-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bp078exbXtwCiSNVLrGgqyKM3PIwFI1dlN7cpjuwUY3i3gVhhKJ2NilWvJKQRp7y M6TZUAfv9iSJo4QgdgclwA== 0001121788-03-000015.txt : 20030627 0001121788-03-000015.hdr.sgml : 20030627 20030627100018 ACCESSION NUMBER: 0001121788-03-000015 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GARMIN LTD CENTRAL INDEX KEY: 0001121788 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 980229227 FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-31983 FILM NUMBER: 03759728 BUSINESS ADDRESS: STREET 1: PO BOX 309 UGLAND HOUSE STREET 2: SOUTH CHURCH ST GEORGETOWN CITY: GRAND CAYMAN BUSINESS PHONE: 9133978200 MAIL ADDRESS: STREET 1: C/O GARMIN INTERNATIONAL INC STREET 2: 1200 E 151ST STREET CITY: OLATHE STATE: KS ZIP: 66062 11-K 1 form11k_123102.txt United States Securities and Exchange Commission Washington, D.C. 20549 FORM 11-K [x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2002 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number: 0-31983 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Garmin International, Inc. 401(k) and Pension Plan c/o Garmin International, Inc. 1200 East 151st Street Olathe, KS 66062 B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Garmin Ltd. P.O. Box 30464 SMB 5th Floor, Harbour Place 103 South Church Street George Town Grand Cayman, Cayman Islands Contents Report of Independent Auditors................................................1 Financial Statements Statements of Net Assets Available for Plan Benefits as of December 31, 2002 and 2001......................................................................2 Statement of Changes in Net Assets Available for Plan Benefits for the Year Ended December 31, 2002.......................................................3 Notes to Financial Statements.................................................4 Supplemental Schedule Schedule H, Line 4i - Schedule of Assets (Held at End of Year)................9 Signature Page...............................................................10 Exhibits Exhibit 23 - Consent of Independent Accountants..............................11 Exhibit 99 - Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002....................12 A schedule of party-in-interest transactions has not been presented because there were no party-in-interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. Schedules of loans, fixed income obligations, and leases in default or uncollectible are not presented, since such loans, fixed income obligations, or leases that are required to be listed in the respective schedule are not present. Report of Independent Auditors The Plan Administrator Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) We have audited the accompanying statements of net assets available for plan benefits of Garmin International Inc. 401(k) and Pension Plan (formerly the Garmin International, Inc. Savings and Profit Sharing Plan) (the "Plan") as of December 31, 2002 and 2001, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2002. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2002 and 2001, and the changes in its net assets available for benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held for investment purposes at end of year) as of December 31, 2002 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Kansas City, Missouri May 31, 2003 Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Statements of Net Assets Available for Benefits December 31 2002 2001 ----------------------------------------- Assets Investments, at fair value $25,587,709 $16,555,721 Receivables: Employer contributions 125,148 - Employee contributions 78,348 - ----------------------------------------- Total receivables 203,496 - ----------------------------------------- Net assets available for benefits $25,791,205 $16,555,721 ========================================= See accompanying notes. Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2002 ---------------- Additions Investment income: Dividends $ 384,871 Interest 46,887 ---------------- 431,758 Contributions: Employee contributions 2,279,302 Employer contributions 2,516,307 Rollover contributions 402,752 ---------------- 5,198,361 Transfer of Garmin International, Inc. Money Purchase Pension Plan balances 5,725,673 ---------------- Total additions 11,355,792 Deductions Distributions to participants (774,307) Administrative expenses (47,674) Excess contribution refunds (14,252) ---------------- (836,233) Net depreciation in fair value of investments (Note 3) (1,284,075) ---------------- Net increase 9,235,484 Net assets available for benefits at beginning of year 16,555,721 ---------------- Net assets available for benefits at end of year $25,791,205 ================ See accompanying notes. Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Notes to Financial Statements December 31, 2002 1. Description of the Plan The Garmin International, Inc. 401(k) and Pension Plan, formerly the Garmin International, Inc. Savings and Profit Sharing Plan, (the Plan) is a contributory defined contribution plan available to full-time employees who are at least 21 years of age and have completed three months of service with Garmin International, Inc. (the Company), a wholly owned subsidiary of Garmin Ltd. Participants are permitted to enter the Plan after meeting eligibility requirements on either January 1 or July 1. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Eligible employees may contribute up to 50% of their annual compensation subject to Internal Revenue Code maximum limitations. The Company matches 75% of an employee's contributions up to 10% of the employee's compensation. Certain other discretionary employer contributions to the Plan are at the sole discretion of the Company's Board of Directors. Under provisions of the Plan, participants direct the investment of their contributions into one or more of the investment accounts available. Participants become fully vested in employer matching contributions to the Plan after five years of continuous service. The vesting percentages are as follows: 0% through one year of service, 20% after one year, 40% after two years, 60% after three years, 80% after four years and 100% after five years of continuous service. Participants become fully vested in discretionary profit sharing contributions after seven years of continuous service. The vesting percentages are as follows: 0% through two years of service, 10% after two years, 20% after three years, 40% after four years, 60% after five years, 80% after six years, and 100% after seven years. The non-vested portions of terminated participants' account balances are forfeited, and such forfeitures serve to reduce future employer contributions. The Plan retained $70,389 in forfeitures at December 31, 2002 and $71,858 at December 31, 2001. Upon termination of employment or at retirement age, a participant may receive either a lump-sum amount equal to the value of the participant's vested account balance or the Plan will purchase an annuity with the lump-sum amount. Participants may borrow from the Plan in the form of a loan. The loan is limited to the amount the participant may borrow without the loan being treated as a taxable distribution. The loan and any outstanding loan balance may not be more than 50% of the participant's vested account not including discretionary profit sharing contributions or Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Notes to Financial Statements (continued) 1. Description of the Plan (continued) merged Garmin International, Inc. Money Purchase Pension Plan (the MPP) contribution balances, or $50,000, whichever is less. The vested account provides the security for the loan, and the participant's account may not be used as security for a loan outside of the Plan. Additionally, loans must be repaid with interest within five years from the date of the loan unless the loan is used to buy the participant's principal residence. The loan may be repaid before it is due. Although the Company has not expressed any intent to do so, it has the right under the plan provisions to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become fully vested in their benefits. Additional information about the Plan and its vesting and withdrawal provisions is contained in the Summary Plan Description, Garmin International, Inc. 401(k) and Pension Plan. Copies of the Summary Plan Description are available from the plan administrator. On January 1, 2001, the Plan adopted an amendment allowing participants to elect to have their allocation invested in the common stock of the Garmin Ltd. On July 1, 2002, the Garmin International, Inc. Money Purchase Pension Plan was merged into the Garmin International, Inc. Savings and Profit Sharing Plan. The Garmin International, Inc. Savings and Profit Sharing Plan was then renamed the Garmin International, Inc. 401(k) and Pension Plan. 2. Summary of Significant Accounting Policies The following is a summary of significant accounting policies of the Plan. Valuation of Investments The fair value of the mutual fund investments owned by the Plan is based on quoted redemption values on the last business day of the plan year. The fair value of the investments owned by the Plan in Garmin Ltd. common stock is based on the quoted market price on the last business day of the plan year. Loans to participants are valued based on outstanding principal amounts owed on the last business day of the plan year as reported to the Plan by the trustee. Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Notes to Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Contributions Contributions from the Company are accrued and paid in the period in which they become obligations of the Company. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. Investments The Plan's investments were held by T. Rowe Price Trust Company at December 31, 2002 and Principal Life Insurance Company at December 31, 2001, respectively. During 2002, the Plan's investments (including investments bought and sold, as well as held, during the year) depreciated in fair value by $1,284,075, as presented in the following table: Garmin Ltd. common stock $ 780,037 Mutual funds (2,064,112) ------------- $(1,284,075) ============= Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Notes to Financial Statements (continued) 3. Investments (continued) The fair value of individual investments that represent 5% or more of the Plan's net assets is as follows:
