ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED October 2, 2015 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
California | 94-2802192 | |
(State or other jurisdiction of | (I.R.S. Employer Identification Number) | |
incorporation or organization) |
Large Accelerated Filer | ý | Accelerated Filer | ¨ | |
Non-accelerated Filer | ¨ (Do not check if a smaller reporting company) | Smaller Reporting Company | ¨ |
PART I. | Page | |
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II. | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 4. | ||
ITEM 6. | ||
Third Quarter of | Fiscal Year End | ||||||
As of | 2015 | 2014 | |||||
(In millions) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 123.6 | $ | 148.0 | |||
Accounts receivable, net | 344.5 | 362.0 | |||||
Other receivables | 15.4 | 29.5 | |||||
Inventories, net | 271.4 | 278.1 | |||||
Deferred income taxes | 51.9 | 45.6 | |||||
Other current assets | 46.2 | 39.4 | |||||
Total current assets | 853.0 | 902.6 | |||||
Property and equipment, net | 162.0 | 157.4 | |||||
Goodwill | 2,083.7 | 2,085.8 | |||||
Other purchased intangible assets, net | 502.1 | 594.5 | |||||
Other non-current assets | 119.1 | 118.6 | |||||
Total assets | $ | 3,719.9 | $ | 3,858.9 | |||
LIABILITIES | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 150.3 | $ | 64.4 | |||
Accounts payable | 97.2 | 103.8 | |||||
Accrued compensation and benefits | 82.7 | 98.9 | |||||
Deferred revenue | 243.0 | 211.6 | |||||
Accrued warranty expense | 19.1 | 20.6 | |||||
Other current liabilities | 95.2 | 89.0 | |||||
Total current liabilities | 687.5 | 588.3 | |||||
Non-current portion of long-term debt | 609.1 | 674.0 | |||||
Non-current deferred revenue | 32.0 | 26.3 | |||||
Deferred income taxes | 93.8 | 121.1 | |||||
Other non-current liabilities | 94.3 | 95.8 | |||||
Total liabilities | 1,516.7 | 1,505.5 | |||||
Commitments and contingencies (Note 8) | |||||||
EQUITY | |||||||
Shareholders’ equity: | |||||||
Preferred stock, no par value; 3.0 shares authorized; none outstanding | — | — | |||||
Common stock, no par value; 360.0 shares authorized; 250.0 and 259.2 shares issued and outstanding as of the end of the third quarter of fiscal 2015 and fiscal year end 2014, respectively | 1,216.0 | 1,207.3 | |||||
Retained earnings | 1,133.2 | 1,211.0 | |||||
Accumulated other comprehensive loss | (147.0 | ) | (76.7 | ) | |||
Total Trimble Navigation Ltd. shareholders’ equity | 2,202.2 | 2,341.6 | |||||
Noncontrolling interests | 1.0 | 11.8 | |||||
Total equity | 2,203.2 | 2,353.4 | |||||
Total liabilities and equity | $ | 3,719.9 | $ | 3,858.9 |
Third Quarter of | First Three Quarters of | ||||||||||||||
(In millions, except per share amounts) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Revenue: | |||||||||||||||
Product | $ | 373.0 | $ | 415.6 | $ | 1,168.2 | $ | 1,327.1 | |||||||
Service | 103.9 | 98.3 | 310.5 | 291.7 | |||||||||||
Subscription | 85.4 | 70.9 | 252.0 | 212.9 | |||||||||||
Total revenue | 562.3 | 584.8 | 1,730.7 | 1,831.7 | |||||||||||
Cost of sales: | |||||||||||||||
Product | 175.5 | 189.3 | 554.0 | 605.4 | |||||||||||
Service | 39.4 | 36.8 | 123.0 | 108.6 | |||||||||||
Subscription | 26.1 | 21.8 | 75.8 | 58.4 | |||||||||||
Amortization of purchased intangible assets | 23.3 | 20.1 | 68.8 | 61.0 | |||||||||||
Total cost of sales | 264.3 | 268.0 | 821.6 | 833.4 | |||||||||||
Gross margin | 298.0 | 316.8 | 909.1 | 998.3 | |||||||||||
Operating expense: | |||||||||||||||
Research and development | 79.6 | 79.0 | 251.3 | 237.2 | |||||||||||
Sales and marketing | 89.1 | 95.8 | 281.8 | 288.8 | |||||||||||
General and administrative | 63.2 | 111.4 | 192.1 | 230.2 | |||||||||||
Restructuring charges | 2.7 | 0.2 | 9.0 | 1.3 | |||||||||||
Amortization of purchased intangible assets | 17.4 | 19.3 | 53.4 | 56.8 | |||||||||||
Total operating expense | 252.0 | 305.7 | 787.6 | 814.3 | |||||||||||
Operating income | 46.0 | 11.1 | 121.5 | 184.0 | |||||||||||
Non-operating income (expense), net: | |||||||||||||||
Interest expense, net | (6.4 | ) | (3.0 | ) | (19.1 | ) | (9.8 | ) | |||||||
Foreign currency transaction gain (loss) | 0.1 | (3.2 | ) | 1.2 | (3.8 | ) | |||||||||
Income from equity method investments | 4.7 | 2.8 | 14.1 | 11.5 | |||||||||||
Other income (expense), net | (0.9 | ) | (0.6 | ) | 5.8 | 12.5 | |||||||||
Total non-operating income (expense), net | (2.5 | ) | (4.0 | ) | 2.0 | 10.4 | |||||||||
Income before taxes | 43.5 | 7.1 | 123.5 | 194.4 | |||||||||||
Income tax provision (benefit) | 6.5 | (4.7 | ) | 26.7 | 36.4 | ||||||||||
Net income | 37.0 | 11.8 | 96.8 | 158.0 | |||||||||||
Less: Net loss attributable to noncontrolling interests | (0.1 | ) | — | (0.3 | ) | (0.3 | ) | ||||||||
Net income attributable to Trimble Navigation Ltd. | $ | 37.1 | $ | 11.8 | $ | 97.1 | $ | 158.3 | |||||||
Basic income per share | $ | 0.15 | $ | 0.05 | $ | 0.38 | $ | 0.61 | |||||||
Shares used in calculating basic income per share | 254.8 | 260.3 | 257.5 | 260.4 | |||||||||||
Diluted income per share | $ | 0.14 | $ | 0.04 | $ | 0.37 | $ | 0.60 | |||||||
Shares used in calculating diluted income per share | 257.2 | 264.4 | 260.3 | 265.1 |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In millions) | |||||||||||||||
Net income | $ | 37.0 | $ | 11.8 | $ | 96.8 | $ | 158.0 | |||||||
Foreign currency translation adjustments, net of tax | (15.3 | ) | (63.9 | ) | (70.5 | ) | (64.6 | ) | |||||||
Net unrealized actuarial gain, net of tax | — | 0.1 | 0.2 | 0.1 | |||||||||||
Comprehensive income (loss) | 21.7 | (52.0 | ) | 26.5 | 93.5 | ||||||||||
Less: Comprehensive loss attributable to noncontrolling interests | (0.1 | ) | — | (0.3 | ) | (0.3 | ) | ||||||||
Comprehensive income (loss) attributable to Trimble Navigation Ltd. | $ | 21.8 | $ | (52.0 | ) | $ | 26.8 | $ | 93.8 |
First Three Quarters of | |||||||
(In millions) | 2015 | 2014 | |||||
Cash flow from operating activities: | |||||||
Net income | $ | 96.8 | $ | 158.0 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation expense | 27.0 | 24.1 | |||||
Amortization expense | 122.2 | 117.8 | |||||
Provision for doubtful accounts | 1.7 | 2.9 | |||||
Deferred income taxes | (0.5 | ) | (1.2 | ) | |||
Stock-based compensation | 37.3 | 32.1 | |||||
Income from equity method investments | (14.1 | ) | (11.5 | ) | |||
Gain on an equity sale | — | (15.1 | ) | ||||
Acquisition / divestiture gain (loss) | (5.8 | ) | 6.0 | ||||
Excess tax benefit for stock-based compensation | (1.4 | ) | (14.1 | ) | |||
Provision for excess and obsolete inventories | 5.1 | 3.5 | |||||
Other non-cash items | 9.0 | (0.6 | ) | ||||
Add decrease (increase) in assets: | |||||||
Accounts receivable | 12.3 | (12.7 | ) | ||||
Other receivables | 6.5 | (4.7 | ) | ||||
Inventories | (6.4 | ) | (27.2 | ) | |||
Other current and non-current assets | (9.5 | ) | (12.9 | ) | |||
Add increase (decrease) in liabilities: | |||||||
Accounts payable | (6.9 | ) | (6.8 | ) | |||
Accrued compensation and benefits | (15.4 | ) | (9.3 | ) | |||
Deferred revenue | 38.6 | 41.9 | |||||
Accrued warranty expense | (1.4 | ) | 2.7 | ||||
Other liabilities | (18.7 | ) | 37.6 | ||||
Net cash provided by operating activities | 276.4 | 310.5 | |||||
Cash flow from investing activities: | |||||||
Acquisitions of businesses, net of cash acquired | (101.7 | ) | (170.9 | ) | |||
Acquisitions of property and equipment | (35.7 | ) | (35.0 | ) | |||
Purchases of equity investments | (3.6 | ) | (10.9 | ) | |||
Acquisitions of intangible assets | (0.1 | ) | (7.0 | ) | |||
Net proceeds from sale of business | 12.1 | — | |||||
Dividends received from equity investments | 15.3 | 25.9 | |||||
Other | 0.3 | (4.5 | ) | ||||
Net cash used in investing activities | (113.4 | ) | (202.4 | ) | |||
Cash flow from financing activities: | |||||||
Issuances of common stock, net of tax withholding | 29.1 | 53.6 | |||||
Payments related to repurchases of common stock | (234.4 | ) | (65.0 | ) | |||
Excess tax benefit for stock-based compensation | 1.4 | 14.1 | |||||
Proceeds from debt and revolving credit lines | 458.0 | 42.0 | |||||
Payments on debt and revolving credit lines | (431.1 | ) | (153.3 | ) | |||
Net cash used in financing activities | (177.0 | ) | (108.6 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (10.4 | ) | (7.2 | ) | |||
Net decrease in cash and cash equivalents | (24.4 | ) | (7.7 | ) | |||
Cash and cash equivalents, beginning of period | 148.0 | 147.2 | |||||
Cash and cash equivalents, end of period | $ | 123.6 | $ | 139.5 |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Cost of sales | $ | 1.0 | $ | 0.8 | $ | 2.9 | $ | 2.3 | |||||||
Research and development | 2.1 | 1.6 | 6.4 | 4.8 | |||||||||||
Sales and marketing | 2.2 | 2.0 | 6.7 | 6.0 | |||||||||||
General and administrative | 7.5 | 6.6 | 21.3 | 19.0 | |||||||||||
Total operating expenses | 11.8 | 10.2 | 34.4 | 29.8 | |||||||||||
Total stock-based compensation expense | $ | 12.8 | $ | 11.0 | $ | 37.3 | $ | 32.1 |
Third Quarter of | First Three Quarters of | ||||||
2015 | 2014 | 2015 | 2014 | ||||
Expected dividend yield | — | — | — | — | |||
Expected stock price volatility | 35.4% | 35.4% | 35.4% | 35.4% | |||
Risk free interest rate | 1.2% | 0.9% | 1.4% | 1.2% | |||
Expected life of options | 3.8 years | 3.9 years | 4.3 years | 4.0 years |
First Three Quarters of | ||||
2015 | ||||
(Dollars in millions) | ||||
Fair value of total purchase consideration | $ | 111.0 | ||
Less fair value of net assets acquired: | ||||
Net tangible assets acquired | 5.4 | |||
Identifiable intangible assets | 52.8 | |||
Deferred income taxes | (8.9 | ) | ||
Goodwill | $ | 61.7 |
As of | Third Quarter of Fiscal 2015 | Fiscal Year End 2014 | |||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||
Carrying | Accumulated | Net Carrying | Carrying | Accumulated | Net Carrying | ||||||||||||||||||
(Dollars in millions) | Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||
Developed product technology | $ | 786.5 | $ | (512.4 | ) | $ | 274.1 | $ | 770.4 | $ | (445.4 | ) | $ | 325.0 | |||||||||
Trade names and trademarks | 52.0 | (38.4 | ) | 13.6 | 51.2 | (33.9 | ) | 17.3 | |||||||||||||||
Customer relationships | 443.1 | (248.4 | ) | 194.7 | 455.0 | (226.8 | ) | 228.2 | |||||||||||||||
Distribution rights and other intellectual properties | 78.9 | (59.2 | ) | 19.7 | 78.5 | (54.5 | ) | 24.0 | |||||||||||||||
$ | 1,360.5 | $ | (858.4 | ) | $ | 502.1 | $ | 1,355.1 | $ | (760.6 | ) | $ | 594.5 |
(Dollars in millions) | |||
2015 (Remaining) | $ | 40.5 | |
2016 | 147.7 | ||
2017 | 124.8 | ||
2018 | 96.1 | ||
2019 | 54.4 | ||
Thereafter | 38.6 | ||
Total | $ | 502.1 |
Engineering and Construction | Field Solutions | Mobile Solutions | Advanced Devices | Total | |||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Balance as of fiscal year end 2014 | $ | 1,170.6 | $ | 96.0 | $ | 796.0 | $ | 23.2 | $ | 2,085.8 | |||||||||
Additions due to acquisitions | 33.6 | 11.1 | 17.0 | — | 61.7 | ||||||||||||||
Purchase price adjustments | (0.6 | ) | 1.7 | — | — | 1.1 | |||||||||||||
Foreign currency translation adjustments | (41.4 | ) | (2.4 | ) | (5.0 | ) | (1.8 | ) | (50.6 | ) | |||||||||
Divestiture | (14.3 | ) | — | — | — | (14.3 | ) | ||||||||||||
Balance as of the end of the third quarter of fiscal 2015 | $ | 1,147.9 | $ | 106.4 | $ | 808.0 | $ | 21.4 | $ | 2,083.7 |
Third Quarter of | Fiscal Year End | ||||||
As of | 2015 | 2014 | |||||
(Dollars in millions) | |||||||
Raw materials | $ | 94.9 | $ | 116.8 | |||
Work-in-process | 6.9 | 4.8 | |||||
Finished goods | 169.6 | 156.5 | |||||
Total inventories, net | $ | 271.4 | $ | 278.1 |
• | Engineering and Construction — Consists of hardware, software and services solutions for a variety of applications including: survey, heavy civil and building construction; infrastructure, geospatial, railway, mining and utilities. |
• | Field Solutions — Consists of hardware, software and services solutions for applications including agriculture, mapping and geographic information systems (GIS), utilities, and energy distribution. |
• | Mobile Solutions — Consists of hardware, software and services solutions that enable end-users to monitor and manage their mobile work, mobile workers and mobile assets. |
• | Advanced Devices — The various operations that comprise this segment are aggregated on the basis that these operations, taken as a whole, do not exceed 10% of the Company’s total revenue, operating income or assets. This segment is comprised of the Embedded Technologies and Timing, Military and Advanced Systems, Applanix, Trimble Outdoors, and ThingMagic businesses. |
Reporting Segments | |||||||||||||||||||
Engineering and Construction | Field Solutions | Mobile Solutions | Advanced Devices | Total | |||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Third Quarter of Fiscal 2015 | |||||||||||||||||||
Segment revenue | $ | 326.4 | $ | 73.5 | $ | 131.6 | $ | 30.8 | $ | 562.3 | |||||||||
Operating income | 68.8 | 19.5 | 23.1 | 10.8 | 122.2 | ||||||||||||||
Depreciation expense | 3.5 | 0.3 | 1.4 | 0.1 | 5.3 | ||||||||||||||
Third Quarter of Fiscal 2014 | |||||||||||||||||||
Segment revenue | $ | 342.2 | $ | 88.8 | $ | 121.2 | $ | 32.6 | $ | 584.8 | |||||||||
Operating income | 74.2 | 26.1 | 19.5 | 9.6 | 129.4 | ||||||||||||||
Depreciation expense | 3.4 | 0.2 | 1.5 | 0.2 | 5.3 | ||||||||||||||
First Three Quarters of Fiscal 2015 | |||||||||||||||||||
Segment revenue | $ | 964.2 | $ | 275.9 | $ | 388.1 | $ | 102.5 | $ | 1,730.7 | |||||||||
Operating income | 166.3 | 85.0 | 62.5 | 37.1 | 350.9 | ||||||||||||||
Depreciation expense | 10.6 | 0.9 | 4.0 | 0.4 | 15.9 | ||||||||||||||
First Three Quarters of Fiscal 2014 | |||||||||||||||||||
Segment revenue | $ | 1,019.6 | $ | 341.4 | $ | 362.7 | $ | 108.0 | $ | 1,831.7 | |||||||||
Operating income | 231.0 | 119.4 | 58.5 | 34.4 | 443.3 | ||||||||||||||
Depreciation expense | 9.7 | 0.6 | 4.0 | 0.5 | 14.8 | ||||||||||||||
As of the Third Quarter of Fiscal 2015 | |||||||||||||||||||
Accounts receivable | $ | 210.5 | $ | 45.2 | $ | 66.8 | $ | 22.0 | $ | 344.5 | |||||||||
Inventories | 187.4 | 39.9 | 28.6 | 15.5 | 271.4 | ||||||||||||||
Goodwill | 1,147.9 | 106.4 | 808.0 | 21.4 | 2,083.7 | ||||||||||||||
As of Fiscal Year End 2014 | |||||||||||||||||||
Accounts receivable | $ | 227.7 | $ | 51.6 | $ | 62.9 | $ | 19.8 | $ | 362.0 | |||||||||
Inventories | 185.2 | 51.0 | 26.1 | 15.8 | 278.1 | ||||||||||||||
Goodwill | 1,170.6 | 96.0 | 796.0 | 23.2 | 2,085.8 |
Reporting Segments | |||||||||||||||||||
Engineering and Construction | Field Solutions | Mobile Solutions | Advanced Devices | Total | |||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Third Quarter of Fiscal 2014 | |||||||||||||||||||
Operating income | $ | 74.2 | $ | 26.1 | $ | 19.5 | $ | 9.6 | $ | 129.4 | |||||||||
Previously allocated stock-based compensation | (3.6 | ) | (0.9 | ) | (1.3 | ) | (0.5 | ) | (6.3 | ) | |||||||||
Previously reported operating income | $ | 70.6 | $ | 25.2 | $ | 18.2 | $ | 9.1 | $ | 123.1 | |||||||||
