the graph and are connected by line. The line
connecting the data points in the Trimble Navigation Limited data set is bold
with square to mark the points, while the lines connecting the data points in
the Nasdaq Composite Total Return Index (US) data set and the S&P Technology
Sector Index data set are dashed with triangle to mark data point and small
square dashes with circle to mark data points, respectively.]
DATA POINTS FOR PERFORMANCE GRAPH
12/95 12/96 12/97 12/98 12/99 12/00
--------------------------------------------
Trimble Navigation
Limited TRMB 100 62 117 39 116 129
Nasdaq Stock Market
(U.S.) INAS 100 123 151 213 395 238
S&P Technology
Sector ITES 100 142 179 309 542 325
- --------------------------
(1) The data in the above graph is presented on a calendar year basis through
December 31, 2000 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
fiscal year end for 2000 was December 29, 2000. Any variations due to the
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, 1995 in the Company's Common
Stock, the Nasdaq Composite Total Return Index (U.S.), and the Standard &
Poor's Technology Sector Index. Total returns assume the reinvestment of
dividends for the indexes. The Company has never paid dividends on its
Common Stock and has no present plans to do so.
17
ITEM II--AMENDMENT OF THE 1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "Option Plan") was adopted by the
Board of Directors in October 1992 and approved by the shareholders in April
1993. Since then, the Board of Directors and the shareholders of the Company
have approved amendments to the Option Plan increasing the number of shares
reserved for issuance thereunder to an aggregate of 5,925,000 shares of the
Company's Common Stock. At the Record Date, options to purchase an aggregate of
3,817,062 shares, having an average exercise price of $19.6031 per share and
expiring from December 2001 to January 2011, were outstanding and only 676,320
shares remained available for future grant under the Option Plan.
In March 2001, the Board of Directors approved an additional amendment to
the Option Plan increasing the number of shares of the Company's Common Stock
reserved thereunder by an additional 450,000 shares to an aggregate of 6,375,000
shares. Prior to the Record Date, the Company has previously repurchased an
aggregate of 1,469,500 shares of its Common Stock (1,080,000 shares in 1998,
139,500 shares in 1997, and 250,000 shares in 1996,) to partially offset the
dilution to existing shareholders resulting from the Company's option plans.
Given the low number of shares currently remaining for grant in the Option
Plan and the Company's present anticipated executive, managerial and technical
hiring needs and expectations, the Board of Directors believes that the increase
in the number of shares under the Option Plan is necessary in order for the
Company to be competitive in the marketplace. Over the years, the Silicon
Valley, where the Company is headquartered, has continued to become more
intensely competitive and attracting and recruiting highly skilled employees has
become increasingly difficult for the Company. Another challenge in the
Company's current employment market is 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 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.
The proposed amendment to the Option 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 retain a talented employee base. 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 an increase of 450,000 shares of Common Stock available for issuance
under the Option Plan.
The essential features of the Option Plan are outlined below:
Purpose
The purposes of the Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility and to provide
additional incentives to employees and consultants of the Company to promote the
success of the Company's business.
Administration
The Option Plan provides for administration by the Board of Directors of
the Company or by a Committee of the Board of Directors. The Option Plan is
currently being administered by the Board of Directors. The interpretation and
construction of any provision of the Option Plan by the Board of Directors or
its designated Committee is final and binding. Members of the Board of Directors
or its Committee receive no additional compensation for their services in
connection with the administration of the Option Plan.
18
Eligibility
The Option Plan provides for grants to employees (including officers of the
Company) of "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, and for grants of nonstatutory stock
options to employees and consultants. The Board of Directors or its Committee
selects the optionees and determines the number of shares to be subject to each
option. Currently, under the terms of the Option Plan, no employee may be
granted, in any fiscal year, options under the plan to acquire more than 150,000
shares of the Common Stock of the Company. Notwithstanding such limitation,
however, an additional one-time grant to purchase up to 250,000 shares may be
made to any newly-hired officer or employee. These limits are subject to
appropriate adjustments in the case of stock splits, reverse stock splits and
the like. In addition, in accordance with the applicable federal tax laws, there
is a limit of $100,000 on the aggregate fair market value of shares which
constitute incentive stock options which become exercisable for the first time
in any one calendar year; and options in excess of this limit are deemed to be
nonstatutory stock options.
Terms of Options
Each option is evidenced by a written stock option agreement between the
Company and the optionee and is generally subject to the terms and conditions
listed below, but specific terms may vary:
(a) Exercise of the Option. The Board of Directors or its designated
Committee determines when options granted under the Option Plan may be
exercised. The current forms of option agreements generally used under the
Option Plan provide that options vest over five years and are exercisable
cumulatively to the extent of 20% of the option shares on the date 12 months
after the vesting commencement date of the option and an additional 1/60th of
the option shares are exercisable at the end of each month thereafter. An option
is exercised by giving written notice of exercise to the Company, specifying the
number of shares of Common Stock to be purchased and tendering payment to the
Company of the purchase price. The Option Plan specifies that the permissible
form of payment for shares issued upon exercise of an option shall be set forth
in the option agreement and may consist of cash, check, promissory note,
exchange of shares of the Company's Common Stock held for more than six months
or such other consideration as determined by the Board of Directors or its
Committee and as permitted by the California Corporations Code. The current
forms of option agreements only permit payment by cash, check or exchange of
shares.
