Cabela's 2004 Annual Report Download - page 26

proceedings and Ñnancial transactions that may adversely aÅect the civil rights of service members during
military service. We spend signiÑcant amounts of time ensuring we are in compliance with these laws and
work with our service providers to ensure that actions they take in connection with services they perform
for us are in compliance with these laws. Depending on the underlying issue and applicable law, regulators
are often authorized to impose penalties for violations of these statutes and, in some cases, to order our
bank subsidiary to compensate injured borrowers. Borrowers may also have a private right of action to
bring actions for some violations. Federal bankruptcy and state debtor relief and collection laws also aÅect
the ability of our bank subsidiary to collect outstanding balances owed by borrowers. The GLB Act
requires our bank subsidiary to disclose its privacy policy to customers and consumers, and requires that
such customers and consumers be given a choice (through an opt-out notice) to forbid the sharing of non-
public personal information about them with non-aÇliated third persons. We have a written Privacy Notice
posted on our website which is delivered to each of our customers when the customer relationships begin,
and annually thereafter, in compliance with the GLB Act.
Certain acquisitions of our capital stock or our bank subsidiary's capital stock may be subject to
regulatory approval or notice under federal or Nebraska law. Investors are responsible for ensuring that
they do not, directly or indirectly, acquire shares of our capital stock in excess of the amount which can be
acquired without regulatory approval.
Taxation Applicable to Us. We pay applicable corporate income, franchise and other taxes, to states
in which our destination retail stores are physically located. Upon entering a new state, we apply for a
private letter ruling from the state's revenue department stating which types of taxes our direct and retail
businesses will be required to collect and pay in such state, and we accrue and remit the applicable taxes
based upon the private letter ruling. As we open more destination retail stores, we will be subject to tax in
an increasing number of state and local taxing jurisdictions. Although we believe we have properly accrued
for these taxes based on our current interpretation of the tax code and prior private letter rulings, state
taxing authorities may challenge our interpretation, attempt to revoke their private letter rulings or amend
their tax laws. If state taxing authorities are successful, additional taxes, interest and related penalties may
be assessed. See ""Factors AÅecting Future Results Ì Our use tax collection policy for our direct business
may expose us to the risk that we may be assessed for unpaid use taxes which would harm our operating
results and cash Öows'' and ""Ì Our destination retail store expansion strategy may result in our direct
business establishing nexus with additional states which may cause our direct business to pay additional
income taxes and require us to collect use taxes from our direct customers which would have an adverse
eÅect on the proÑtability and cash Öows of our direct business.''
Other Regulations Applicable to Us. We must comply with federal, state and local regulations,
including the federal Brady Handgun Violence Prevention Act, which require us, as a federal Ñrearms
licensee, to perform a pre-sale background check of purchasers of hunting riÖes and other Ñrearms.
We are also subject to a variety of state laws and regulations relating to, among other things,
advertising, pricing, and product safety/restrictions. Some of these laws prohibit or limit the sale, in certain
states and locations, of certain items we oÅer such as black powder Ñrearms, ammunition, bows, knives
and similar products. State and local government regulation of hunting can also aÅect our business.
We are subject to certain federal, state and local laws and regulations relating to the protection of the
environment and human health and safety. We believe that we are in substantial compliance with the
terms of environmental laws and that we have no liabilities under such laws that we expect to have a
material adverse eÅect on our business, results of operations or Ñnancial condition.
Our direct business is subject to the Merchandise Mail Order Rule and related regulations
promulgated by the Federal Trade Commission, or FTC, which aÅect our catalog mail order operations.
FTC regulations, in general, govern the solicitation of orders, the information provided to prospective
customers, and the timeliness of shipments and refunds. In addition, the FTC has established guidelines
for advertising and labeling many of the products we sell.
14