Wants Shareholders To Approve Move To Switzerland

Garmin announced last week that its board of directors has unanimously approved moving the place of incorporation of the company from the Cayman Islands to Switzerland. Garmin’s shareholders will be asked to vote in favor of the proposed change in place of incorporation, also known as a redomestication, at a shareholders meeting, which is expected to be held on May 20, 2010. The redomestication will also be subject to approval of the Grand Court of the Cayman Islands. If the redomestication is approved by Garmin shareholders and the Grand Court of the Cayman Islands, it is expected that a new Swiss company, also called Garmin Ltd., would replace the existing Cayman Islands company as the ultimate public holding company of the Garmin group and each shareholder will receive one share of the Swiss company for each share held of the Cayman Islands company.

The original parent company of the Garmin group was Garmin Corporation, a company incorporated in Taiwan. Under the legal framework of Taiwan at the time of Garmin’s initial public offering in 2000, it was not practical for Garmin Corporation to offer its shares in the United States.  Therefore, Garmin Ltd. was formed in the Cayman Islands in July 2000 as a holding company for Garmin Corporation in order to facilitate the listing of its shares on the NASDAQ stock market in the United States.

“Following a thorough review, we have determined that it is in the best interest of Garmin and its shareholders to change the jurisdiction of incorporation of our group parent company to Switzerland,” said Dr. Min Kao, chairman and CEO of Garmin Ltd. “Switzerland is centrally located in Europe in close proximity to our major Western and Eastern European markets.”

“Garmin’s footprint in Europe has grown considerably, through the acquisition of our distributors in ten European countries during the last four years, plus our recent establishment of an office in Poland.  The Swiss office will provide a base for expansion of certain corporate functions in Europe and a more favorable structure from which it would be possible to acquire or partner with European businesses.  We believe that the change of our jurisdiction of incorporation will enhance our global business operations and reputation consistent with our status as an international company with significant operations in Asia, North America, as well as Europe.  Switzerland also offers a well-developed corporate, legal and regulatory environment with an extensive network of tax treaties with other countries,” said Kao.

Garmin GNS530

Garmin does not expect that the redomestication will have any material impact on its financial results. Details of the proposed redomestication are provided in Garmin’s preliminary proxy statement, which have been filed with the SEC.

Since Swiss law does not permit shareholder rights plans, Garmin Ltd’s board of directors has approved an amendment, subject to the approval of the redomestication by Garmin’s shareholders and the Grand Court of the Cayman Islands, to change the expiration date of the rights issued under the company’s shareholder rights plan from October 31, 2011 to the effective date of the redomestication to Switzerland, which is currently expected to be June 27, 2010. Accordingly, as of the effective date of the redomestication, the rights under such plan will expire and no longer be outstanding.

FMI: www.garmin.com