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 (S)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 0-11.
(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 0-11 (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 with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[GARMIN LOGO]
GARMIN LTD.
NOTICE AND PROXY STATEMENT
for
The Annual General Meeting of Shareholders
to be held
June 8, 2001
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 1, 2001.
[GARMIN Logo]
Garmin Ltd.
P.O. Box 30464SMB
113 South Church Street
George Town, Grand Cayman
Cayman Islands
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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 8, 2001
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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 8, 2001, to consider and vote upon the
following matters:
1. Election of three directors;
2. Appointment of Ernst & Young LLP as independent auditors for the 2001
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
30, 2000 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 23, 2001 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 1, 2001 Andrew R. Etkind
General Counsel and Secretary
Garmin Ltd.
P.O. Box 30464SMB
113 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 Three Directors....................................... 8
Proposal 2 - Appointment of Ernst & Young LLP as Independent Auditors for the
2001 Fiscal Year at Remuneration to be Approved by the Board of Directors...... 9
The Board of Directors......................................................... 9
Audit Matters.................................................................. 12
Executive Compensation Matters................................................. 13
Shareholder Proposals.......................................................... 18
Section 16(a) Beneficial Ownership Reporting Compliance........................ 19
Other Matters.................................................................. 20
Appendix A..................................................................... A-1
1
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 8, 2001, 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 1, 2001.
INFORMATION CONCERNING SOLICITATION AND VOTING
Proposals
At the Annual Meeting, the Garmin Board intends to present (a) the
election of three directors; and (b) the appointment of Ernst & Young LLP as
independent auditors for the fiscal year 2001 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 30, 2000 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 23, 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 108,242,111 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.
2
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 approval of the other proposals.
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 Voting
Card and inserting the full name of such other person. In that case, the Record
Holder must sign the Voting 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 Proxy 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.
3
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 Plan Participants
may be recast with a later-dated, properly executed and delivered Voting 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.
4
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the Record Date, the Company had outstanding 108,242,111 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. Other than a single share of stock held by each of several
Garmin officers and directors in a foreign subsidiary of the Company to comply
with foreign law, which holdings constitute less than 1% of such subsidiary's
stock, no officer or director of the Company owns any equity securities of any
subsidiary of the Company.
5
Common Percent of
------ ----------
Name and Address Shares/(1)/ Class/(2)/
---------------- ----------- ----------
Gene M. Betts
Director/(3)/ --- ---
Gary L. Burrell,
Director, Co-Chairman and Co-CEO 16,529,023/(4)/ 15.3%
Jonathan C. Burrell/(5)/
Shareholder 5,849,764/(6)/ 5.4%
Donald H. Eller, Ph.D./(7)/
Director 19,229,152/(8)/ 17.8%
Andrew R. Etkind,
General Counsel and Corporate Secretary 4,000 *
Min H. Kao, Ph.D./(9)/
Director, Co-Chairman and Co-CEO 5,439,578/(10)/ 5.0%
Gary Kelley,
Director of Marketing,
Garmin International, Inc. 4,800 *
Kevin Rauckman,
Chief Financial Officer and Treasurer 3,700 *
Thomas A. McDonnell/(11)/
Director 20,000 *
Ruey-Jeng Kao,/(12)/
Director 8,972,481 8.3%
Jia-Fang Tsai,/(13)/
Shareholder 7,337,440/(14)/ 6.8%
All Executive Officers and Directors as a Group
(9 persons) 50,049,748 46.2%
_________________
* 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, 2330 Shawnee Mission
Parkway, Westwood, Kansas 66205.
6
(4) The amount of Common Shares reported includes 76,643 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 2,923,492 Common Shares held by the Gary L. Burrell
2000 Grantor Retained Annuity Trust and 2,923,492 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.
(5) Mr. Burrell's address is c/o Garmin International, Inc., 1200 East
151/st/ Street, Olathe, Kansas 66062.
(6) The number of Common Shares over which Mr. Burrell has sole voting and
dispositive power includes 2,923,492 Common Shares owned by the Gary L.
Burrell 2000 Grantor Retained Annuity Trust and 2,923,492 Common Shares
owned by the Judith M. Burrell 2000 Grantor Retained Annuity Trust.
