Garmin Ltd – ‘8-K’ for 6/3/05 – EX-10

On:  Monday, 6/6/05, at 5:59pm ET   ·   As of:  6/7/05   ·   For:  6/3/05   ·   Accession #:  1121788-5-21   ·   File #:  0-31983

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Current Report   —   Form 8-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         8     25K 
 2: EX-10       Material Contract                                     27    121K 
 3: EX-10       Material Contract                                      9     37K 
 4: EX-10       Material Contract                                      9     36K 
 5: EX-10       Material Contract                                      9     36K 

EX-10   —   Material Contract
Exhibit Table of Contents

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                                                                  EXHIBIT 10.2

 GARMIN LTD.
2005 EQUITY INCENTIVE PLAN
 NONQUALIFIED STOCK OPTION AGREEMENT

To:      ___________________________ ( "you" or the "Grantee")                  

NOTICE OF GRANT:

     You have been granted an option (the  "Option") to purchase  common shares,
$0.01 par value per share, of Garmin Ltd.  ("Shares"),  subject to the terms and
conditions  of the Garmin Ltd. 2005 Equity  Incentive  Plan (the "Plan") and the
Option Award Agreement  between you and Garmin Ltd. (the "Company")  attached as
Exhibit A as follows:                                                           

    Grant Date:                               ________________________

    Total Number of Shares Subject to Option  ________________(______)

Option Price per Share ($):               $___.___            

    Expiration Date:                          ________________________

     In order to fully understand your rights under the Plan (a copy of which is
attached)  and the  Option  Award  Agreement  attached  as  Exhibit  A,  you are
encouraged  to read the Plan and this  document  carefully.  Please refer to the
Plan document for the definition of capitalized terms used in this Agreement.   

     To properly  accept this Option,  you must enter your E*Trade  password and
click the "Accept"  button on the  previous  screen.  Acceptances  shall be made
electronically  within ten (10) days of your  receipt  of this  Notice and Award
Agreement.  By  accepting  this  Option,  you are also  agreeing  to be bound by
Exhibit A, including the restrictive covenants in Section 9 of Exhibit A.       

 GARMIN LTD.

            By:    /s/  Min H. Kao
                    ----------------
       Name:  Min H. Kao
             Title: Chairman and CEO

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 EXHIBIT A

AGREEMENT:

     In consideration of the mutual promises and covenants  contained herein and
other good and valuable  consideration  paid by the Grantee to the Company,  the
Grantee and the Company agree as follows:                                       

Section 1. Incorporation of Plan                                      

     All  provisions  of this  Award  Agreement  and the  rights of the  Grantee
hereunder  are  subject in all  respects to the  provisions  of the Plan and the
powers of the Board  therein  provided.  Capitalized  terms  used in this  Award
Agreement but not defined shall have the meaning set forth in the Plan.         

Section 2. Grant of Nonqualified Stock Option                         

     As of the Grant Date identified  above,  the Company grants to the Grantee,
subject to the terms and conditions set forth herein and in the Plan, the right,
privilege,  and  option  (the  "Option")  to  purchase  that  number  of  Shares
identified  above  opposite  the  heading  "Total  Number of Shares  Subject  to
Option",  at the per Share price  specified  above opposite the heading  "Option
Price per Share."                                                               

Section 3. Exercisability of Option                                   

     (a)  Except to the extent the Option is  permitted to be  transferred  to a
          person set forth in Section 8(b) of this Award  Agreement,  during the
          Grantee's lifetime,  this Option may be exercised only by the Grantee.
          This Option, except as specifically provided elsewhere under the terms
of the Plan, shall become exercisable as follows:           

          Years Elapsed from Grant Date         Percentage of Option Exercisable
          -----------------------------         --------------------------------
                 1 Year                                          20%
                 2 Years                                         40%
                 3 Years                                         60%
                 4 Years                                         80%
                 5 Or More Years                                100%

          For purposes of this Section 3, a Year shall mean a period of 365 days
(or 366 days in the event of a leap year).                  

