SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[Amendment No. _____]
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 Materials under ss.240.14a-12
GARMIN LTD.
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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 the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and O-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| Fee paid previously by written preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule O-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_____________________________________
2) Form Schedule or Registration Statement No.:________________
3) Filing Party:_______________________________________________
4) Date Filed:_________________________________________________
[GARMIN LOGO]
GARMIN LTD.
NOTICE AND PROXY STATEMENT
for
The Annual General Meeting of Shareholders
to be held
June 7, 2002
YOUR VOTE IS IMPORTANT!
Please mark, date and sign the enclosed proxy card
and promptly return it in the enclosed envelope.
Mailing of this Notice and Proxy Statement and the accompanying enclosed
Proxy commenced on or about May 3, 2002.
[GARMIN Logo]
Garmin Ltd.
P.O. Box 30464 SMB
5th Floor, Harbour Place
103 South Church Street
George Town, Grand Cayman
Cayman Islands
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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 7, 2002
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You are hereby notified of and cordially invited to attend the Annual
General Meeting (the "Annual Meeting") of Shareholders of Garmin Ltd., a Cayman
Islands company ("Garmin" or the "Company") to be held at the Ritz-Charles
Conference Center, 9000 West 137th Street, Overland Park, Kansas 66221, USA, at
10:00 a.m. Central Time, on Friday, June 7, 2002, to consider and vote upon the
following matters:
1. Election of two directors;
2. Appointment of Ernst & Young LLP as independent auditors for the
2002 fiscal year at remuneration to be approved by the Board of
Directors; and
3. Such other matters as may properly be brought before the Annual
Meeting or any adjournment thereof.
Information concerning the matters to be acted upon at the Annual Meeting
is contained in the accompanying Proxy Statement.
In accordance with the Company's Articles of Association, the Company's
audited consolidated financial statements for the fiscal year ending December
29, 2001 will be presented at the Annual Meeting. There is no requirement under
the Company's Articles of Association or Cayman Islands law that such financial
statements be approved by shareholders, and no such approval will be sought at
the Annual Meeting.
Shareholders of record at the close of business on April 18, 2002 are
entitled to notice of, and to vote at, this meeting and any adjournments
thereof. A shareholder entitled to attend and to vote at the Annual Meeting is
entitled to appoint a proxy to attend and, on a poll, vote instead of him or
her.
It is important that your shares be represented at the meeting. Please use
the enclosed Proxy Card to direct the vote of your shares, regardless of whether
you plan to attend the Annual Meeting. Please date the Proxy Card, sign it and
promptly return it in the enclosed envelope, which requires no postage if mailed
in the United States. You may also appoint another person (who need not be a
shareholder) as your proxy to attend and vote at the Annual Meeting.
If you own shares registered in the name of a broker, you should receive a
card from that broker permitting you to direct the broker to vote those shares.
Please promptly complete the card and return it to the broker.
By Order of the Board of Directors
/s/ Andrew R. Etkind
May 3, 2002 Andrew R. Etkind
General Counsel and Secretary
Garmin Ltd.
P.O. Box 30464 SMB
5th Floor, Harbour Place
103 South Church Street
George Town, Grand Cayman
Cayman Islands
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PROXY STATEMENT
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TABLE OF CONTENTS
Page
Proxy Statement........................................................ 2
Information Concerning Solicitation and Voting......................... 2
Stock Ownership of Certain Beneficial Owners and Management............ 5
Proposal 1 - Election of Two Directors................................. 7
Proposal 2 - Appointment of Ernst & Young LLP as Independent Auditors for
the 2002 Fiscal Year at Remuneration to be Approved by the Board of
Directors.............................................................. 8
The Board of Directors................................................. 8
Audit Matters.......................................................... 11
Executive Compensation Matters......................................... 12
Shareholder Proposals.................................................. 18
Section 16(a) Beneficial Ownership Reporting Compliance................ 19
Householding of Annual Meeting Materials............................... 19
Other Matters.......................................................... 20
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Garmin
Ltd., a Cayman Islands company, ("Garmin" or the "Company" ) for use at the
Annual General Meeting of Shareholders (the "Annual Meeting") to be held at
10:00 a.m., Central Time, on Friday, June 7, 2002, at the Ritz-Charles
Conference Center, 9000 West 137th Street, Overland Park, Kansas 66221, 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. This Proxy
Statement and the accompanying proxy card are first being mailed to shareholders
on or about May 3, 2002.
INFORMATION CONCERNING SOLICITATION AND VOTING
Proposals
At the Annual Meeting, the Garmin Board intends to present (a) the election
of two directors; and (b) the appointment of Ernst & Young LLP as independent
auditors for the fiscal year 2002 at remuneration to be approved by the Garmin
Board. In accordance with the Company's Articles of Association, the Company's
audited consolidated financial statements for the fiscal year ending December
29, 2001 will be presented at the Annual Meeting. There is no requirement under
the Company's Articles of Association or Cayman Islands law that such financial
statements be approved by shareholders, and no such approval will be sought at
the Annual Meeting. The Garmin Board knows of no other matters that will be
presented or voted on at the Annual Meeting. Shareholders do not have any
dissenters' rights of appraisal in connection with either of the proposals.
Record Date and Shares Outstanding
Shareholders of record at the close of business on April 18, 2002 (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 107,787,618 common
shares, par value $0.01 per share ("Common Shares").
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 fully executed proxy bearing a later date or by
attending the meeting and voting in person.
Solicitation of Proxies
The cost of soliciting proxies will be borne by the Company. In addition to
soliciting shareholders by mail and through its regular employees not
specifically engaged or compensated for that purpose, the Company will request
banks and brokers, and other custodians, nominees and fiduciaries to solicit
their customers who have shares of the Company registered in the names of such
persons and will reimburse them for their reasonable, out-of-pocket costs. The
Company may use the services of its officers, directors and others to solicit
proxies, personally or by telephone, facsimile or electronic mail, without
additional compensation.
Voting
Each shareholder is entitled to one vote on the proposals presented in this
Proxy Statement for each share held. There is no cumulative voting in the
election of directors. The required quorum for the transaction of business at
the Annual Meeting is a majority of the Common Shares issued and outstanding on
the Record Date. The affirmative vote of a majority of the Common Shares
represented and voting at the meeting in person or by proxy is required for the
election of directors and the appointment of the independent auditors.
Absentions and Broker Non-Votes
Pursuant to Cayman Islands law, (i) shares represented at the meeting whose
votes are withheld on any matter, (ii) shares which are represented by "broker
non-votes" (i.e., shares held by brokers or nominees which are represented at
the meeting but with respect to which the broker or nominee is not empowered to
vote on a particular proposal) and (iii) shares which abstain from voting on any
matter are not included in the determination of the shares voting on such matter
but are counted for quorum purposes.
How Shareholders Vote
Shareholders holding Common Shares in their own names on the Record Date
("Record Holders"), persons ("Plan Participants") holding Common Shares on the
Record Date through the Garmin International, Inc. Savings and Profit Sharing
Plan (the "401(k) Plan") and investors ("Broker Customers") holding Common
Shares on the Record Date through a broker or other nominee, may vote such
shares as follows:
Common Shares of Record
Record Holders may only vote their shares if they or their proxies are
present at the Annual Meeting. Record Holders may appoint as their proxy the
Proxy Committee, which consists of officers of the Company whose names are
listed on the Proxy Card. The Proxy Committee will vote all Common Shares for
which it is the proxy as specified by the shareholders on the Proxy Cards. A
Record Holder desiring to name as proxy someone other than the Proxy Committee
may do so by crossing out the names of the Proxy Committee members on the Proxy
Card and inserting the full name of such other person. In that case, the Record
Holder must sign the Proxy Card and deliver it to the person named, and the
person named must be present and vote at the Annual Meeting.
