GARMIN LTD.
EXHIBIT
10.1
2005
EQUITY INCENTIVE PLAN
(Freestanding
Stock-Settled SAR only)
To: _______________________
("you" or the "Grantee")
NOTICE
OF GRANT:
You
have
been granted freestanding stock appreciation rights ("SARs") related to the
common shares, $0.01 par value per share, of Garmin Ltd. ("Shares"), subject
to
the terms and conditions of the Garmin Ltd. 2005 Equity Incentive Plan (the
"Plan") and the SARs Award Agreement between you and Garmin Ltd. (the
"Company"), attached as Exhibit A, as follows:
|
Grant
Date:
|
__________________ |
|
Total
Number of Shares Subject to SARs
|
__________________
(_______)
|
|
Exercise
Price per Share ($):
|
$___.___
|
|
Expiration
Date:
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__________________ |
In
order
to fully understand your rights under the Plan (a copy of which is attached)
and
the SARs Award Agreement, attached as Exhibit A, you are encouraged to read
the
Plan and this document carefully. Please refer to the Plan document for the
definition of capitalized terms used in this Agreement.
To
properly accept these SARs, you must enter your E*Trade password and click
the
"Accept" button on the previous screen. Acceptances shall be made electronically
within ten (10) days of your receipt of this Notice and SAR Award Agreement.
By
accepting these SARs, you are also agreeing to be bound by Exhibit A, including
the restrictive covenants in Section 10 of Exhibit A.
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| By: | ||
|
Name:
Min ▇. ▇▇▇
Title:
Chairman and CEO
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||
EXHIBIT
A
AGREEMENT:
In
consideration of the mutual promises and covenants contained herein and other
good and valuable consideration paid by the Grantee to the Company, the Grantee
and the Company agree as follows:
| Section 1. |
Incorporation
of Plan
|
All
provisions of this Award Agreement and the rights of the Grantee hereunder
are
subject in all respects to the provisions of the Plan and the powers of the
Board therein provided. Capitalized terms used in this Award Agreement but
not
defined shall have the meaning set forth in the Plan.
| Section 2. |
Grant
of Stock Appreciation
Rights
|
As
of the
Grant Date identified above, the Company grants to the Grantee, subject to
the
terms and conditions set forth herein and in the Plan, the right and privilege
to receive compensation equal to the appreciation on each of the Shares
identified above opposite the heading "Total Number of Shares Subject to SARs",
from the Grant Date to the date the SAR with respect to such Shares is
exercised.
| Section 3. |
Exercisability
of SAR
|
|
(a)
|
During
the Grantee's lifetime, this SAR may be exercised only by the Grantee.
This SAR, except as specifically provided elsewhere under the terms
of the
Plan, shall become exercisable as
follows:
|
|
Years
Elapsed from Grant Date
|
Percentage
of SAR Exercisable
|
|
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1
Year
|
20%
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2
Years
|
40%
|
|
|
3
Years
|
60%
|
|
|
4
Years
|
80%
|
|
|
5
Or More Years
|
100%
|
For
purposes of this Section 3, a Year shall mean a period of 365 days (or 366
days
in the event of a leap year).
|
(b)
|
In
the event of the Grantee's death or Disability while the Grantee
is
employed on a "Full-Time
Basis" (as defined below) by the Company, the SAR shall become fully
exercisable. For purposes of this Agreement, "Full-Time Basis" means
the
Grantee is regularly scheduled to work 30 or more hours per week.
For
purposes of this Agreement, except where the Board otherwise
determines,
a
Grantee who, immediately before taking a Company-approved leave of
absence, was employed on a Full-Time Basis will be considered employed
on
a Full-Time Basis during the period of such Company-approved leave.