     (b)  In the event of the Grantee's death or Disability while the Grantee is
          employed, the Option shall become fully exercisable. In the event that
          the  Grantee  dies  or  becomes   Disabled   following  the  Grantee's
          Termination of Affiliation, the exercisability of the Option shall not
          accelerate  due to such death or Disability  and shall be  exercisable
          only to the  extent it was  exercisable  on the date of the  Grantee's
Termination of Affiliation.                                 

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Section 4. Method of Exercise                                         

     Provided  this Option has not  expired,  been  terminated  or  cancelled in
accordance  with the terms of the Plan,  that  percentage of the Option which is
exercisable in accordance with Section 3 above may be exercised,  in whole or in
part and from time to time, by delivery to the Company or its designee a written
notice or such other electronic or telephonic notice as may be acceptable to the
Company or its designee which shall:                                            

     (a)  set forth the number of Shares with  respect to which the Option is to
        be exercised (such number must be in a minimum amount of 50 Shares);

     (b)  if  the  person  exercising  this  Option  is  not  the  Grantee,   be
          accompanied  by  satisfactory  evidence  of  such  person's  right  to
exercise this option; and                                   

     (c)  be  accompanied  by payment in full of the Option Price in the form of
          cash,  personal or certified  bank check or  electronic  wire transfer
          payable to the order of the Company or any other means allowable under
          the Plan which the  Company  in its sole  discretion  determines  will
provide legal consideration for the Shares.                 

Section 5. Expiration of Option                                       

     Unless  terminated  earlier  in  accordance  with the  terms of this  Award
Agreement or the Plan, the Option granted herein shall expire at 5:00 P.M., U.S.
Central Time, on the tenth (10th) Anniversary of the Grant Date (the "Expiration
Date"). In the event the Expiration Date is a Saturday,  Sunday or any other day
which is a holiday of the United  States  Federal  Government  (a  "Non-Business
Day"), then the Option granted herein shall expire, unless earlier terminated in
a accordance  with the terms of this Award  Agreement or the Plan, at 5:00 P.M.,
U.S.  Central Time, on the first day that is not a Non-Business Day (a "Business
Day") following such Expiration Date.                                           

Section 6. Effect of Termination of Affiliation                       

     If the Grantee has a Termination of Affiliation  for any reason,  including
termination by the Company with or without Cause, voluntary resignation,  death,
or  Disability,  the effect of such  Termination  of  Affiliation  on all or any
portion of this Option is as provided below.  Notwithstanding  anything below to
the contrary, in no event may the Option be exercised after the Expiration Date.

     (a)  If the Grantee has a Termination of Affiliation within the Option Term
          for Cause,  the Option shall  thereafter be void for all purposes upon
          such Termination of Affiliation. The effect of this Section 6(a) shall
          be limited to determining the conditions  under which an Option may be
          rendered  null and  void,  and  nothing  in this  Section  6(a)  shall
          restrict or otherwise  interfere  with the Company's  discretion  with
          respect  to the  termination  of any  employee's  employment  with the
Company.                                                    

     (b)  If the Grantee has a Termination of Affiliation within the Option Term
          due to the  Grantee's  voluntary  resignation  or  termination  by the
          Company  other than for Cause,  the  Option  may be  exercised  by the
          Grantee at any time  prior to 5:00 P.M.,  U.S.  Central  Time,  on the
          ninetieth  (90th) calendar day following the Grantee's  Termination of
          Affiliation  (but in no event later than the Expiration  Date). In the

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          event that such ninetieth (90th) day shall not be a Business Day, then
          the Option shall expire at 5:00 P.M., U.S.  Central Time, on the first
          (1st) Business Day immediately following such ninetieth (90th) day. In
          any such case, the Option may be exercised only as to the Shares as to
          which the Option had become  exercisable  on or before the date of the
Termination of Affiliation.                                 