If a properly executed and unrevoked Proxy Card does not specify how the
shares represented thereby are to be voted, the Proxy Committee intends to vote
such shares for the election as directors of the persons nominated by the
Company's Board of Directors ("Board Nominees"), for approval of the appointment
of Ernst & Young LLP as independent auditors at remuneration to be approved by
the Board of Directors, and in accordance with the discretion of the Proxy
Committee upon such other matters as may properly come before the Annual
Meeting.
Common Shares Held Under the 401(k) Plan
Plan Participants may on the voting instructions card instruct the trustees
of the 401(k) Plan how to vote the shares allocated to their respective
participant accounts. Common Shares for which inadequate or no voting
instructions are received generally will be voted by the trustee in the same
proportion as those shares for which instructions were actually received from
Plan Participants. The trustee of the plan may vote shares allocated to the
accounts of the participants either in person or through a proxy.
Common Shares Held Through a Broker or Other Nominee
Each broker or nominee must solicit from the Broker Customers directions on
how to vote the Company's shares, and the broker or nominee must then vote such
shares in accordance with such directions. Brokers or nominees are to forward
soliciting materials to the Broker Customers, at the reasonable expense of the
Company if the broker or nominee requests reimbursement. Most broker-dealers are
members of the National Association of Securities Dealers, which generally does
not allow them to vote shares held in street name unless they are permitted to
do so under the rules of a national securities exchange to which they belong.
Under the rules of the New York Stock Exchange ("NYSE"), NYSE member brokers who
do not receive instructions from beneficial owners are entitled to vote on the
proposals presented in this Proxy Statement. If you do not vote your shares held
in street name and your broker does not vote them, those shares will have no
effect on the outcome of any matter voted on at the Annual Meeting.
Revoking Proxy Authorizations or Instructions
Until the polls close (or in the case of Plan Participants, until the
trustee of the 401(k) Plan votes) votes of Record Holders and voting
instructions of Plan Participants may be recast with a later-dated, properly
executed and delivered Proxy Card or, in the case of Plan Participants, a voting
instruction card. Otherwise, shareholders may not revoke a vote, even by
attending the Annual Meeting, unless, (a) in the case of a Record Holder, a
written revocation is delivered to the Corporate Secretary of the Company at any
time before the Chairman of the Annual Meeting closes the polls; (b) in the case
of a Plan Participant, the revocation procedures of the trustee of the 401(k)
Plan are followed; or (c) in the case of a Broker Customer, the revocation
procedures of the broker or nominee are followed.
Attendance and Voting in Person at the Annual Meeting
Attendance at the Annual Meeting is limited to Record Holders or their
properly appointed proxies, beneficial owners of Common Shares having evidence
of such ownership, and guests of the Company. Plan Participants and Broker
Customers, absent special direction to the Company from the respective 401(k)
Plan trustee, broker or nominee, may only vote by instructing the trustee,
broker or nominee and may not cast a ballot at the Annual Meeting. Record
Holders who have not appointed a proxy, or who have revoked the appointment of a
proxy, may vote by casting a ballot at the Annual Meeting.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the Record Date, the Company had outstanding 107,787,618 Common
Shares. The following table sets forth information as of the Record Date
concerning the beneficial ownership of Common Shares by: (i) beneficial owners
of Common Shares who have publicly filed a report acknowledging ownership of
more than 5% of the number of outstanding Common Shares; (ii) the directors and
certain executive officers of the Company; and (iii) all of the Company's
executive officers and directors as a group. Beneficial ownership generally
means either the sole or shared power to vote or dispose of the shares. Except
as otherwise noted, to the Company's knowledge the holders have sole voting and
dispositive power. No officer or director of the Company owns any equity
securities of any subsidiary of the Company.
Common Shares(1) Percent of
------------- Class(2)
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Name and Address
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Gene M. Betts(3) 770(4) *
Director
Gary L. Burrell(5) 17,392,590(6) 16.1%
Director, Co-Chairman and Co-CEO
Donald H. Eller, Ph.D.(7) 16,592,130(8) 15.4%
Director
Andrew R. Etkind(9) 8,445(10) *
General Counsel and Corporate Secretary
Min H. Kao, Ph.D.(11) 7,891,950(12) 7.3%
Director, Co-Chairman and Co-CEO
Gary Kelley(13) 8,663(14) *
Director of Marketing,
Garmin International, Inc.
Kevin Rauckman(15) 6,767(16) *
Chief Financial Officer and Treasurer
Thomas A. McDonnell(17) 20,770(18) *
Director
Ruey-Jeng Kao(19) 8,922,481 8.3%
Director
Jia-Fang Tsai(20) 7,337,440(21) 6.8%
Shareholder
All Executive Officers and Directors as
a Group (9 persons) 50,844,566(22) 47.2%
* Less than 1% of the outstanding Common Shares
(1) Beneficial ownership is determined in accordance with the rules of the SEC.
In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares subject to options held by that
person that are currently exercisable at the Record Date or within 60 days
of such date are deemed outstanding. The holders may disclaim beneficial
ownership of any such shares that are owned by or with family members,
trusts or other entities. Except as indicated in the footnotes to this
table and pursuant to applicable community property laws, each shareholder
named in the table has sole voting power and investment power with respect
to the shares set forth opposite such shareholder's name.
(2) The percentage is based upon the number of shares outstanding as of the
Record Date.
(3) Mr. Betts' address is c/o Sprint Corporation, 6200 Sprint Parkway, Mail
Stop KSOPMF0310-3A353, Overland Park, Kansas 66251.
(4) Mr. Betts' beneficial ownership includes 770 shares that may be acquired
through options that are currently exercisable or will become exercisable
within 60 days of the Record Date.
(5) Mr. Burrell's address is c/o Garmin International, Inc., 1200 East 151st
Street, Olathe, Kansas 66062.
(6) The amount of Common Shares reported includes 508,425 Common Shares held by
Judith M. Burrell, Mr. Burrell's wife, over which Mr. Burrell does not have
any voting or dispositive power. Mr. Burrell disclaims beneficial ownership
of these shares owned by his wife. The amount of Common Shares reported
excludes 2,491,707 Common Shares held by the Gary L. Burrell 2000 Grantor
Retained Annuity Trust and 2,491,707 Common Shares held by the Judith M.
Burrell 2000 Grantor Retained Annuity Trust. Mr. Burrell does not have any
voting power or dispositive power over such shares and disclaims beneficial
ownership.
(7) Dr. Eller's address is 3111 Bel Air Drive, #23A, Las Vegas, Nevada 89109.
(8) The number of Common Shares over which Dr. Eller has sole voting and
dispositive power includes 7,494,088 Common Shares owned by the Min-Hwan
Kao 2000 Grantor Retained Annuity Trust and 7,494,088 Common Shares owned
by the Yu Fan C. Kao 2000 Grantor Retained Annuity Trust. Dr. Eller serves
as sole trustee of each of these trusts. Dr. Eller's beneficial ownership
includes 200,000 shares subject to a variable prepaid forward agreement and
770 shares that may be acquired through options that are currently
exercisable or will become exercisable within 60 days of the Record Date.
(9) Mr. Etkind's address is c/o Garmin International, Inc., 1200 East 151st
Street, Olathe, Kansas 66062.
(10) Mr. Etkind's beneficial ownership includes 3,500 shares that may be
acquired through options that are currently exercisable or will become
exercisable within 60 days of the Record Date.