December 31 2002 2001 ------------------------------------ Fair value as determined by quoted market price: Oakmark Equity and Income Fund $4,085,078 $ - T. Rowe Price Equity Income Fund 3,614,312 - Garmin Ltd. common stock 2,970,854 2,001,008 T. Rowe Price Equity Index 500 Fund 2,940,210 - T. Rowe Price Prime Reserve Fund 2,253,008 - T. Rowe Price New Income Fund 1,910,321 - Vanguard Wellington Fund - 1,772,228 Vanguard Windsor II Fund - 2,269,916 Vanguard Star Fund - 1,027,302 Principal Money Market Account - 1,325,972 Principal Bond and Mortgage Account - 1,436,718 Principal Large Cap Stock Index Account - 2,193,669
Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Notes to Financial Statements (continued) 4. Income Tax Status The Internal Revenue Service has determined that the Plan is qualified under Section 401(a) of the Internal Revenue Code and, therefore, is not subject to tax under present income tax law. The plan administrator believes that the Plan continues to qualify as a tax-exempt defined contribution plan, and the plan administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 5. Transactions With Parties in Interest The Company pays certain administrative costs and provides certain accounting and administrative services to the Plan for which no fees are charged. Garmin International, Inc. 401(k) and Pension Plan (Formerly the Garmin International, Inc. Savings and Profit Sharing Plan) Employee Identification Number: 48-1088407 Plan Number: 001 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2002
Number of Shares Identity of Issuer or Units Current Value - ----------------------------------------------------------------------------------------------------------- Liberty Acorn Fund 9,965 $ 154,458 Ariel Appreciation Fund 6,615 218,704 PBHG Real Estate Fund 14,333 115,236 T. Rowe Price Stable Value Fund* 1,140,691 1,140,691 Neuberger Berman Focus Fund 1,281 20,580 BGI Lifepath 2010 30 320 BGI Lifepath 2020 572 6,801 BGI Lifepath 2030 529 6,115 BGI Lifepath 2040 667 8,181 Oakmark Equity and Income Fund 227,075 4,085,078 Oakmark International Fund 2,381 31,285 Calvert Social Investment Fund (Equity A) 746 19,697 Lord Abbett Mid-Cap Value Fund 9,604 147,806 Garmin Ltd. common stock* 101,394 2,970,854 Pimco Total Return Fund 41,110 438,640 T. Rowe Price Mid-Cap Value Fund* 36,363 545,443 T. Rowe Price Total Equity Market Index Fund* 3,629 32,334 T. Rowe Price International Stock Fund* 134,268 1,192,303 T. Rowe Price New Income Fund* 214,884 1,910,321 T. Rowe Price Prime Reserve Fund* 2,253,008 2,253,008 T. Rowe Price Small-Cap Value Fund* 20,543 450,707 T. Rowe Price Equity Index 500 Fund* 124,217 2,940,210 T. Rowe Price Science and Technology Fund* 48,076 597,580 T. Rowe Price Mid-Cap Growth Fund* 19,469 604,317 T. Rowe Price Small-Cap Stock Fund* 29,486 633,951 T. Rowe Price Equity Income Fund* 182,633 3,614,312 T. Rowe Price Blue Chip Growth Fund* 1,143 25,083 T. Rowe Price Growth Stock Fund* 47,716 886,567 Loans to participants - 537,127 -------------------- $25,587,709 ====================
*Indicates party-in-interest to the Plan. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. GARMIN INTERNATIONAL, INC. 401(k) AND PENSION PLAN By /s/ Kevin Rauckman Kevin Rauckman Chief Financial Officer Garmin International, Inc. Dated: June 27, 2003 EXHIBIT 23 Consent of Independent Accountants We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-52766) pertaining to the Garmin International, Inc. 401(k) and Pension Plan (formerly the Garmin International, Inc. Savings and Profit Sharing Plan) of our report dated May 31, 2003, with respect to the financial statements and schedule of the Garmin International, Inc. 401(k) and Pension Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2002. /s/ Ernst & Young LLP Kansas City, Missouri June 23, 2003 EXHIBIT 99 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) The undersigned hereby certifies, for the purposes of Chapter 63 of Title 18, of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as the person who performs the functions equivalent to both the chief executive officer and chief financial officer of the Garmin International, Inc. 401(k) and Pension Plan (the "Plan") for purposes of this certification, that: (1) The Annual Report on Form 11-K for the year ended December 31, 2002 (the "Report") of the Plan 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 net assets available for benefits, and changes in net assets available for benefits, of the Plan. Dated: June 27, 2003 /s/ Kevin Rauckman Kevin Rauckman Chief Financial Officer Garmin International, Inc. A signed original of this written statement has been provided to the Plan and will be retained by the Plan and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----