     (c)  If the  Grantee  dies or becomes  Disabled  within the Option Term (A)
          while he or she is an employee,  or (B) within the  ninety-day  period
          referred to in clause (b) above,  the Option may be  exercised  by the
          Grantee or the Grantee's  Beneficiaries  entitled to do so at any time
          prior to 5:00 P.M.,  U.S.  Central  Time,  on the 365th  calendar  day
          following  the date of the Grantee's  death or  Disability  (but in no
          event later than the Expiration Date). In the event that the 365th day
          is not a Business Day, then the Option shall expire at 5:00 P.M., U.S.
          Central Time, on the first (1st)  Business Day  immediately  following
          such 365th day. In any such case,  the Option may be exercised only as
          to the  Shares as to which the Option  had  become  exercisable  on or
          before the date of the Grantee's death or Disability,  or at such time
  as the Grantee ceased to be an employee, whichever is earlier.

     (d)  In the event the Grantee has a  Termination  of  Affiliation  during a
          Change in Control  Period  (which is the one year  period  following a
          Change of Control) and such Termination of Affiliation is initiated by
          the Company or a  Subsidiary  other than for Cause or initiated by the
          Grantee for Good Reason,  then all Options  shall  immediately  become
          exercisable and may be exercised, in whole or in part, for ninety (90)
          days following such  Termination of Affiliation (but in no event later
than the Expiration Date).                                  

Section 7. Investment Intent.                                         

     The  Grantee  agrees  that the Shares  acquired  on exercise of this Option
shall be acquired  for his/her  own account for  investment  only and not with a
view to, or for resale in connection  with, any  distribution or public offering
thereof  within the  meaning of the  Securities  Act of 1933 (the "1933 Act") or
other  applicable  securities  laws.  If the  Board  so  determines,  any  share
certificates  issued upon  exercise  of this  Option  shall bear a legend to the
effect that the Shares have been so  acquired.  The Company may, but in no event
shall be required to, bear any expenses of  complying  with the 1933 Act,  other
applicable  securities  laws  or the  rules  and  regulations  of  any  national
securities  exchange  or  other  regulatory  authority  in  connection  with the
registration,  qualification, or transfer, as the case may be, of this Option or
any Shares acquired upon the exercise thereof. The foregoing restrictions on the
transfer of the Shares shall be inoperative if (a) the Company  previously shall
have been  furnished  with an opinion  of  counsel,  satisfactory  to it, to the
effect that such  transfer  will not involve any  violation  of the 1933 Act and
other  applicable  securities  laws or (b)  the  Shares  shall  have  been  duly
registered in compliance with the 1933 Act and other applicable state or federal
securities  laws. If this Option,  or the Shares subject to this Option,  are so
registered under the 1933 Act, the Grantee agrees that he will not make a public
offering of the said Shares  except on a national  securities  exchange on which
the common shares of the Company are then listed.                               

Section 8. Nontransferability of Option                               

     (a)  Except  as  provided  above  in  Section  6(c)  (in the  event  of the
          Grantee's  death) and below in Section  8(b), no portion of the Option
          granted  hereunder may be sold,  transferred,  pledged,  assigned,  or

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          otherwise  alienated or hypothecated,  other than by will, by the laws
          of descent and  distribution.  All rights  with  respect to the Option
          granted to the Grantee  shall be available  during his or her lifetime
only to the Grantee.                                        

     (b)  Pursuant to conditions  and  procedures  established by the Board from
          time to time,  the Board may permit the Option to be  transferred  to,
          exercised  by  and  paid  to  (a)  the  Grantee's  child,   stepchild,
          grandchild,  parent, stepparent,  grandparent,  spouse, former spouse,
          sibling,  niece,  nephew,  mother-in-law,  father-in-law,  son-in-law,
          daughter-in-law,  brother-in-law, or sister-in-law (including adoptive
          relationships),  (b) any person sharing the Grantee's household (other
          than a tenant or employee),  (c) a trust in which persons described in
          (a) or (b)  have  more  than  50% of the  beneficial  interest,  (d) a
          foundation  in which  persons  described  in (a) or (b) or the Grantee
          owns more than 50% of the voting interests;  provided such transfer is
          not  for  value.  Any  permitted  transfer  shall  be  subject  to the
          condition that the Board receive evidence  satisfactory to it that the
          transfer is being made for estate  and/or tax  planning  purposes on a
          gratuitous  or donative  basis and without  consideration  (other than
nominal consideration).                                     