(11) Dr. Kao's address is c/o Garmin International, Inc., 1200 East 151st
Street, Olathe, Kansas 66062.
(12) Of the 7,891,950 Common Shares, (i) 5,445,370 Common Shares are held by the
Min-Hwan Kao Revocable Trust 9/28/95, over which Dr. Kao has sole voting
and dispositive power, (ii) 948,928 Common Shares are held by Dr. Kao's
children over which he does not have any voting or dispositive power, (iii)
1,496,252 Common Shares are held by the Yu-Fan C. Kao Revocable Trust
9/28/95, over which Dr. Kao does not have any voting or dispositive power,
and (iv) 700 shares are held by his wife, over which Dr. Kao does not have
any voting or dispositive power. Dr. Kao disclaims beneficial ownership of
those shares owned by the Yu-Fan C. Kao Revocable Trust 9/28/95 and by his
wife and children. The amount of Common Shares reported excludes 7,494,088
Common Shares held by the Min-Hwan Kao 2000 Grantor Retained Annuity Trust
(the "Min Kao GRAT") and 7,494,088 Common Shares held by the Yu-Fan C. Kao
2000 Grantor Retained Annuity Trust (the "Yu-Fan Kao GRAT") over which Dr.
Kao does not have any voting power or dispositive power. Yu Fan C. Kao is
the wife of Dr. Kao. Dr. Kao disclaims beneficial ownership of such shares.
Dr. Eller is the trustee of the Min Kao GRAT and the Yu-Fan Kao GRAT.
(13) Mr. Kelley's address is c/o Garmin International, Inc., 1200 East 151st
Street, Olathe, Kansas 66062.
(14) Mr. Kelley's beneficial ownership includes 3,500 shares that may be
acquired through options that are currently exercisable or will become
exercisable within 60 days of the Record Date.
(15) Mr. Rauckman's address is c/o Garmin International, Inc., 1200 East 151st
Street, Olathe, Kansas 66062.
(16) Mr. Rauckman's beneficial ownership includes 2,500 shares that may be
acquired through options that are currently exercisable or will become
exercisable within 60 days of the Record Date.
(17) Mr. McDonnell's address is c/o DST Systems, Inc., 333 West 11th Street,
Kansas City, Missouri 64105.
(18) Mr. McDonnell's beneficial ownership includes 770 shares that may be
acquired through options that are currently exercisable or will become
exercisable within 60 days of the Record Date.
(19) Mr. Kao's address is Fortune Land Law Offices, 8th Floor, 132, Hsinyi Road,
Section 3, Taipei, Taiwan.
(20) Ms. Tsai's address is 10FL, No. 48, Lane 177, Sec. 1, Duenhua S. Road,
Taipei, Taiwan.
(21) Of such 7,337,440 Common Shares, (i) Ms. Tsai is the direct beneficial
owner of 3,528,178 Common Shares and is (ii) the indirect beneficial owner
of 3,809,262 Common Shares that are directly owned by her husband, over
which shares Ms. Tsai does not have any voting or dispositive power. Ms.
Tsai disclaims beneficial ownership of those shares owned by her husband.
The number of shares is based upon information reported in a Schedule 13G,
filed by Ms. Tsai that was dated February 8, 2001.
(22) The number includes 11,810 shares that may be acquired through options that
are currently exercisable or will become exercisable within 60 days of the
Record Date.
Presentation of Financial Statements
In accordance with the Company's Articles of Association, the Company's
audited consolidated financial statements for the fiscal year ending December
29, 2001 will be presented at the Annual Meeting. There is no requirement under
the Company's Articles of Association or Cayman Islands law that such financial
statements be approved by shareholders, and no such approval will be sought at
the Annual Meeting.
PROPOSAL 1 - ELECTION OF THREE DIRECTORS
The Company's Articles of Association classify the Company's Board of
Directors into three classes and stagger the three year terms of each class to
expire in consecutive years.
The Company's nominees for election at this Annual Meeting are Donald H.
Eller and Ruey-Jeng Kao. Dr. Eller and Mr. Kao are being nominated as Class II
directors to hold office for a three-year term expiring in 2005.
Dr. Eller and Mr. Kao are currently directors of the Company. Dr. Eller was
elected at the Annual Meeting held in June 2001 for a term expiring on the date
of this Annual Meeting and previously served as a director from March 2001 to
June 2001 by appointment of the Company's Board. Mr. Kao was appointed by the
subscribers to the Company's Memorandum of Association in August 2000 for a term
expiring on the date of this Annual Meeting. Dr. Eller and Mr. Kao have
indicated that they are willing and able to continue serving as directors if
elected and have consented to being named as nominees in this Proxy Statement.
If any of these nominees should for any reason become unavailable for election,
the Proxy Committee will vote for such other nominee as may be proposed by the
Company's Board of Directors.
Donald H. Eller, age 59, has been a director of the Company since March
2001. Dr. Eller is a private investor. From September 1979 to November 1982 he
served as the Manager of Navigation System Design for a division of Magnavox
Corporation. From January 1984 to December 1996 he served as a consultant on
Global Positioning Systems and other navigation technology to various U.S.
military agencies and U.S. and foreign corporations. Dr. Eller holds B.S., M.S.
and Ph.D. degrees in Electrical Engineering from the University of Texas.
Ruey-Jeng Kao, age 65, has been a director of the Company since August
2000. He has been a supervisor of the Company's Taiwan subsidiary, Garmin
Corporation, since January 1990. Elected by shareholders, a supervisor serves as
an ex officio member of the Board of Directors to protect the interests of all
shareholders. Mr. Kao has been a partner in Fortune Land Law Offices, Taipei,
Taiwan, since January 2000. Prior to founding Fortune Land Law Offices, Mr. Kao
had his own law practice in Taipei, Taiwan from 1967 to 1999. He was Chairman of
the Taipei Bar Association in 1996 and 1997. Mr. Kao holds LLB and LLM degrees
from National Taiwan University. Mr. Kao is the brother of Min H. Kao.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THESE NOMINEES.
PROPOSAL 2 - APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR THE 2002 FISCAL YEAR AT REMUNERATION
TO BE APPROVED BY THE BOARD OF DIRECTORS
Ernst & Young LLP were the Company's independent auditors for the 2000 and
2001 fiscal years and have served as the independent auditors for Garmin
Corporation since 1990 and for Garmin International, Inc. since 1991. The Board
of Directors has nominated Ernst & Young LLP for appointment by the shareholders
as the Company's independent auditors for the 2002 fiscal year. A representative
of Ernst & Young LLP is expected to be present at the Annual Meeting to respond
to shareholders' questions and will have the opportunity to make a statement if
he or she so desires.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE 2002 FISCAL
YEAR AT REMUNERATION TO BE APPROVED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS
Information about present directors
In addition to the Board nominees who are described under Proposal 1, the
following individuals are also on the Company's Board, for a term ending on the
date of the Annual Meeting of shareholders in the year indicated.
Directors Serving Until the Annual Meeting in 2003
Min H. Kao, age 53, has served as Co-Chairman and Co-Chief Executive
Officer of the Company since August 2000. He has been President of Garmin
Corporation since January 1999 and Chairman and a director since January 1990.
