SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): October 24, 2001
GARMIN LTD.
(Exact name of registrant as specified in its charter)
Cayman Islands 0-31983 98-0229227
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
P.O. Box 30464SMB
5th Floor, Harbour Place
103 South Church Street
George Town, Grand Cayman, Cayman Islands
(Address of principal executive offices)
Registrant's telephone number, including area code: (345) 946-5203*
P.O. Box 30464SMB
113 South Church Street
George Town, Grand Cayman, Cayman Islands
(Former name or former address, if changed since last report)
Item 5. Other Events
On October 24, 2001, the Board of Directors of Garmin Ltd. (the "Company")
declared a dividend distribution of one Right for each outstanding share of the
Company's Common Shares, $0.01 par value per share (the "Common Shares") of the
Company to the shareholders of record on November 1, 2001 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company
1/1,000ths of a share of Series A Preferred Shares (the "Preferred Shares") or
in some circumstances, Common Shares, other securities, cash or other assets as
summarized below at a price of $95.00 per share (the "Purchase Price"), (both
shares and price are subject to adjustment as described below). The complete
terms and conditions of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and UMB Bank, N.A., dated as of October
25, 2001, as may be amended from time to time. Capitalized terms not defined
herein are defined in the Rights Agreement.
Each share outstanding on the Record Date will receive one Right. Until the
Distribution Date (or the earlier redemption or expiration of the Rights),
Common Shares issued will have the Rights automatically attached.
In the event that a Person or group of affiliated or associated persons (an
"Acquiring Person") becomes the beneficial owner of or announces a tender or
exchange offer for 15 percent or more of the outstanding Common Shares of the
Company, proper provision shall be made so that each holder of a Right, other
than of Rights that are or were beneficially owned by the Acquiring Person
(which will thereafter be null and void), will thereafter have the right to
receive upon exercise that number of shares of the Preferred Shares (or in
certain circumstances, Common Shares or assets or other securities of the
Company) having a market value of two times the exercise price of the Right. In
the event that the Company were acquired in a merger or other business
combination transaction (other than pursuant to a Permitted Offer) or more than
50 percent of the Company's (together with its subsidiaries) assets or earning
power were sold, proper provision shall be made so that each holder of a Right,
other than of Rights that are or were beneficially owned by an Acquiring Person
(which will thereafter be null and void) shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of the highest priority voting securities of the
acquiring company (or certain of its affiliates) that at the time of such
transaction would have a market value of two times the exercise price of the
Right. If the Rights are exercised to acquire the Preferred Shares, then the
Rights will not be exercisable to acquire the securities of any Acquiring
Person.
Until ten calendar days following the earlier to occur of (unless extended
by the Board of Directors and subject to the earlier redemption or expiration of
the Rights): (i) the date of a public announcement that an Acquiring Person
acquired, or obtained the right to acquire, beneficial ownership of 15 percent
or more of the outstanding shares of the Common Shares of the Company, or (ii)
the commencement or announcement of an intention to make a tender offer or
exchange offer that would result in an Acquiring Person beneficially owning 15
percent or more of such outstanding Common Shares of the Company (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Company's Common Shares certificates outstanding as
of the Record Date, by such Common Shares certificate. The certificates for
Common Shares issued after the Record Date, but prior to the Distribution Date
will have a notation referencing the Rights Agreement. The Rights Agreement
provides that, until the Distribution Date, the Rights will be transferred with
and only with the Company's Common Shares, and until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any of the Company's Common Shares certificates outstanding as of the Record
Date, will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Company's Common
Shares as of the close of business on the Distribution Date and such separate
Rights Certificates alone will evidence the Rights.
Permitted Offer is defined in the Rights Agreement as a tender offer that
is for all outstanding Common Shares of the Company at a price and on terms
determined to be adequate prior to the purchase of shares under such tender or
exchange offer, by at least 70% of the members of the Board of Directors of the
Company, taking into account all factors that such directors deem relevant
including, without limitation, prices that could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize maximum
value and otherwise in the best interests of the Company and its shareholders
(other than the Person or any Affiliate or Associate thereof for whose benefit
the offer is being made).