If the
Grantee dies or becomes Disabled following the Grantee's Termination
of
Affiliation, or following the Grantee ceasing to be employed on a
Full-Time Basis, the exercisability of the SAR shall not accelerate
due to
such death or Disability and shall be exercisable only to the extent
it
was exercisable on the date of the Grantee's Termination of Affiliation
or
the date the Grantee ceased to be employed on a Full-Time
Basis.
|
2
| Section 4. |
Method
of Exercise
|
Provided
this SAR has not expired, been terminated or cancelled in accordance with the
terms of the Plan, that percentage of the SAR which is exercisable in accordance
with Section 3 above may be exercised, in whole or in part and from time to
time, by delivery to the Company or its designee a written notice or such other
electronic or telephonic notice as may be acceptable to the Company or its
designee which shall:
|
(a)
|
set
forth the number of Shares with respect to which the SAR is to be
exercised (such number must be in a minimum amount of 50 Shares);
and
|
| (b) |
if
the person exercising this SAR is not the Grantee, be accompanied
by
satisfactory evidence of such person's right to exercise this
SAR.
|
| Section 5. |
Payment
of SAR
|
Upon
the
SAR Exercise Date, the Grantee shall be entitled to receive payment from the
Company in an amount determined by multiplying (i) the positive difference
between the Fair Market Value of a Share on the SAR Exercise Date over the
Exercise Price per Share (as set forth at the beginning of this Award Agreement)
by (ii) the number of Shares with respect to which the SAR is exercised. The
payment upon a SAR exercise shall be solely in whole Shares equal in value
to
the amount of payment calculated immediately above. Fractional Shares shall
be
rounded down to the nearest whole Share with no cash consideration being paid
upon exercise.
| Section 6. |
Expiration
of SAR
|
Unless
terminated earlier in accordance with the terms of this Award Agreement or
the
Plan, the SAR granted herein shall expire at 5:00 P.M., U.S. Central Time,
on
the tenth (10th)
Anniversary of the Grant Date (the "Expiration Date"). If the Expiration Date
is
a Saturday, Sunday or any other day which is a holiday of the United States
Federal Government (a "Non-Business Day"), then the SAR granted herein shall
expire, unless earlier terminated in accordance with the terms of this Award
Agreement or the Plan, at 5:00 P.M., U.S. Central Time, on the first day that
is
not a Non-Business Day (a "Business Day") following such Expiration Date.
| Section 7. |
Effect
of Termination of Affiliation or Cessation as Full-Time
Employee
|
If
the
Grantee has a Termination of Affiliation or ceases to be employed on a Full-Time
Basis for any reason, including termination by the Company with or without
Cause, voluntary resignation, change in employment status from full-time to
part-time, death, or Disability, the effect of such Termination of Affiliation
or ceasing to be employed on a Full-Time Basis on all or any portion of this
SAR
is as provided below. Notwithstanding anything below to the contrary, in no
event may the SAR be exercised after the Expiration Date.
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(a)
|
If
the Grantee has a Termination of Affiliation within the SAR Term
for
Cause, the SAR shall thereafter be void for all purposes upon such
Termination of Affiliation. The effect of this Section 7(a) shall
be
limited to determining the conditions under which a SAR may be rendered
null and void, and nothing in this Section 7(a) shall restrict or
otherwise interfere with the Company's discretion with respect to
the
termination of any employee's employment with the
Company.
|
3
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(b)
|
If
the Grantee has a Termination of Affiliation or ceases to be employed
on a
Full-Time Basis within the SAR Term due to the Grantee's voluntary
resignation, change in employment status from full-time to part-time,
or
termination by the Company other than for Cause, the SAR may be exercised
by the Grantee at any time prior to 5:00 P.M., U.S. Central Time,
on the
ninetieth (90th) calendar day following the Grantee's Termination
of
Affiliation or the date Grantee ceased to be employed on a Full-Time
Basis, as the case may be, (but in no event later than the Expiration
Date). If such ninetieth (90th) day shall not be a Business Day,
then the
SAR shall expire at 5:00 P.M., U.S. Central Time, on the first (1st)
Business Day immediately following such ninetieth (90th) day. In
any such
case, the SAR may be exercised only as to the Shares as to which
the SAR
had become exercisable on or before the date of the Termination of
Affiliation or the date the Grantee ceased to be employed on a Full-Time
Basis, as the case may be.
|
|
(c)
|
If
the Grantee dies or becomes Disabled within the SAR Term (A) while
he or
she is employed on a Full-Time Basis, or (B) within the ninety-day
period
referred to in clause (b) above, the SAR may be exercised by the
Grantee
or the Grantee's Beneficiaries entitled to do so at any time prior
to 5:00
P.M., U.S. Central Time, on the 365th
calendar day following the date of the Grantee's death or Disability
(but
in no event later than the Expiration Date). If such 365th
day is not a Business Day, then the SAR shall expire at 5:00 P.M.,
U.S.
