Garmin 2009 Annual Report Download - page 48

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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.
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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.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.
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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.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havemadeinpreviousyearsormaymakeinthefuture.Ifwefail
tosuccessfullyintegratesuchtransactions,ourbusinesscouldbemateriallyharmed.
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Wemayhaveadditionaltaxliabilities.
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WearesubjecttoincometaxesinboththeUnitedStatesandnumerousforeignjurisdictions.Significantjudgment
isrequiredindeterminingourworldwideprovisionforincometaxes.Intheordinarycourseofourbusiness,there
aremanytransactionsandcalculationswheretheultimatetaxdeterminationisuncertain.Weareregularlyunder
auditbytaxauthorities.Althoughwebelieveourtaxestimatesarereasonable,thefinaldeterminationoftax
auditsandanyrelatedlitigationcouldbemateriallydifferentfromourhistoricalincometaxprovisionsand
accruals.Theresultsofanauditorlitigationcouldhaveamaterialeffectonourincometaxprovision,netincome
orcashflowsintheperiodorperiodsforwhichthatdeterminationismade.
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OurshareholdersmayfacedifficultiesinprotectingtheirinterestsbecauseweareincorporatedunderCayman
Islandslaw.
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OurcorporateaffairsaregovernedbyourMemorandumandArticlesofAssociation,asamended,andby
theCompaniesLaw(2009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.
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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.
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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.
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Failuretoobtainrequiredcertificationsofourproductsonatimelybasiscouldharmourbusiness.
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Wehavecertainproducts,especiallyinouraviationsegment,thataresubjecttogovernmentalandsimilar
certificationsbeforetheycanbesold.Forexample,FAAcertificationisrequiredforallofouraviationproducts