First Three Quarters of Fiscal 2014 | |||||||||||||||||||
Operating income | $ | 231.0 | $ | 119.4 | $ | 58.5 | $ | 34.4 | $ | 443.3 | |||||||||
Previously allocated stock-based compensation | (11.0 | ) | (2.6 | ) | (3.7 | ) | (1.5 | ) | (18.8 | ) | |||||||||
Previously reported operating income | $ | 220.0 | $ | 116.8 | $ | 54.8 | $ | 32.9 | $ | 424.5 |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Consolidated segment operating income | $ | 122.2 | $ | 129.4 | $ | 350.9 | $ | 443.3 | |||||||
Unallocated corporate expense | (32.8 | ) | (74.8 | ) | (97.4 | ) | (134.0 | ) | |||||||
Amortization of purchased intangible assets | (40.7 | ) | (39.4 | ) | (122.2 | ) | (117.8 | ) | |||||||
Acquisition costs | (2.7 | ) | (4.1 | ) | (9.8 | ) | (7.5 | ) | |||||||
Consolidated operating income | 46.0 | 11.1 | 121.5 | 184.0 | |||||||||||
Non-operating income (expense), net: | (2.5 | ) | (4.0 | ) | 2.0 | 10.4 | |||||||||
Consolidated income before taxes | $ | 43.5 | $ | 7.1 | $ | 123.5 | $ | 194.4 |
Third Quarter of | Fiscal Year End | ||||||
As of | 2015 | 2014 | |||||
(Dollars in millions) | |||||||
Notes | $ | 400.0 | $ | 400.0 | |||
Unamortized discount on Notes | (2.9 | ) | (3.2 | ) | |||
Credit Facilities: | |||||||
2014 Credit facility | 211.0 | 277.0 | |||||
Uncommitted facilities | 150.0 | 57.0 | |||||
Promissory notes and other debt | 1.3 | 7.6 | |||||
Total debt | 759.4 | 738.4 | |||||
Less current portion of long-term debt | 150.3 | 64.4 | |||||
Non-current portion | $ | 609.1 | $ | 674.0 |
Year Payable | |||
2015 (Remaining) | $ | 150.1 | |
2016 | 0.2 | ||
2017 | 0.3 | ||
2018 | 0.2 | ||
2019 | 211.1 | ||
Thereafter | 400.4 | ||
Total | $ | 762.3 |
2015 (Remaining) | $ | 9.3 | |
2016 | 27.0 | ||
2017 | 21.8 | ||
2018 | 16.0 | ||
2019 | 12.4 | ||
Thereafter | 35.8 | ||
Total | $ | 122.3 |
Fair Values as of the end of the Third Quarter of Fiscal 2015 | Fair Values as of Fiscal Year End 2014 | ||||||||||||||||||||||||||||||
(Dollars in millions) | Level I | Level II | Level III | Total | Level I | Level II | Level III | Total | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Deferred compensation plan assets (1) | $ | 19.9 | $ | — | $ | — | $ | 19.9 | $ | 19.2 | $ | — | $ | — | $ | 19.2 | |||||||||||||||
Derivative assets (2) | — | 1.1 | — | 1.1 | — | 2.9 | — | 2.9 | |||||||||||||||||||||||
Contingent consideration assets (3) | — | — | 7.0 | 7.0 | — | — | 8.3 | 8.3 | |||||||||||||||||||||||
Total | $ | 19.9 | $ | 1.1 | $ | 7.0 | $ | 28.0 | $ | 19.2 | $ | 2.9 | $ | 8.3 | $ | 30.4 | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Deferred compensation plan liabilities (1) | $ | 19.9 | $ | — | $ | — | $ | 19.9 | $ | 19.2 | $ | — | $ | — | $ | 19.2 | |||||||||||||||
Derivative liabilities (2) | — | 0.1 | — | 0.1 | — | 1.4 | — | 1.4 | |||||||||||||||||||||||
Contingent consideration liabilities (4) | — | — | 1.7 | 1.7 | — | — | 3.7 | 3.7 | |||||||||||||||||||||||
Total | $ | 19.9 | $ | 0.1 | $ | 1.7 | $ | 21.7 | $ | 19.2 | $ | 1.4 | $ | 3.7 | $ | 24.3 |
(1) | The Company maintains a self-directed, non-qualified deferred compensation plan for certain executives and other highly compensated employees. The plan assets and liabilities are invested in actively traded mutual funds and individual stocks valued using observable quoted prices in active markets. Deferred compensation plan assets and liabilities are included in Other non-current assets and Other non-current liabilities on the Company's Condensed Consolidated Balance Sheets. |
(2) | Derivative assets and liabilities primarily represent forward currency exchange contracts. The Company typically enters into these contracts to minimize the short-term impact of foreign currency exchange rates on certain trade and inter-company receivables and payables. Derivative assets and liabilities are included in Other current assets and Other current liabilities on the Company's Condensed Consolidated Balance Sheets. |
(3) | Contingent consideration assets represents arrangements for buyers to pay the Company for certain businesses that it has divested. The fair value is determined based on the Company's expectations of future receipts. The minimum amount to be received under these arrangements is $3.5 million. Contingent consideration assets are included in Other receivables and Other non-current assets on the Company's Condensed Consolidated Balance Sheets. |
(4) | Contingent consideration liabilities represent arrangements to pay the former owners of certain companies that Trimble acquired. The undiscounted maximum payment under the arrangements is $14.6 million at the end of the third quarter of fiscal 2015, based on estimated future revenues or other milestones. Contingent consideration liabilities are included in Other current liabilities and Other non-current liabilities on the Company's Condensed Consolidated Balance Sheets. |
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
As of | Third Quarter of Fiscal 2015 | Fiscal Year End 2014 | |||||||||||||
(Dollars in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 123.6 | $ | 123.6 | $ | 148.0 | $ | 148.0 | |||||||
Liabilities: | |||||||||||||||
Notes | $ | 400.0 | $ | 405.0 | $ | 400.0 | $ | 396.9 | |||||||
Credit facilities | 211.0 | 211.0 | 277.0 | 277.0 | |||||||||||
Uncommitted facilities | 150.0 | 150.0 | 57.0 | 57.0 | |||||||||||
Promissory notes and other debt | 1.3 | 1.3 | 7.6 | 7.6 |
(Dollars in millions) | |||
Balance as of fiscal year end 2014 | $ | 20.6 | |
Acquired warranties | 0.1 | ||
Accruals for warranties issued | 12.8 | ||
Changes in estimates | 3.3 | ||
Warranty settlements (in cash or in kind) | (17.7 | ) | |
Balance as of the end of the third quarter of fiscal 2015 | $ | 19.1 |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In millions, except per share amounts) | |||||||||||||||
Numerator: | |||||||||||||||
Net income attributable to Trimble Navigation Ltd. | $ | 37.1 | $ | 11.8 | $ | 97.1 | $ | 158.3 | |||||||
Denominator: | |||||||||||||||
Weighted average number of common shares used in basic income per share | 254.8 | 260.3 | 257.5 | 260.4 | |||||||||||
Effect of dilutive securities | 2.4 | 4.1 | 2.8 | 4.7 | |||||||||||
Weighted average number of common shares and dilutive potential common shares used in diluted income per share | 257.2 | 264.4 | 260.3 | 265.1 | |||||||||||
Basic income per share | $ | 0.15 | $ | 0.05 | $ | 0.38 | $ | 0.61 | |||||||
Diluted income per share | $ | 0.14 | $ | 0.04 | $ | 0.37 | $ | 0.60 |
As of Fiscal Year End 2014 | ||||||||||||||
As previously | As | |||||||||||||
Consolidated Balance Sheet Data: | Reported | Adjustment | Revised | |||||||||||
Goodwill | $ | 2,101.2 | $ | (15.4 | ) | $ | 2,085.8 | |||||||
Total assets | 3,874.3 | (15.4 | ) | 3,858.9 | ||||||||||
Accumulated other comprehensive loss | (61.3 | ) | (15.4 | ) | (76.7 | ) | ||||||||
Total Trimble Navigation Ltd. shareholders' equity | 2,357.0 | (15.4 | ) | 2,341.6 | ||||||||||
Total equity | 2,368.8 | (15.4 | ) | 2,353.4 | ||||||||||
Total liabilities and equity | 3,874.3 | (15.4 | ) | 3,858.9 |
Third Quarter of 2014 | First Three Quarters of 2014 | ||||||||||||||||||||||
Consolidated Statements of Comprehensive Income | As previously | As | As previously | As | |||||||||||||||||||
Reported | Adjustment | Revised | Reported | Adjustment | Revised | ||||||||||||||||||
Net income | $ | 11.8 | $ | — | $ | 11.8 | $ | 158.0 | $ | — | $ | 158.0 | |||||||||||
Foreign currency translation adjustments | (60.5 | ) | (3.4 | ) | (63.9 | ) | (62.9 | ) | (1.7 | ) | (64.6 | ) | |||||||||||
Net unrealized actuarial gain | 0.1 | — | 0.1 | 0.1 | — | 0.1 | |||||||||||||||||
Comprehensive income (loss) | (48.6 | ) | (3.4 | ) | (52.0 | ) | 95.2 | (1.7 | ) | 93.5 | |||||||||||||
Less: Comprehensive loss attributable to noncontrolling interests | — | — | — | (0.3 | ) | — | (0.3 | ) | |||||||||||||||
Comprehensive income (loss) attributable to Trimble Navigation Ltd. | $ | (48.6 | ) | $ | (3.4 | ) | $ | (52.0 | ) | $ | 95.5 | $ | (1.7 | ) | $ | 93.8 | |||||||
• | the portion of our revenue coming from sales to international customers; |
• | seasonal fluctuations in our construction and agricultural equipment business revenues, and macroeconomic conditions and business conditions in the markets we serve; |
• | our plans to continue to invest in research and development at a rate consistent with our past, to develop and introduce new products, and to improve our competitive position, and to enter new markets; |
• | our belief that increases in recurring revenue from our software and solutions will provide us with enhanced business visibility over time; |
• | our potential exposure in connection with pending proceedings; |
• | our belief that our cash and cash equivalents, together with borrowings under our 2014 Credit Facility, will be sufficient to meet our anticipated operating cash needs, debt service, planned capital expenditures, and stock purchases under the stock repurchase program for at least the next twelve months; |
• | our expectation that planned capital expenditures will constitute a partial use of our cash resources; and |
• | fluctuations in interest rates. |
• | Focus on attractive markets with significant growth and profitability potential - We focus on large markets historically underserved by technology that offer significant potential for long-term revenue growth, profitability and market leadership. Our core industries such as construction, agriculture, and transportation markets are each multi-trillion dollar global industries which operate in increasingly demanding environments with technology adoption in the early phases relative to other industries. With the emergence of mobile computing capabilities, the increasing technological know-how of end users and the compelling return on investment to our customers, we believe many of our markets are ripe for substituting Trimble’s technology and solutions in place of traditional operating methods. |
• | Domain knowledge and technological innovation that benefit a diverse customer base - We have over time redefined our technological capabilities from hardware-driven point solutions to integrated work process solutions by developing domain expertise and heavily reinvesting in R&D, capex and acquisitions. Over the last several years and through the first nine months of fiscal 2015, we have been spending approximately 13% to 15% of revenue on R&D and currently hold over 1,000 unique patents. We intend to continue to leverage our divisional structure to take advantage of our |
• | Increasing focus on software and services - Software and services are increasingly important elements of our solutions and are core to our growth strategy. Trimble has an open application programming interface (API) philosophy and open vendor environment which leads to increased adoption of our software offerings. Professional services constitute an additional growth channel that helps our customers integrate and optimize the use of our offerings in their environment. The increased recurring revenue from these solutions will provide us with enhanced business visibility over time. |
• | Geographic expansion with localization strategy - We view international expansion as an important element of our strategy and we continue to position ourselves in geographic markets that will serve as important sources of future growth. We currently have a physical presence in over 35 countries and third party representation in over 100 countries. In the third quarter of fiscal 2015, 48% of our sales occurred in countries outside of the U.S. |
• | Optimized distribution channels to best access our markets - We utilize vertically-focused distribution channels that leverage domain expertise to best serve the needs of individual markets domestically and abroad. These channels include independent dealers, joint ventures, original equipment manufacturers (OEM) sales, and distribution alliances with key partners, such as CNH Global, Caterpillar, and Nikon, as well as direct sales to end-users, that provide us with broad market reach and localization capabilities to effectively serve our markets. |
• | Strategic acquisitions - Organic growth continues to be our primary focus, while acquisitions serve to enhance our market position. We acquire businesses that bring technology, products, or distribution capabilities that augment our portfolio and allow us to penetrate existing markets more effectively, or to establish a market beachhead. Our level of success in targeting and effectively integrating acquisitions is an important aspect of our growth strategy. |
Third Quarter of | First Three Quarters of | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Dollars in millions) | ||||||||||||||
Revenue: | ||||||||||||||
Product | $ | 373.0 | $ | 415.6 | $ | 1,168.2 | $ | 1,327.1 | ||||||
Service | 103.9 | 98.3 | 310.5 | 291.7 | ||||||||||
Subscription | 85.4 | 70.9 | 252.0 | 212.9 | ||||||||||
Total revenue | $ | 562.3 | $ | 584.8 | 1,730.7 | 1,831.7 | ||||||||
Gross margin | $ | 298.0 | $ | 316.8 | $ | 909.1 | $ | 998.3 | ||||||
Gross margin % | 53.0 | % | 54.2 | % | 52.5 | % | 54.5 | % | ||||||
Operating income | $ | 46.0 | $ | 11.1 | $ | 121.5 | $ | 184.0 | ||||||
Operating income % | 8.2 | % | 1.9 | % | 7.0 | % | 10.0 | % |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Engineering and Construction | |||||||||||||||
Revenue | $ | 326.4 | $ | 342.2 | $ | 964.2 | $ | 1,019.6 | |||||||
Segment revenue as a percent of total revenue | 58 | % | 58 | % | 56 | % | 56 | % | |||||||
Operating income | $ | 68.8 | $ | 74.2 | $ | 166.3 | $ | 231.0 | |||||||
Operating income as a percent of segment revenue | 21 | % | 22 | % | 17 | % | 23 | % | |||||||
Field Solutions | |||||||||||||||
Revenue | $ | 73.5 | $ | 88.8 | $ | 275.9 | $ | 341.4 | |||||||
Segment revenue as a percent of total revenue | 13 | % | 15 | % | 16 | % | 18 | % | |||||||
Operating income | $ | 19.5 | $ | 26.1 | $ | 85.0 | $ | 119.4 | |||||||
Operating income as a percent of segment revenue | 27 | % | 29 | % | 31 | % | 35 | % | |||||||
Mobile Solutions | |||||||||||||||
Revenue | $ | 131.6 | $ | 121.2 | $ | 388.1 | $ | 362.7 | |||||||
Segment revenue as a percent of total revenue | 23 | % | 21 | % | 22 | % | 20 | % | |||||||
Operating income | $ | 23.1 | $ | 19.5 | $ | 62.5 | 58.5 | ||||||||
Operating income as a percent of segment revenue | 18 | % | 16 | % | 16 | % | 16 | % | |||||||
Advanced Devices | |||||||||||||||
Revenue | $ | 30.8 | $ | 32.6 | $ | 102.5 | $ | 108.0 | |||||||
Segment revenue as a percent of total revenue | 6 | % | 6 | % | 6 | % | 6 | % | |||||||
Operating income | $ | 10.8 | $ | 9.6 | $ | 37.1 | $ | 34.4 | |||||||
Operating income as a percent of segment revenue | 35 | % | 29 | % | 36 | % | 32 | % |
Reporting Segments | |||||||||||||||||||
Engineering and Construction | Field Solutions | Mobile Solutions | Advanced Devices | Total | |||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Third Quarter of Fiscal 2014 | |||||||||||||||||||