(b) Option Price. The exercise price of the options granted under the
Option Plan is determined by the Board of Directors or its Committee in
accordance with the Option Plan, but the option price of incentive stock options
and nonstatutory stock options may not be less than 100% and 85%, respectively,
of the fair market value of the Company's Common Stock. The Option Plan provides
that, because the Company's Common Stock is currently traded on the Nasdaq
National Market, the fair market value per share shall be the closing price on
such system on the date of the grant of the option. With respect to any
participant who owns stock representing more than 10% of the voting power of the
Company's capital stock, the exercise price of any incentive or nonstatutory
stock option must equal at least 110% of the fair market value per share on the
date of the grant.
(c) Termination of Employment. The Option Plan provides that if the
optionee's employment by the Company is terminated for any reason, other than
death or disability, options may be exercised not later than 30 days after the
date of such termination and may be exercised only to the extent the options
were exercisable on the date of termination.
(d) Disability. If the optionee terminates his employment with the Company
as a result of his total or permanent disability, options may be exercised
within six months after the date of such termination and may be exercised only
to the extent the options were exercisable on the date of termination.
19
(e) Death. If an optionee should die while an employee or a consultant of
the Company or during the 30 day period following termination of the optionee's
employment or consultancy, the optionee's estate may exercise the options at any
time within 12 months after the date of death but only to the extent that the
options were exercisable on the date of death or termination of employment.
(f) Termination of Options. The terms of options granted under the Option
Plan may not exceed ten years from the date of grant. However, any option
granted to any optionee who, immediately before the grant of such option, owned
more than 10% of the total combined voting power of all classes of stock of the
Company or a parent or subsidiary corporation, may not have a term of more than
five years. Under the current form of option agreements, options granted to
employees have a term of ten years from the date of grant while options granted
to consultants and independent contractors have a term of five-years and
three-months from the date of grant. No option may be exercised by any person
after such expiration.
(g) Nontransferability of Options. All options are nontransferable by the
optionee, other than by will or the laws of descent and distribution, and,
during the lifetime of the optionee, may be exercised only by the optionee.
Adjustment Upon Changes in Capitalization
In the event any change, such as a stock split or dividend, is made in the
Company's capitalization which results in an increase or decrease in the number
of outstanding shares of Common Stock without receipt of consideration by the
Company, an appropriate adjustment shall be made in the option price and in the
number of shares subject to each option. In the event of the proposed
dissolution or liquidation of the Company, all outstanding options automatically
terminate. In the event of a merger of the Company with or into another
corporation where the Company is not the successor entity, options outstanding
shall be assumed or an equivalent option shall be substituted by the successor
entity, unless the Board of Directors accelerates the exercisability of the
options such that the optionee shall have the right to exercise his or her
option on or before the effective date of such merger. Should an option be
assumed or substituted upon a merger, the exercisability of the option will also
be accelerated if the successor entity terminates the employment of the optionee
within one year of the merger.
Amendment and Termination
The Board of Directors may, at any time, amend or terminate the Option
Plan, but no amendment or termination may be made which would impair the rights
of any participant under any grant theretofore made, without his or her consent.
In addition, in any event, the Option Plan will terminate in 2003.
Certain Federal Income Tax Information
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or nonstatutory options.
An optionee who is granted an incentive stock option will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as long-term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (i)
the fair market value of the shares at the date of the option exercise or (ii)
the sale price of the shares. A different rule for measuring ordinary income
upon such a premature disposition may apply if the optionee is also an officer,
director, or 10% shareholder of the Company. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the
20
optionee. Any gain recognized on such a premature disposition of the shares
in excess of the amount treated as ordinary income will be characterized as
long-term or short-term capital gain, depending on the holding period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory options. An optionee will not recognize any taxable
income at the initial time of the grant of a nonstatutory option. However, upon
its exercise, the optionee will recognize taxable income generally measured as
the excess of the then fair market value of the shares purchased over the
purchase price. Any taxable income recognized in connection with an option
exercise by an optionee who is also an employee of the Company will be subject
to tax withholding by the Company. Upon resale of such shares by the optionee,
any difference between the sales price and the optionee's purchase price, to the
extent not recognized as taxable income as described above, will be treated as
long-term or short-term capital gain or loss, depending on the holding period.
The Company will be entitled to a tax deduction in the same amount as the
ordinary income recognized by the Optionee with respect to shares acquired upon
exercise of a nonstatutory option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Option Plan and does not purport to be complete. Reference
should be made to the applicable provisions of the Code. In addition, this
summary does not discuss the tax consequences of the optionee's death or the
income tax laws of any municipality, state or foreign country in which an
optionee may reside.
Vote Required
Approval of the increase of 450,000 shares of Common Stock to be reserved
for issuance under the Option Plan requires the affirmative vote of the holders
of a majority of the shares present at the Annual Meeting in person or by proxy
and entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote FOR an increase of
450,000 shares in the number of shares of Common Stock reserved for issuance
under the Option Plan from 5,925,000 shares to an aggregate of 6,375,000 shares.
21
ITEM 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 28, 2001. Ernst & Young has
been the Company's independent auditors since their appointment in 1986. The
Company expects that a representative of Ernst & Young will be present at the
Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to answer any appropriate questions.
Fees Billed to the Company by Ernst & Young LLP During Fiscal Year 2000
Audit Fees:
Audit fees billed to the Company by Ernst & Young during the Company's
fiscal year 2000 for the review of the Company's annual financial statements and
those financial statements included in the Company's quarterly reports filed on
Form 10-Q totaled approximately $760,000.
Financial Information Systems Design and Implementation Fees:
The Company did not engage Ernst & Young to provide any advice to the
Company regarding financial information systems design and implementation during
fiscal year 2000.
