Audiovox 2010 Annual Report Download - page 18

We Depend Heavily on Existing Directors, Management and Key Personnel and Our Ability to Recruit and Retain Qualified
Personnel.
Our success depends on the continued efforts of our directors, executives and senior vice presidents, many of whom have
worked with Audiovox for over two decades, as well as our other executive officers and key employees. We have no employment
contracts with any of our executive officers or key employees, except our President and Chief Executive Officer. The loss or
interruption of the continued full-time service of certain of our executive officers and key employees could have a material adverse
effect on our business.
In addition, to support our continued growth, we must effectively recruit, develop and retain additional qualified personnel
both domestically and internationally. Our inability to attract and retain necessary qualified personnel could have a material adverse
effect on our business.
We Are Responsible for Product Warranties and Defects.
Even though we outsource manufacturing, we provide warranties for all of our products for which we have provided an
estimated liability. Therefore, we are highly dependent on the quality of our suppliers’ products.
Our Capital Resources May Not Be Sufficient to Meet Our Future Capital and Liquidity Requirements.
We believe that we currently have sufficient resources to fund our existing operations for the foreseeable future. However,
we may need additional capital to operate our business if:
• market conditions change,
• our business plans or assumptions change,
• we make significant acquisitions, or
• we need to make significant increases in capital expenditures or working capital.
Our Stock Price Could Fluctuate Significantly.
The market price of our common stock could fluctuate significantly in response to various factors and events, including:
• operating results being below market expectations,
• announcements of technological innovations or new products by us or our competitors,
• loss of a major customer or supplier,
• changes in, or our failure to meet, financial estimates by securities analysts,
• industry developments,
• economic and other external factors,
• general downgrading of our industry sector by securities analysts,
• inventory write-downs, and
• ability to integrate acquisitions.
In addition, the securities markets have experienced significant price and volume fluctuations over the past several years that
have often been unrelated to the operating performance of particular companies. These market fluctuations may also have a material
adverse effect on the market price of our common stock.
John J. Shalam, Our Chairman, Owns a Significant Portion of Our Common Stock and Can Exercise Control over Our Affairs.
Mr. Shalam beneficially owns approximately 54% of the combined voting power of both classes of common stock. This will
allow him to elect our Board of Directors and, in general, to determine the outcome of any other matter submitted to the stockholders
for approval. Mr. Shalam's voting power may have the effect of delaying or preventing a change in control of the Company.
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.
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Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