Operating income | $ | 74.2 | $ | 26.1 | $ | 19.5 | $ | 9.6 | $ | 129.4 | |||||||||
Previously allocated stock-based compensation | (3.6 | ) | (0.9 | ) | (1.3 | ) | (0.5 | ) | (6.3 | ) | |||||||||
Previously reported operating income | $ | 70.6 | $ | 25.2 | $ | 18.2 | $ | 9.1 | $ | 123.1 | |||||||||
First Three Quarters of Fiscal 2014 | |||||||||||||||||||
Operating income | $ | 231.0 | $ | 119.4 | $ | 58.5 | $ | 34.4 | $ | 443.3 | |||||||||
Previously allocated stock-based compensation | (11.0 | ) | (2.6 | ) | (3.7 | ) | (1.5 | ) | (18.8 | ) | |||||||||
Previously reported operating income | $ | 220.0 | $ | 116.8 | $ | 54.8 | $ | 32.9 | $ | 424.5 |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Consolidated segment operating income | $ | 122.2 | $ | 129.4 | $ | 350.9 | $ | 443.3 | |||||||
Unallocated corporate expense | (32.8 | ) | (74.8 | ) | (97.4 | ) | (134.0 | ) | |||||||
Amortization of purchased intangible assets | (40.7 | ) | (39.4 | ) | (122.2 | ) | (117.8 | ) | |||||||
Acquisition costs | (2.7 | ) | (4.1 | ) | (9.8 | ) | (7.5 | ) | |||||||
Consolidated operating income | 46.0 | 11.1 | 121.5 | 184.0 | |||||||||||
Non-operating income (expense), net: | (2.5 | ) | (4.0 | ) | 2.0 | 10.4 | |||||||||
Consolidated income before taxes | $ | 43.5 | $ | 7.1 | $ | 123.5 | $ | 194.4 |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Research and development | $ | 79.6 | $ | 79.0 | $ | 251.3 | $ | 237.2 | |||||||
Percentage of revenue | 14 | % | 14 | % | 15 | % | 13 | % | |||||||
Sales and marketing | $ | 89.1 | $ | 95.8 | $ | 281.8 | $ | 288.8 | |||||||
Percentage of revenue | 16 | % | 16 | % | 16 | % | 16 | % | |||||||
General and administrative | $ | 63.2 | $ | 111.4 | $ | 192.1 | $ | 230.2 | |||||||
Percentage of revenue | 11 | % | 19 | % | 11 | % | 12 | % | |||||||
Total | $ | 231.9 | $ | 286.2 | $ | 725.2 | $ | 756.2 | |||||||
Percentage of revenue | 41 | % | 49 | % | 42 | % | 41 | % |
Third Quarter of | First Three Quarters of | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(Dollars in millions) | |||||||||||||||
Interest expense, net | $ | (6.4 | ) | $ | (3.0 | ) | $ | (19.1 | ) | $ | (9.8 | ) | |||
Foreign currency transaction gain (loss) | 0.1 | (3.2 | ) | 1.2 | (3.8 | ) | |||||||||
Income from equity method investments, net | 4.7 | 2.8 | 14.1 | 11.5 | |||||||||||
Other income (expense), net | (0.9 | ) | (0.6 | ) | 5.8 | 12.5 | |||||||||
Total non-operating income (expense), net | $ | (2.5 | ) | $ | (4.0 | ) | $ | 2.0 | $ | 10.4 |
Third Quarter of | Fiscal Year End | ||||||
As of | 2015 | 2014 | |||||
(In millions) | |||||||
Cash and cash equivalents | $ | 123.6 | $ | 148.0 | |||
Total debt | 759.4 | 738.4 | |||||
First Three Quarters of | |||||||
2015 | 2014 | ||||||
(In millions) | |||||||
Cash provided by operating activities | $ | 276.4 | $ | 310.5 | |||
Cash used in investing activities | (113.4 | ) | (202.4 | ) | |||
Cash used in financing activities | (177.0 | ) | (108.6 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (10.4 | ) | (7.2 | ) | |||
Net decrease in cash and cash equivalents | $ | (24.4 | ) | $ | (7.7 | ) |
Third Quarter of | Fiscal Year End | ||||
As of | 2015 | 2014 | |||
Accounts receivable days sales outstanding | 56 | 58 | |||
Inventory turns per year | 4.0 | 3.9 |
(In millions, except per share amounts) | Third Quarter of | First Three Quarters of | |||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||||
Dollar | % of | Dollar | % of | Dollar | % of | Dollar | % of | ||||||||||||||||||||||
Amount | Revenue | Amount | Revenue | Amount | Revenue | Amount | Revenue | ||||||||||||||||||||||
GROSS MARGIN: | |||||||||||||||||||||||||||||
GAAP gross margin: | $ | 298.0 | 53.0 | % | $ | 316.8 | 54.2 | % | $ | 909.1 | 52.5 | % | $ | 998.3 | 54.5 | % | |||||||||||||
Restructuring charges | ( A ) | 0.3 | 0.1 | % | 0.1 | — | % | 0.8 | — | % | 0.3 | — | % | ||||||||||||||||
Amortization of purchased intangible assets | ( B ) | 23.3 | 4.1 | % | 20.1 | 3.4 | % | 68.8 | 4.0 | % | 61.0 | 3.3 | % | ||||||||||||||||
Stock-based compensation | ( C ) | 1.0 | 0.2 | % | 0.8 | 0.1 | % | 2.9 | 0.2 | % | 2.3 | 0.1 | % | ||||||||||||||||
Amortization of acquisition-related inventory step-up | ( D ) | — | — | % | 0.5 | 0.1 | % | — | — | % | 0.6 | 0.1 | % | ||||||||||||||||
Non-GAAP gross margin: | $ | 322.6 | 57.4 | % | $ | 338.3 | 57.8 | % | $ | 981.6 | 56.7 | % | $1,062.5 | 58.0 | % | ||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||||||||
GAAP operating expenses: | $ | 252.0 | 44.8 | % | $ | 305.7 | 52.3 | % | $ | 787.6 | 45.5 | % | $ | 814.3 | 44.5 | % | |||||||||||||
Restructuring charges | ( A ) | (2.7 | ) | (0.5 | )% | (0.2 | ) | — | % | (9.0 | ) | (0.5 | )% | (1.3 | ) | (0.1 | )% | ||||||||||||
Amortization of purchased intangible assets | ( B ) | (17.4 | ) | (3.1 | )% | (19.3 | ) | (3.3 | )% | (53.4 | ) | (3.1 | )% | (56.8 | ) | (3.1 | )% | ||||||||||||
Stock-based compensation | ( C ) | (11.8 | ) | (2.1 | )% | (10.2 | ) | (1.8 | )% | (34.4 | ) | (2.0 | )% | (29.8 | ) | (1.6 | )% | ||||||||||||
Acquisition / divestiture items | ( E ) | (2.4 | ) | (0.4 | )% | (4.1 | ) | (0.7 | )% | (8.0 | ) | (0.4 | )% | (7.5 | ) | (0.4 | )% | ||||||||||||
Litigation | ( F ) | — | — | % | (52.0 | ) | (8.9 | )% | — | — | % | (52.0 | ) | (2.9 | )% | ||||||||||||||
Non-GAAP operating expenses: | $ | 217.7 | 38.7 | % | $ | 219.9 | 37.6 | % | $ | 682.8 | 39.5 | % | $ | 666.9 | 36.4 | % | |||||||||||||
OPERATING INCOME: | |||||||||||||||||||||||||||||
GAAP operating income: | $ | 46.0 | 8.2 | % | $ | 11.1 | 1.9 | % | $ | 121.5 | 7.0 | % | $ | 184.0 | 10.0 | % | |||||||||||||
Restructuring charges | ( A ) | 3.0 | 0.5 | % | 0.3 | — | % | 9.8 | 0.6 | % | 1.6 | 0.1 | % | ||||||||||||||||
Amortization of purchased intangible assets | ( B ) | 40.7 | 7.2 | % | 39.4 | 6.7 | % | 122.2 | 7.1 | % | 117.8 | 6.4 | % | ||||||||||||||||
Stock-based compensation | ( C ) | 12.8 | 2.3 | % | 11.0 | 1.9 | % | 37.3 | 2.1 | % | 32.1 | 1.8 | % | ||||||||||||||||
Amortization of acquisition-related inventory step-up | ( D ) | — | — | % | 0.5 | 0.1 | % | — | — | % | 0.6 | — | % | ||||||||||||||||
Acquisition / divestiture items | ( E ) | 2.4 | 0.5 | % | 4.1 | 0.7 | % | 8.0 | 0.5 | % | 7.5 | 0.4 | % | ||||||||||||||||
Litigation | ( F ) | — | — | % | 52.0 | 8.9 | % | — | — | % | 52.0 | 2.9 | % | ||||||||||||||||
Non-GAAP operating income: | $ | 104.9 | 18.7 | % | $ | 118.4 | 20.2 | % | $ | 298.8 | 17.3 | % | $ | 395.6 | 21.6 | % | |||||||||||||
NON-OPERATING INCOME (EXPENSE), NET: | |||||||||||||||||||||||||||||
GAAP non-operating income (expense), net: | $ | (2.5 | ) | $ | (4.0 | ) | $ | 2.0 | $ | 10.4 | |||||||||||||||||||
Acquisition / divestiture items | ( E ) | (0.2 | ) | 1.7 | (5.8 | ) | 6.0 | ||||||||||||||||||||||
Gain on an equity sale | ( G ) | — | — | — | (15.1 | ) | |||||||||||||||||||||||
Non-GAAP non-operating income (expense), net: | $ | (2.7 | ) | $ | (2.3 | ) | $ | (3.8 | ) | $ | 1.3 | ||||||||||||||||||
GAAP and Non-GAAP Tax Rate % | ( L ) | GAAP and Non-GAAP Tax Rate % | ( L ) | GAAP and Non-GAAP Tax Rate % | ( L ) | GAAP and Non-GAAP Tax Rate % | ( L ) | ||||||||||||||||||||||
INCOME TAX PROVISION: | |||||||||||||||||||||||||||||
GAAP income tax provision: | $ | 6.5 | 15 | % | $ | (4.7 | ) | (66 | )% | $ | 26.7 | 22 | % | $ | 36.4 | 19 | % | ||||||||||||
Non-GAAP items tax effected: | ( H ) | 8.8 | 13.9 | 37.8 | 36.3 | ||||||||||||||||||||||||
Difference in GAAP and Non-GAAP tax rate | ( I ) | 9.2 | — | 6.3 | — | ||||||||||||||||||||||||
Tax on gain on an equity sale | ( J ) | — | — | — | (5.8 | ) | |||||||||||||||||||||||
Tax on RDS litigation | ( K ) | — | 19.8 | — | 19.8 | ||||||||||||||||||||||||
Non-GAAP income tax provision: | $ | 24.5 | 24 | % | $ | 29.0 | 25 | % | $ | 70.8 | 24 | % | $ | 86.7 | 22 | % | |||||||||||||
NET INCOME: | |||||||||||||||||||||||||||||
GAAP net income attributable to Trimble Navigation Ltd. | $ | 37.1 | $ | 11.8 | $ | 97.1 | $ | 158.3 | |||||||||||||||||||||
Restructuring charges | ( A ) | 3.0 | 0.3 | 9.8 | 1.6 | ||||||||||||||||||||||||
Amortization of purchased intangible assets | ( B ) | 40.7 | 39.4 | 122.2 | 117.8 | ||||||||||||||||||||||||
Stock-based compensation | ( C ) | 12.8 | 11.0 | 37.3 | 32.1 | ||||||||||||||||||||||||
Amortization of acquisition-related inventory step-up | ( D ) | — | 0.5 | — | 0.6 | ||||||||||||||||||||||||
Acquisition / divestiture items | ( E ) | 2.2 | 5.8 | 2.2 | 13.5 | ||||||||||||||||||||||||
Gain on an equity sale | ( G ) | — | — | — | (15.1 | ) | |||||||||||||||||||||||
Litigation | ( F ) | — | 52.0 | — | 52.0 | ||||||||||||||||||||||||
Non-GAAP tax adjustments | ( H ) - ( K ) | (18.0 | ) | (33.7 | ) | (44.1 | ) | (50.3 | ) | ||||||||||||||||||||
Non-GAAP net income attributable to Trimble Navigation Ltd. | $ | 77.8 | $ | 87.1 | $ | 224.5 | $ | 310.5 | |||||||||||||||||||||
DILUTED NET INCOME PER SHARE: | |||||||||||||||||||||||||||||
GAAP diluted net income per share attributable to Trimble Navigation Ltd. | $ | 0.14 | $ | 0.04 | $ | 0.37 | $ | 0.60 | |||||||||||||||||||||
Restructuring charges | ( A ) | 0.01 | — | 0.04 | 0.01 | ||||||||||||||||||||||||
Amortization of purchased intangible assets | ( B ) | 0.16 | 0.15 | 0.47 | 0.44 | ||||||||||||||||||||||||
Stock-based compensation | ( C ) | 0.05 | 0.04 | 0.14 | 0.12 | ||||||||||||||||||||||||
Amortization of acquisition-related inventory step-up | ( D ) | — | — | — | — | ||||||||||||||||||||||||
Acquisition / divestiture items | ( E ) | 0.01 | 0.02 | 0.01 | 0.05 | ||||||||||||||||||||||||
Gain on an equity sale | ( G ) | — | — | — | (0.06 | ) | |||||||||||||||||||||||
Litigation | ( F ) | — | 0.20 | — | 0.20 | ||||||||||||||||||||||||
Non-GAAP tax adjustments | ( H ) - ( K ) | (0.07 | ) | (0.12 | ) | (0.17 | ) | (0.19 | ) | ||||||||||||||||||||
Non-GAAP diluted net income per share attributable to Trimble Navigation Ltd. | $ | 0.30 | $ | 0.33 | $ | 0.86 | $ | 1.17 | |||||||||||||||||||||
OPERATING LEVERAGE: | |||||||||||||||||||||||||||||
Increase (decrease) in non-GAAP operating income | $ | (13.5 | ) | $ | 0.2 | $ | (96.8 | ) | $ | 46.8 | |||||||||||||||||||
Increase (decrease) in revenue | $ | (22.5 | ) | $ | 28.3 | $ | (101.0 | ) | $ | 142.8 |
Operating leverage (increase in non-GAAP operating income as a % of increase in revenue) | N/A | 0.7 | % | N/A | 32.8 | % |
A. | Restructuring costs. Included in our GAAP presentation of cost of sales and operating expenses, restructuring costs recorded are primarily for employee compensation resulting from reductions in employee headcount in connection with our company restructurings. We exclude restructuring costs from our non-GAAP measures because we believe they do not reflect expected future operating expenses, they are not indicative of our core operating performance, and they are not meaningful in comparisons to our past operating performance. We have incurred restructuring expense in each of the periods presented however the amount incurred can vary significantly based on whether a restructuring has occurred in the period and the timing of headcount reductions. |
B. | Amortization of purchased intangible assets. Included in our GAAP presentation of gross margin and operating expenses is amortization of purchased intangible assets. US GAAP accounting requires that intangible assets are recorded at fair value and amortized over their useful lives. Consequently, the timing and size of our acquisitions will cause our operating results to vary from period to period, making a comparison to past performance difficult for investors. This accounting treatment may cause differences when comparing our results to companies that grow internally because the fair value assigned to the intangible assets acquired through acquisition may significantly exceed the equivalent expenses that a company may incur for similar efforts when performed internally. Furthermore, the useful life that we expense our intangible assets over may be substantially different from the time period that an internal growth company incurs and recognizes such expenses. We believe that by excluding the amortization of purchased intangible assets, which primarily represents technology and/or customer relationships already developed, it provides an alternative way for investors to compare our operations pre-acquisition to those post-acquisition and to those of our competitors that have pursued internal growth strategies. However, we note that companies that grow internally will incur costs to develop intangible assets that will be expensed in the period incurred, which may make a direct comparison more difficult. |
C. | Stock-based compensation. Included in our GAAP presentation of cost of sales and operating expenses, stock-based compensation consists of expenses for employee stock options and awards and purchase rights under our employee stock purchase plan. We exclude stock-based compensation expense from our non-GAAP measures because some investors may view it as not reflective of our core operating performance as it is a non-cash expense. For the third quarter and first three quarters of fiscal 2015 and 2014, stock-based compensation was allocated as follows: |
Third Quarter of | First Three Quarters of | ||||||||||||||
(Dollars in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Cost of sales | $ | 1.0 | $ | 0.8 | $ | 2.9 | $ | 2.3 | |||||||
Research and development | 2.1 | 1.6 | 6.4 | 4.8 | |||||||||||
Sales and Marketing | 2.2 | 2.0 | 6.7 | 6.0 | |||||||||||
General and administrative | 7.5 | 6.6 | 21.3 | 19.0 | |||||||||||
$ | 12.8 | $ | 11.0 | $ | 37.3 | $ | 32.1 |
D. | Amortization of acquisition-related inventory step-up. The purchase accounting entries associated with our business acquisitions require us to record inventory at its fair value, which is sometimes greater than the previous book value of the inventory. Included in our GAAP presentation of cost of sales, the increase in inventory value is amortized to cost of sales over the period that the related product is sold. We exclude inventory step-up amortization from our non-GAAP measures because it is a non-cash expense that we do not believe is indicative of our ongoing operating results. We further believe that excluding this item from our non-GAAP results is useful to investors in that it allows for period-over-period comparability. |
E. | Acquisition / divestiture items. Included in our GAAP presentation of operating expenses, acquisition costs consist of external and incremental costs resulting directly from merger and acquisition and strategic investment activities such as legal, due diligence, and integration costs as well as adjustments to the fair value of earn-out liabilities. Included in our GAAP presentation of non-operating income (expense) net, acquisition / divestiture items includes unusual acquisition, investment, or divestiture gains/losses. Although we do numerous acquisitions, the costs that have been excluded from the non-GAAP measures are costs specific to particular acquisitions. These are one-time costs that vary significantly in amount and timing and are not indicative of our core operating performance. |
