Plantronics 2010 Annual Report Download - page 29

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Although it is impossible to predict the occurrences or consequences of any of the events described above, such events could
significantly disrupt our operations. In addition, should major public health issues arise, including pandemics, we could be negatively
impacted by the need for more stringent employee travel restrictions, limitations in the availability of freight services, governmental
actions limiting the movement of products between various regions, delays in production ramps of new products, and disruptions in
the operations of our manufacturing vendors and component suppliers. Our operating results and financial condition could be
adversely affected by these events.
Our business could be materially adversely affected if we lose the benefit of the services of key personnel.
Our success depends to a large extent upon the services of a limited number of executive officers and other key employees. The
unanticipated loss of the services of one or more of our executive officers or key employees could have a material adverse effect upon
our business, financial condition, and results of operations.
We also believe that our future success will depend in large part upon our ability to attract and retain additional highly skilled
technical, management, sales and marketing personnel. Competition for such personnel is intense. We may not be successful in
attracting and retaining such personnel, and our failure to do so could have a material adverse effect on our business, operating results
or financial condition.
We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002,
and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an
adverse effect on our stock price.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, our management is required to report on, and our independent registered
public accounting firm to attest to, the effectiveness of our internal control over financial reporting. We have an ongoing program to
perform the system and process evaluation and testing necessary to comply with these requirements.
We have and will continue to consume management resources and incur significant expenses for Section 404 compliance on an
ongoing basis. In the event that our chief executive officer, chief financial officer, or independent registered public accounting firm
determines in the future that our internal control over financial reporting is not effective as defined under Section 404, investor
perceptions may be adversely affected and could cause a decline in the market price of our stock.
Provisions in our charter documents and Delaware law and our adoption of a stockholder rights plan may delay or prevent a third
party from acquiring us, which could decrease the value of our stock.
Our Board of Directors has the authority to issue preferred stock and to determine the price, rights, preferences, privileges and
restrictions, including voting and conversion rights, of those shares without any further vote or action by the stockholders. The
issuance of our preferred stock could have the effect of making it more difficult for a third party to acquire us. In addition, we are
subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which could also have the effect of
delaying or preventing our acquisition by a third party. Further, certain provisions of our Certificate of Incorporation and bylaws
could delay or make more difficult a merger, tender offer or proxy contest, which could adversely affect the market price of our
common stock.
In 2002, our Board of Directors adopted a stockholder rights plan, pursuant to which we distributed one right for each outstanding
share of common stock held by stockholders of record as of April 12, 2002. Because the rights may substantially dilute the stock
ownership of a person or group attempting to take us over without the approval of our Board of Directors, the plan could make it more
difficult for a third party to acquire us, or a significant percentage of our outstanding capital stock, without first negotiating with our
Board of Directors regarding such acquisition.
We have $17.5 million of goodwill and intangible assets recorded on our balance sheet, and we have incurred significant
impairment losses over the last two fiscal years recorded in discontinued operations. If the carrying value of our goodwill or
intangible assets is not recoverable, an impairment loss may be recognized, which would adversely affect our financial results.
As a result of past acquisitions, the Company has $17.5 million of goodwill and intangible assets on the consolidated balance sheets
related to our continuing operations. It is not possible at this time to determine if any future impairment charge would result or, if it
does, whether such charge would be material related to these remaining assets. If such a charge is necessary, it may have a material
adverse affect our financial results.