Section 9. Restrictive Covenants                                      

     As a condition of this Option and in addition to any restrictive agreements
the Grantee may have  entered  into with the  Company,  the Grantee  accepts and
agrees to be bound as follows:                                                  

     (a)  Nondisclosure  of Option Terms.  The Grantee agrees not to disclose or
          cause to be disclosed at any time,  nor  authorize  anyone to disclose
          any  information  concerning  this Award  Agreement  or the  Grantee's
          Option  except  (i)  as  required  by  law,  or  (ii)  to a  permitted
          transferee  listed  in  Section  8 who  agrees  to be  bound  by  this
          Paragraph 9(a), or (iii) to the Grantee's legal and financial advisors
who agree to be bound by this Paragraph 9(a).               

     (b)  Noncompetition.  During the  Grantee's  employment  and until one year
          after the Grantee  ceases being  employed by or acting as a consultant
          or  independent  contractor  to the  Company  or any  Subsidiary,  the
          Grantee will not perform services as an employee,  director,  officer,
          consultant,  independent  contractor or advisor, or invest in, whether
          in the form of equity or debt, or otherwise have an ownership interest
          in any company,  entity or person that directly  competes  anywhere in
          the  United  States,  the  United  Kingdom,  Taiwan,  or in any  other
          location outside the United States, the United Kingdom or Taiwan where
          the Company or a Subsidiary  conducts or (to the Grantee's  knowledge)
          plans  to  conduct  business.  Nothing  in this  Section  9(b)  shall,
          however,  restrict the Grantee from making an investment in and owning
          up to one-percent  (1%) of the common stock of any company whose stock
          is listed on a national  securities  exchange or actively traded in an
          over-the-counter  market;  provided that such investment does not give
          the  Grantee the right or ability to control or  influence  the policy
      decisions of any direct competitor of the Company or a Subsidiary.

     (c)  Noninterference.  During the Grantee's  employment  and until one year
          after the Grantee  ceases being  employed by or acting as a consultant
          or  independent  contractor  to the  Company  or any  Subsidiary,  the

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          Grantee  will not,  either  directly  or  indirectly  through  another
          business or person,  solicit, entice away, or otherwise interfere with
          any employee,  customer,  prospective  customer,  vendor,  prospective
          vendor,  supplier  or  other  similar  business  relation  or (to  the
          Grantee's  knowledge)  prospective business relation of the Company or
any Subsidiary.                                             

     (d)  Nonsolicitation.  During the Grantee's  employment  and until one year
          after the Grantee  ceases being  employed by or acting as a consultant
          or  independent  contractor  to the  Company  or any  Subsidiary,  the
          Grantee  will not,  either  directly  or  indirectly  through  another
          business or person, hire, recruit, employ, or attempt to hire, recruit
          or employ,  or  facilitate  any such acts by others,  any person  then
currently employed by the Company or any Subsidiary.        

     (e)  Confidentiality. The Grantee acknowledges that it is the policy of the
          Company and its  subsidiaries  to maintain as secret and  confidential
          all valuable and unique information and techniques acquired, developed
          or  used  by the  Company  and  its  subsidiaries  relating  to  their
          businesses,   operations,   employees  and  customers   ("Confidential
          Information").   The   Grantee   recognizes   that  the   Confidential
          Information is the sole and exclusive  property of the Company and its
          subsidiaries,  and that disclosure of Confidential  Information  would
          cause damage to the Company and its  subsidiaries.  The Grantee  shall
          not at any time  disclose or  authorize  anyone  else to disclose  any
          Confidential  Information  or  proprietary  information  that  (A)  is
          disclosed  to or known by the Grantee as a result or as a  consequence
          of or through the Grantee's performance of services for the Company or
          any  Subsidiary,  (B) is not publicly or generally  known  outside the
          Company and (C) relates in any manner to the Company's business.  This
          obligation will continue even though the Grantee's employment with the
          Company or a Subsidiary may have terminated. This paragraph 9(e) shall
          apply  in   addition   to,  and  not  in   derogation   of  any  other
          confidentiality  agreements  that  may  exist,  now or in the  future,
between the Grantee and the Company or any Subsidiary.      

