Enom 2011 Annual Report Download - page 36

Certain stockholders owning a majority of our outstanding shares are party to a stockholders agreement that entitles them to require us to register
shares of our common stock owned by them for public sale in the United States, subject to the restrictions of Rule 144. In addition, certain shareholders,
including investors in our preferred stock that converted into common stock as well as current and former employees, are eligible to resell shares of common
stock under Rule 144 and Rule 701 without registering such stock with the SEC.
In addition, we have registered approximately 44 million shares reserved for future issuance under our equity compensation plans and agreements.
Subject to the satisfaction of applicable exercise periods, vesting requirements and, in certain cases, performance conditions, the shares of common stock
issued upon exercise of outstanding options, vesting of future awards or pursuant to purchases under our employee stock purchase plan will be available for
immediate resale in the United States in the open market.
Sales of our common stock as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the
future at a time and at a price that we deem appropriate. These sales also could cause our stock price to fall and make it more difficult for shareholders to sell
shares of our common stock.
We also have previously and may in the future issue shares of our common stock from time to time as consideration for acquisitions and
investments. If any such acquisition or investment is significant, the number of shares that we may issue may in turn be significant. In addition, we may also
grant registration rights covering those shares in connection with any such acquisitions and investments.
Our recently announced stock repurchase program may be suspended or terminated at any time, which may result in a decrease in the trading price of
our common stock.
We recently announced a stock repurchase program approved by our board of directors whereby we are authorized to repurchase shares of our
common stock. Such purchases may be limited, suspended, or terminated at any time without prior notice. There can be no assurance that we will buy
additional shares of our common stock under our stock repurchase program or that any future repurchases will have a positive impact on the trading price of
our common stock or earnings per share. Important factors that could cause us to limit, suspend or terminate our stock repurchase program include, among
others, unfavorable market conditions, the trading price of our common stock, the nature of other investment or strategic opportunities presented to us from
time to time, the rate of dilution of our equity compensation programs and the availability of adequate funds, our ability to make appropriate, timely, and
beneficial decisions as to when, how, and whether to purchase shares under the stock repurchase program,. If we limit, suspend or terminate our stock
repurchase program, our stock price may be negatively affected.
As a public company, we are subject to compliance initiatives that will require substantial time from our management and result in significantly increased
costs that may adversely affect our operating results and financial condition.
The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as other rules implemented by
the SEC and the New York Stock Exchange, impose various requirements on public companies, including requiring changes in corporate governance
practices. These and proposed corporate governance laws and regulations under consideration may further increase our compliance costs. If compliance with
these various legal and regulatory requirements diverts our management's attention from other business concerns, it could have a material adverse effect on
our business, financial condition and results of operations. We also expect that these laws and regulations may make it more difficult and more expensive
for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs
to obtain the same or similar coverage than used to be available. As a result, it may be more difficult for us to attract and retain qualified individuals to serve
on our board of directors, on committees of our board of directors, or as executive officers.
We are required to make an assessment of the effectiveness of our internal controls over financial reporting in accordance with Section 404 of the
Sarbanes-Oxley Act of 2002. Further, our independent registered public accounting firm has been engaged to express an opinion on the effectiveness of our
internal controls over financial reporting for our financial year ending December 31, 2012. Section 404 requires us to perform system and process evaluation
and testing of our internal controls over financial reporting to allow management and our independent registered public accounting firm to report on the
effectiveness of our internal controls over financial reporting for each fiscal year. Our testing, or the subsequent testing by our independent registered public
accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. If we are unable to
comply with the requirements of Section 404, management may not be
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