Jonathan C. Burrell is the sole trustee of each of these trusts. Gary L.
Burrell and Judith M. Burrell are the parents of Jonathan C. Burrell.
(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 8,719,925 Common Shares owned by the Min-Hwan
Kao 2000 Grantor Retained Annuity Trust and 8,719,925 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.
(9) Dr. Kao's address is c/o Garmin International, Inc., 1200 East 151/st/
Street, Olathe, Kansas 66062.
(10) Of the 5,439,578 Common Shares, (i) 4,213,134 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 his
children over which Dr. Kao does not have any voting or dispositive
power, (iii) 270,416 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 8,719,925 Common Shares held by the Min-Hwan Kao 2000
Grantor Retained Annuity Trust and 8,719,925 Common Shares held by the
Yu-Fan C. Kao 2000 Grantor Retained Annuity Trust 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 such trusts.
(11) Mr. McDonnell's address is c/o DST Systems, Inc., 333 West 11/th/
Street,. Kansas City, Missouri 64105.
(12) Mr. Kao's address is Fortune Land Law Offices, 8/th/ Floor, 132, Hsinyi
Road, Section 3, Taipei, Taiwan.
(13) Ms. Jia-Fang Tsai's address is 10FL, No. 48, Lane 177, Sec. 1, Duenhua S.
Road, Taipei, Taiwan.
(14) 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.
7
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 30, 2000 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 Gene M.
Betts, Donald H. Eller and Thomas A. McDonnell. Mr. Betts and Mr. McDonnell are
being nominated as Class I directors to hold office for a three-year term
expiring in 2004. Mr. Eller is being nominated as a Class II director to hold
office for a one-year term expiring in 2002.
Mr. Betts, Mr. Eller and Mr. McDonnell are currently directors of the
Company. They were appointed by the Company's Board in March, 2001 for a term
expiring on the date of this Annual Meeting. They 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.
Gene M. Betts, age 48, 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 five registered investment
companies in the Buffalo Funds complex.
Donald H. Eller, age 58, 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.
Thomas A. McDonnell, age 55, 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., Commerce Bancshares,
Inc., Computer Sciences Corporation, Euronet Services, Inc. and Informix
Software, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THESE NOMINEES.
8
PROPOSAL 2 - APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR THE 2001 FISCAL YEAR AT REMUNERATION
TO BE APPROVED BY THE BOARD OF DIRECTORS
Ernst & Young LLP were the Company's independent auditors for the 2000
fiscal year 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 2001 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 2001 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 2002
Ruey-Jeng Kao, age 64, 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.
Directors Serving Until the Annual Meeting in 2003
Min H. Kao, age 52, 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 also been a director of Garmin International, Inc. since August 1990
and a Vice President since April 1991, a director of Garmin (Europe) Ltd. since
1992 and a director of Garmin Foreign Sales Corporation since May 1998 and Vice
President since July 1998. 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 63, 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
President and a director of Garmin International, Inc. since August 1990, a
director and Chairman of Garmin (Europe) Ltd. since 1992 and a director of
Garmin Foreign Sales Corporation since May 1998 and President since July 1998.
Mr. Burrell
9
holds a BS degree in Electrical Engineering from Wichita State University and a
MS degree in Electrical Engineering from Rennsselaer Polytechnic Institute.
Board of Directors Meetings and Standing Committee Meetings
The Board of Directors held one meeting and took action by unanimous
written consent 15 times during the fiscal year ended December 30, 2000. No
director attended fewer than 75% of the meetings of the Board of Directors.
Committees
The Company's Board of Directors did not have any standing committees
in 2000. In March 2001 the Board established an Audit Committee and a
Compensation Committee and appointed Messrs. Betts, Eller and McDonnell as
members of each committee. The Board adopted an Audit Committee Charter,
attached to this Proxy Statement as Appendix A, in March 2001 which defines the
responsibilities of 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.)
The purposes 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
Prior to the Company's initial public offering in December 2000, the
Company was not required to have a Compensation Committee and the compensation
of all executive officers, including themselves, was determined by Gary L.
Burrell and Min H. Kao, the Co-Chairmen and Co-Chief Executive Officers. Dr.