     (f)  No Detrimental  Communications.  The Grantee agrees not to disclose or
          cause to be  disclosed  at any time any untrue,  negative,  adverse or
          derogatory   comments  or   information   about  the  Company  or  any
          Subsidiary,  about any  product or service  provided by the Company or
          any  Subsidiary,  or about  prospects for the future of the Company or
any Subsidiary.                                             

     (g)  Remedy.  The Grantee  acknowledges the  consideration  provided herein
          (absent the Grantee's agreement to this Section 9) is more than Garmin
          is  obligated  to  pay,  and the  Grantee  further  acknowledges  that
          irreparable  harm would  result  from any breach of this  Section  and
          monetary   damages  would  not  provide  adequate  relief  or  remedy.
          Accordingly,  the Grantee  specifically agrees that, in the event that
          the  Grantee  breaches  any of the  Grantee's  obligations  under this
          Section  9,  the  Company  and any  Subsidiary  shall be  entitled  to
          injunctive  relief therefor,  and in particular,  without limiting the
          generality of the  foregoing,  neither the Company nor any  Subsidiary
          shall be precluded from pursuing any and all remedies they may have at
          law or in equity for breach of such  obligations.  In  addition,  this
          Option shall terminate immediately the first date on which the Grantee
          engages in such  activity  and the Board shall be entitled on or after

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          the first  date on which  the  Grantee  engages  in such  activity  to
          require  the Grantee to return any Shares  obtained  by the  Grantee's
          exercise  of this  Option to the Company and to require the Grantee to
          repay  any  proceeds  received  at any time  from  the sale of  Shares
          obtained by the  Grantee's  exercise of this Option (plus  interest on
          such  amount  from  the date  received  at a rate  equal to the  prime
          lending  rate as  announced  from  time to  time  in The  Wall  Street
          Journal) and to recover all  reasonable  attorneys'  fees and expenses
          incurred in  terminating  this Option and  recovering  such Shares and
proceeds.                                                   

Section 10. Status of the Grantee                                     

     The Grantee shall not be deemed a  shareholder  of the Company with respect
to any of the Shares  subject  to this  Option,  except to the extent  that such
Shares shall have been purchased and issued to him or her. The Company shall not
be required to issue or transfer  any  certificates  for Shares  purchased  upon
exercise  of this  Option  until all  applicable  requirements  of law have been
complied  with and such  Shares  shall have been duly  listed on any  securities
exchange on which the Shares may then be listed.                                

Section 11. No Effect on Capital Structure                            

     This  Option  shall not  affect  the right of the  Company  to  reclassify,
recapitalize  or  otherwise  change its capital or debt  structure  or to merge,
consolidate,  convey any or all of its assets, dissolve,  liquidate,  windup, or
otherwise reorganize.                                                           

Section 12. Adjustments                                               

     Notwithstanding  any provision herein to the contrary,  in the event of any
change  in  the  number  of  outstanding  Shares  effected  without  receipt  of
consideration  therefor by the Company,  by reason of a merger,  reorganization,
consolidation,  recapitalization, separation, liquidation, stock dividend, stock
split,  share  combination  or other  change in the  corporate  structure of the
Company  affecting the Shares,  the aggregate number and class of Shares subject
to this  Option and the  exercise  price of this Option  shall be  automatically
adjusted to accurately and equitably  reflect the effect thereon of such change;
provided,  however,  that any fractional  share  resulting from such  adjustment
shall be eliminated.  In the event of a dispute concerning such adjustment,  the
decision of the Board shall be conclusive.                                      

Section 13. Amendments                                                

     This Award  Agreement  may be  amended  only by a writing  executed  by the
Company and the Grantee which specifically states that it is amending this Award
Agreement;  provided  that this Award  Agreement  is subject to the power of the
Board to amend the Plan as provided therein. Except as otherwise provided in the
Plan, no such amendment shall  materially  adversely affect the Grantee's rights
under this Award Agreement without the Grantee's consent.                       

