Garmin 2003 Annual Report Download - page 63

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Employee Stock Purchase Plan
The stockholders also adopted an employee stock purchase plan (ESPP). Up to 1,000,000 shares of common stock have been
reserved for the ESPP. Shares will be offered to employees at a price equal to the lesser of 85% of the fair market value of the stock on
the date of purchase or 85% of the fair market value on the enrollment date. The ESPP is intended to qualify as an “employee stock
purchase plan” under Section 423 of the Internal Revenue Code. During 2003, 2002 and 2001, 70,857, 70,035 and 123,007 shares
were purchased under the plan for a total purchase price of $1,805, $1,265 and $1,464, respectively. At December 27, 2003,
approximately 736,000 shares are available for future issuance.
12. Earnings Per Share
The following table sets forth the computation of basic and diluted net income per share:
Options to purchase 48 shares of common stock at $54.54 per share were outstanding during 2003 and 472 shares of common
stock at prices ranging from $21.67 to $29.79 per share were outstanding during 2002 but were not included in the computation of
diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares and,
therefore, the effect would be antidilutive.
13. Share Repurchase Program
On September 24, 2001, the Board of Directors authorized the Company to repurchase up to 5,000,000 shares of the
Company’s common stock through December 31, 2002. Through December 28, 2002, the Company had purchased 595,200 shares at
$9,834. The share repurchase authorization expired on December 31, 2002.
14. Shareholder Rights Plan
On October 24, 2001, Garmin’s Board of Directors adopted a shareholder rights plan (the “Rights Plan”). Pursuant to the
Rights Plan, the Board declared a dividend of one preferred share purchase right on each outstanding common share of Garmin to
shareholders of record as of November 1, 2001. The rights trade together with Garmin’s common shares. The rights generally will
become exercisable if a person or group acquires or announces an intention to acquire 15% or more of Garmin’s outstanding common
shares. Each right (other than those held by the new 15% shareholder) will then be exercisable to purchase preferred shares of Garmin
(or in certain instances other securities of Garmin) having at that time a market value equal to two times the then current exercise
price. Garmin’s Board of Directors may redeem the rights at $0.002 per right at any time before the rights become exercisable. The
rights expire on October 31, 2011.
Fiscal Year Ended
December 27, December 28, December 29,
2003 2002 2001
Numerator (in thousands):
Numerator for basic and diluted
net income per share - net income $178,634 $142,797 $113,448
Denominator (in thousands):
Denominator for basic net income per share -
weighted-average common shares 108,011 107,774 108,097
Effect of dilutive securities -
employee stock options (note 11) 891 427 350
Denominator for diluted net income per share -
adjusted weighted-average common shares 108,902 108,201 108,447
Basic net income per share $1.65 $1.32 $1.05
Diluted net income per share $1.64 $1.32 $1.05