Dr. Kao has been President of Garmin International, Inc. since March 2002 and a
director of Garmin International, Inc. since August 1990. He served as Vice
President of Garmin International, Inc. from April 1991 to March 2002. Dr. Kao
has been President of Garmin USA, Inc. since March 2002 and a director of Garmin
USA, Inc. since December 2001. He served as Vice President of Garmin USA, Inc.
from December 2001 to March 2002. He has been a director of Garmin (Europe) Ltd.
since 1992. Dr. Kao was a director of Garmin Foreign Sales Corporation from May
1998 to December 2001 and Vice President of Garmin Foreign Sales Corporation
from July 1998 to December 2001. Garmin Corporation, Garmin International, Inc.,
Garmin USA, Inc. and Garmin (Europe) Ltd. are subsidiaries of the Company and
Garmin Foreign Sales Corporation was a subsidiary of the Company until its
dissolution in December 2001. Dr. Kao holds Ph.D. and MS degrees in Electrical
Engineering from the University of Tennessee and a BS degree in Electrical
Engineering from National Taiwan University. Dr. Min Kao is the brother of
Ruey-Jeng Kao.
Gary L. Burrell, age 64, has served as Co-Chairman and Co-Chief Executive
Officer of the Company since August 2000. He has been a director of Garmin
Corporation since January 1990. He served as President of Garmin Corporation
from January 1990 to December 1998. Mr. Burrell has also been Chairman of Garmin
International, Inc. since March 2002, and a director of Garmin International,
Inc. since August 1990. He served as President of Garmin International, Inc.
from August 1990 to March 2002. Mr. Burrell has been Chairman of Garmin USA,
Inc. since March 2002 and a director of Garmin USA, Inc. since December 2001. He
served as President of Garmin USA, Inc. from December 2001 to March 2002. Mr.
Burrell has been a director and Chairman of Garmin (Europe) Ltd. since 1992. Mr.
Burrell was a director
of Garmin Foreign Sales Corporation from May 1998 to December 2001 and President
of Garmin Foreign Sales Corporation from July 1998 to December 2001. Garmin
Corporation, Garmin International, Inc., Garmin USA, Inc. and Garmin (Europe)
Ltd. are subsidiaries of the Company and Garmin Foreign Sales Corporation was a
subsidiary of the Company until its dissolution in December 2001. Mr. Burrell
holds a BS degree in Electrical Engineering from Wichita State University and a
MS degree in Electrical Engineering from Rensselaer Polytechnic Institute.
Directors Serving Until the Annual Meeting in 2004
Gene M. Betts, age 49, has been a director of the Company since March 2001.
Mr. Betts has been a Senior Vice President of Sprint Corporation ("Sprint")
since 1990 and has been Treasurer of Sprint since 1998. In these positions his
responsibilities include capital markets and treasury operations, mergers and
acquisitions, taxes, corporate financial planning and budgeting, pension and
savings trust management, and risk management and loss prevention for Sprint and
all of its subsidiaries. Mr. Betts is a Certified Public Accountant. Prior to
joining Sprint he was a partner in Arthur Young & Co. (now Ernst & Young). Mr.
Betts is a director of seven registered investment companies in the Buffalo
Funds complex.
Thomas A. McDonnell, age 56, has been a director of the Company since March
2001. Mr. McDonnell has been President of DST Systems, Inc. ("DST") since
January 1973 (except for a 30-month period from October 1984 to April 1987),
Chief Executive Officer of DST since 1984 and a director of DST since 1971. He
is also a director of BHA Group, Inc., Blue Valley Ban Corp., Commerce
Bancshares, Inc., Computer Sciences Corporation and Euronet Worldwide, Inc.
Board of Directors Meetings and Standing Committee Meetings
Meetings
The Board of Directors held seven meetings and took action by unanimous
written consent five times during the fiscal year ended December 29, 2001. The
Board of Directors has established two standing committees, the Audit Committee
and the Compensation Committee. During the 2001 fiscal year, the Audit Committee
held three meetings and the Compensation Committee held five meetings. No
director attended fewer than 75% of the meetings of the Board of Directors and
of the meetings of the committees on which such director served. As permitted by
Cayman Islands law and the Company's Articles of Association, Mr. Ruey-Jeng Kao
attended meetings of the Board of Directors by appointing Dr. Min Kao as his
proxy.
Audit Committee
Messrs. McDonnell (Chairman), Betts and Eller serve as the members of the
Audit Committee. The Board of Directors has adopted a written charter for the
Audit Committee. The primary responsibilities of the Audit Committee are to
oversee the Company's financial reporting processes on behalf of the Board, to
review the audited financial statements of the Company and to recommend the
appointment of, and approve the fee arrangement with, the Company's independent
auditors. The members of the Audit Committee are independent (as independence is
defined in Rule 4200(a)(14) of the National Association of Securities Dealers'
listing standards.)
Compensation Committee
Messrs. Betts (Chairman), Eller and McDonnell are the members of the
Compensation Committee. The primary responsibilities of the Compensation
Committee are to make determinations with respect to compensation arrangements
for the Company's executive officers and to administer the Company's benefit
plans, including the Company's 2000 Equity Incentive Plan and the Company's
Employee Stock Purchase Plan.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee is, or has ever been, an
officer or employee of the Company or any of its subsidiaries. During 2001, the
Company had no compensation committee interlocks.
Compensation of Directors
Directors who are officers or employees of Garmin or its subsidiaries do
not receive any fees or other compensation for service on the Board or its
committees. Except as set forth below, no fees were paid during 2001 to any
director or Named Executive Officer (as defined herein) of Garmin for service on
any board of directors of any subsidiary of Garmin.
The Outside Directors (those directors who are not officers of, and not
otherwise employed by Garmin or its subsidiaries) are paid an annual retainer of
$10,000. In addition, the Outside Directors are paid $1,000 for each Board
meeting attended in person or $350 for attending a Board meeting by
teleconference. For each committee meeting convened separately from a Board
meeting, the Outside Directors are also paid $1,000 for each committee meeting
attended in person or $350 for attending by teleconference. The Chairman of the
Audit Committee receives an additional annual fee of $3,000, and the Chairman of
the Compensation Committee receives an additional annual fee of $1,500. The
Outside Directors may also be granted awards, including among others, options to
buy Garmin Common Shares, pursuant to the 2000 Non-Employee Directors' Option
Plan, as determined by the Committee (as defined in such plan).
Each year at the Annual Meeting, each Outside Director will automatically
be granted an option for a number of shares equal to four times the annual
retainer divided by the fair market value of a share on the grant date. If an
Outside Director first joins the Board at a time other than the Annual Meeting,
he or she will receive a pro-rata grant for that year. The per-share option
price will be 100% of the fair market value of a share on the grant date. The
option will vest in equal installments over three years, subject to acceleration
in the event the Outside Director terminates his or her directorship on account
of death, disability or an involuntary termination within one year after a
change of control of Garmin. These options will have a term of 10 years, subject
to earlier termination on certain terminations of the director's service on the
Board.
In 2001 each Outside Director received an automatic grant of options to
purchase 2,313 of the Company's Common Shares.
Under Taiwan banking practice, the directors of a company are generally
required to personally guarantee the company's loans and mortgages. During
fiscal year 2001, Dr. Kao and Mr. Burrell, as directors of Garmin Corporation,
each received compensation from Garmin Corporation in the amount of $49,556 for
their personal guarantees of Garmin Corporation's obligations. As a supervisor
of Garmin Corporation, Mr. Ruey-Jeng Kao was also required to personally
guarantee Garmin Corporation's loans and mortgages and during fiscal year 2001
received compensation from Garmin Corporation of $49,556 for such personal
guarantee.
AUDIT MATTERS
Report of Audit Committee
The Audit Committee reviewed and discussed the Company's audited financial
statements for the fiscal year ended December 29, 2001 with management and with
Ernst & Young, LLP, the Company's independent auditors. The Audit Committee
received management's representation and the opinion of the independent auditors
that the Company's audited financial statements were prepared in accordance with
generally accepted accounting principles. The Audit Committee also discussed
with the Company's independent auditors during the 2001 fiscal year the matters
required to be discussed by Statement of Auditing Standards No. 61
(Communication with Audit Committees), as amended.