Kao also serves as the President and as the Chairman and a director of Garmin
Corporation, as Vice President and a director of Garmin International, Inc., as
a director of Garmin (Europe) Ltd. and as a director and Vice President of
Garmin Foreign Sales Corporation. Mr. Burrell also serves as a director of
Garmin Corporation, as President and a director of Garmin International, Inc.,
as director and Chairman of Garmin (Europe) Ltd. and as a director and President
of Garmin Foreign Sales Corporation. Garmin Corporation, Garmin International,
Inc., Garmin (Europe) Ltd. and Garmin Foreign Sales Corporation are subsidiaries
of Garmin. In their positions as officers and directors of the above Garmin
subsidiaries, Dr. Kao and Mr. Burrell determine the compensation of the
executive officers of these subsidiaries.
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 2000 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
10
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.
Under Taiwan banking practice, the directors of a company are
generally required to personally guarantee the company's loans and mortgages.
During fiscal year 2000, Dr. Kao and Mr. Burrell, as directors of Garmin
Corporation, each received compensation from Garmin Corporation in the amount of
$53,784 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 2000 received compensation from Garmin Corporation of $53,784 for such
personal guarantee.
11
AUDIT MATTERS
Report of the Board of Directors
The Company's Audit Committee was not established until March 2001 at
the time of the appointment of three independent directors to the Company's
Board of Directors. Prior to that time, the Company's Board of Directors, as
then constituted (references in this section to the "Board of Directors" shall
mean the Board of Directors as constituted prior to such appointment of three
independent directors), reviewed Garmin's consolidated financial statements with
management and Garmin's independent auditors, and management represented to and
the independent auditors opined to the Board of Directors that Garmin's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles. The Board of Directors also discussed with
Garmin's independent auditors matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees).
Garmin's independent auditors provided the Board of Directors with the
written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Board of Directors
discussed with the independent accountants the independence of their firm.
Based upon such review and discussions, the Board of Directors
recommended that the Garmin Board include the audited consolidated financial
statements in Garmin's Annual Report on Form 10-K for the year ended December
30, 2000 filed with the Securities and Exchange Commission ("SEC").
Min H. Kao
Gary L. Burrell
Ruey-Jeng Kao
Principal Accounting Firm Fees
The following table sets forth the aggregate fees billed to Garmin for
the fiscal year ended December 30, 2000 by Garmin's principal accounting firm,
Ernst & Young LLP:
Audit Fees..................................................... $168,493
Financial Information Systems Design and Implementation Fees... 0
All Other Fees................................................. 492,649 (a)(b)
--------
$661,142
__________________
(a) Includes fees for tax consulting, consulting with respect to the initial
public offering and the restructuring and other non-audit services.
(b) The Board of Directors has considered whether the provision of these
services is compatible with maintaining the independence of Ernst & Young
LLP.
12
EXECUTIVE COMPENSATION MATTERS
Compensation Committee Report on Executive Compensation
The Company's Board established a Compensation Committee in March
2001. Prior to that time, executive compensation was determined by Min H. Kao
and Gary L. Burrell, the Co-Chairmen and Co-Chief Executive Officers of the
Company.
Compensation Principles
The Company'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 employees. The Company's
policy is to provide total compensation that is competitive for comparable work
and comparable corporate performance. In executing its compensation policy, the
Company seeks to relate compensation with the Company's financial performance
and business objectives and reward high levels of individual performance.
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 setting the annual base salaries for the Company's
executives for 2000, Dr. Kao and Mr. Burrell reviewed the contribution of each
executive along with that of the Company's non-executive key employees. They
also reviewed the aggregate salary and bonus compensation for individuals in
comparable positions with other companies, including competitors of the Company,
and adjusted such amounts to reflect individual performance.
Cash bonuses are tied directly 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. In
connection with the Company's initial public offering in December, 2000, certain
executive officers were awarded options based upon their contribution and length
of service with the Company.
Co-Chief Executive Officers' Compensation
A base salary of $173,329 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
13
the steps required to exclude from calculation of the $1 million compensation
expense limitation any performance-based awards granted under the 2000 Equity
Incentive Plan to the executive officers listed in the Summary Compensation
Table of this Proxy Statement.