All Other Fees:
Fees billed to the Company by Ernst & Young during the Company's fiscal
year 2000 for all other non-audit related services rendered to the Company,
including tax related services, totaled approximately $1,848,000, which included
approximately $1,506,000 for due diligence procedures, services and advice
related to mergers and acquisitions completed by the Company during the fiscal
year.
Vote Required
Ratification of the appointment of Ernst & Young as the Company's
independent auditors for the current fiscal year ending December 28, 2001, will
require the affirmative vote of the holders of a majority of the shares present
at the Annual Meeting in person or by proxy and entitled to vote as of the
Record Date. In the event that such ratification by the shareholders is not
obtained, the 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 28, 2001.
22
ITEM IV--PROPOSED SHAREHOLDER RESOLUTION
(Please note that the Company is not responsible for the contents of the
following proposed shareholder resolution or supporting statement.)
Bartlett Naylor, 1255 N. Buchanan, Arlington, Virginia 22205, owner of 910
shares of Common Stock of the Company, has given notice to the Company that he
intends to present for action at the Annual Meeting the following proposed
resolution:
"Resolved: The shareholders urge our board of directors to take the
necessary steps to nominate at least two candidates for each open board
position, and that the names, biographical sketches, SEC-required declarations
and photographs of such candidates shall appear in the company's proxy materials
(or other required disclosures) to the same extent that such information is
required by law and is our company's current practice with the single candidates
it now proposes for each position."
Mr. Naylor's supporting statement is as follows:
"Although our company's board appreciates the importance of qualified
people overseeing management, I believe that the process for electing directors
can be improved.
Our company currently nominates for election only one candidate for each
board seat, thus leaving shareholders no practical choice in most director
elections. Shareholders who oppose a candidate have no easy way to do so unless
they are willing to undertake the considerable expense of running an independent
candidate for the board. The only other way to register dissent about a given
candidate is to withhold support for that nominee, but that process rarely
affects the outcome of director elections. The current system thus provides no
readily effective way for shareholders to oppose a candidate that has failed to
attend board meetings; or serves on so many boards as to be unable to supervise
our company management diligently; or who serves as a consultant to the company
that could compromise independence; or poses other problems. As a result, while
directors legally serve as the shareholder agent in overseeing management, the
election of directors at the annual meeting is largely perfunctory. Even
directors of near bankrupt companies enjoy re-election with 90%+ pluralities.
The "real" selection comes through the nominating committee, a process too often
influenced, if not controlled, by the very management the board is expected to
scrutinize critically.
Our company should offer a rational choice when shareholders elect
directors. Such a process could abate the problem of a chair "choosing" his own
board, that is, selecting those directors he expects will reflexively support
his initiatives, and shedding those who may sometimes dissent. Such a process
could create healthy and more rigorous shareholder evaluation about which
specific nominees are best qualified.
Would such a process lead to board discontinuity? Perhaps, but only with
shareholder approval. Presumably an incumbent would be defeated only because
shareholders considered the alternative a superior choice. Would such a
procedure discourage some candidates? Surely our board should not be made of
those intolerant of competition. Would such a procedure be "awkward" for
management when it recruits candidates? Hopefully so. (Management could print a
nominee's name advanced by an independent shareholder to limit such
embarrassment.). The point is to remove the "final" decision on who serves as a
board director from the hands of management, and place it firmly in those of
shareholders."
"I urge you to vote FOR this proposal."
23
The Board of Directors favors a vote AGAINST the adoption of the
shareholder resolution proposed by Mr. Naylor, for the following reasons:
Currently, the Board of Directors and its Nominating Committee are
responsible for annually identifying the best candidates for election to the
Company's Board of Directors. The Nominating Committee's duties include
evaluating the size and composition of the Board of Directors as well as
considering potential new members.
In selecting a slate of candidates each year, the Nominating Committee and
the Board of Directors carefully consider the performance and qualifications not
just of each individual candidate, but of the group to be nominated as a whole.
The Nominating Committee and the Board of Directors then nominate to the
shareholders the group of persons, as a slate, that they believe will together
best serve the interests of the shareholders of the Company.
The Board of Directors and Nominating Committee believe that the current
members of the Board of Directors have a broad range of valuable experience and
unique individual backgrounds important to the Company (see "Election of
Directors - Nominees"); however, they recognize their responsibilities to the
shareholders and take an active role in finding new qualified candidates. In
addition, upon the Board of Director's recommendation, last year the potential
size of the Company's Board of Directors was increased to up to nine members in
order to provide more flexibility in adding additional new qualified members.
Such resolution was approved by the Company's shareholders at the 2000 Annual
Meeting.
The Board of Directors believes that the current nomination and election
process ensures that only the best qualified candidates, who are willing to
serve, are proposed to the shareholders each year for election at the annual
meeting of shareholders.
The Board of Directors believes that if they followed the procedure as set
forth in the proposal by Mr. Naylor and nominated twice as many candidates to
the Board of Directors as there are seats, they would fail in their duties to
the Company's shareholders to identify and recommend only the best candidates.
In addition, it is unlikely that the Board of Directors would even be able to
find enough well-qualified candidates willing to be involved with a contested
election of the sort proposed by Mr. Naylor, especially if the individuals knew
that they were to be part of the "second" group of candidates that the Board of
Directors was not recommending to the shareholders.
As a practical matter, many well-qualified persons would simply not be
willing to participate in the type of contested election that Mr. Naylor's
proposal would produce because of the Board of Director's obligation to inform
shareholders which candidates that they favor.