The Audit Committee received from Ernst & Young, LLP the written
disclosures and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees) and discussed with Ernst &
Young, LLP the independence of their firm.
Based upon such review and discussions, the Audit Committee recommended to
the Company's Board of Directors, and the Board of Directors approved, that the
audited financial statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended December 29, 2001, for filing with the Securities
and Exchange Commission.
Audit Committee
Thomas A. McDonnell, Chairman
Gene M. Betts
Donald H. Eller
Principal Accounting Firm Fees
The following table sets forth the aggregate fees billed to Garmin for the
fiscal year ended December 29, 2001 by Garmin's principal accounting firm, Ernst
& Young LLP:
Audit Fees.......................................................$283,927
Financial Information Systems Design and Implementation Fees..... -0-
All Other Fees...................................................$701,383(a)(b)
--------
$985,310
(a) Comprises fees for tax consulting, consulting related to acquisitions, and
consulting with respect to the Company's initial public offering.
(b) The Audit Committee has considered whether the provision of these services
is compatible with maintaining the independence of Ernst & Young LLP.
EXECUTIVE COMPENSATION MATTERS
Compensation Committee Report on Executive Compensation
Compensation Principles
The Compensation Committee's executive compensation philosophy is based on
the belief that fair, reasonable and competitive compensation is essential to
attract, motivate and retain highly qualified and industrious executives. In
executing its compensation policy, the Compensation Committee seeks to relate
compensation with the Company's financial performance and business objectives
and reward high levels of individual performance while adhering to the
philosophy established by the Company's founders which is to foster a team
environment where executive compensation is fair and equitable but not
disproportionate relative to that of other employees.
Executive Compensation Program
The compensation of the Company's executive officers consists of three
principal elements: base salary, cash bonus and awards under the 2000 Equity
Incentive Plan. In determining the annual base salaries for the Company's
executives for 2001, the Compensation Committee reviewed the contribution of
each executive along with that of the Company's non-executive key employees. In
determining the annual base salaries, cash bonuses and stock option awards for
executives other than Dr. Kao and Mr. Burrell, the Compensation Committee
considered the recommendations of Dr. Kao and Mr. Burrell and each executive's
position, skills, responsibilities, achievements and tenure with the Company.
Cash bonuses are tied to the Company's achievement of its goals and
objectives and the contribution of the executive to such achievements.
Executive officer compensation also includes long-term incentives afforded
by options to purchase shares of the Company's Common Shares pursuant to the
2000 Equity Incentive Plan. The purposes of the Company's 2000 Equity Incentive
Plan are to strengthen key employees' commitment to the success of the Company,
to stimulate employee efforts on behalf of the Company, and to help the Company
attract new employees with skills which are in high demand and retain existing
key employees. Although the plan also permits the award of restricted shares,
bonus shares, deferred shares, stock appreciation rights, performance units and
performance shares, no such awards have been made under the plan. Awards of
stock options during the year under the Company's 2000 Equity Incentive Plan are
made at the then current fair market value of the Company's Common Shares as
quoted on the Nasdaq National Market. Making the awards at the then current fair
market value ensures that the options only become valuable upon the continued
appreciation of the Company's share price. Messrs. Etkind, Kelley and Rauckman
received stock option grants in 2001 based upon their contribution to the
Company's long-term growth and profitability.
Co-Chief Executive Officers' Compensation
A base salary of $181,571 for each of Dr. Kao and Mr. Burrell was
determined in the same manner as the salaries of the Company's other executive
officers. No options or cash bonus were awarded to Dr. Kao or Mr. Burrell since
each has a significant ownership interest in the Company and, therefore, already
has a motivation to maximize shareholder value.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limits a public company's
deduction for federal income tax purposes of compensation expense in excess of
$1 million paid to the executive officers named in the company's summary
compensation table. Performance-based compensation which meets the requirements
of Section 162(m) is excluded from the compensation subject to the $1 million
deduction limitation. The Company believes it has taken the steps required to
exclude from calculation of the $1 million compensation expense limitation
any performance-based awards granted under the 2000 Equity Incentive Plan to
the executive officers listed in the Summary Compensation Table of this Proxy
Statement.
Compensation Committee
Gene M. Betts (Chairman)
Donald H. Eller
Thomas A. McDonnell
Stock Performance Graph
PERFORMANCE GRAPH
The following graph illustrates the cumulative total shareholder return
(rounded to the nearest whole dollar) of Garmin Common Shares during the period
beginning December 8, 2000 (the date of Garmin's initial public offering)
through December 31, 2001, and compares it to the cumulative total return on the
Nasdaq Composite Total Return Index (U.S.) and the Nasdaq Non-Financial Stocks
Index. The comparison assumes a $100 investment on December 8, 2000, in Garmin
Common Shares and in each of the foregoing indices and assumes reinvestment of
dividends, if any.
GARMIN LTD.
RELATIVE MARKET PERFORMANCE TOTAL RETURN
DECEMBER 8, 2000 - DECEMBER 31, 2001
[PERFORMANCE GRAPH]
In Dollars 12/8/00 12/31/00 3/31/01 6/30/01 9/30/01 12/31/01
---------- ------- --------- ------- ------- ------- --------
Garmin Ltd. 100 99 99 114 81 107
Nasdaq Composite Total Return Index (U.S.) 100 84 63 74 52 67
Nasdaq Non Financial Stocks Index 100 83 61 71 48 64
Summary Compensation Table
The following table sets forth information about the compensation earned in
the fiscal years ended December 29, 2001, December 30, 2000 and December 25,
1999 by the Co-Chief Executive Officers and our other executive officers
(collectively, the "Named Executive Officers").
Long-Term
Compensation
Annual Compensation(1) Awards
--------------------------------------------- -------------------
Securities
Name and Underlying
Principal Other Annual Options/ All Other
Position Year Salary Bonus Compensation SARs Compensation
($) ($)(2) ($) (#) ($)
-----------------------------------------------------------------------------------------------------------------------------
Min H. Kao, Ph.D. 2001 181,571 203 49,556(1) --- 18,443(3)
Co-Chief Executive 2000 173,329 203 54,034 --- 18,028
Officer 1999 166,270 14,330 52,104 --- 18,091
Gary L. Burrell 2001 181,571 203 49,556(1) --- 18,443(4)
Co-Chief Executive 2000 173,329 203 53,784 --- 18,013
Officer 1999 166,270 14,330 52,271 --- 18,101
Andrew R. Etkind 2001 155,155 20,203 --- 6,500 18,058(5)
General Counsel and 2000 140,010 20,203 --- 17,500 17,214
Secretary 1999 127,634 15,203 --- --- 15,821
Gary Kelley 2001 138,905 6,203 --- 5,000 14,889(6)
Director of Marketing, 2000 131,365 6,203 --- 17,500 14,161
Garmin International, 1999 124,475 6,203 --- --- 13,462
Inc.
Kevin Rauckman 2001 130,325 15,203 --- 5,000 16,268(7)
Chief Financial Officer 2000 116,970 15,203 --- 12,500 15,531
and Treasurer 1999 111,650 5,203 --- --- 8,641
-----------------------------------------------------------------------------------------------------------------------------
(1) All compensation paid to the Named Executive Officers was paid by Garmin
International, Inc. to such Named Executive Officers in their capacities as
officers and employees of Garmin International, Inc., except that the other
annual compensation amounts for Dr. Kao and Mr. Burrell include
compensation to each from Garmin Corporation in the following amounts: 2001
-- $49,556; 2000 -- $53,784 and 1999 -- $52,021. Under Taiwan law, the
directors of a company are required to personally guarantee the company's
loans and mortgages. These salaries from Garmin Corporation were paid as
compensation for the personal guarantees of Garmin Corporation's
obligations signed by Dr. Kao and Mr. Burrell.