Min H. Kao
Gary L. Burrell
Stock Performance Graph
A stock performance graph is not included because Garmin Ltd. was a
public company for less than 30 days in the fiscal year ended December 30,
2000.
Summary Compensation Table
The following table sets forth information about the compensation
earned in the fiscal years ended December 30, 2000, December 25, 1999 and
December 26, 1998 by the Co-Chief Executive Officers and our other executive
officers (collectively, the "Named Executive Officers").
Long-Term
Compensation
Annual Compensation(1) Awards
----------------------------------------------------------------
Securities
Name and Underlying
Principal Other Annual Options/ All Other
Position Year Salary Bonus Compensation SARs Compensation
($) ($)(2) ($) (#) ($)
----------------------------------------------------------------------------------------------------------------------------------
Min H. Kao, Ph.D. 2000 173,329 203 54,034(1)(3) --- 18,028(3)
Co-Chief Executive 1999 166,270 14,330 52,104 --- 18,091
Officer 1998 163,800 203 50,747 --- 17,116
Gary L. Burrell 2000 173,329 203 53,784(1) --- 18,013(4)
Co-Chief Executive 1999 166,270 14,330 52,271 --- 18,101
Officer 1998 163,800 203 50,914 --- 17,036
Andrew R. Etkind 2000 140,010 20,203 --- 17,500 17,214(5)
General Counsel and 1999 127,634 15,203 --- --- 15,821
Secretary 1998 103,133(6) 10,203 24,000 --- 11,578
Gary Kelley 2000 131,365 6,203 --- 17,500 14,161(7)
Director of Marketing, 1999 124,475 6,203 --- --- 13,462
Garmin International, Inc. 1998 122,112 6,703 --- --- 13,293
Kevin Rauckman 2000 116,970 15,203 --- 12,500 15,531(8)
Chief Financial Officer 1999 111,650 5,203 --- --- 8,641
and Treasurer 1998 N/A N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
(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:
2000 -- $53,784; 1999 -- $52,021; and 1998 -- $50,747. 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
14
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) Other annual compensation for Dr. Kao, includes $53,784 in compensation
from Garmin Corporation, as described in footnote (1) above, and
incentive payments for inventions for which patent applications were
filed in the amount of $250. 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 $9,970, and premiums on life insurance of $183.
(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 $9,955, and premiums on life insurance of $183.
(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 $9,156, and
premiums on life insurance of $183.
(6) Mr. Etkind joined Garmin International, Inc. in February 1998.
(7) Includes a contribution to Mr. Kelley's account under Garmin
International, Inc.'s 401(k) plan of $6,181, a contribution to his
account under Garmin International, Inc.'s pension plan of $7,797, and
premiums on life insurance of $183.
(8) 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 $7,473, and
premiums on life insurance of $183.
Option/SAR Grants in Last Fiscal Year
The following table sets forth information about the options to
acquire Garmin Common Shares granted the Named Executive Officers during 2000.
---------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed Annual
Rates of Share Price
Appreciation for
Individual Grants Option Term(3)
---------------------------------------------------------------------------------------------------------------
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted(1) Fiscal Year(2) ($/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 17,500 1.46% 14.00 12/07/10 154,000 390,425
Gary Kelley 17,500 1.46% 14.00 12/07/10 154,000 390,425
Kevin Rauckman 12,500 1.04% 14.00 12/07/10 110,000 278,875
---------------------------------------------------------------------------------------------------------------
(1) The options were granted on December 7, 2000 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 1,200,750 Garmin Common Shares were granted to
eligible employees in 2000.
15
(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 2000 of options to purchase Garmin Common
Shares and shows the number and value of their exercisable and unexercisable
options at December 30, 2000, Garmin's fiscal year end.
-------------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARs Options/SARs
Acquired on Value At At
Name Exercise Realized December 30, December 30,
(#) ($)(1) 2000 (#) 2000 ($)(2)
Exercisable/ Exercisable/
Unexercisable Unexercisable
---------------------------------------------------------------------------------------------------
Min H. Kao N/A N/A N/A
Gary L. Burrell N/A N/A N/A N/A
Andrew R. Etkind N/A N/A 0/17,500 0/95,156
Gary Kelley N/A N/A 0/17,500 0/95,156
Kevin Rauckman N/A N/A 0/12,500 0/67,969
---------------------------------------------------------------------------------------------------
(1) No options were exercised during fiscal year 2000 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 29, 2000 (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.