In addition, Mr. Naylor's proposal suggests that only by nominating an
excess number of candidates can the shareholders have an appropriate choice of
directors for election to the Company's Board of Directors. On the contrary,
shareholders of the Company are protected in several ways under the Company's
current election methods, which are used by virtually all publicly-held
companies.
Under the Company's current election methods dissatisfied shareholders may
register their disapproval for a candidate by withholding votes for some or all
nominees or by conducting a proxy contest to challenge the Board of Director's
candidates. The federal securities laws require that all companies include in
their proxy materials any such challenges as well as certain other information
about each candidate that the Securities and Exchange Commission has determined
is necessary for a shareholder's informed vote. The specific voting information
of the shareholders for each election to the Board of Directors is published by
the Company, and is readily available to the public, as part of the Company's
first Quarterly Report on Form 10-Q following such elections at the Annual
Meeting of shareholders.
24
In making their selections each year, the Nominating Committee and the
Board of Directors use all available information about potential candidates and
consider many issues such as potential conflicts of interest as well as
attendance and participation. Finally, the Nominating Committee has, in the
past, and will continue to, in the future, consider all suitably qualified
nominees proposed by shareholders. (See "Board Meetings and Committees".)
The Company's existing election process also helps to facilitate continuity
and stability of the Company's long-term business strategies and policies by
helping to ensure that, at any given time, a sufficient number of the members of
the Board of Directors will have prior experience as directors of the Company
and will already be familiar with its business, operations, markets and
competitors. All of these current methods help to ensure that the Board of
Directors is made up of members who represent the best interests of the
shareholders as a whole.
The Board of Directors believes that the Company's current policies for
selecting candidates for membership on the Board of Directors is the best
available method in attracting and retaining competent directors who enhance the
value of the Company. The procedure set forth in Mr. Naylor's proposed
shareholder resolution would not be an efficient, nor an effective, means of
selecting the best directors for the Company.
Vote Required
The approval of the resolution proposed by Mr. Naylor, if it is properly
presented at the Annual Meeting, would require the affirmative vote of the
holders of a majority of the shares present at the Annual Meeting in person or
by proxy and entitled to vote as of the Record Date.
Recommendation of the Board of Directors
The Company's Board of Directors recommends a vote AGAINST the shareholder
resolution as proposed by Mr. Naylor and as set forth in this Item IV. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED AGAINST THIS PROPOSAL UNLESS A
SHAREHOLDER SPECIFIES A DIFFERENT CHOICE.
25
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 5, 2001
26
APPENDIX
TRIMBLE NAVIGATION LIMITED
CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
(as amended January 29, 2001)
PURPOSE:
The purpose of the Audit Committee established by this charter will be to
make such examinations as are necessary to monitor the corporate financial
reporting and the internal and external audits of the corporation, to provide to
the Board of Directors the results of its examinations and recommendations
derived therefrom, to outline to the Board improvements made, or to be made, in
internal accounting controls, to nominate independent auditors, and to provide
to the Board such additional information and materials as it may deem necessary
to make the Board aware of significant financial matters which require Board
attention.
In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
prescribes from time to time.
MEMBERSHIP:
The Audit Committee will consist of at least three members of the Board.
The members of the Audit Committee will be appointed by and will serve at the
discretion of the Board of Directors.
The members of the Audit Committee will be outside directors, financially
literate, and considered independent. The Board of Directors may chose to
appoint one non-independent member to the Audit Committee. The Board of
Directors will disclose the reasons for the appointment of a non-independent
member in the Company's annual proxy statement.
RESPONSIBILITIES:
The responsibilities of the Audit Committee shall include:
1. Nominating the independent auditors;
2. Reviewing the plan for the audit and related services;
3. Reviewing audit results and financial statements;
4. Overseeing the adequacy of the corporation's system of internal
accounting controls, including obtaining from the independent
auditor's management letters or summaries on such internal accounting
controls;
5. Overseeing the effectiveness of the internal audit function;
6. Overseeing compliance with the Foreign Corrupt Practices Act;
7. Overseeing compliance with SEC requirements for disclosure of auditor's
services and Audit Committee members and activities;
8. Obtaining a formal written statement of independence from the
independent auditors; and
9. Engaging in a dialog with the auditors with respect to any
relationships that may impact the objectivity or independence of
the auditors.
In addition to the above responsibilities, the Audit Committee shall review
and assess the adequacy of its charter on at least an annual basis, especially
in light of the then currently applicable rules for continued listing on the
Nasdaq National Market, and undertake any other duties as the Board of Directors
delegates to it, and will report, at least annually, to the Board regarding the
Committee's examinations and recommendations.
MEETINGS:
The Audit Committee will meet at least four times each year. The Audit
Committee may establish its own schedule which it will provide in advance to the
Board of Directors.
The Audit Committee will meet separately with the president and separately
with the chief financial officer of the corporation at least annually to review
the financial affairs of the corporation. The Audit Committee will meet with the
independent auditors of the corporation, at such times as it deems appropriate,
to review the independent auditor's examination and management report.
REPORTS:
The Audit Committee will record its summaries of recommendations in writing
to the Board, which will be incorporated as a part of the minutes of the Board
of Directors meetings.
MINUTES:
The Audit Committee will maintain written minutes of its meetings and the
minutes will be filed in the corporate minute book.