(2) Includes a holiday bonus paid to all employees in a fixed amount of $203.
(3) All other compensation for Dr. Kao includes a contribution to his account
under Garmin International, Inc.'s 401(k) plan of $7,875, a contribution to
his account under Garmin International, Inc.'s pension plan of $10,424, and
premiums on life insurance of $144.
(4) All other compensation for Mr. Burrell includes a contribution to his
account under Garmin International, Inc.'s 401(k) plan of $7,875, a
contribution to his account under Garmin International, Inc.'s pension plan
of $10,424, and premiums on life insurance of $144.
(5) Includes a contribution to Mr. Etkind's account under Garmin International,
Inc.'s 401(k) plan of $7,875, a contribution to his account under Garmin
International, Inc.'s pension plan of $10,039, and premiums on life
insurance of $144.
(6) Includes a contribution to Mr. Kelley's account under Garmin International,
Inc.'s 401(k) plan of $6,521, a contribution to his account under Garmin
International, Inc.'s pension plan of $8,224, and premiums on life
insurance of $144.
(7) Includes a contribution to Mr. Rauckman's account under Garmin
International, Inc.'s 401(k) plan of $7,875, a contribution to his account
under Garmin International, Inc.'s pension plan of $8,249, and premiums on
life insurance of $144.
Option/SAR Grants in Last Fiscal Year
The following table sets forth information about the options to acquire
Garmin Common Shares granted the Named Executive Officers during 2001.
------------------------------------------------------------------------------------------------------------------
Potential
Realizable Value at
Assumed Annual
Rates of Share
Price Appreciation
for Option Term(3)
Individual Grants
------------------------------------------------------------------------------------------------------------------
Percent of Total
Number of Options/SARs
Securities Granted to
Underlying Employees in Exercise or
Options/SARs Fiscal Year(2) Base Price Expiration
Name Granted(1) ($/Sh) Date 5% ($) 10% ($)
------------------------------------------------------------------------------------------------------------------
Min H. Kao N/A N/A N/A N/A N/A N/A
Gary L. Burrell N/A N/A N/A N/A N/A N/A
Andrew R. Etkind 6,500 1.76% 20.75 12/20/11 84,822 214,956
Gary Kelley 5,000 1.36% 20.75 12/20/11 65,248 165,351
Kevin Rauckman 5,000 1.36% 20.75 12/20/11 65,248 165,351
------------------------------------------------------------------------------------------------------------------
(1) The options were granted on December 21, 2001 under Garmin's 2000 Equity
Incentive Plan. The options become exercisable in equal increments over
five years, subject to accelerated vesting in the case of certain events
occurring within one year after a change of control of Garmin.
(2) Options for a total of 368,875 Garmin Common Shares were granted to
eligible employees in 2001.
(3) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the SEC and do not represent Garmin's estimate or
projection of future prices of its Common Shares. The actual value realized
may be greater or less than the potential realizable values set forth in
the table.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
The following table gives aggregated information about the Named Executive
Officers' exercises during 2001 of options to purchase Garmin Common Shares and
shows the number and value of their exercisable and unexercisable options at
December 29, 2001, Garmin's fiscal year end.
------------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Options/SARs Options/SARs
On Value At At
Name Exercise Realized December 29, December 29,
(#) ($)(1) 2001(#) 2001($)(2)
Exercisable/ Exercisable/
Unexercisable Unexercisable
---------------------------------------------------------------------------------------------
Min H. Kao N/A N/A N/A N/A
Gary L. Burrell N/A N/A N/A N/A
Andrew R. Etkind N/A N/A 3,500/20,500 25,375/104,750
Gary Kelley N/A N/A 3,500/19,000 25,375/104,000
Kevin Rauckman N/A N/A 2,500/15,000 18,125/75,000
---------------------------------------------------------------------------------------------
(1) No options were exercised during fiscal year 2001 by the Named Executive
Officers.
(2) The dollar values in this column are calculated by multiplying (a) the
difference between the fair market value of the shares of Garmin Common
Shares underlying the options on December 28, 2001 (the last trading day of
the year) and the exercise price of the options by (b) the number of
options held at year-end.
Employment Agreements
Garmin does not have employment agreements with any of its key personnel.
Other Compensatory Plans
Garmin and its subsidiaries maintain compensation plans for certain of
their officers and employees. Certain of those plans have vesting provisions
under which the plan participants do not have the right to receive all of the
plan benefits allocated to their accounts until certain conditions have been
satisfied. Described below are the portions of those plans in which the accounts
of the officers named in the summary compensation table become vested as a
result of their retirement from or termination of employment with the Company or
a change in control of the Company.
Pension Plan
Effective January 1, 1990, Garmin International, Inc. established a
retirement plan called a "money purchase pension plan" (the "Pension Plan"). An
employee of Garmin International, Inc. automatically becomes a participant in
the Pension Plan as of the first January 1 or July 1 after he or she reaches age
21 and completes three months of service. All contributions to the Pension Plan
are made by Garmin International, Inc. Garmin International, Inc.'s contribution
for each participant is equal to 3% of each participant's eligible compensation
up to 20% of the Social Security taxable wage base, plus 6% of each
participant's eligible compensation in excess of 20% of the Social Security
taxable wage base. For 2001, the Social
Security taxable wage base was $80,400, but this amount is increased from
time to time by the Social Security Administration. Participants become
vested in their accounts gradually over a seven-year period. Participants
become fully vested if they reach age 65, die or become disabled while they
are still working for Garmin International, Inc. Participants are allowed to
direct the investment of their accounts in a menu of authorized investment
alternatives A participant's account is distributable when the participant
terminates employment, retires, dies or becomes disabled. The Pension Plan is
intended to qualify under Section 401 of the Internal Revenue Code, so that
participants are not taxed on contributions or earnings on those contributions
until withdrawn from the Pension Plan, and so that contributions by Garmin
International, Inc. are tax deductible when made. The Named Executive
Officers, as employees of Garmin International, Inc., are covered by the Pension
Plan.
Equity Incentive Plan
Garmin's 2000 Equity Incentive Plan, which was approved by Garmin's
shareholders on October 24, 2000, provides for grants of non-qualified stock
options and incentive stock options. The 2000 Equity Incentive Plan also
provides for grants of restricted shares, bonus shares, deferred shares, stock
appreciation rights, performance units and performance shares. Employees of
Garmin or any majority owned subsidiary are eligible for awards. The
Compensation Committee selects the grantees and determines the terms of the
awards granted. Generally, the exercise price of an option and the strike price
of a stock appreciation right must be at least the fair market value of a share
as of the grant date. The plan provides that vesting of outstanding awards will
be accelerated if Garmin terminates the grantee's employment (other than for
death, disability or cause) or the grantee terminates the employment because of
a diminution in compensation or status or a required move of 50 miles, within
one year after a change of control of Garmin.
Savings and Profit Sharing Plan
Garmin International, Inc. sponsors a retirement plan which is sometimes
called a "401(k) plan" (the "401(k) Plan") because of the section of the
Internal Revenue Code which authorizes this type of plan. Every employee of
Garmin International, Inc. is eligible to participate in the 401(k) Plan as of
the first January 1 or July 1 after he or she reaches age 21 and completes three
months of service. Participants can elect to make pre-tax contributions to the
401(k) Plan from their eligible compensation, up to the limits imposed by law.
