Audiovox 2005 Annual Report Download - page 20

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We have two classes of common stock: Class A common stock is traded on the
Nasdaq Stock Market under the symbol VOXX and Class B common stock, which is not
publicly traded and substantially all of which is beneficially owned by Mr.
Shalam. Each share of Class A common stock is entitled to one vote per share and
each share of Class B common stock is entitled to ten votes per share. Both
classes vote together as a single class, except in certain circumstances, for
the election and removal of directors and as otherwise may be required by
Delaware law. Since our charter permits shareholder action by written consent,
Mr. Shalam may be able to take significant corporate actions without prior
notice and a shareholder meeting.
OTHER RISKS
Other risks and uncertainties include:
o changes in U.S. federal, state and local law,
o our ability to implement operating cost structures that align with
revenue growth,
o trade sanctions against or for foreign countries, and
o successful integration of business acquisitions and new brands in our
distribution network
ITEM 1B−UNRESOLVED STAFF COMMENTS
As of the filing of this annual report on Form 10−K, there were no
unresolved comments from the staff of the Securities and Exchange Commission.
ITEM 2−PROPERTIES
Our Corporate headquarters is located at 180 Marcus Blvd. in Hauppauge, New
York. In addition, as of November 30, 2005, the Company leased a total of
eighteen operating facilities or offices located in eight states as well as
Germany and Venezuela. The leases have been classified as operating leases, with
the exception of one, which is recorded as a capital lease. These facilities are
located in California, Florida, Georgia, Massachusetts, New York, Ohio,
Tennessee, and Michigan. These facilities serve as offices, warehouses,
distribution centers or retail locations. Additionally, we utilize public
warehouse facilities located in Virginia, Nevada and Mississippi.
ITEM 3−LEGAL PROCEEDINGS
The Company is currently, and has in the past been, a party to various
routine legal proceedings incident to the ordinary course of business. If
management determines, based on the underlying facts and circumstances, that it
is probable a loss will result from a litigation contingency and the amount of
the loss can be reasonably estimated, the estimated loss is accrued for. The
Company believes its outstanding litigation matters will not have a material
adverse effect on the Company's financial statements, individually or in the
aggregate; however, due to the uncertain outcome of these matters, the Company
disclosed these specific matters below:
During 2004, several purported derivative and class actions were filed in
the Court of Chancery of the State of Delaware, New Castle County. On January
10, 2005, Vice Chancellor Steven Lamb of the Court of Chancery of the State of
Delaware, New Castle County, granted an order permitting the filing of a
Consolidated Complaint by several shareholders of Audiovox Corporation
derivatively on behalf of Audiovox Corporation against Audiovox Corporation, ACC
and the directors of Audiovox Corporation
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