APPENDIX
PROXY TRIMBLE NAVIGATION LIMITED PROXY
PROXY FOR 2001 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 5, 2001, and hereby appoints
Robert S. Cooper and Steven W. Berglund, 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 2001 Annual Meeting
of Shareholders of TRIMBLE NAVIGATION LIMITED, to be held on Thursday, May 10,
2001, at 1:00 p.m. local time, at the Westin Hotel in Santa Clara, located at
5101 Great America Parkway, Santa Clara, California 95054 in the Magnolia Room
and at any adjournment(s) thereof, and to vote all shares of Common Stock which
the undersigned would be entitled to vote if then and there personally present,
on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, IT
WILL BE VOTED FOR THE LISTED NOMINEES IN THE ELECTION OF DIRECTORS, FOR THE
APPROVAL OF AN INCREASE OF 450,000 SHARES IN THE NUMBER OF SHARES AVAILABLE FOR
ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION PLAN, FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 28, 2001, AGAINST THE PROPOSED SHAREHOLDER RESOLUTION (IF IT IS
PROPERLY PRESENTED AT THE ANNUAL MEETING) AND AS SAID PROXIES DEEM ADVISABLE ON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Both of such attorneys or substitutes (if both are present and acting at
said meeting or any 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.proxyvoting.com/trmb. 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 1-800-840-1208 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 conrner of this card.
3. Mark, sign and date this proxy form and return it in the enclosed
envelope.
Please mark
your votes [X]
as indicated in
in this example
1. Elections of Directors WITHHOLD
FOR FOR All
(INSTRUCTION: If you wish to FOR AGAINST ABSTAIN
withhold authority to vote for [ ] [ ] 2. Approval of an increase of THIS PROXY/VOTING CARD WILL
any individual nominee, strike 450,000 shares in the number of BE VOTED "AGAINST" ITEM 4
a line through that nominee's shares of Common Stock re- [ ] [ ] [ ] IF NO CHOICE IS SPECIFIED.
name in the list below:) served for issuance under the
Company's 1993 Stock Option FOR AGAINST ABSTAIN
Plan from 5,925,000 shares to 4. Proposed
01 Steven W. Berglund, 02 Robert S. Cooper, an aggregate of 6,375,000 shares. shareholder
03 John B. Goodrich, 04 William Hart, 05 Ulf resolution. [ ] [ ] [ ]
J. Johansson, and 06 Bradford W. Parkinson 3. Ratification of the appointment
of Ernst & Young LLP as the
independent auditors of the [ ] [ ] [ ]
Company for the current fiscal
year ending December 28, 2001.
______________________________________________________
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Signature(s)______________________________________________ Dated _______, 2001
(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.)
FOLD AND DETACH HERE
[Omitted picture of VOTE BY TELEPHONE OR INTERNET [Omitted picture
telephone] of computer]
QUICK * * * EASY * * * IMMEDIATE
YOUR VOTE IS IMPORTANT - YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone
24 hours a day - 7 days a week.
There is NO CHARGE to you for this call. - Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box in
the lower right hand conrner of this form.
OPTION #1: To vote as the Board of Directors recommends on ALL Items: Press 1.
When asked, please confirm your vote by Pressing 1.
OPTION #2: If you choose to vote on each item separately, press 0. You will
hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR
ALL nominees, press 9.
To WITHOHLD FOR INDIVIDUAL nominee(s), press 0 and
listen to the instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9;
ABSTAIN, press 0.
When asked, please confirm your vote by Pressing 1.
The instructions are the same for all remaining proposals.
or
2. VOTE BY INTERNET: Follow the instructions at our Website Address:
http://www.proxyvoting.com/trmb
or
3. VOTE BY PROXY: Mark, sign and date your proxy card and return promptly in
the enclosed envelope.
NOTE: If you vote by internet or telephone, THERE IS NO NEED TO MAIL BACK your
Proxy Card.
THANK YOU FOR VOTING.
APPENDIX
TRIMBLE NAVIGATION LIMITED ANNUAL MEETING TO BE HELD ON 05/10/01 AT 1:00 P.M.
PDT FOR HOLDERS AS OF 03/09/01
6 1-0001
CUSIP: 896239100
DIRECTORS CONTROL NO.
- ---------- |-------
DIRECTORS RECOMMEND: A VOTE FOR ELECTION OF THE FOLLOWING |
NOMINEES 0010100|
1- 01-STEVEN W. BERGLUND, 02-ROBERT S. COOPER, 03-JOHN B. GOODRICH, |
04-WILLIAM HART, 05-ULF J. JOHANSSON, 06-BRADFORD W. PARKINSON |
|
DIRECTORS
PROPOSALS RECOMMENDED
- ---------- ------------
2 - APPROVAL OF AN INCREASE OF 450,000 SHARES ------>>> FOR --->>>2
IN THE NUMBER OF SHARES OF COMMON STOCK RESERVED 0020702
FOR ISSUANCE UNDER THE COMPANY'S 1993 STOCK OPTION
PLAN FROM 5,925,000 SHARES TO AN AGGREGATE OF
6,375,000 SHARES.
3 - RATIFICATION OF THE APPOINTMENT OF ERNST & ------>>> FOR --->>>3
YOUNG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY 0010200
FOR THE CURRENT FISCAL YEAR ENDING DECEMBER 28, 2001.
THIS PROXY VOTING CARD WILL BE VOTED "AGAINST"
ITEM 4 IF NO CHOICE IS SPECIFIED.
