Garmin 2008 Annual Report Download - page 51

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meeting. We have adopted a shareholders’ rights plan which under certain circumstances would significantly impair
the ability of third parties to acquire control of us without prior approval of our Board of Directors. This
shareholders’ rights plan and the provisions in our charter documents could make it more difficult for a third party to
acquire us, even if doing so would benefit our shareholders.
Unlike many jurisdictions in the United States, Cayman Islands law does not currently provide for mergers
as that expression is understood under corporate law in the United States. While Cayman Islands law does have
statutory provisions that provide for the reconstruction and amalgamation of companies, which are commonly
referred to in the Cayman Islands as a “scheme of arrangement,” the procedural and legal requirements necessary to
consummate these transactions are more rigorous and take longer to complete than the procedures typically required
to consummate a merger in the United States. Under Cayman Islands law and practice, a scheme of arrangement in
relation to a solvent Cayman Islands exempted company must be approved at a shareholders’ meeting by a majority
of the company’s shareholders who are present and voting (either in person or by proxy) at such meeting. The shares
voted in favor of the scheme of arrangement must also represent at least 75% of the value of each class of the
company’s shareholders (excluding the shares owned by the parties to the scheme of arrangement) present and
voting at the meeting. The Grand Court of the Cayman Islands must also sanction the convening of these meetings
and the terms of the amalgamation. Although there is no requirement to seek the consent of the creditors of the
parties involved in the scheme of arrangement, the Grand Court typically seeks to ensure that the creditors have
consented to the transfer of their liabilities to the surviving entity or that the scheme of arrangement does not
otherwise materially adversely affect the creditors’ interests. Furthermore, the Grand Court will only approve a
scheme of arrangement if it is satisfied that:
• the statutory provisions as to majority vote have been complied with;
• the shareholders have been fairly represented at the meeting in question;
• the scheme of arrangement is such as a businessman would reasonably approve; and
• the scheme of arrangement is not one that would more properly be sanctioned under some other
provision of the Companies Law.
There are proposals to amend the Companies Law to permit companies to merge in a manner broadly
similar to the mergers provisions in the State of Delaware. Those proposals were released by the Cayman Islands
government for comment on January 20, 2009. Although the period for comments has now expired, a final draft bill
has not been released and, therefore, it is not possible to specify the final form of the proposals or an anticipated date
for such legislation to be adopted.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The following are the principal properties owned or leased by the Company and its subsidiaries:
Garmin International, Inc. and Garmin USA, Inc. occupy a facility of approximately 995,000 square feet on
42 acres in Olathe, Kansas, where the majority of product design and development work is conducted, the majority
of aviation panel-mount products are manufactured and products are warehoused, distributed, and supported for
North, Central and South America. An additional approximately 125,000 square foot expansion to the main Olathe
facility is in process for additional development and/or aviation manufacturing space (expected completion June
2009), which will bring the total size of the main Olathe facility to 1,120,000 square feet when complete. Garmin’s
subsidiary, Garmin Realty, LLC also owns an additional 46 acres of land on the Olathe site for future expansion. In
connection with the bond financings for the facility in Olathe and the expansion of that facility, the City of Olathe
holds the legal title to the Olathe facility which is leased to Garmin’s subsidiaries by the City. Upon the payment in
full of the outstanding bonds, the City of Olathe is obligated to transfer title to Garmin’s subsidiaries for the