8-KLeadership ChangesExhibits & Filings

GARMIN LTD 8-K Report, Executive Changes (Jun 8, 2009)

Filed June 8, 2009For Securities:GRMN

Summary

Garmin Ltd. (GRMN) filed an 8-K on June 8, 2009, reporting on shareholder approvals for significant amendments to its equity incentive plans. These changes, approved on June 5, 2009, primarily focus on increasing the share pool available for issuance under the 2005 Equity Incentive Plan and the 2000 Non-Employee Directors' Option Plan, while also introducing new restrictions and flexibilities related to equity awards. Key among the updates is a substantial increase in the number of restricted shares, restricted stock units, and performance shares that can be issued under the 2005 Equity Plan, from 2 million to 3 million. For the Directors' Plan, the shares reserved for delivery have been increased from 100,000 to 250,000, and the plan's expiration for new grants has been extended significantly. These amendments aim to provide Garmin with greater flexibility in its executive and director compensation strategies, particularly in attracting and retaining talent, and in managing equity awards during corporate transactions.

Key Highlights

  • 1Shareholders approved amendments to the Garmin Ltd. 2005 Equity Incentive Plan (Equity Plan) on June 5, 2009.
  • 2The limit for restricted shares, RSUs, and performance shares issuable under the Equity Plan increased from 2 million to 3 million.
  • 3The Equity Plan now restricts the substitution or replacement of stock options/SARs if it constitutes a repricing.
  • 4Shareholders also approved amendments to the Garmin Ltd. 2000 Non-Employee Directors' Option Plan (Directors' Plan) on June 5, 2009.
  • 5The number of shares reserved for the Directors' Plan increased from 100,000 to 250,000.
  • 6The definition of 'Change of Control' in the Directors' Plan was amended to require transaction consummation rather than just shareholder approval.
  • 7The expiry date for new option grants under the Directors' Plan was extended from November 1, 2010, to June 5, 2019.

Frequently Asked Questions

The primary impact for investors is a larger pool of equity (3 million shares) available for issuance under the 2005 Equity Incentive Plan, which can be used for executive compensation, employee incentives, and potentially for strategic transactions. This allows for greater flexibility in rewarding and retaining key personnel.

Yes, both the Equity Plan and the Directors' Plan now include restrictions against repricing stock options or stock appreciation rights. This is a positive for shareholders as it prevents management from artificially lowering the strike price of underwater options.

The Directors' Plan will have more shares available (250,000), the period for granting new options has been extended to 2019, and the definition of a 'Change of Control' is now more robust, requiring the actual completion of a transaction. This provides greater flexibility for director compensation and aligns the plan with more standard corporate governance practices.

No, this filing specifically relates to Item 5.02, which covers departures, elections, or appointments. However, the content of this specific 8-K details shareholder approvals related to equity plans rather than any changes in directors or officers.