F. | Litigation. The fiscal 2014 amount represents $0.7M of costs based on an arbitration agreement, as well as $51.3M of estimated costs that were reserved during the third quarter based on a jury verdict in favor of the plaintiff, Recreational Data Services, Inc. and then reversed during the fourth quarter after the judge overturned the verdict. We have excluded these costs from our non-GAAP measures because they are non-recurring expenses that are not indicative of our ongoing operating results. We further believe that excluding these items from our non-GAAP results is useful to investors in that it allows for period-over-period comparability. |
G. | Gain on an equity sale. Included in our GAAP presentation of non-operating income (expense), net this amount represents a gain on a partial equity sale of Virtual Site Solutions. We excluded the gain from our non-GAAP measures. We believe that investors benefit from excluding this item from our non-GAAP measures because it facilitates an evaluation of our non-operating income trends. |
H. | Non-GAAP items tax effected. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP items ( A ) - ( E ) on non-GAAP net income. We believe this information is useful to investors because it provides for consistent treatment of the excluded items in this non-GAAP presentation. |
I. | Difference in GAAP and Non-GAAP tax rate. This amount represents the difference between the GAAP and Non-GAAP tax rates applied to the Non-GAAP Operating Income plus the Non-GAAP Non-Operating Income (Expense), Net. In fiscal 2015 we began calculating a non-GAAP tax rate separate from the GAAP rate as we expect this to add consistency in the quarterly trends. We have not retroactively gone back to prior periods to restate them with a similar separate rate. Therefore, comparability between periods may be affected. |
J. | Tax on gain on an equity sale. This amount represents the tax effect of a gain on a partial equity sale of Virtual Site Solutions. We excluded this item as it represents the tax effect of a non-recurring gain. We believe that investors benefit from excluding this item from our non-GAAP income tax provision because it facilitates a comparison of the non-GAAP tax rate in 2014 to the non-GAAP tax rates in the current and prior periods. |
K. | Tax on Recreational Data Services Inc. litigation. This amount represents the tax effect of the $51.3M of estimated costs that were reserved during the third quarter based on a jury verdict in favor of the plaintiff, Recreational Data Services, Inc. and then reversed during the fourth quarter after the judge overturned the verdict. We excluded this item as it represents the tax effect of a non-recurring expense. We believe that investors benefit from excluding this item from our non-GAAP income tax provision because it allows for period-over-period comparability. |
L. | GAAP and non-GAAP tax rate %. These percentages are defined as GAAP income tax provision as a percentage of GAAP income before taxes and non-GAAP income tax provision as a percentage of non-GAAP income before taxes. We believe that investors benefit from a presentation of non-GAAP tax rate percentage as a way of facilitating a comparison to non-GAAP tax rates in prior periods. However, this comparability may be impacted since we began separately calculating a non-GAAP tax rate in fiscal 2015. |
Third Quarter of Fiscal 2015 | Fiscal Year End 2014 | ||||||||||||||
Nominal Amount | Fair Value | Nominal Amount | Fair Value | ||||||||||||
Forward contracts: | |||||||||||||||
Purchased | $ | (81.1 | ) | $ | 0.2 | $ | (58.4 | ) | $ | (1.1 | ) | ||||
Sold | $ | 87.2 | $ | 0.8 | $ | 132.9 | $ | 2.6 |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program | ||||||
July 4, 2015 – August 7, 2015 | 365,313 | $19.51 | 365,313 | $169,909,802 | (1) | ||||
August 8, 2015 – September 4, 2015 | 4,173,433 | $19.01 | 4,173,433 | $324,922,586 | (1)/(2) | ||||
September 5, 2015 – October 2, 2015 | 3,688,148 | $18.49 | 3,688,148 | $249,922,586 | (2) | ||||
Total | 8,226,894 | $18.80 | 8,226,894 |
3.1 | Restated Articles of Incorporation of the Company filed June 25, 1986. (2) |
3.2 | Certificate of Amendment of Articles of Incorporation of the Company filed October 6, 1988. (2) |
3.3 | Certificate of Amendment of Articles of Incorporation of the Company filed July 18, 1990. (2) |
3.4 | Certificate of Amendment of Articles of Incorporation of the Company filed May 29, 2003. (3) |
3.5 | Certificate of Amendment of Articles of Incorporation of the Company filed March 4, 2004. (4) |
3.6 | Certificate of Amendment of Articles of Incorporation of the Company filed February 21, 2007. (6) |
3.7 | Certificate of Amendment of Articles of Incorporation of the Company filed March 20, 2013. (7) |
3.8 | Bylaws of the Company, amended and restated through May 7, 2015. (5) |
4.1 | Specimen copy of certificate for shares of Common Stock of the Company. (1) |
10.1 | Form of global stock option agreement (officer) under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.2 | Form of global restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan.(8) |
10.3 | Form of U.S. director restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.4 | Form of non-U.S. director restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.5 | Form of global subscription agreement under the Company’s Amended and Restated Employee Stock Purchase Plan. (8) |
10.6 | Form of global performance restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.7 | Trimble Navigation Limited Deferred Compensation Plan effective December 30, 2004, as amended and restated November 6, 2015. (8) |
10.8 | Trimble Navigation Limited Amended and Restated Employee Stock Purchase Plan dated July 30, 2012. (8) |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | XBRL Taxonomy Extension Definition Document. |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
(1) | Incorporated by reference to exhibit number 4.1 to the registrant’s Registration Statement on Form S-1, as amended (File No. 33-35333), which became effective July 19, 1990. |
(2) | Incorporated by reference to identically numbered exhibits to the registrant’s Annual Report on Form 10-K for the fiscal year ended January 1, 1999. |
(3) | Incorporated by reference to exhibit number 3.5 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2003. |
(4) | Incorporated by reference to exhibit number 3.6 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2004. |
(5) | Incorporated by reference to exhibit number 3.2 to the Company’s Current Report on Form 8-K, filed March 25, 2015. |
(6) | Incorporated by reference to exhibit number 3.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2007. |
(7) | Incorporated by reference to exhibit number 3.1 to the Company’s Current Report on Form 8-K, filed March 20, 2013. |
(8) | Furnished or filed herewith. |
TRIMBLE NAVIGATION LIMITED | ||
(Registrant) | ||
By: | /s/ François Delépine | |
François Delépine | ||
Chief Financial Officer | ||
(Authorized Officer and Principal | ||
Financial Officer) |
3.1 | Restated Articles of Incorporation of the Company filed June 25, 1986. (2) |
3.2 | Certificate of Amendment of Articles of Incorporation of the Company filed October 6, 1988. (2) |
3.3 | Certificate of Amendment of Articles of Incorporation of the Company filed July 18, 1990. (2) |
3.4 | Certificate of Amendment of Articles of Incorporation of the Company filed May 29, 2003. (3) |
3.5 | Certificate of Amendment of Articles of Incorporation of the Company filed March 4, 2004. (4) |
3.6 | Certificate of Amendment of Articles of Incorporation of the Company filed February 21, 2007. (6) |
3.7 | Certificate of Amendment of Articles of Incorporation of the Company filed March 20, 2013. (7) |
3.8 | Bylaws of the Company, amended and restated through May 7, 2015. (5) |
4.1 | Specimen copy of certificate for shares of Common Stock of the Company. (1) |
10.1 | Form of global stock option agreement (officer) under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.2 | Form of global restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan.(8) |
10.3 | Form of U.S. director restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.4 | Form of non-U.S. director restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.5 | Form of global subscription agreement under the Company’s Amended and Restated Employee Stock Purchase Plan. (8) |
10.6 | Form of global performance restricted stock unit award agreement under the Company’s Amended and Restated 2002 Stock Plan. (8) |
10.7 | Trimble Navigation Limited Deferred Compensation Plan effective December 30, 2004, as amended and restated November 6, 2015. (8) |
10.8 | Trimble Navigation Limited Amended and Restated Employee Stock Purchase Plan dated July 30, 2012. (8) |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated November 9, 2015. (8) |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema Document. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | XBRL Taxonomy Extension Definition Document. |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
(1) | Incorporated by reference to exhibit number 4.1 to the registrant’s Registration Statement on Form S-1, as amended (File No. 33-35333), which became effective July 19, 1990. |
(2) | Incorporated by reference to identically numbered exhibits to the registrant’s Annual Report on Form 10-K for the fiscal year ended January 1, 1999. |
(3) | Incorporated by reference to exhibit number 3.5 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2003. |
(4) | Incorporated by reference to exhibit number 3.6 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2004. |
(5) | Incorporated by reference to exhibit number 3.2 to the Company’s Current Report on Form 8-K, filed March 25, 2015. |
(6) | Incorporated by reference to exhibit number 3.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2007. |
(7) | Incorporated by reference to exhibit number 3.1 to the Company’s Current Report on Form 8-K, filed March 20, 2013. |
(8) | Furnished or filed herewith. |
Type of Option | Incentive Stock Option | |
Nonstatutory Stock Option |
OPTIONEE: | TRIMBLE NAVIGATION LIMITED: | ||
Signature | By | ||
Steven W. Berglund | |||
Print Name | Print Name | ||
President & CEO | |||
Residence Address | Title |
SERVICE PROVIDER: | TRIMBLE NAVIGATION LIMITED: | ||
Signature | By | ||
Print Name | Print Name | ||
Residence Address | Title |
(i) | The revocation must be made within one (1) week after acceptance of the Award Agreement. |
(ii) | The revocation must be in written form to be valid. It is sufficient if the Optionee returns the Award Agreement to the Company or the Company’s representative with language which can be understood as a refusal to conclude or honor the Award Agreement, provided the revocation is sent within the period discussed above. |
SERVICE PROVIDER: | TRIMBLE NAVIGATION LIMITED: | ||
Signature | By | ||
JANOW, MERIT E. | Steve Berglund | ||
Print Name | Print Name | ||
49 EAST 96TH ST. APT 6E | |||
NEW YORK, NY, 10128 | |||
UNITED STATES | CEO | ||
Residence Address | Title |
SERVICE PROVIDER: | TRIMBLE NAVIGATION LIMITED: | ||
Signature | By | ||
JOHANSSON, ULF J. | STEVE BERGLUND | ||
Print Name | Print Name | ||
STRANDV 43 IV, | |||
STOCKHOLM, SWEDEN, S-11456 | CEO | ||
Residence Address | Title |
(i) | The revocation must be made within one (1) week after acceptance of the Subscription Agreement. |
(ii) | The revocation must be in written form to be valid. It is sufficient if I return the Subscription Agreement to the Company or the Company’s representative with language which can be understood as a refusal to conclude or honor the Subscription Agreement, provided the revocation is sent within the period discussed above. |
1. | To prepare, execute and file any report, application and/or any other documents required for implementation of the Trimble Navigation Limited Amended and Restated Employee Stock Purchase Plan (the “Stock Purchase Plan”) in Chile; |
2. | To take any action that may be necessary or appropriate to implement the Stock Purchase Plan with the competent Chilean authorities, including, without limitation, to transfer my payroll deductions out of Chile to purchase shares of Common Stock under the Stock Purchase Plan; and |
3. | To constitute and appoint, in its place and stead, and as its substitute, one or more representatives, with power of revocation. |
A. | The individual who has obtained authorised access to this Joint Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive options pursuant to the Trimble Navigation Limited Amended and Restated Employee Stock Purchase Plan (the “Stock Purchase Plan”), and |
B. | Trimble Navigation Limited, at 935 Stewart Drive, Sunnyvale, California 94085, U.S.A. (the “Company”), which may grant options under the Stock Purchase Plan and is entering into this Joint Election on behalf of the Employer. |
1.1 | This Joint Election relates to any option granted to the Employee under the Stock Purchase Plan on or after January 1, 2013 up to the termination date of the Stock Purchase Plan. |
1.2 | In this Joint Election the following words and phrases have the following meanings: |
(a) | “Chargeable Event” means, in relation to the Stock Purchase Plan: |
(i) | the acquisition of securities pursuant to options (within section 477(3)(a) of ITEPA); |
(ii) | the assignment (if applicable) or release of options in return for consideration (within section 477(3)(b) of ITEPA); |
(iii) | the receipt of a benefit in connection with the options, other than a benefit within (i) or (ii) above (within section 477(3)(c) of ITEPA); |
(iv) | post-acquisition charges relating to the options and/or shares acquired pursuant to the options (within section 427 of ITEPA); and/or |
(v) | post-acquisition charges relating to the options and/or shares acquired pursuant to the options (within section 439 of ITEPA). |
1.3 | This Joint Election relates to the employer’s secondary Class 1 National Insurance contributions (the “Employer’s Liability”) which may arise on the occurrence of a Chargeable Event in respect of the options pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA. |
1.4 | This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA, or the Social Security Contributions and Benefits (Northern Ireland) Act 1992. |
1.5 | This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value). |
3.1 | The Employee hereby authorises the Company and/or the Employer to collect the Employer’s Liability from the Employee at any time after the Chargeable Event: |
(i) | by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Chargeable Event; and/or |
(ii) | directly from the Employee by payment in cash or cleared funds; and/or |