16
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 2000, the Social Security taxable wage base was $76,200,
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
17
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. These shares, which
represented approximately 100% of the issued and outstanding common stock of
Garmin Corporation as of July 24, 2000, were used by the stockholders to pay for
their subscriptions to 100,000,000 Common Shares (post-split) of Garmin. As a
result of that reorganization, Garmin owns approximately 100% of Garmin
Corporation. One share of Garmin Corporation's stock is 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 requires that, as a "company limited by
stock," Garmin Corporation have at least seven shareholders, and 4,000 shares
are held by two related shareholders who did not convert their Garmin
Corporation shares to Common Shares of Garmin. These 4,006 shares represent
approximately 0.004% of the outstanding shares of Garmin Corporation. In
addition, 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.
Trademarks and Licenses
All 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 2000 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 2000 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
18
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 1,
2002. 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 30464SMB,
113 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 17, 2002 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 2000 and any
amendments thereto furnished to Garmin and written representations from certain
of the Reporting Persons, all Section 16 Reports for fiscal year 2000 were
timely filed by the Reporting Persons.
19
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 30, 2000, 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's Annual Report to Shareholders distributed with this Proxy
Statement includes its Annual Report on Form 10-K for the year ended December
30, 2000 (without exhibits) as filed with the SEC. 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 30, 2000 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 1, 2001
20
APPENDIX A
GARMIN LTD.
AUDIT COMMITTEE CHARTER
PURPOSE
The Audit Committee is appointed by the Board of Directors (the "Board") of
Garmin Ltd. to assist the Board in monitoring (1) the integrity of the financial
statements of Garmin Ltd. and its subsidiaries (the "Company"), and (2) the
independence and performance of the Company's outside auditor and any internal
audit function.
ORGANIZATION
The Audit Committee shall be comprised of three members of the Board. The
members of the Audit Committee shall meet the independence and experience
requirements of the rules of the Nasdaq Stock Market. Committee members shall be
designated by the full Board of Directors, in a manner consistent with the rules
of the Nasdaq Stock Market. One member of the Audit Committee shall be appointed
as Chairman.
The Chairman of the Audit Committee shall be responsible for scheduling and
presiding over meetings, preparing agendas and making regular reports to the
Board. Members of senior management, the independent auditor or others may
attend meetings of the Audit Committee at the invitation of the Audit Committee
and shall provide pertinent information as necessary.
The Chairman of the Audit Committee shall set the agenda of each meeting and
arrange for the distribution of the agenda, together with supporting material,
to the Audit Committee members prior to each meeting.
At each meeting, the Chairman of the Audit Committee shall select one Audit
Committee member to act as secretary and prepare minutes of the meeting. After
approval by the Audit Committee Chairman, such minutes shall be distributed to
all members of the Board of Directors.
DUTIES AND RESPONSIBILITIES
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board., Management is responsible
for preparing the Company's financial statements and the independent auditor is
responsible for auditing those financial statements. The Board and Audit
Committee have the ultimate authority and responsibility to select, evaluate
and, where appropriate, replace the independent auditor (or to nominate the
independent auditor for shareholder approval in any proxy statement). The
independent auditor is accountable to the Board and the Audit Committee as the
representative of the shareholders. In discharging its oversight role, the Audit
Committee is empowered to investigate any matter brought to its attention with
full access to all books, records, facilities and personnel of the Company and
has the power to retain outside counsel, or other experts, for this purpose.
The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the Audit Committee may supplement them as
appropriate.
A-1
General Responsibilities
------------------------
. Make regular reports to the Board with such recommendations, as the Committee
may deem appropriate.
. Review and reassess the adequacy of this Charter annually and recommend
changes to the Board for approval.
. Meet at least annually with the chief financial officer and the independent
auditor in separate sessions.
. Assist the Board in satisfying its responsibilities to the shareholders with
respect to matters relating to the Company's accounting, financial reporting,
audit, legal compliance, and internal control practices.