Central Time, on the first (1st) Business Day immediately following
such
365th
day. In any such case, the SAR may be exercised only as to the Shares
as
to which the SAR had become exercisable on or before the date of
the
Grantee's death or Disability, or at such time as the Grantee ceased
to be
employed on a Full-Time Basis, whichever is
earlier.
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(d)
|
If
the Grantee has a Termination of Affiliation during a Change in Control
Period (which is the one year period following a Change of Control)
and
such Termination of Affiliation is initiated by the Company or a
Subsidiary other than for Cause or initiated by the Grantee for Good
Reason, then all SARs shall immediately become exercisable and may
be
exercised, in whole or in part, by the Grantee at any time prior
to 5:00
P.M., U.S. Central Time, on the ninetieth (90th) calendar day following
the Grantee's Termination of Affiliation (but in no event later than
the
Expiration Date).
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4
| Section 8. |
Investment
Intent
|
The
Grantee agrees that the Shares acquired on exercise of this SAR shall be
acquired for his/her own account for investment only and not with a view to,
or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933 (the "1933 Act") or other
applicable securities laws. If the Board so determines, any share certificates
issued upon exercise of this SAR shall bear a legend to the effect that the
Shares have been so acquired. The Company may, but in no event shall be required
to, bear any expenses of complying with the 1933 Act, other applicable
securities laws or the rules and regulations of any national securities exchange
or other regulatory authority in connection with the registration,
qualification, or transfer, as the case may be, of this SAR or any Shares
acquired upon the exercise thereof. The foregoing restrictions on the transfer
of the Shares shall be inoperative if (a) the Company previously shall have
been
furnished with an opinion of counsel, satisfactory to it, to the effect that
such transfer will not involve any violation of the 1933 Act and other
applicable securities laws or (b) the Shares shall have been duly registered
in
compliance with the 1933 Act and other applicable state or federal securities
laws. If this SAR, or the Shares subject to this SAR, are so registered under
the 1933 Act, the Grantee agrees that he will not make a public offering of
the
said Shares except on a national securities exchange on which the common shares
of the Company are then listed.
| Section 9. |
Nontransferability
of SAR
|
Except
as
provided above in Section 7(c) (in the event of the Grantee's death) in which
case the SAR may be transferred by will, or by the laws of descent and
distribution, no portion of the SAR granted hereunder may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, including, without
limitation, any purported transfer to a current spouse or former spouse in
connection with a legal separation or divorce proceeding. All rights with
respect to the SAR granted to the Grantee shall be available during his or
her
lifetime only to the Grantee.
| Section 10. |
Restrictive
Covenants
|
As
a
condition of this SAR and in addition to any restrictive agreements the Grantee
may have entered into with the Company, the Grantee accepts and agrees to be
bound as follows:
|
(a)
|
Nondisclosure
of SAR Terms.
The Grantee agrees not to disclose or cause to be disclosed at any
time,
nor authorize anyone to disclose any information concerning this
Award
Agreement or the Grantee's SAR except (i) as required by law, or
(ii) to a
permitted transferee listed in Section 9 who agrees to be bound by
this
Paragraph 10(a), or (iii) to the Grantee's legal and financial advisors
who agree to be bound by this Paragraph
10(a).
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|
(b)
|
Noncompetition.
During the Grantee's employment and until one year after the Grantee
ceases being employed by or acting as a consultant or independent
contractor to the Company or any Subsidiary, the Grantee will not
perform
services as an employee, director, officer, consultant, independent
contractor or advisor, or invest in, whether in the form of equity
or
debt, or otherwise have an ownership interest in any company, entity
or
person that directly competes anywhere in the United States, the
United
Kingdom, Taiwan, or in any other location outside the United States,
the
United Kingdom or Taiwan where the Company or a Subsidiary conducts
or (to
the Grantee's knowledge) plans to conduct business. Nothing in this
Section 10(b) shall, however, restrict the Grantee from making an
investment in and owning up to one-percent (1%) of the common stock
of any
company whose stock is listed on a national securities exchange or
actively traded in an over-the-counter market; provided that such
investment does not give the Grantee the right or ability to control
or
influence the policy decisions of any direct competitor of the Company
or
a Subsidiary.