(iii) | by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive pursuant to the options; and/or |
(iv) | through any other method as set forth in the applicable Subscription Agreement entered into between the Employee and the Company. |
3.2 | The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities to the Employee in respect of the options until full payment of the Employer’s Liability is received. |
3.3 | The Company agrees to remit the Employer’s Liability to Her Majesty’s Revenue & Customs (“HMRC”) on behalf of the Employee within 14 days after the end of the UK tax month during which the Chargeable Event occurs (or within 17 days if payments are made electronically). |
4.1 | The Employee and the Company agree to be bound by the terms of this Joint Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due. |
4.2 | This Election will continue in effect until the earliest of the following: |
(i) | the Employee and the Company agree in writing that it should cease to have effect; |
(ii) | on the date the Company serves written notice on the Employee terminating its effect; |
(iii) | on the date HMRC withdraws approval of this Joint Election; or |
(iv) | after due payment of the Employer’s Liability in respect of the Stock Purchase Plan to which this Joint Election relates or could relate, such that the Election ceases to have effect in accordance with its terms. |
Registered Office: | Baird House 15-17 St Cross Street London, EC1N 8UW |
Company Registration Number: | 4,735,063 |
Corporation Tax District: | |
Corporation Tax Reference: | 204 52184 23681 |
PAYE Reference: | 073/JZ45398 |
Registered Office: | Bank House 171 Midsummer Boulevard Milton Keynes, MK9 1EB |
Company Registration Number: | 5801504 |
Corporation Tax District: | |
Corporation Tax Reference: | [insert] |
PAYE Reference: | 362/YZ90419 |
Registered Office: | Tekla House Cliffe Park Way Morely, Leeds, West Yorkshire LS27 0RY |
Company Registration Number: | 3753064 |
Corporation Tax District: | |
Corporation Tax Reference: | 36670 28216 |
PAYE Reference: | 567/D6523 |
Registered Office: | 1 Bath Street Ipswich, Suffolk 1P2 8SD |
Company Registration Number: | 4069823 |
Corporation Tax District: | |
Corporation Tax Reference: | 346 14947 14009 |
PAYE Reference: | 245 / VA37745 |
SERVICE PROVIDER: | TRIMBLE NAVIGATION LIMITED: | ||
Signature | By | ||
Print Name | Print Name | ||
Residence Address | Title |
TSR Percentile Ranking | Vested Percentage | |
Maximum: 80th Percentile or higher | 200% | |
Target: 50th Percentile or higher | 100% | |
Threshold: 25th Percentile | 50% | |
Below Threshold | 0% |
ARTICLE 1 | Definitions 1 |
ARTICLE 2 | Selection, Enrollment, Eligibility 7 |
2.1 | Selection by Committee 7 |
2.2 | Enrollment and Eligibility Requirements; Commencement of Participation 8 |
ARTICLE 3 | Deferral Commitments/Company Contribution Amounts/Company Restoration Matching Amounts /Vesting/Crediting/Taxes 8 |
3.1 | Minimum Deferrals 8 |
3.2 | Maximum Deferral 8 |
3.3 | Timing of Deferral Elections; Effect of Election Form 9 |
3.4 | Withholding and Crediting of Annual Deferral Amounts 10 |
3.5 | Company Contribution Amount 11 |
3.6 | Vesting 11 |
3.7 | Crediting/Debiting of Account Balances 11 |
3.8 | FICA and Other Taxes 13 |
ARTICLE 4 | Scheduled Distributions; Unforeseeable Emergencies 13 |
4.1 | Scheduled Distributions 13 |
4.2 | Other Benefits Take Precedence Over Scheduled Distributions 14 |
4.3 | Unforeseeable Emergencies 14 |
ARTICLE 5 | Change In Control Benefit 14 |
5.1 | Change in Control Benefit 14 |
5.2 | Payment of Change in Control Benefit 15 |
ARTICLE 6 | Retirement Benefit 15 |
6.1 | Retirement Benefit 15 |
6.2 | Payment of Retirement Benefit 15 |
ARTICLE 7 | Termination Benefit 16 |
7.1 | Termination Benefit 16 |
7.2 | Payment of Termination Benefit 16 |
ARTICLE 8 | Disability Benefit 16 |
8.1 | Disability Benefit 16 |
8.2 | Payment of Disability Benefit 17 |
ARTICLE 9 | Death Benefit 17 |
9.1 | Death Benefit 17 |
9.2 | Payment of Death Benefit 17 |
ARTICLE 10 | Beneficiary Designation 17 |
10.1 | Beneficiary 17 |
10.2 | Beneficiary Designation; Change; Spousal Consent 17 |
10.3 | Acknowledgement 17 |
10.4 | No Beneficiary Designation 17 |
10.5 | Doubt as to Beneficiary 17 |
10.6 | Discharge of Obligations 18 |
ARTICLE 11 | Leave of Absence 18 |
11.1 | Paid Leave of Absence 18 |
11.2 | Unpaid Leave of Absence 18 |
ARTICLE 12 | Termination of Plan, Amendment or Modification 18 |
12.1 | Termination of Plan 18 |
12.2 | Amendment 19 |
12.3 | Plan Agreement 19 |
12.4 | Effect of Payment 19 |
ARTICLE 13 | Administration 19 |
13.1 | Committee Duties 19 |
13.2 | Administration Upon Change In Control 19 |
13.3 | Agents 20 |
13.4 | Binding Effect of Decisions 20 |
13.5 | Indemnity of Committee 20 |
13.6 | Employer Information 20 |
ARTICLE 14 | Other Benefits and Agreements 20 |
14.1 | Coordination with Other Benefits 20 |
ARTICLE 15 | Claims Procedures 21 |
15.1 | Presentation of Claim 21 |
15.2 | Notification of Decision 21 |
15.3 | Review of a Denied Claim 21 |
15.4 | Decision on Review 22 |
15.5 | Legal Action 22 |
ARTICLE 16 | Trust 22 |
16.1 | Establishment of the Trust 22 |
16.2 | Interrelationship of the Plan and the Trust 22 |
16.3 | Distributions From the Trust 22 |
ARTICLE 17 | Miscellaneous 22 |
17.1 | Status of Plan 22 |
17.2 | Unsecured General Creditor 23 |
17.3 | Employer’s Liability 23 |
17.4 | Nonassignability 23 |
17.5 | Not a Contract of Employment 23 |
17.6 | Furnishing Information 23 |
17.7 | Terms 23 |
17.8 | Captions 23 |
17.9 | Governing Law 24 |
17.10 | Notice 24 |
17.11 | Successors 24 |
17.12 | Spouse’s Interest 24 |
17.13 | Validity 24 |
17.14 | Incompetent 24 |
17.15 | Domestic Relations Orders 24 |
17.16 | Insurance 24 |
17.17 | Distribution in the Event of Income Inclusion Under Code Section 409A 25 |
17.18 | Deduction Limitation on Benefit Payments 25 |
1.1 | “Administrator” shall have the meaning ascribed to the term in Section 13.2 |
1.2 | “Account Balance” shall mean, with respect to a Participant, an entry on the records of the Employer equal to the sum of the Participant’s Annual Accounts. The Account Balance shall be a bookkeeping |
1.3 | “Annual Account” shall mean, with respect to a Participant, an entry on the records of the Employer equal to (a) the sum of the Participant’s Annual Deferral Amount and Company Contribution Amount for any one Plan Year, plus (b) amounts credited or debited to such amounts pursuant to this Plan, less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Annual Account for such Plan Year. The Annual Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan. |
1.4 | “Annual Deferral Amount” shall mean that portion of a Participant's Base Salary, Bonus, Commissions, Director Fees and LTIP Amounts that a Participant defers in accordance with Article 3 for any one Plan Year, without regard to whether such amounts are withheld and credited during such Plan Year. |
1.5 | “Annual Installment Method” shall mean the method used to determine the amount of each payment due to a Participant who has elected to receive a benefit over a period of years in accordance with the applicable provisions of the Plan. The amount of each annual payment due to the Participant shall be calculated by multiplying the balance of the Participant’s benefit by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due to the Participant. The amount of the first annual payment shall be calculated as of the close of business on or around the Participant’s Benefit Distribution Date, and the amount of each subsequent annual payment shall be calculated on or around each anniversary of such Benefit Distribution Date. For purposes of this Plan, the right to receive a benefit payment in annual installments shall be treated as the entitlement to a single payment. |
1.6 | “Base Salary” shall mean the cash compensation relating to services performed during any Plan Year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, director fees and other fees, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee. |
1.7 | “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 10, that are entitled to receive benefits under this Plan upon the death of a Participant. |
1.8 | “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries. |
1.9 | “Benefit Distribution Date” shall mean the date upon which all or an objectively determinable portion of a Participant’s vested benefits will become eligible for distribution. Except as otherwise provided in the Plan, a Participant’s Benefit Distribution Date shall be determined based on the earliest to occur of an event or scheduled date set forth in Articles 4 through 9, as applicable. |
1.10 | “Board” shall mean the board of directors of the Company. |
1.11 | “Bonus” shall mean any compensation, in addition to Base Salary, Commissions and LTIP Amounts, earned by a Participant under any Employer's bonus and cash incentive plans. |
1.12 | “Change in Control” shall mean the occurrence of a “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of a corporation, as determined in accordance with this Section and Treas. Reg §1.409A-3(i)(5). |
(a) | A “change in the ownership” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of such corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(v). If a person or group is considered either to own more than 50% of the total fair market value or total voting power of the stock of such corporation, or to have effective control of such corporation within the meaning of part (b) of this Section, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a “change in the ownership” of such corporation. |
(b) | A “change in the effective control” of the applicable corporation shall occur on either of the following dates: |
(i) | The date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of such corporation possessing 30% or more of the total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi). If a person or group is considered to possess 30% or more of the total voting power of the stock of a corporation, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a “change in the effective control” of such corporation; or |
(ii) | The date on which a majority of the members of the applicable corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such corporation’s board of directors before the date of the appointment or election, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi). In determining whether the event described in the preceding sentence has occurred, the applicable corporation to which the event must relate shall only include a corporation identified in accordance with |
(c) | A “change in the ownership of a substantial portion of the assets” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii). A transfer of assets shall not be treated as a “change in the ownership of a substantial portion of the assets” when such transfer is made to an entity that is controlled by the shareholders of the transferor corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii)(B). |
1.13 | “Change in Control Benefit” shall have the meaning ascribed to the term in Section 5.1. |
1.14 | “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. |
1.15 | “Commissions” shall mean the cash commissions earned by a Participant during a Plan Year, as determined in accordance with Code Section 409A and related Treasury Regulations. |
1.16 | “Committee” shall mean the committee described in Article 13. |
1.17 | “Company” shall mean Trimble Navigation Limited, a California corporation, and any successor to all or substantially all of the Company’s assets or business. |
1.18 | “Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5. |
1.19 | “Director” shall mean a member of the Board. |
1.20 | “Director Fees” shall mean the annual fees earned by a Director from any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors. |
1.21 | “Disability” or “Disabled” shall mean that a Participant is either (a) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s Employer. For purposes of this Plan, a Participant shall be deemed Disabled if determined to be totally disabled by the Social Security Administration. A Participant shall also be deemed Disabled if determined to be disabled in accordance with the applicable disability insurance program of such Participant’s Employer, provided that the definition of “disability” applied under such disability insurance program complies with the requirements of this Section. |
1.22 | “Election Form” shall mean the form, which may be in electronic format, established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan. |
1.23 | “Employee” shall mean a person who is an employee of an Employer. |
1.24 | “Employer(s)” shall mean the Company (a) and/or any of its Subsidiaries (now in existence or hereafter formed or acquired), (b) and/or any of its other subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor. |
1.25 | “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. |
1.26 | “401(k) Plan” shall mean, with respect to an Employer, a plan qualified under Code Section 401(a) that contains a cash or deferral arrangement described in Code Section 401(k), adopted by the Employer, as it may be amended from time to time, or any successor thereto. |
1.27 | “LTIP Amounts” shall mean any portion of the compensation attributable to a Plan Year that is earned by a Participant under any Employer's long-term incentive plan or any other long-term incentive arrangement designated by the Committee. |
1.28 | “Participant” shall mean any Employee or Director (a) who is selected to participate in the Plan, (b) whose executed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, and (c) whose Plan Agreement has not terminated. |
1.29 | “Performance-Based Compensation” shall mean compensation the entitlement to or amount of which is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(e). |
1.30 | “Plan” shall mean the Trimble Navigation Limited Deferred Compensation Plan, which shall be evidenced by this instrument, as it may be amended from time to time, and by any other documents that together with this instrument define a Participant’s rights to amounts credited to his or her Account Balance. |
1.31 | “Plan Agreement” shall mean a written agreement in the form prescribed by or acceptable to the Committee that evidences a Participant’s agreement to the terms of the Plan and which may establish additional terms or conditions of Plan participation for a Participant. Unless otherwise determined by the Committee, the most recent Plan Agreement accepted with respect to a Participant shall supersede any prior Plan Agreements for such Participant. Plan Agreements may vary among Participants and may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan. |
1.32 | “Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year. |
1.33 | “Pre-2014 Restatement Participant” shall mean a Participant who had commenced participation in the Plan prior to the 2014 Restatement Date and who continues to be eligible to elect an Annual Deferral Amount for Plan Years following the 2014 Restatement Date. |