The Purchase Price payable, and the number of shares of Preferred Shares
(or Common Shares, other securities, cash or other assets, as the case may be)
issuable upon exercise of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a shares dividend on, or a subdivision,
combination or reclassification of the Preferred Shares, (ii) upon the grant to
holders of the Preferred Shares of certain rights or warrants to subscribe for
shares of the Preferred Shares or convertible securities at less than the
current market price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends out of earnings or retained earnings
or dividends payable in the Preferred Shares) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1
percent in such Purchase Price. No fractional shares will be issued (other than
fractional shares which are integral multiples of 1/1,000ths of a share of
Preferred Shares) and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Shares on the last Trading Date prior to
the date of exercise.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on October 31, 2011, unless earlier redeemed by the Company as described
below.
At any time prior to 5:00 p.m. New York, New York time on the tenth
calendar day after the first date after the public announcement that an
Acquiring Person has acquired beneficial ownership of 15 percent or more of the
outstanding shares of the Common Shares of the Company (the "Share Acquisition
Date"), the Company may redeem the Rights in whole, but not in part, at a price
of $0.02 per Right (the "Redemption Price"). Following the Share Acquisition
Date, but prior to an event listed in Section 13(a) of the Rights Agreement
(i.e. a merger, consolidation or sale of more than 50 percent of the assets or
earnings power of the Company and its subsidiaries), the Company may redeem the
Rights in connection with any event specified in Section 13(a) in which all
shareholders are treated alike and which does not include the Acquiring Person
or its Affiliates or Associates. In addition, the Company's right of redemption
may be reinstated following an inadvertent trigger of the Rights (as determined
by the Board) if an Acquiring Person reduces its beneficial ownership to 10
percent or less of the outstanding Common Shares of the Company in a transaction
or series of transactions not involving the Company. Immediately upon the action
of the Board of Directors of the Company electing to redeem the Rights, the
Company shall make announcement thereof, and upon such election, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders of the Company, shareholders may, depending on the
circumstances, recognize taxable income in the event that the Rights become
exercisable for the Preferred Shares (or other securities, as the case may be)
of the Company.
Prior to the Distribution Date the Company may amend or supplement any
provision of the Rights Agreement without the consent of the holders of the
Rights. Following the Distribution Date, the Company may amend the provisions of
the Rights Agreement in order to cure any ambiguity, to correct any defect or
inconsistency, to make changes deemed necessary or desirable so long as such
changes do not adversely affect the interests of the holders of the Rights
(excluding the interests of any Acquiring Person and its affiliates and
associates). In either case, however, the Company may not amend or supplement
the Rights Agreement to change or supplement the Redemption Price, Final
Expiration Date, the Purchase Price or the number of 1/1,000ths of a share of
Preferred Shares for which a Right is exercisable.
The Rights may have the effect of impeding a change in control of the
Company without the prior consent of the Company's Board of Directors, and the
Rights could cause substantial dilution to a person that attempts to acquire the
Company without conditioning the offer on redemption of the Rights by the
Company's Board of Directors or on the acquisition by such person of a
substantial number of Rights.
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, a copy of
which is attached as Exhibit 4 to this Form 8-K and which is hereby incorporated
by reference.
Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits. The following exhibit is filed herewith.
Exhibit No. Description
4 Rights Agreement dated as of
October 25, 2001 between
Garmin Ltd.and UMB Bank N.A.,
as Rights Agent, including
Exhibits A, B and C thereto.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GARMIN LTD.
Date: October 25, 2001 /s/ Min H. Kao
---------------------------------------------
Min H. Kao
Co-Chairman and Co-Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
4 Rights Agreement dated as of
October 25, 2001 between
Garmin Ltd.and UMB Bank N.A.,
as Rights Agent, including
Exhibits A, B and C thereto.
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* The executive offices of the Registrant's principal United States subsidiary
are located at 1200 East 151st Street, Olathe, Kansas 66062. The telephone
number there is (913) 397-8200.