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5
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(c)
|
Noninterference.
During the Grantee's employment and until one year after the Grantee
ceases being employed by or acting as a consultant or independent
contractor to the Company or any Subsidiary, the Grantee will not,
either
directly or indirectly through another business or person, solicit,
entice
away, or otherwise interfere with any employee, customer, prospective
customer, vendor, prospective vendor, supplier or other similar business
relation or (to the Grantee's knowledge) prospective business relation
of
the Company or any Subsidiary.
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(d)
|
Nonsolicitation.
During the Grantee's employment and until one year after the Grantee
ceases being employed by or acting as a consultant or independent
contractor to the Company or any Subsidiary, the Grantee will not,
either
directly or indirectly through another business or person, hire,
recruit,
employ, or attempt to hire, recruit or employ, or facilitate any
such acts
by others, any person then currently employed by the Company or any
Subsidiary.
|
|
(e)
|
Confidentiality.
The Grantee acknowledges that it is the policy of the Company and
its
subsidiaries to maintain as secret and confidential all valuable
and
unique information and techniques acquired, developed or used by
the
Company and its subsidiaries relating to their businesses, operations,
employees and customers ("Confidential Information"). The Grantee
recognizes that the Confidential Information is the sole and exclusive
property of the Company and its subsidiaries, and that disclosure
of
Confidential Information would cause damage to the Company and its
subsidiaries. The Grantee shall not at any time disclose or authorize
anyone else to disclose any Confidential Information or proprietary
information that (A) is disclosed to or known by the Grantee as a
result
or as a consequence of or through the Grantee's performance of services
for the Company or any Subsidiary, (B) is not publicly or generally
known
outside the Company and (C) relates in any manner to the Company's
business. This obligation will continue even though the Grantee's
employment with the Company or a Subsidiary may have terminated.
This
paragraph 10(e) shall apply in addition to, and not in derogation
of any
other confidentiality agreements that may exist, now or in the future,
between the Grantee and the Company or any
Subsidiary.
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(f)
|
No
Detrimental Communications.
The Grantee agrees not to disclose or cause to be disclosed at any
time
any untrue, negative, adverse or derogatory comments or information
about
the Company or any Subsidiary, about any product or service provided
by
the Company or any Subsidiary, or about prospects for the future
of the
Company or any Subsidiary.
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6
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(g)
|
Remedy.
The Grantee acknowledges the consideration provided herein (absent
the
Grantee's agreement to this Section 10) is more than Garmin is obligated
to pay, and the Grantee further acknowledges that irreparable harm
would
result from any breach of this Section and monetary damages would
not
provide adequate relief or remedy. Accordingly, the Grantee specifically
agrees that, if the Grantee breaches any of the Grantee's obligations
under this Section 9, the Company and any Subsidiary shall be entitled
to
injunctive relief therefor, and in particular, without limiting the
generality of the foregoing, neither the Company nor any Subsidiary
shall
be precluded from pursuing any and all remedies they may have at
law or in
equity for breach of such obligations. In addition, this SAR shall
terminate immediately the first date on which the Grantee engages
in such
activity and the Board shall be entitled on or after the first date
on
which the Grantee engages in such activity to require the Grantee
to
return any Shares obtained by the Grantee's exercise of this SAR
to the
Company and to require the Grantee to repay any proceeds received
at any
time from the sale of Shares obtained by the Grantee's exercise of
this
SAR (plus interest on such amount from the date received at a rate
equal
to the prime lending rate as announced from time to time in The
Wall Street Journal)
and to recover all reasonable attorneys' fees and expenses incurred
in
terminating this SAR and recovering such Shares and
proceeds.