1.34 | “Restatement Date” shall mean October 25, 2010. |
1.35 | “Retirement,” “Retire(s)” or “Retired” shall mean with respect to a Participant who is an Employee, a Separation from Service on or after the attainment of (a) age sixty-five (65) with five (5) Years of Service, or (b) age fifty-five (55) with ten (10) Years of Service; and shall mean with respect to a Participant who is a Director, a Separation from Service as a Director with the Company on or after the attainment of age seventy (70). If a Participant is both an Employee and a Director and participates in the Plan in each capacity, (a) the determination of whether the Participant qualifies for Retirement as an Employee shall be made when the Participant experiences a Separation from Service as an Employee and such determination shall only apply to the applicable Account Balance established in accordance with Section 1.1 for amounts deferred under the Plan as an Employee, and (b) the determination of whether the Participant qualifies for Retirement as a Director shall be made at the time the Participant experiences a Separation from Service as a Director and such determination shall only apply to the applicable Account Balance established in accordance with Section 1.1 for amounts deferred under the Plan as a Director. |
1.36 | “Retirement Benefit” shall have the meaning ascribed to the term in Section 6.1. |
1.37 | “Separation from Service” shall mean a termination of services provided by a Participant to his or her Employer, whether voluntarily or involuntarily, other than by reason of death or Disability, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h). In determining whether a Participant has experienced a Separation from Service, the following provisions shall apply: |
(a) | For a Participant who provides services to an Employer as an Employee, except as otherwise provided in part (c) of this Section, a Separation from Service shall occur when such Participant has experienced a termination of employment with such Employer. A Participant shall be considered to have experienced a termination of employment when the facts and circumstances indicate that the Participant and his or her Employer reasonably anticipate that either (i) no further services will be performed for the Employer after a certain date, or (ii) that the level of bona fide services the Participant will perform for the Employer after such date (whether as an Employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an Employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Employer if the Participant has been providing services to the Employer less than 36 months). |
(b) | For a Participant who provides services to an Employer as an independent contractor, except as otherwise provided in part (c) of this Section, a Separation from Service shall occur upon the expiration of the contract (or in the case of more than one contract, all contracts) under which services are performed for such Employer, provided that the expiration of such contract(s) is determined by the Committee to constitute a good-faith and complete termination of the contractual relationship between the Participant and such Employer. |
(c) | For a Participant who provides services to an Employer as both an Employee and an independent contractor, a Separation from Service generally shall not occur until the Participant has ceased providing services for such Employer as both as an Employee and as an independent contractor, as determined in accordance with the provisions set forth in parts (a) and (b) of this Section, respectively. Similarly, if a Participant either (i) ceases providing services for an Employer as an independent contractor and begins providing services for such Employer as an Employee, or (ii) ceases providing services for an Employer as an Employee and begins providing services for such Employer as an independent contractor, the Participant will not be considered to have experienced a Separation from Service until the Participant has ceased providing services for such Employer in both capacities, as determined in accordance with the applicable provisions set forth in parts (a) and (b) of this Section. |
1.38 | “Subsidiary” shall mean a wholly owned subsidiary of the Company. |
1.39 | “Trust” shall mean one or more trusts established by the Company in accordance with Article 16. |
1.40 | “Unforeseeable Emergency” shall mean a severe financial hardship of the Participant resulting from (a) an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary or the Participant’s dependent (as defined in Code Section 152 without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (b) a loss of the Participant’s property due to casualty, or (c) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined by the Committee based on the relevant facts and circumstances. |
1.41 | “Years of Service” shall mean the total number of full years in which a Participant has been employed by one or more Employers. For purposes of this definition, a year of employment shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first year of employment, commences on the Employee's date of hiring and that, for any subsequent year, commences on an anniversary of that hiring date. A partial year of employment shall not be treated as a Year of Service. |
1.42 | “2014 Restatement Date” shall mean May 9, 2014. |
1.43 | “2015 Restatement Date” shall mean November 6, 2015. |
1.44 | “2015 Plan Year” shall mean the Plan Year commencing 2015. |
2.1 | Selection by Committee. Participation in the Plan shall be limited to Directors and, as determined by the Committee in its sole discretion, a select group of management or highly compensated Employees. From that group, the Committee shall select, in its sole discretion, those individuals who may actually participate in this Plan. |
2.2 | Enrollment and Eligibility Requirements; Commencement of Participation. |
(a) | As a condition to participation, each Director or selected Employee shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form by the deadline(s) established by the Committee in accordance with the applicable provisions of this Plan. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines, in its sole discretion, are necessary. |
(b) | Each Director or selected Employee who is eligible to participate in the Plan shall commence participation in the Plan on the date that the Committee determines that the Director or Employee has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period. |
(c) | If a Director or an Employee fails to meet all requirements established by the Committee within the period required, that Director or Employee shall not be eligible to participate in the Plan during such Plan Year. |
3.1 | Minimum Annual Deferral Amount. |
Deferral | Minimum Percentage |
Base Salary | 5% |
Bonus | 5% |
Commissions | 5% |
LTIP Amounts | 5% |
Director Fees | 5% |
3.2 | Maximum Deferral. |
(a) | Annual Deferral Amount. For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Salary, Bonus, LTIP Amounts and/or Director Fees, and, for any Plan Year commencing prior to the 2015 Restatement Date, Commissions, up to the following maximum percentages for each deferral elected: |
Deferral | Maximum Percentage |
Base Salary | 90% |
Bonus | 100% (prior to the 2015 Restatement Date) 85% (following the 2015 Restatement Date) |
Commissions | 100% |
LTIP Amounts | 100% (prior to the 2015 Restatement Date) 85% (following the 2015 Restatement Date) |
Director Fees | 100% |
(b) | Short Plan Year. Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, then to the extent required by Section 3.3 and Code Section 409A and related Treasury Regulations, the maximum amount of the Participant’s Base Salary, Bonus, Commissions, LTIP Amounts or Director Fees that may be deferred by the Participant for the Plan Year shall be determined by applying the percentages set forth in Section 3.2(a) to the portion of such compensation attributable to services performed after the date that the Participant’s deferral election is made. |
3.3 | Timing of Deferral Elections; Effect of Election Form. |
(a) | General Timing Rule for Deferral Elections. Except as otherwise provided in this Section 3.3, in order for a Participant to make a valid election to defer Base Salary, Bonus, Commissions, Director Fees and/or LTIP Amounts, the Participant must submit an Election Form on or before the deadline established by the Committee, which in no event shall be later than the December 31st preceding the Plan Year in which such compensation will be earned. |
(b) | Timing of Deferral Elections for Newly Eligible Plan Participants. A Director or selected Employee who first becomes eligible to participate in the Plan on or after the beginning of a Plan Year, as determined in accordance with Treas. Reg. §1.409A-2(a)(7)(i) and (ii) and the “plan aggregation” rules provided in Treas. Reg. §1.409A-1(c)(2), may be permitted to make an election to defer the portion of Base Salary, Bonus, Commissions, Director Fees and/or LTIP Amounts attributable to services to be performed after such election, provided that the Participant submits an Election Form on or before the deadline established by the Committee, which in no event shall be later than 30 days after the Participant first becomes eligible to participate in the Plan. |
(c) | Timing of Deferral Elections for Performance-Based Compensation. Subject to the limitations described below, the Committee may determine that an irrevocable initial deferral election for an amount that qualifies as Performance-Based Compensation may be made by submitting an Election Form on or before the deadline established by the Committee, which in no event shall be later than 6 months before the end of the performance period. |
(d) | Timing Rule for Deferral of Compensation Subject to Risk of Forfeiture. With respect to compensation (i) to which a Participant has a legally binding right to payment in a subsequent year, and (ii) that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least 12 months from the date the Participant obtains the legally binding right, the Committee may determine that an irrevocable deferral election for such compensation may be made by timely delivering an Election Form to the Committee in accordance with its rules and procedures, no later than the 30th day after the Participant obtains the legally binding right to the compensation, provided that the election is made at least 12 months in advance of the earliest date at which the forfeiture condition could lapse, as determined in accordance with Treas. Reg. §1.409A-2(a)(5). |
3.4 | Withholding and Crediting of Annual Deferral Amounts. For each Plan Year, the Base Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base |
3.5 | Company Contribution Amount . |
(a) | For each Plan Year, an Employer may be required to credit amounts to a Participant’s Annual Account in accordance with employment or other agreements entered into between the Participant and the Employer, which amounts shall be part of the Participant’s Company Contribution Amount for that Plan Year. Such amounts shall be credited to the Participant’s Annual Account for the applicable Plan Year on the date or dates prescribed by such agreements. |
(b) | For each Plan Year, an Employer, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant’s Annual Account under this Plan, which amount shall be part of the Participant’s Company Contribution Amount for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Company Contribution Amount for that Plan Year. The Company Contribution Amount described in this Section 3.5(b), if any, shall be credited to the Participant’s Annual Account for the applicable Plan Year on a date or dates to be determined by the Committee. |
(c) | If not otherwise specified in the Participant’s employment or other agreement entered into between the Participant and the Employer, the amount (or the method or formula for determining the amount) of a Participant’s Company Contribution Amount shall be set forth in writing in one or more documents, which shall be deemed to be incorporated into this Plan in accordance with Section 1.31, no later than the date on which such Company Contribution Amount is credited to the applicable Annual Account of the Participant. |
3.6 | Vesting . |
(a) | A Participant shall at all times be 100% vested in the portion of his or her Account Balance attributable to Annual Deferral Amounts, plus amounts credited or debited on such amounts pursuant to Section 3.7. |
(b) | A Participant shall be vested in his or her Company Contribution Account in accordance with the vesting schedule(s) set forth in his or her Plan Agreement, employment agreement or any other agreement entered into between the Participant and his or her Employer. If not addressed in such agreements, the Company shall determine the vesting schedule for Company Contribution Amounts at the time such contribution is made to the Participant’s Company Contribution Account. |
3.7 | Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant's Account Balance in accordance with the following rules: |
(a) | Measurement Funds. The Participant may elect one or more of the measurement funds selected by the Committee, in its sole discretion, which are based on certain mutual funds (the “Measurement Funds”), for the purpose of crediting or debiting additional amounts to his or her Account Balance. As necessary, the Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund. Each such action will take effect as of |
(b) | Election of Measurement Funds. A Participant, in connection with his or her initial deferral election in accordance with Section 3.3 above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in Section 3.7(a) above) to be used to determine the amounts to be credited or debited to his or her Account Balance. If a Participant does not elect any of the Measurement Funds as described in the previous sentence, the Participant’s Account Balance shall automatically be allocated into the lowest-risk Measurement Fund, as determined by the Committee, in its sole discretion. The Participant may (but is not required to) elect, by submitting an Election Form to the Committee that is accepted by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the amounts to be credited or debited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund. If an election is made in accordance with the previous sentence, it shall apply as of the first business day deemed reasonably practicable by the Committee, in its sole discretion, and shall continue thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the previous sentence. Notwithstanding the foregoing, the Committee, in its sole discretion, may impose limitations on the frequency with which one or more of the Measurement Funds elected in accordance with this Section 3.7(b) may be added or deleted by such Participant; furthermore, the Committee, in its sole discretion, may impose limitations on the frequency with which the Participant may change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund. |