Section 14. Board Authority                                           

     Any questions  concerning the  interpretation of this Award Agreement,  any
adjustments required to be made under Sections 12 or 13 of this Award Agreement,
and any controversy  which arises under this Award Agreement shall be settled by
the Board in its sole discretion.                                               

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Section 15. Withholding Taxes                                         

     The Grantee agrees to make  appropriate  arrangements  with the Company for
satisfaction of any applicable Federal, state or local income tax or payroll tax
withholding amounts required by law to be withheld, including the payment to the
Company at the time of exercise of an Option of all such taxes and requirements.
The  Company is not  required to issue  shares upon the  exercise of this Option
unless the  Grantee  first pays in cash or by share  withholding  to the Company
such amount,  if any, of tax  withholding.  The Company may, in its  discretion,
accommodate the Grantee's  request to have  additional tax withholding  taken at
the time of exercise.                                                           

Section 16. Nonqualified Stock Option                                 

     This  Option is not  intended  to qualify as an  "incentive  stock  option"
within the meaning of Section 422 of the Code, and shall not be so construed.   

Section 17. Notice                                                    

     Whenever any notice is required or permitted hereunder, such notice must be
given in writing by (a) personal delivery, or (b) expedited, recognized delivery
service with proof of delivery,  or (c) United  States  Mail,  postage  prepaid,
certified  mail,  return receipt  requested,  or (d) telecopy or email (provided
that the telecopy or email is confirmed). Any notice required or permitted to be
delivered  hereunder  shall be deemed to be  delivered  on the date which it was
personally  delivered,  sent to the intended  addressee,  or,  whether  actually
received or not, on the third  business  day after it is deposited in the United
States mail, certified or registered,  postage prepaid,  addressed to the person
who is to receive it at the address which such person has theretofore  specified
by written notice delivered in accordance  herewith.  The Company or the Grantee
may change,  at any time and from time to time, by written  notice to the other,
the  address  specified  for  receiving  notices.  Until  changed in  accordance
herewith,  the  Company's  address for  receiving  notices shall be Garmin Ltd.,
Attention:  General Counsel,  1200 East 151st Street,  Olathe, KS 66062.  Unless
changed,  the Grantee's  address for  receiving  notices shall be the last known
address of the Grantee on the Company's records.  It shall be the Grantee's sole
responsibility  to notify the  Company  as to any change in his or her  address.
Such notification shall be made in accordance with this Section 17.             

Section 18. Severability                                              

     If  any  part  of  this  Award  Agreement  is  declared  by  any  court  or
governmental   authority  to  be  unlawful  or  invalid,  such  unlawfulness  or
invalidity  shall not serve to invalidate  any part of this Award  Agreement not
declared to be unlawful  or  invalid.  Any part so declared  unlawful or invalid
shall, if possible,  be construed in a manner which gives effect to the terms of
such part to the  fullest  extent  possible  while  remaining  lawful and valid.
Additionally,  if any of the covenants in Section 9 are determined by a court to
be  unenforceable  in whole or in part  because of such  covenant's  duration or
geographical  or other  scope,  such  court  shall  have the power to modify the
duration  or scope of such  provision  as the case may be,  so as to cause  such
covenant, as so modified, to be enforceable.                                    

Section 19. Binding Effect                                            

     This Award  Agreement  shall bind,  and,  except as  specifically  provided
herein,   shall  inure  to  the   benefit  of  the   respective   heirs,   legal
representatives, successors and assigns of the parties hereto.                  

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Section 20. Governing Law                                             

     This Award Agreement and the rights of all persons claiming hereunder shall
be construed and  determined in accordance  with the laws of the State of Kansas
without giving effect to the principles of the Conflict of Laws to the contrary.

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