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| Section 11. |
Status
of the Grantee
|
The
Grantee shall not be deemed a shareholder of the Company with respect to any
of
the Shares subject to this SAR, except to the extent that such Shares shall
have
been issued to him or her. The Company shall not be required to issue or
transfer any certificates for Shares otherwise required to be transferred upon
exercise of this SAR until all applicable requirements of law have been complied
with and such Shares shall have been duly listed on any securities exchange
on
which the Shares may then be listed.
| Section 12. |
No
Effect on Capital
Structure
|
This
SAR
shall not affect the right of the Company to reclassify, recapitalize or
otherwise change its capital or debt structure or to merge, consolidate, convey
any or all of its assets, dissolve, liquidate, windup, or otherwise
reorganize.
| Section 13. |
Adjustments
|
Notwithstanding
any provision herein to the contrary, in the event of any change in the number
of outstanding Shares effected without receipt of consideration therefor by
the
Company, by reason of a merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, stock split, share combination or
other
change in the corporate structure of the Company affecting the Shares, the
aggregate number and class of Shares subject to this SAR and the exercise price
of this SAR shall be automatically adjusted to accurately and equitably reflect
the effect thereon of such change; provided, however, that any fractional share
resulting from such adjustment shall be eliminated. In the event of a dispute
concerning such adjustment, the decision of the Board shall be
conclusive.
7
| Section 14. |
Amendments
|
This
Award Agreement may be amended only by a writing executed by the Company and
the
Grantee which specifically states that it is amending this Award Agreement;
provided that this Award Agreement is subject to the power of the Board to
amend
the Plan as provided therein. Except as otherwise provided in the Plan, no
such
amendment shall materially adversely affect the Grantee's rights under this
Award Agreement without the Grantee's consent.
| Section 15. |
Board
Authority
|
Any
questions concerning the interpretation of this Award Agreement, any adjustments
required to be made under Sections 13 or 14 of this Award Agreement, and any
controversy which arises under this Award Agreement shall be settled by the
Board in its sole discretion.
| Section 16. |
Withholding
|
The
Company shall withhold from any payment to the Grantee upon the Grantee's
exercise of this SAR all applicable Federal, state or local income tax or
payroll tax withholding amounts required by law to be withheld.
| Section 17. |
Freestanding
SAR
|
This
SAR
is freestanding and has been granted independently of any stock option issued
by
the Company.
| Section 18. |
Notice
|
Whenever
any notice is required or permitted hereunder, such notice must be given in
writing by (a) personal delivery, or (b) expedited, recognized delivery service
with proof of delivery, or (c) United States Mail, postage prepaid, certified
mail, return receipt requested, or (d) telecopy or email (provided that the
telecopy or email is confirmed). Any notice required or permitted to be
delivered hereunder shall be deemed to be delivered on the date which it was
personally delivered, sent to the intended addressee, or, whether actually
received or not, on the third business day after it is deposited in the United
States mail, certified or registered, postage prepaid, addressed to the person
who is to receive it at the address which such person has theretofore specified
by written notice delivered in accordance herewith. The Company or the Grantee
may change, at any time and from time to time, by written notice to the other,
the address specified for receiving notices. Until changed in accordance
herewith, the Company's address for receiving notices shall be Garmin Ltd.,
Attention: General Counsel, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Unless
changed, the Grantee's address for receiving notices shall be the last known
address of the Grantee on the Company's records. It shall be the Grantee's
sole
responsibility to notify the Company as to any change in his or her address.
Such notification shall be made in accordance with this Section 18.
8
| Section 19. |
Severability
|
If
any
part of this Award Agreement is declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not serve
to
invalidate any part of this Award Agreement not declared to be unlawful or
invalid. Any part so declared unlawful or invalid shall, if possible, be
construed in a manner which gives effect to the terms of such part to the
fullest extent possible while remaining lawful and valid. Additionally, if
any
of the covenants in Section 10 are determined by a court to be
unenforceable in whole or in part because of such covenant's duration or
geographical or other scope, such court shall have the power to modify the
duration or scope of such provision as the case may be, so as to cause such
covenant, as so modified, to be enforceable.
| Section 20. |
Binding
Effect
|
This
Award Agreement shall bind, and, except as specifically provided herein, shall
inure to the benefit of the respective heirs, legal representatives, successors
and assigns of the parties hereto.
| Section 21. |
Governing
Law
|
This
Award Agreement and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Kansas
without giving effect to the principles of the Conflict of Laws to the
contrary.
9