(c) | Proportionate Allocation. In making any election described in Section 3.7(b) above, the Participant shall specify on the Election Form, in increments of one percent (1%), the percentage of his or her Account Balance or Measurement Fund, as applicable, to be allocated/reallocated. |
(d) | Crediting or Debiting Method. The performance of each Measurement Fund (either positive or negative) will be determined on a daily basis based on the manner in which such Participant’s Account Balance has been hypothetically allocated among the Measurement Funds by the Participant. |
(e) | No Actual Investment. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant's election of any such Measurement Fund, the allocation of his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant's Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the investments on which the Measurement Funds are based, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant's Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company. |
3.8 | FICA and Other Taxes . |
(a) | Annual Deferral Amounts. For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus, Commissions and/or LTIP Amounts that is |
(b) | Company Contribution Amounts. When a Participant becomes vested in a portion of his or her Account Balance attributable to any Company Contribution Amounts, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus, Commissions and/or LTIP Amounts that is not deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such amounts. If necessary, the Committee may reduce the vested portion of the Participant’s Company Contribution Amount, as applicable, in order to comply with this Section 3.8. |
(c) | Distributions. The Participant’s Employer(s), or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer(s), or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer(s) and the trustee of the Trust. |
4.1 | Scheduled Distributions. In connection with each election to defer an Annual Deferral Amount, a Participant may elect to receive (i) in the case of Annual Deferral Amounts preceding the Restatement Date, all or a portion of such Annual Deferral Amount and (ii) in the case of Annual Deferral Amounts following the Restatement Date, all of such Annual Deferral Amounts, plus amounts credited or debited on that amount pursuant to Section 3.7, in the form of a lump sum payment, calculated as of the close of business on or around the Benefit Distribution Date designated by the Participant in accordance with this Section (a “Scheduled Distribution”). The Benefit Distribution Date for the amount subject to a Scheduled Distribution election shall be the first day of any Plan Year designated by the Participant, which may be the 5th, 10th, or 15th Plan Year after the end of the Plan Year to which the Participant’s deferral election relates, unless otherwise provided on an Election Form approved by the Committee. |
4.2 | Other Benefits Take Precedence Over Scheduled Distributions. Should an event occur prior to any Benefit Distribution Date designated for a Scheduled Distribution that would trigger a benefit under Articles 5 through 9, as applicable, all amounts subject to a Scheduled Distribution election shall be paid in accordance with the other applicable provisions of the Plan and not in accordance with this Article 4. |
4.3 | Unforeseeable Emergencies. |
(a) | If a Participant experiences an Unforeseeable Emergency prior to the occurrence of a distribution event described in Articles 5 through 9, as applicable, the Participant may petition the Committee to receive a partial or full payout from the Plan. The payout, if any, from the Plan shall not exceed the lesser of (i) the Participant's vested Account Balance, calculated as of the close of business on or around the Benefit Distribution Date for such |
(b) | A Participant’s deferral elections under this Plan shall also be cancelled to the extent the Committee determines that such action is required for the Participant to obtain a hardship distribution from an Employer’s 401(k) Plan pursuant to Treas. Reg. §1.401(k)-1(d)(3). |
5.1 | Change in Control Benefit. |
(a) | Newly Eligible Participants. A Participant, in connection with his or her commencement of participation in the Plan, shall have an opportunity to irrevocably elect to receive his or her vested Account Balance in the form of a lump sum payment in the event that a Change in Control occurs prior to the Participant’s Separation from Service, Disability or death (the “Change in Control Benefit”). |
(b) | Existing Participants as of 2014 Restatement Date. Notwithstanding anything to the contrary in Section 5.1(a) hereof, a Pre-2014 Restatement Participant shall have a one-time opportunity to irrevocably elect, prior to the deadline established by the Committee for deferrals relating to the 2015 Plan Year, a Change in Control Benefit (if the Pre-2014 Restatement Participant had not previously elected a Change in Control Benefit) or to revoke a Change in Control Benefit (if the Pre-2014 Restatement Participant had previously elected a Change in Control Benefit), in each case, with respect to Annual Accounts that accrue on and after the commencement of the 2015 Plan Year. For the avoidance of any doubt, the one-time election contemplated under the foregoing sentence shall replace and supersede any Change in Control Benefit election made with respect to a Pre-2014 Restatement Participant’s Annual Accounts that accrue on and after the commencement of the 2015 Plan Year, but the one-time election shall have no effect on a Pre-2014 Restatement Participant’s election made pursuant to Section 5.1(a) above with respect to Annual Accounts relating to Annual Deferral Amounts deferred prior to the commencement of the 2015 Plan Year. |
(c) | Failure to Elect. If a Participant elects not to receive a Change in Control Benefit in Sections 5(a) and 5(b) above, or fails to make an election in connection with his or her commencement of participation in the Plan or pursuant to the one-time election opportunity provided under Section 5(b) above, the Participant’s Account Balance shall be paid in accordance with the other applicable provisions of the Plan. |
(d) | Benefit Distribution Date. The Benefit Distribution Date for the Change in Control Benefit elected in Sections 5(a) and 5(b) above, if any, shall be the date on which the Change in Control occurs. |
5.2 | Payment of Change in Control Benefit. The Change in Control Benefit, if any, shall be calculated as of the close of business on or around the Participant’s Benefit Distribution Date, as determined by the Committee, and paid to the Participant no later than 30 days after the Participant’s Benefit Distribution Date. |
6.1 | Retirement Benefit. If a Participant experiences a Separation from Service that qualifies as a Retirement, the Participant shall be eligible to receive his or her vested Account Balance in either a lump sum or annual installment payments, as elected by the Participant in accordance with Section 6.2 (the “Retirement Benefit”). A Participant’s Retirement Benefit shall be calculated as of the close of business on or around the applicable Benefit Distribution Date for such benefit, which shall be the first day after the end of the 6-month period immediately following the date on which the Participant experiences such Separation from Service. |
6.2 | Payment of Retirement Benefit. |
(a) | Elections Prior to Restatement Date. A Participant, in connection with his or her commencement of participation in the Plan prior to the Restatement Date, shall elect on an Election Form to receive the Retirement Benefit in a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years. |
(b) | Elections Following Restatement Date and Prior to 2014 Restatement Date. In connection with his or her participation in the Plan following the Restatement Date but prior to the 2014 Restatement Date, a Participant, in connection with each election to defer an Annual Deferral Amount, shall elect on an Election Form to receive the portion of the Retirement Benefit relating to the applicable elected Annual Deferral Amounts that accrue in an Annual Account in a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years. |
(c) | Elections Following 2014 Restatement Date. A Participant, in connection with his or her commencement of participation in the Plan following the 2014 Restatement Date, shall elect on an Election Form to receive the Retirement Benefit in the form of a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years. Notwithstanding anything to the contrary in Section 6.2(b), a Pre-2014 Restatement Participant, in connection with his or her continuing participation in the Plan, shall elect on an Election Form, prior to the deadline established by the Committee for deferrals relating to the 2015 Plan Year, to receive the Retirement Benefit for all Annual Deferral Amounts that accrue in Annual Accounts on and after the commencement of the 2015 Plan Year in the form of a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years. For the avoidance of any doubt, the election contemplated under the foregoing sentence shall apply to a Participant’s Annual Accounts that accrue on and after the commencement of the 2015 Plan Year. |
(d) | Failure to Elect. If a Participant does not make any election with respect to the payment of the Retirement Benefit, then such Participant shall be deemed to have elected to receive the Retirement Benefit as a lump sum. |
(e) | Benefit Distribution Date. The lump sum payment shall be made, or installment payments shall commence, no later than 30 days after the Participant’s Benefit Distribution Date. Remaining installments, if any, shall be paid no later than 30 days after each anniversary of the Participant’s Benefit Distribution Date. |
7.1 | Termination Benefit. If a Participant experiences a Separation from Service that does not qualify as a Retirement, the Participant shall receive his or her vested Account Balance in the form of a lump sum payment (the “Termination Benefit”). A Participant’s Termination Benefit shall be calculated as of the close of business on or around the Benefit Distribution Date for such benefit, which shall be the first day after the end of the 6-month period immediately following the date on which the Participant experiences such Separation from Service |
7.2 | Payment of Termination Benefit. The Termination Benefit shall be paid to the Participant no later than 30 days after the Participant’s Benefit Distribution Date. |
8.1 | Disability Benefit. If a Participant becomes Disabled prior to the occurrence of a distribution event described in Articles 5 through 7, as applicable, the Participant shall receive his or her vested Account Balance in the form of a lump sum payment (the “Disability Benefit”). The Disability Benefit shall be calculated as of the close of business on or around the Participant’s Benefit Distribution Date for such benefit, which shall be the date on which the Participant becomes Disabled. |
8.2 | Payment of Disability Benefit. The Disability Benefit shall be paid to the Participant no later than 30 days after the Participant’s Benefit Distribution Date. |
9.1 | Death Benefit. In the event of a Participant’s death prior to the complete distribution of his or her vested Account Balance, the Participant's Beneficiary(ies) shall receive the Participant's unpaid vested Account Balance in a lump sum payment (the “Death Benefit”). The Death Benefit shall be calculated as of the close of business on or around the Benefit Distribution Date for such benefit, which shall be the date on which the Committee is provided with proof that is satisfactory to the Committee of the Participant’s death. |
9.2 | Payment of Death Benefit. The Death Benefit shall be paid to the Participant’s Beneficiary(ies) no later than 30 days after the Participant’s Benefit Distribution Date. |
10.1 | Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates. |
10.2 | Beneficiary Designation; Change; Spousal Consent. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee's rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary, the Committee may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Committee, executed by such Participant's spouse and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death. |
10.3 | Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent. |
10.4 | No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided in Sections 10.1, 10.2 and 10.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant's benefits, then the Participant's designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant's estate. |
10.5 | Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant's Employer to withhold such payments until this matter is resolved to the Committee's satisfaction. |
10.6 | Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant's Plan Agreement shall terminate upon such full payment of benefits. |
11.1 | Paid Leave of Absence. If a Participant is authorized by the Participant's Employer to take a paid leave of absence from the employment of the Employer, and such leave of absence does not constitute a Separation from Service, (a) the Participant shall continue to be considered eligible for the benefits provided under the Plan, and (b) the Annual Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.3. |
11.2 | Unpaid Leave of Absence. If a Participant is authorized by the Participant's Employer to take an unpaid leave of absence from the employment of the Employer for any reason, and such leave of absence does not constitute a Separation from Service, such Participant shall continue to be eligible for the benefits provided under the Plan. During the unpaid leave of absence, the Participant shall not be allowed to make any additional deferral elections. However, if the Participant returns to employment, the Participant may elect to defer an Annual Deferral Amount for the Plan Year following his or her return to employment and for every Plan Year thereafter while a Participant in the Plan, provided such deferral elections are otherwise allowed and an Election Form is delivered to and accepted by the Committee for each such election in accordance with Section 3.3 above. |