Internal Control
----------------
. Review with management and the independent accountants the quality and
adequacy of internal controls.
Financial Reporting Process
---------------------------
. Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices as
well as the adequacy of internal controls that could significantly affect the
Company's financial statements.
. Review with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation of the
Company's financial statements.
. Review with management and the independent auditor the Company's quarterly
financial statements and press release prior to release of quarterly earnings
and the Company's Form 10-Q and Form 10-K prior to filing. The Chairman and
the Audit Committee may represent the entire Audit Committee for this
purpose.
. Review the Company's major financial risk exposures and the steps management
has taken to monitor and control such exposures.
. Review major changes to the Company's accounting principles and practices as
suggested by the independent auditor or management.
Legal and Regulatory Matters
----------------------------
. Review with the Company's general counsel, at least annually, any legal or
regulatory matters that may have a material impact on the Company's financial
statements and any material reports or inquiries from regulatory or
governmental agencies.
Independent Accountants
-----------------------
. Recommend to the Board the appointment of the independent auditor, which firm
is ultimately accountable to the Audit Committee and the Board.
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. Receive from the independent auditor a formal written statement delineating
all relationships between the independent auditor and the Company (consistent
with Independence Standards Board Standard 1),
. Receive periodic reports, at least annually, from the independent auditor
regarding the auditor's independence, discuss such reports with the auditor,
including discussion of any disclosed relationships or services that may
impact the objectivity and independence of the auditor, and if so determined
by the Audit Committee, recommend that the Board take appropriate action to
satisfy itself of the independence of the auditor.
. Review with the Board the performance of the independent auditor.
. Review with management and the independent auditor planning and staffing for
the annual audit.
. Discuss with the independent auditor the matters required to be discussed by
Statement on Auditing Standards No. 61 relating to the conduct of the audit.
. Review with the independent auditor any problems or difficulties encountered
in the course of the audit work, including any restrictions on the scope of
activities or access to required information and any management letter
provided by the auditor and the Company's response to that letter.
. Review with the independent auditor and management the extent to which any
changes or improvements in financial or accounting practices, as approved by
the Committee, have been implemented.
. Obtain from the independent auditor assurance that Section 10A of the Private
Securities Litigation Reform Act of 1995 has not been implicated.
REPORTING RESPONSIBILITIES
. Prepare the report of the Audit Committee required by the rules of the
Securities and Exchange Commission to be included in the Company's annual
proxy statement stating:
(1) whether the Audit Committee has
(a) reviewed and discussed the audited financial statements
with management
(b) discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards
No. 61
(c) received disclosures from the auditors regarding the
auditors' independence required by Independence Standards
Board Standard No. 1, and discussed with the auditors the
auditors' independence
(2) whether, based upon such review and discussion, the Audit Committee
recommended to the Board of Directors that the audited financial
statements be included in the Company's Form 10-K
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Review and recommend to the Board appropriate changes to this Charter
periodically, as conditions dictate.
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APPENDIX B
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 THREE DIRECTORS" and "THE BOARD OF DIRECTORS."
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APPENDIX C
FORM OF PROXIES
--------------------------------------------------------------------------------
PROXY
--------------------------------------------------------------------------------
GARMIN LTD.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR SHAREHOLDERS MEETING ON JUNE 8, 2001
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 2001 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 8, 2001 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 Three Directors [_] FOR all the nominees listed below
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all 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 - one year term expiring in 2002
Gene M. Betts - three year term expiring in 2004
Thomas A. McDonnell - three year term expiring in 2004
2. 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
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.
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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:__________________________, 2001
_____________________________________
(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.
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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 8, 2001, 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 Three Directors [_] FOR all the nominees listed below
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all 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 - one year term expiring in 2002
Gene M. Betts - three year term expiring in 2004
Thomas A. McDonnell - three year term expiring in 2004
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.
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CONFIDENTIAL VOTING INSTRUCTIONS TO
KEVIN RAUCKMAN, GARY BURRELL AND MIN KAO AS TRUSTEES
UNDER THE GARMIN INTERNATIONAL, INC.
SAVINGS AND PROFIT SHARING PLAN
Dated:__________________________, 2001
_____________________________________
(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.
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