4*- PROPOSED SHAREHOLDER RESOLUTION. -------------->>> AGAINST -->>>4
0060300
*NOTE* SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF
ENTER YOUR VOTING INSTRUCTIONS AT 1-800-454-8683 OR WWW.PROXY.VOTE.COM
UP UNTIL 11:59 PM EASTERN TIME THE DAY BEFORE THE CUT-OFF OR MEETING
DATE.
FOLD AND DETACH HERE
TRIMBLE NAVIGATION LIMITED
05/10/01 AT 1:00 P.M. PDT
2 ITEM(S) SHARE(S)
DIRECTORS
---------
(MARK 'X' FOR ONLY ONE BOX)
1 [ ] FOR ALL NOMINEES
|------
[ ] WITHHOLD ALL NOMINEES |
|
[ ] WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE. WRITE
NUMBER(S) OF NOMINEE(S) BELOW.
USE NUMBER ONLY __________________________
FOR AGAINST ABSTAIN
2 [ ] [ ] [ ] PLEASE INDICATE YOUR PROPOSAL SELECTION BY
FIRMLY PLACING AN 'X' IN THE APPROPRIATE [X]
NUMBERED BOX WITH BLUE OR BLACK INK ONLY
DO NOT USE SEE VOTING INSTRUCTIONS NO. 2 ON REVERSE
DO NOT USE ACCOUNT NO:
FOR AGAINST ABSTAIN CUSIP: 896239100
3 [ ] [ ] [ ]
CONTROL NO:
DO NOT USE CLIENT NO:
DO NOT USE PLEASE MARK HERE IF YOU PLAN TO ATTEND
AND VOTE YOUR SHARES AT THE MEETING [ ]
FOR AGAINST ABSTAIN
4 [ ] [ ] [ ]
DO NOT USE
51 MERCEDES WAY
DO NOT USE EDGEWOOD NY 17717
FOR AGAINST ABSTAIN
DO NOT USE
DO NOT USE
TRIMBLE NAVIGATION LIMITED
DO NOT USE ATTN:BARBARA HALL
645 N MARY AVE
SUNNYVALE, CA 94088
FOR AGAINST ABSTAIN
DO NOT USE
DO NOT USE
DO NOT USE
_____________________________________ /____/____
FOLD AND DETACH HERE SIGNATURE(S) DATE
BACK SIDE OF PROXY CARD
VOTING INSTRUCTIONS
TO OUR CLIENTS:
WE HAVE BEEN REQUESTED TO IF WE DO NOT HEAR FROM YOU PRIOR TO
FORWARD TO YOU THE ENCLOSED THE ISSUANCE OF THE FIRST VOTE, WE
PROXY MATERIAL RELATIVE TO MAY VOTE YOUR SECURITIES IN OUR
SECURITIES HELD BY US IN YOUR DISCRETION TO THE EXTENT PERMITTED
ACCOUNT BUT NOT REGISTERED IN BY THE RULES OF THE EXCHANGE (ON
YOUR NAME. SUCH SECURITIES CAN THE TENTH DAY, IF THE PROXY
BE VOTED ONLY BY US AS THE MATERIAL WAS MAILED AT LEAST 15
HOLDER OF RECORD. WE SHALL BE DAYS PRIOR TO THE MEETING DATE; ON
PLEASED TO VOTE YOUR SECURITIES FIFTEENTH DAY IF THE PROXY
IN ACCORDANCE WITH YOUR WISHES MATERIAL WAS MAILED 25 DAYS OR
IF YOU WILL EXECUTE THE FORM MORE PRIOR TO THE MEETING DATE). IF
AND RETURN IT TO US PROMPTLY YOU ARE UNABLE TO COMMUNICATE
IN THE ENCLOSED BUSINESS REPLY WITH US BY SUCH DATE, WE WILL
ENVELOPE. IT IS UNDERSTOOD NEVERTHELESS FOLLOW YOUR VOTING
THAT IF YOU SIGN WITHOUT INSTRUCTIONS, EVEN IF OUR
OTHERWISE MARKING THE FORM, DISCRETIONARY VOTE HAS ALREADY
THE SECURITIES WILL BE VOTED BEEN GIVEN, PROVIDED YOUR
AS RECOMMENDED BY THE BOARD INSTRUCTIONS ARE RECEIVED PRIOR TO
OF DIRECTORS ON ALL MATTERS TO THE MEETING DATE.
BE CONSIDERED AT THE MEETING.
FOR THIS MEETING, THE VOTING INSTRUCTION NUMBER 3
EXTENT OF OUR AUTHORITY TO IN ORDER FOR YOUR SECURITIES TO BE
VOTE YOUR SECURITIES IN THE REPRESENTED AT THE MEETING. IT WILL
ABSENCE OF YOUR INSTRUCTIONS BE NECESSARY FOR US TO HAVE YOUR
CAN BE DETERMINED BY REFERRING SPECIFIC VOTING INSTRUCTIONS.
TO THE APPLICABLE VOTING PLEASE DATE, SIGN AND RETURN YOUR
INSTRUCTION NUMBER INDICATED VOTING INSTRUCTIONS TO US PROMPTLY
ON THE FACE OF YOUR FORM. IN THE RETURN ENVELOPE PROVIDED.
VOTING INSTRUCTIONS NUMBER 1
WE URGE YOU TO SEND IN YOUR VOTING INSTRUCTION NUMBER 4
INSTRUCTION SO THAT WE MAY REMINDER - WE HAVE PREVIOUSLY SENT
VOTE YOUR SECURITIES IN YOU PROXY SOLICITING MATERIAL
ACCORDANCE WITH YOUR WISHES. PERTAINING TO THE MEETING OF
HOWEVER, THE RULES OF THE SHAREHOLDERS OF THE COMPANY
NEW YORK STOCK EXCHANGE INDICATED.