Participants are fully vested in their pre-tax contributions and earnings on
those contributions. In addition, Garmin International, Inc. makes a matching
contribution for each participant equal to 75% of his or her pre-tax
contributions up to 10% of the participant's eligible compensation. Garmin
International, Inc. may also make a profit sharing contribution which is divided
among participants based on their compensation. Participants become vested in
their matching and profit sharing contributions, and earnings on those
contributions, gradually over five years. Participants become fully vested
automatically if they reach age 65, die or become disabled while they are still
working for Garmin International, Inc. Participants are allowed to direct the
investment of their accounts in a menu of authorized investment alternatives.
Participants may direct the investment of their accounts up to 100% in Garmin
Common Shares. Accounts are distributable when the participant terminates
employment, retires, dies, becomes disabled, reaches age 59 1/2 or suffers a
financial hardship. Participants may also be permitted to request a loan from
their 401(k) Plan accounts. The 401(k) Plan is intended to be a tax-qualified
plan under the Internal Revenue Code which means that participants are generally
not taxed on contributions to the 401(k) Plan or earnings on those contributions
until they are withdrawn from the 401(k) Plan, and that contributions by Garmin
International, Inc. are tax deductible when made. The Named Executive Officers,
as employees of Garmin International, Inc., are covered by this plan.
Certain Relationships and Related Transactions
Reorganization
Garmin was formed on July 24, 2000 as a holding company for Garmin
Corporation in order to facilitate the listing of Garmin Common Shares in the
United States. Subsequently, the stockholders of Garmin Corporation executed a
shareholders agreement to transfer to Garmin Ltd. their investments in
88,984,394 shares of common stock of Garmin
Corporation. Under the shareholders' agreement, shareholders of Garmin
Corporation party to the agreement agreed to take all reasonable actions
required to prevent the disposition by Garmin of any shares of Garmin
Corporation or of substantially all of the assets of Garmin Corporation until
after December 31, 2005 except upon approval of a majority in interest of such
shareholders who are U.S. citizens or residents.
Until April 15, 2002, one share of Garmin Corporation's stock was held by
each of six shareholders as nominees under nominee trusts in order to comply
with Article 2 of the Company Law of Taiwan which required that, as a "company
limited by stock," Garmin Corporation have at least seven shareholders, and
4,000 shares of Garmin Corporation were held by two shareholders who did not
convert their Garmin Corporation shares to Common Shares of Garmin. These 4,006
shares represented approximately 0.004% of the outstanding shares of Garmin
Corporation. Taiwan company law was recently changed to remove the requirement
that a Taiwan company have a minimum of seven shareholders and to permit single
shareholder companies. As of April 15, 2002, Garmin has acquired the 4,000
shares of Garmin Corporation that were held by the two shareholders and the six
nominee shareholders have each transferred their one share of Garmin
Corporation's stock to Garmin. As a result, Garmin now owns all of the
outstanding shares of Garmin Corporation.
Trademarks and Licenses
Some of the Garmin entities' U.S. and foreign trademarks and patents are
currently held by Garmin Corporation. Garmin Corporation licenses such
trademarks to Garmin International, Inc. and Garmin (Europe) Ltd., but no fee is
paid for such licenses.
Certain Relationships
Ruey-Jeng Kao, a director of Garmin, is also a Supervisor of Garmin
Corporation. Mr. Kao is currently a partner in the Fortune Land Law Offices
which received compensation from Garmin Corporation for legal services during
the 2001 fiscal year. The amount paid to this law firm by Garmin did not exceed
5% of the law firm's gross revenues for that firm's last full fiscal year. Mr.
Kao is Dr. Kao's brother.
Gene M. Betts, a director of Garmin, is a Senior Vice President of Sprint
Corporation. Garmin International, Inc. made payments to Sprint Corporation in
2001 for long-distance telephone services. These payments did not exceed 5% of
either Garmin's consolidated net sales for the 2000 fiscal year or Sprint
Corporation's consolidated gross revenues for its last full fiscal year.
SHAREHOLDER PROPOSALS
To be properly brought before the Annual Meeting, a proposal must be either
(i) specified in the notice of the meeting (or any supplement thereto) given by
or at the direction of the Board of Directors, (ii) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (iii)
otherwise properly brought before the meeting by a shareholder.
If a holder of Garmin Common Shares wishes to present a proposal for
inclusion in Garmin's Proxy Statement for next year's annual general meeting of
shareholders, such proposal must be received by Garmin on or before January 3,
2003. Such proposal must be made in accordance with the applicable laws and
rules of the Securities and Exchange Commission and the interpretations thereof.
Any such proposal should be sent to the Secretary of Garmin, P.O. Box 30464 SMB,
5th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman,
Cayman Islands.
In order for a shareholder proposal that is not included in Garmin's Proxy
Statement for next year's annual meeting of shareholders to be properly brought
before the meeting, such proposal must be delivered to the Secretary and
received at Garmin's executive offices no later than March 19, 2003 and such
proposal must also comply with the procedures outlined below. The determination
that any such proposal has been properly brought before such meeting is made by
the officer presiding over such meeting.
Contents of Notice of Proposal
A shareholder proposal must be in the form of a written notice of proposal.
The required contents of the notice depend on whether the proposal pertains to
nominating a director or to other business. A shareholder's notice pertaining to
the nomination of a director shall set forth: (a) as to each nominee whom the
shareholder proposes to nominate for election or re-election as a director, (i)
the name, age, business address and residence address of the nominee, (ii) the
principal occupation or employment of the nominee, (iii) the class and number of
shares of capital stock of Garmin that are beneficially owned by the nominee,
and (iv) any other information concerning the nominee that would be required,
under the rules of the SEC, in a proxy statement soliciting proxies for the
election of such nominee; (b) as to the shareholder giving the notice, (i) the
name and address of the shareholder, and (ii) the class and number of shares of
capital stock of Garmin that are beneficially owned by the shareholder and the
name and address of record under which such stock is held; and (c) the signed
consent of the nominee to serve as a director if elected.
A shareholder's notice concerning business other than nominating a director
shall set forth as to each matter the shareholder proposes to bring before the
meeting (a) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting, (b) the
name and address of the shareholder proposing such business, (c) the class and
number of shares of capital stock of Garmin that are beneficially owned by the
shareholder and the name and address of record under which such stock is held,
and (d) any material interest of the shareholder in such business. The Chairman
of the annual meeting has the power to determine whether the proposed business
is an appropriate subject for and was properly brought before the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Garmin's directors, executive officers and certain other officers, and persons,
legal or natural, who own more than 10 percent of Garmin's Common Shares
(collectively "Reporting Persons"), to file reports of their ownership of such
shares, and the changes therein, with the SEC, and Garmin (the "Section 16
Reports"). Based solely on a review of the Section 16 reports for 2001 and any
amendments thereto furnished to Garmin and written representations from certain
of the Reporting Persons, all Section 16 Reports for fiscal year 2001 were
timely filed by the Reporting Persons.
