Garmin 2005 Annual Report Download - page 55

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25
the Taiwan government. Although significant economic and cultural relations have been established during recent
years between Taiwan and the PRC, the PRC government has indicated that it may use military force to gain control
over Taiwan in certain circumstances, such as the declaration of independence by Taiwan. Relations between
Taiwan and the PRC have on occasion adversely affected the market value of Taiwanese companies and could
negatively affect our operations in Taiwan in the future.
There is uncertainty as to our shareholders’ ability to enforce certain foreign civil liabilities in the Cayman
Islands and Taiwan.
We are a Cayman Islands company and a substantial portion of our assets are located outside the United
States, particularly in Taiwan. As a result, it may be difficult to effect service of process within the United States
upon us. In addition, there is uncertainty as to whether the courts of the Cayman Islands or Taiwan would recognize
or enforce judgments of United States courts obtained against us predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof, or be competent to hear original actions brought in the
Cayman Islands or Taiwan against us predicated upon the securities laws of the United States or any state thereof.
Our shareholders may face difficulties in protecting their interests because we are incorporated under
Cayman Islands law.
Our corporate affairs are governed by our Memorandum and Articles of Association, as amended, and by
the Companies Law (2004 Revision) and the common law of the Cayman Islands. The rights of our shareholders
and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as under
statutes or judicial precedent in existence in jurisdictions in the United States. Therefore, you may have more
difficulty in protecting your interests in the face of actions by the management, directors or our controlling
shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States, due to the
comparatively less developed nature of Cayman Islands law in this area.
Unlike many jurisdictions in the United States, Cayman Islands law does not specifically provide for
shareholder appraisal rights on a merger or consolidation of a company. This may make it more difficult for you to
assess the value of any consideration you may receive in a merger or consolidation or to require that the offeror give
you additional consideration if you believe the consideration offered is insufficient.
Shareholders of Cayman Islands exempted companies such as ourselves have no general rights under
Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders of the
company. This may make it more difficult for you to obtain the information needed to establish any facts necessary
for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
Subject to limited exceptions, under Cayman Islands law, a minority shareholder may not bring a derivative
action against the board of directors. Our Cayman Islands counsel is not aware of any reported class action or
derivative action having been brought in a Cayman Islands court.
We may pursue strategic acquisitions, investments, strategic partnerships or other ventures, and our business
could be materially harmed if we fail to successfully identify, complete and integrate such transactions.
We intend to evaluate acquisition opportunities and opportunities to make investments in complementary
businesses, technologies, services or products, or to enter into any strategic partnerships with parties who can
provide access to those assets, additional product or services offerings or additional industry expertise. In October
2005, we acquired MotionBased Technologies, LLC. We currently have no commitments to make any material
investments or acquisitions, or to enter into strategic partnerships. We may not be able to identify suitable
acquisition, investment or strategic partnership candidates, or if we do identify suitable candidates in the future, we
may not be able to complete those transactions on commercially favorable terms, or at all.
Any future acquisition could result in difficulties assimilating acquired operations and products and
diversion of capital and management’s attention away from other business issues and opportunities. Integration of