Garmin 2007 Annual Report Download - page 53

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27
We are a Cayman Islands company and a substantial portion of our assets are located outside the United
States, particularly in Taiwan. As a result, it may be difficult to effect service of process within the United States
upon us. In addition, there is uncertainty as to whether the courts of the Cayman Islands or Taiwan would recognize
or enforce judgments of United States courts obtained against us predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof, or be competent to hear original actions brought in the
Cayman Islands or Taiwan against us predicated upon the securities laws of the United States or any state thereof.
Our shareholders may face difficulties in protecting their interests because we are incorporated under
Cayman Islands law.
Our corporate affairs are governed by our Memorandum and Articles of Association, as amended, and by
the Companies Law (2007 Revision) and the common law of the Cayman Islands. The rights of our shareholders
and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as under
statutes or judicial precedent in existence in jurisdictions in the United States. Therefore, you may have more
difficulty in protecting your interests in the face of actions by the management, directors or our controlling
shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States, due to the
comparatively less developed nature of Cayman Islands law in this area.
Unlike many jurisdictions in the United States, Cayman Islands law does not specifically provide for
shareholder appraisal rights on a merger or consolidation of a company. This may make it more difficult for you to
assess the value of any consideration you may receive in a merger or consolidation or to require that the offeror give
you additional consideration if you believe the consideration offered is insufficient.
Shareholders of Cayman Islands exempted companies such as Garmin have no general rights under Cayman
Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders of the company.
This may make it more difficult for you to obtain the information needed to establish any facts necessary for a
shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
Subject to limited exceptions, under Cayman Islands law, a minority shareholder may not bring a derivative
action against the board of directors. Our Cayman Islands counsel has advised that they are not aware of any
reported class action or derivative action having been brought in a Cayman Islands court.
We may pursue strategic acquisitions, investments, strategic partnerships or other ventures, and our business
could be materially harmed if we fail to successfully identify, complete and integrate such transactions.
We intend to evaluate acquisition opportunities and opportunities to make investments in complementary
businesses, technologies, services or products, or to enter into strategic partnerships with parties who can provide
access to those assets, additional product or services offerings, additional distribution or marketing synergies or
additional industry expertise. In 2007, we acquired Digital Cyclone, Inc., EME TecSat SAS, Gesellschaft für
Professionelle Satellitennavigation mbH, Synergy S.p.A, Electrónica Trepat S.A. and the assets of Nautamatic
Marine Systems, Inc., We may not be able to identify suitable acquisition, investment or strategic partnership
candidates, or if we do identify suitable candidates in the future, we may not be able to complete those transactions
on commercially favorable terms, or at all.
Any past or future acquisitions could also result in difficulties assimilating acquired employees (including
cultural differences with foreign acquisitions), operations, and products and diversion of capital and management’s
attention away from other business issues and opportunities. Integration of acquired companies may result in
problems related to integration of technology and inexperienced management teams. In addition, the key personnel
of the acquired company may decide not to work for us. Our management has had limited experience in
assimilating acquired organizations and products into our operations. We may not successfully integrate internal
controls, compliance under the Sarbanes-Oxley Act of 2002 and other corporate governance matters, operations,
personnel or products related to acquisitions we made in 2007 or may make in the future. If we fail to successfully
integrate such transactions, our business could be materially harmed.