Garmin 2010 Annual Report Download - page 40

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30
fo etai aiatio OEM poduts, ou ustoes ailit to sell aiplaes. Theefoe, suh iailities o delas
could adversely affect our operating results. In addition, we cannot assure you that our certified products will not
be decertified. Any such decertification could have an adverse effect on our operating results.
Our business may suffer if we are not able to hire and retain sufficient qualified personnel or if we lose our key
personnel.
Our future success depends partly on the continued contribution of our key executive, engineering, sales,
marketing, manufacturing and administrative personnel. We currently do not have employment agreements with
any of our key executive officers. We do not have key man life insurance on any of our key executive officers and
do not currently intend to obtain such insurance. The loss of the services of any of our senior level management,
or other key employees, could harm our business. Recruiting and retaining the skilled personnel we require to
maintain and grow our market position may be difficult. For example, in some recent years there has been a
nationwide shortage of qualified electrical engineers and software engineers who are necessary for us to design
and develop new products, and therefore, it has sometimes been challenging to recruit such personnel. If we fail
to hire and retain qualified employees, we may not be able to maintain and expand our business.
Thee is uetaity as to ou shaeholdes’ aility to efoe etai foreign civil liabilities in Switzerland and
Taiwan.
We are a Swiss 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 Switzerland 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 Switzerland or
Taiwan against us predicated upon the securities laws of the United States or any state thereof.
A shut down of U.S. airspace or imposition of restrictions on general aviation would harm our business.
Following the September 11, 2001 terrorist attacks, the FAA ordered all aircraft operating in the U.S. to be
grounded for several days. In addition to this shut down of U.S. airspace, the general aviation industry was further
impacted by the additional restrictions implemented by the FAA on those flights that fly utilizing Visual Flight Rules
(VFR). The FAA restricted VFR flight inside 30 enhanced Class B (a 20-25 mile radius around the 30 largest
metropolitan areas in the USA) airspace areas. The Aircraft Owners and Pilots Association (AOPA) estimated that
these restrictions affected approximately 41,800 general aviation aircraft based at 282 airports inside the 30
enhanced Class B airspace areas. The AOPA estimates that approximately 90% of all general aviation flights are
conducted VFR, and that only 15% of general aviation pilots are current to fly utilizing Instrument Flight Rules (IFR).
The shutdown of U.S. airspace following September 11, 2001 caused reduced sales of our general aviation
products and delays in the shipment of our products manufactured in our Taiwan manufacturing facility to our
distribution facility in Olathe, Kansas, thereby adversely affecting our ability to supply new and existing products to
our dealers and distributors.
Any future shut down of U.S. airspace or imposition of restrictions on general aviation could have a
material adverse effect on our business and financial results.
Many of our products rely on the Global Positioning System.
The Global Positioning System is a satellite-based navigation and positioning system consisting of a
constellation of orbiting satellites. The satellites and their ground control and monitoring stations are maintained
and operated by the United States Department of Defense. The Department of Defense does not currently charge
users for access to the satellite signals. These satellites and their ground support systems are complex electronic
systems subject to electronic and mechanical failures and possible sabotage. The satellites were originally designed