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
Pursuant to the rules of the Securities and Exchange Commission, services
that deliver Garmin's communications to shareholders that hold their shares
through a bank, broker or other nominee holder of record may deliver to multiple
shareholders sharing the same address a single copy of Garmin's Annual Report
and Proxy Statement. Garmin will promptly deliver upon written or oral request a
separate copy of the Annual Report and/or Proxy Statement to any shareholder at
a shared address to which a single copy of the documents was delivered. Written
requests should be made to Garmin Ltd., c/o Garmin International, Inc., 1200
East 151st Street, Olathe, Kansas 66062, Attention: Debbie Pollard, and
oral requests may be made by calling Debbie Pollard at (913) 397-8200. Any
shareholder who wants to receive separate copies of the Proxy Statement or
Annual Report in the future, or any shareholder who is receiving multiple
copies and would like to receive only one copy per household, should contact
the shareholder's bank, broker or other nominee holder of record, or the
shareholder may contact Garmin at the above address or telephone number.
OTHER MATTERS
The Board of Directors knows of no other matters that are expected to be
presented for consideration at the Annual Meeting. However, if other matters
properly come before the meeting, it is intended that persons named in the
accompanying proxy will vote on them in accordance with their best judgment.
The Annual Report to Shareholders of Garmin for the fiscal year ended
December 29, 2001, which includes financial statements and accompanies this
Proxy Statement, does not form part of the materials for the solicitation of
proxies.
Notwithstanding anything to the contrary set forth in any of Garmin's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the Compensation Committee Report on Executive Compensation,
the Performance Graph and the Audit Committee Report included herein shall not
be incorporated by reference into any such filings.
Garmin will furnish without charge upon written request a copy of Garmin's
Annual Report on Form 10-K. The Annual Report on Form 10-K includes a list of
all exhibits thereto. Garmin will furnish copies of such exhibits upon written
request therefor and payment of Garmin's reasonable expenses in furnishing such
exhibits. Each such request must set forth a good faith representation that, as
of the Record Date, the person making such request was a beneficial owner of
Common Shares entitled to vote at the Annual Meeting. Such written request
should be directed to the Secretary of Garmin, c/o Garmin International, Inc.,
1200 East 151st Street, Olathe, Kansas 66062. The Annual Report on Form 10-K for
the year ended December 29, 2001 with exhibits, as well as other filings by
Garmin with the SEC, are also available through the SEC's Internet site at
www.sec.gov.
By Order of the Board of Directors
/s/ Andrew R. Etkind
Andrew R. Etkind
General Counsel and Secretary
May 3, 2002
APPENDIX A
GRAPHIC AND IMAGE MATERIAL
IN
PROXY STATEMENT
In accordance with Rule 304 of Regulation S-T, the following graphic and
image material is included in the Garmin proxy statement.
Photographs of Each Director
The proxy statement includes photographs of each director. A photograph of
a director is placed in the proxy statement next to the discussion of the
director's principal occupations in the section entitled "PROPOSAL (1) -
ELECTION OF TWO DIRECTORS" and "THE BOARD OF DIRECTORS."
Performance Graph
The proxy statement also includes a stock performance graph, which is
supplemented by a table showing the dollar value of the points on the graph. The
table is set forth in this electronic format document in the section entitled
"Performance Graph". Both the graph and the table will be included in the paper
format definitive proxy mailed to Garmin's shareholders. In accordance with a
letter to EDGAR filers dated November 16, 1992 from Mauri L. Osheroff, Associate
Director of Regulatory Policy of the Division of Corporate Finance, no further
explanation of the graph is set forth in this appendix.
APPENDIX B
FORM OF PROXIES
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PROXY
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GARMIN LTD.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR SHAREHOLDERS MEETING ON JUNE 7, 2002
The undersigned shareholder of Garmin Ltd., a Cayman Islands company,
hereby appoints Gary L. Burrell and Min H. Kao and Kevin Rauckman and each of
them, with full power of substitution, as true and lawful agents and proxies to
represent the undersigned and vote all common shares of Garmin Ltd. owned by the
undersigned in all matters coming before the 2002 Annual General Meeting of
Shareholders (or any adjournment thereof) to be held at the Ritz-Charles
Conference Center, 9000 West 137th Street, Overland Park, Kansas 66221, on
Friday, June 7, 2002 at 10:00 a.m. local time. The Board of Directors recommends
a vote "FOR" the following proposals, all as more specifically set forth in the
Proxy Statement:
1. Election of Two |_| FOR all the nominees listed below |_| WITHHOLD AUTHORITY
Directors (except as marked to the contrary to vote for all
below) nominees listed
below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below. Failure to follow this
procedure to withhold authority to vote for any individual nominee will
result in the granting of authority to vote for the election of such
nominee.)
Donald H. Eller - three year term expiring in 2005
Ruey-Jeng Kao - three year term expiring in 2005
2. Appointment of Ernst & Young, LLP as independent auditors for the 2002
fiscal year at remuneration to be approved by the Board of Directors.
|_| FOR |_| AGAINST |_| ABSTAIN
3. In their discretion, the Proxies are authorized to vote with respect to any
other matters that may properly come before the Annual General Meeting or
any adjournment thereof, including matters incident to its conduct.
I/WE RESERVE THE RIGHT TO REVOKE THE PROXY AT ANY TIME BEFORE THE EXERCISE
THEREOF. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER
SPECIFIED ABOVE BY THE SHAREHOLDER. TO THE EXTENT CONTRARY SPECIFICATIONS ARE
NOT GIVEN, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE DIRECTORS
NOMINATED AND "FOR" PROPOSAL 2.
Dated:__________________________, 2002
-------------------------------------
(Signature)
-------------------------------------
(Signature if held jointly)
Please sign exactly as your name appears on
your share certificate, indicating your
official position or representative capacity,
if applicable. If shares are held jointly,
each owner should sign.
IMPORTANT: PLEASE SIGN, DATE AND RETURN THIS
PROXY BEFORE THE DATE OF THE ANNUAL MEETING
IN THE ENCLOSED ENVELOPE.
CONFIDENTIAL VOTING INSTRUCTIONS TO
KEVIN RAUCKMAN, GARY BURRELL AND MIN KAO AS TRUSTEES
UNDER THE GARMIN INTERNATIONAL, INC.
SAVINGS AND PROFIT SHARING PLAN
This voting instruction card is solicited by the Trustee. I hereby direct
that the voting rights pertaining to Common Shares of Garmin Ltd. held by the
Trustee and allocated to my account shall be exercised at the Annual General
Meeting of Shareholders to be held on June 7, 2002, or any adjournment thereof,
as specified hereon and in its discretion on all other matters that are properly
brought before the Annual General Meeting of Shareholders and matters incidental
to such meeting.
1. Election of Two |_| FOR all the nominees listed below |_| WITHHOLD AUTHORITY
Directors (except as marked to the contrary to vote for all
below) nominees listed
below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)
Donald H. Eller - three year term expiring in 2005
Ruey-Jeng Kao - three year term expiring in 2005
3. Appointment of Ernst & Young, LLP as independent auditors for the 2001
fiscal year at remuneration to be approved by the Board of Directors.
|_| FOR |_| AGAINST |_| ABSTAIN
If the voting instruction card is not returned, the Trustee must vote such
shares in the same proportions as the shares for which voting instruction
cards were received from the plan participants.
CONFIDENTIAL VOTING INSTRUCTIONS TO
KEVIN RAUCKMAN, GARY BURRELL AND MIN KAO AS TRUSTEES
UNDER THE GARMIN INTERNATIONAL, INC.
SAVINGS AND PROFIT SHARING PLAN
Dated:__________________________, 2002
-------------------------------------
(Signature)
Please sign exactly as your name appears.
IMPORTANT: PLEASE SIGN, DATE AND RETURN THIS
VOTING INSTRUCTION CARD BEFORE THE DATE OF
THE ANNUAL MEETING IN THE ENCLOSED ENVELOPE.
DO NOT RETURN THIS CARD TO GARMIN LTD. AS
YOUR VOTE IS CONFIDENTIAL.