12.1 | Termination of Plan. Although each Employer anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that any Employer will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer reserves the right to terminate the Plan with respect to all of its Participants. In the event of a Plan termination no new deferral elections shall be permitted for the affected Participants and such Participants shall no longer be eligible to receive new company contributions. However, after the Plan termination the Account Balances of such Participants shall continue to be credited with Annual Deferral Amounts attributable to a deferral election that was in effect prior to the Plan termination to the extent deemed necessary to comply with Code Section 409A and related Treasury Regulations, and additional amounts shall continue to credited or debited to such Participants’ Account Balances pursuant to Section 3.7. The Measurement Funds available to Participants following the termination of the Plan shall be comparable in number and type to those Measurement Funds available to Participants in the Plan Year preceding the Plan Year in which the Plan termination is effective. In addition, following a Plan termination, Participant Account Balances shall remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Employer may provide that upon termination of the Plan, all Account Balances of the Participants shall be distributed, subject to and in accordance with any rules established by such Employer deemed necessary to comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix). |
12.2 | Amendment. Any Employer may, at any time, amend or modify the Plan in whole or in part with respect to that Employer. Notwithstanding the foregoing, (i) no amendment or modification shall be effective to decrease the value of a Participant's vested Account Balance in existence at the time the amendment or modification is made, and (ii) no amendment or modification of this Section 12.2 or Section 13.2 of the Plan shall be effective |
12.3 | Plan Agreement. Despite the provisions of Sections 12.1, if a Participant's Plan Agreement contains benefits or limitations that are not in this Plan document, the Employer may only amend or terminate such provisions with the written consent of the Participant. |
12.4 | Effect of Payment. The full payment of the Participant’s vested Account Balance in accordance with the applicable provisions of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan, and the Participant's Plan Agreement shall terminate. |
13.1 | Committee Duties. Except as otherwise provided in this Article 13, this Plan shall be administered by a Committee, which shall consist of the Board, or such committee as the Board shall appoint. The members of the Committee need not be members of the Board and may be Participants under this Plan. The Committee shall also have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan, and (b) decide or resolve any and all questions, including benefit entitlement determinations and interpretations of this Plan, as may arise in connection with the Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Company. |
13.2 | Administration Upon Change In Control. For purposes of this Plan, the Committee shall be the “Administrator” at all times prior to the occurrence of a Change in Control. Within one hundred and twenty (120) days following a Change in Control, an independent third party “Administrator” may be selected by the individual who, immediately prior to the Change in Control, was the Company’s Chief Executive Officer or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”). The Committee, as constituted prior to the Change in Control, shall continue to be the Administrator until the earlier of (i) the date on which such independent third party is selected and approved, or (ii) the expiration of the one hundred and twenty (120) day period following the Change in Control. If an independent third party is not selected within one hundred and twenty (120) days of such Change in Control, the Committee, as described in Section 13.1 above, shall be the Administrator. The Administrator shall continue to have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, only the Trustee shall have the power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely information to the Administrator on all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date and circumstances of the Retirement, Disability, death or Separation from Service of the Participants, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) by the Trustee only with the approval of the Ex-CEO. Upon and after a Change in Control, the Administrator may not be terminated by the Company. |
13.3 | Agents. In the administration of this Plan, the Committee or the Administrator, as applicable, may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel. |
13.4 | Binding Effect of Decisions. The decision or action of the Committee or Administrator, as applicable, with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan. |
13.5 | Indemnity of Committee. All Employers shall indemnify and hold harmless the members of the Committee, any Employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Employee or the Administrator. |
13.6 | Employer Information. To enable the Committee and/or Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the compensation of its Participants, the date and circumstances of the Separation from Service, Disability or death of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require. |
14.1 | Coordination with Other Benefits. The benefits provided for a Participant and Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant's Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided. |
15.1 | Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant. |
15.2 | Notification of Decision. The Committee shall consider a Claimant's claim within a reasonable time, but no later than 90 days after receiving the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90 day period. In no event shall such extension exceed a period of 90 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. The Committee shall notify the Claimant in writing: |
(a) | that the Claimant's requested determination has been made, and that the claim has been allowed in full; or |
(b) | that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant's requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant: |
(i) | the specific reason(s) for the denial of the claim, or any part of it; |
(ii) | specific reference(s) to pertinent provisions of the Plan upon which such denial was based; |
(iii) | a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; |
(iv) | an explanation of the claim review procedure set forth in Section 15.3 below; and |
(v) | a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
15.3 | Review of a Denied Claim. On or before 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant's duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. The Claimant (or the Claimant's duly authorized representative): |
(a) | may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claim for benefits; |
(b) | may submit written comments or other documents; and/or |
(c) | may request a hearing, which the Committee, in its sole discretion, may grant. |
15.4 | Decision on Review. The Committee shall render its decision on review promptly, and no later than 60 days after the Committee receives the Claimant’s written request for a review of the denial of the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 60 day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. In rendering its decision, the Committee shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The decision must be written in a manner calculated to be understood by the Claimant, and it must contain: |
(a) | specific reasons for the decision; |
(b) | specific reference(s) to the pertinent Plan provisions upon which the decision was based; |
(c) | a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and |
(d) | a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a). |
15.5 | Legal Action. A Claimant's compliance with the foregoing provisions of this Article 15 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under this Plan. |
16.1 | Establishment of the Trust. In order to provide assets from which to fulfill its obligations to the Participants and their Beneficiaries under the Plan, the Company may establish a trust by a trust agreement with a third party, the trustee, to which each Employer may, in its discretion, contribute cash or other property, including securities issued by the Company, to provide for the benefit payments under the Plan (the “Trust”). |
16.2 | Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at all times remain liable to carry out its obligations under the Plan. |
16.3 | Distributions From the Trust. Each Employer's obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Employer's obligations under this Plan. |
17.1 | Status of Plan . The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted (a) to the extent possible in a manner consistent with the intent described in the preceding sentence, and (b) in accordance with Code Section 409A and related Treasury guidance and Regulations. |
17.2 | Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of an Employer. For purposes of the payment of benefits under this Plan, any and all of an Employer's assets shall be, and remain, the general, unpledged unrestricted assets of the Employer. An Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future. |
17.3 | Employer's Liability. An Employer's liability for the payment of benefits shall be defined only by the Plan and the Plan Agreement, as entered into between the Employer and a Participant. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Plan Agreement. |
17.4 | Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise. |
17.5 | Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, either as an Employee or a Director, or to interfere with the right of any Employer to discipline or discharge the Participant at any time. |
17.6 | Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary. |
17.7 | Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply. |
17.8 | Captions. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. |
17.9 | Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of California without regard to its conflicts of laws principles. |
17.10 | Notice. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: |
Trimble Navigation Limited |
Attn: General Counsel – Urgent Notice |
935 Stewart Drive |
Sunnyvale, California 94085 |
17.11 | Successors. The provisions of this Plan shall bind and inure to the benefit of the Participant's Employer and its successors and assigns and the Participant and the Participant's designated Beneficiaries. |
17.12 | Spouse's Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse's will, nor shall such interest pass under the laws of intestate succession. |
17.13 | Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. |
17.14 | Incompetent. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person's property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount. |
17.15 | Domestic Relations Orders. If necessary to comply with a domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan, the Committee shall have the right to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to such spouse or former spouse. |
17.16 | Insurance . The Employers, on their own behalf or on behalf of the trustee of the Trust, and, in their sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Employers or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Employers shall submit to medical examinations and supply such information and execute such documents as |
17.17 | Distribution in the Event of Income Inclusion Under Code Section 409A . If any portion of a Participant’s Account Balance under this Plan is required to be included in income by the Participant prior to receipt due to a failure of this Plan to comply with the requirements of Code Section 409A and related Treasury Regulations, the Committee may determine that such Participant shall receive a distribution from the Plan in an amount equal to the lesser of (i) the portion of his or her Account Balance required to be included in income as a result of the failure of the Plan to comply with the requirements of Code Section 409A and related Treasury Regulations, or (ii) the unpaid vested Account Balance. |
17.18 | Deduction Limitation on Benefit Payments . If an Employer reasonably anticipates that the Employer’s deduction with respect to any distribution from this Plan would be limited or eliminated by application of Code Section 162(m), then to the extent permitted by Treas. Reg. §1.409A-2(b)(7)(i), payment shall be delayed as deemed necessary to ensure that the entire amount of any distribution from this Plan is deductible. Any amounts for which distribution is delayed pursuant to this Section shall continue to be credited/debited with additional amounts in accordance with Section 3.7. The delayed amounts (and any amounts credited thereon) shall be distributed to the Participant (or his or her Beneficiary in the event of the Participant’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m). In the event that such date is determined to be after a Participant’s Separation from Service, then to the extent deemed necessary to comply with Treas. Reg. §1.409A-3(i)(2), the delayed payment shall not made before the end of the six-month period following such Participant’s Separation from Service. |
1. | I have reviewed this quarterly report on Form 10-Q of Trimble Navigation Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 9, 2015 | /s/ Steven W. Berglund |
Steven W. Berglund | ||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Trimble Navigation Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 9, 2015 | /s/ François Delépine |
François Delépine | ||
Chief Financial Officer |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Steven W. Berglund |
Steven W. Berglund |
Chief Executive Officer |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ François Delépine |
François Delépine |
Chief Financial Officer |
Income Per Share (Schedule Of Computation Of Earnings Per Share And Effect On Weighted-Average Number Of Shares) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2015 |
Oct. 03, 2014 |
Oct. 02, 2015 |
Oct. 03, 2014 |
|
Earnings Per Share Reconciliation [Abstract] | ||||
Net income attributable to Trimble Navigation Ltd. | $ 37.1 | $ 11.8 | $ 97.1 | $ 158.3 |
Weighted average number of common shares used in basic income per share | 254.8 | 260.3 | 257.5 | 260.4 |
Effect of dilutive securities | 2.4 | 4.1 | 2.8 | 4.7 |
Weighted average number of common shares and dilutive potential common shares used in diluted income per share | 257.2 | 264.4 | 260.3 | 265.1 |
Basic income per share | $ 0.15 | $ 0.05 | $ 0.38 | $ 0.61 |
Diluted income per share | $ 0.14 | $ 0.04 | $ 0.37 | $ 0.60 |
Debt, Commitments and Contingencies (Schedule of Debt Maturities) (Details) $ in Millions |
Oct. 02, 2015
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2015 (Remaining) | $ 150.1 |
2016 | 0.2 |
2017 | 0.3 |
2018 | 0.2 |
2019 | 211.1 |
Thereafter | 400.4 |
Total | $ 762.3 |
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