PROVIDE THAT IF INSTRUCTIONS
ARE NOT RECEIVED FROM YOU
PRIOR TO THE ISSUANCE OF THE ACCORDING TO OUR LATEST RECORDS,
FIRST VOTE, THE PROXY MAY BE WE HAVE NOT, AS YET RECEIVED YOUR
GIVEN AT DISCRETION BY THE VOTING INSTRUCTION ON THE MATTERS
HOLDER OF RECORD OF THE TO BE CONSIDERED AT THIS MEETING
SECURITIES (ON THE TENTH DAY AND THE COMPANY HAS REQUESTED US
IF THE PROXY MATERIAL WAS TO COMMUNICATE WITH YOU IN AN
MAILED AT LEAST 15 DAYS ENDEAVOR TO HAVE YOUR SECURITIES
PRIOR TO THE MEETING DATE; VOTED.
ON THE FIFTEENTH DAY IF
PROXY MATERIAL WAS MAILED THE VOTING INSTRUCTIONS REQUEST
25 DAYS OR MORE PRIOR TO PERTAINS TO SECURITIES CARRIED BY US
THE MEETING DATE). IF YOU IN YOUR ACCOUNT BUT NOT REGISTERED
ARE UNABLE TO COMMUNICATE IN YOUR NAME. SUCH SECURITIES CAN
WITH US BY SUCH DATE, WE WILL BE VOTED ONLY BY US AS THE HOLDER
NEVERTHELESS FOLLOW YOUR OF RECORD OF THE SECURITIES.
INSTRUCTIONS, EVEN IF OUR PLEASE DATE, SIGN AND RETURN YOUR
DISCRETIONARY VOTE HAS VOTING INSTRUCTIONS TO US PROMPTLY
ALREADY BEEN GIVEN, PROVIDED IN THE RETURN ENVELOPE PROVIDED.
YOUR INSTRUCTIONS ARE
RECEIVED PRIOR TO THE
MEETING DATE.
VOTING INSTRUCTIONS NUMBER 2
WE WISH TO CALL YOUR ATTENTION SHOULD YOU WISH TO ATTEND THE
TO THE FACT THAT UNDER THE MEETING AND VOTE IN PERSON, PLEASE
RULES OF THE NEW YORK STOCK CHECK THE BOX ON THE FRONT OF THE
EXCHANGE, WE CANNOT VOTE FROM FOR THIS PURPOSE. A LEGAL
YOUR SECURITIES ON ONE OR PROXY COVERING YOUR SECURITIES
MORE OF THE MATTERS TO BE WILL BE ISSUED TO YOU.
ACTED UPON AT THE MEETING
WITHOUT YOUR SPECIFIC
VOTING INSTRUCTIONS.
APPENDIX
TRIMBLE NAVIGATION LIMITED
1993 STOCK OPTION PLAN
(as amended May 11, 2000)
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" shall mean the Committee, if one has been appointed, or the
Board of Directors of the Company, if no Committee is appointed.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(e) "Common Stock" shall mean the Common Stock of the Company.
(f) "Company" shall mean Trimble Navigation Limited, a California
corporation.
(g) "Consultant" shall mean any person who is engaged by the Company or any
Parent or Subsidiary to render consulting services and is compensated for such
consulting services, and any director of the Company whether compensated for
such services or not, provided that the term Consultant shall not include
directors who are not compensated for their services or are paid only a
director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" shall mean the absence
of any interruption or termination of service as an Employee or Consultant.
Continuous Status as an Employee or Consultant shall not be considered
interrupted in the case of sick leave, military leave, or any other leave of
absence approved by the Company or any Parent or Subsidiary of the Company;
provided that such leave is for a period of not more than 90 days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.
(i) "Employee" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a
national market system including without limitation the National Market System
of the National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported, as quoted on such
system or exchange for the last market trading day prior to the time of
determination) as reported in the Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the ommon Stock is quoted on the NASDAQ System (but not on the
National Market System thereof) or regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean between the high and low asked prices for the Common Stock or;
(iii) In the absence of an established market for the Common Stock, the
Fair Market Value thereof shall be determined in good faith by the
Administrator.
(l) "Incentive Stock Option" shall mean an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an Incentive Stock Option.
(n) "Option" shall mean a stock option granted pursuant to the Plan.
(o) "Optioned Stock" shall mean the Common Stock subject to an Option.
(p) "Optionee" shall mean an Employee or Consultant who receives an Option.
(q) "Parent" shall mean a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(r) "Plan" shall mean this 1993 Stock Option Plan.
(s) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(t) "Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 5,925,000 shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. Notwithstanding any other provision of the Plan, shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant or sale under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be dministered by
different Committees with respect to different groups of Employees and
Consultants.
(ii) Section 162(m). To the extent that the Administrator determines it
to be desirable to qualify Options granted hereunder as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the Plan shall
be administered by a Committee of two or more "outside directors" within the
meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunderas exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(b) Powers of the Administrator. Subject to the provisions of the Plan and
in the case of a Committee, the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;
(ii) to select the officers, Consultants and Employees to whom Options
may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be covered
by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not limited
to, the share price and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any Option and/
or the shares of Common Stock relating thereto, based in each case on such
factors as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an Option may be
settled in cash under subsection 9(e) instead of Common Stock;
(viii) to determine whether, to what extent and under what circumstances
Common Stock and other amounts payable with respect to an award under this Plan
shall be deferred either automatically or at the election of the participant
(including providing for and determining the amount, if any, of any deemed
earnings on any deferred amount during any deferral period);
(ix) to reduce the exercise price of any Option to the then current Fair
Market Value if the Fair Market Value of the Common Stock covered by such Option
shall have declined since the date the Option was granted; and
(c) Effect of Administrator's Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all Optionees
and any other holders of any Options.
(d) Grant Limits. The following limitations shall apply to grants of
Options under the Plan:
(i) No employee shall be granted, in any fiscal year of the
Company, Options under the Plan to purchase more than 150,000 Shares, provided
that the Company may make an additional one-time grant of up to 250,000
Shares to newly-hired Employees.
(ii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described
in Section 11.
(iii) If an Option is canceled (other than in connection with a
transaction described in Section 11), the canceled Option shall be counted
against the limits set forth in Section 4(d)(i). For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted only to Employees, Directors,
and Consultants. Incentive Stock Options may be granted only to Employees. An
Employee, Director, or Consultant who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be taken
into account in the order in which they were granted, and the Fair Market Value
of the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with his right or the Company's right to terminate
his employment or consulting relationship at any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company as described in Section 18 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 14 of the
Plan.
7. Term of Option. The term of each Option shall be ten (10) years from the
date of grant thereof or such shorter term as may be provided in the Option
Agreement. However, in the case of an Incentive Stock Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or
Subsidiary, the term of the Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the Option Agreement.
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of such
Incentive Stock Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share exercise
price shall be determined by the Administrator. In the case of a Nonstatutory
Stock Option intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Code, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with a per
Share exercise price of less than 100% of the Fair Market Value per Share on the
date of grant pursuant to a merger or other corporate transaction.
(b) The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by the
Administrator and may consist entirely of (1) cash, (2) check, (3) promissory
note, (4) other Shares which (x) either have been owned by the Optionee for more
than six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) delivery of an irrevocable subscription
agreement for the Shares which irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery of
the subscription agreement, (8) any combination of the foregoing methods of
payment, (9) or such other consideration and method of payment for the issuance
of Shares to the extent permitted under Applicable Laws. In making its
determination as to the type of consideration to accept, the Board shall
consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as an Employee or Consultant. In the event of
termination of an Optionee's Continuous Status as an Employee or Consultant (as
the case may be), such Optionee may, but only within thirty (30) days (or such
other period of time, not exceeding three (3) months in the case of an Incentive
Stock Option or six (6) months in the case of a Nonstatutory Stock Option, as is
determined by the Board) after the date of such termination (but in no event
later than the date of expiration of the term of such Option as set forth in the
Option Agreement), exercise his Option to the extent that he was entitled to
exercise it at the date of such termination. To the extent that he was not
entitled to exercise the Option at the date of such termination, or if he does
not exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 9(b)
above, in the event of termination of an Optionee's Continuous Status as an
Employee or Consultant as a result of his total and permanent disability (as
defined in Section 22(e)(3) of the Code), he may, but only within six (6) months
(or such other period of time not exceeding twelve (12) months as is determined
by the Board) from the date of such termination (but in no event later than the
date of expiration of the term of such Option as set forth in the Option
Agreement), exercise his Option to the extent he was entitled to exercise it at
the date of such termination. To the extent that he was not entitled to exercise
the Option at the date of termination, or if he does not exercise such Option
(which he was entitled to exercise) within the time specified herein, the Option
shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
(i) during the term of the Option who is at the time of his death an
Employee or Consultant of the Company and who shall have been in Continuous
Status as an Employee or Consultant since the date of grant of the Option, the
Option may be exercised, at any time within twelve (12) months following the
date of death (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that would have
accrued had the Optionee continued living and remained in Continuous Status as
an Employee or Consultant twelve (12) months after the date of death, subject to
the limitation set forth in Section 5(b); or
(ii) within thirty (30) days (or such other period of time not exceeding
three (3) months as is determined by the Board) after the termination of
Continuous Status as an Employee or Consultant, the Option may be exercised, at
any time within twelve (12) months following the date of death (but in no event
later than the date of expiration of the term of such Option as set forth in the
Option Agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that had accrued at the date of termination.
(e) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 10.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the Optionee at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised, the Option
will terminate immediately prior to the consummation of such proposed action. In
the event of a merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
In the even the successor corporation does not agree to assume the option or the
substitute and equivalent option, the Board shall, in lieu of such assumption or
substitution, provide for the Optionee to have the right to vest in and exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be vested or exercisable. If the Board makes an
Option fully vested and exercisable in lieu of assumption or substitution in the
event of a merger, the Board shall notify the Optionee that the Option shall be
fully vested and exercisable for a period of fifteen (15) days from the date of
such notice, and the Option will terminate upon the expiration of such period.
If, in such a merger, the Option is assumed or an equivalent option is
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, and if during a one-year period after the effective date
of such merger, the Optionee's Continuous Status as an Employee or Consultant is
terminated for any reason other than the Optionee's voluntary termination of
such relationship, then the
Optionee shall have the right within thirty days thereafter to exercise the
Option as to all of the Optioned Stock, including Shares as to which the Option
would not be otherwise exercisable, effective as of the date of such
termination.
12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined.
13. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Section 422 of the Code (or
any other applicable law or regulation, including the requirements of the NASD
or an established stock exchange), the Company shall obtain shareholder approval
of any Plan amendment in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or termination
of the Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and the Board,
which agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
16. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
18. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws.