Netgear 2006 Annual Report Download - page 24

Table of Contents
harm our business. Moreover, if our computer information systems or communication systems, or those of our
vendors or customers, are subject to disruptive hacker attacks or other disruptions, our business could suffer. We
have not established a formal disaster recovery plan. Our back-up operations may be inadequate and our business
interruption insurance may not be enough to compensate us for any losses that may occur. A significant business
interruption could result in losses or damages and harm our business. For example, much of our order fulfillment
process is automated and the order information is stored on our servers. If our computer systems and servers go down
even for a short period at the end of a fiscal quarter, our ability to recognize revenue would be delayed until we were
again able to process and ship our orders, which could cause our stock price to decline significantly.
If we lose the services of our Chairman and Chief Executive Officer, Patrick C.S. Lo, or our other key
personnel, we may not be able to execute our business strategy effectively.
Our future success depends in large part upon the continued services of our key technical, sales, marketing and
senior management personnel. In particular, the services of Patrick C.S. Lo, our Chairman and Chief Executive
Officer, who has led our company since its inception, are very important to our business. In November 2006,
Jonathan R. Mather, our former Executive Vice President and Chief Financial Officer, left the company to pursue
other opportunities, and we are still in the process of hiring his replacement. We do not maintain any key person life
insurance policies. The loss of any of our senior management or other key research, development, sales or marketing
personnel, particularly if lost to competitors, could harm our ability to implement our business strategy and respond
to the rapidly changing needs of the small business and home markets.
None.
Our principal administrative, sales, marketing and research and development facilities occupy approximately
74,000 square feet in an office complex in Santa Clara, California, under a lease that expires in December 2007, with
a three-year renewal option. Our international headquarters occupy approximately 10,000 square feet in an office
complex in Cork, Ireland, under a lease entered into in February 2006 and expiring in December 2026. Our
international sales personnel reside in local sales offices or home offices in Austria, Australia, Brazil, China, Czech
Republic, Denmark, France, Germany, India, Italy, Japan, Korea, Norway, Poland, Russia, Singapore, Spain,
Sweden, Switzerland, the Netherlands, the United Arab Emirates, and the United Kingdom. We also have operations
personnel using a facility in Hong Kong, which is subleased from our third party logistics provider, Kerry Logistics.
We also maintain a research and development facility in Taipei, Taiwan. From time to time we consider various
alternatives related to our long-
term facilities needs. While we believe our existing facilities are adequate to meet our
immediate needs, it may be necessary to lease additional space to accommodate future growth.
We use third parties to provide warehousing services to us, consisting of facilities in Southern California,
Hong Kong and the Netherlands.
The information set forth under Note 6 of the Notes to Consolidated Financial Statements, included in Part IV,
Item 15 of this report, is incorporated herein by reference. For an additional discussion of certain risks associated
with legal proceedings, see the section entitled “Risk Factors” in Item 1A of this report.
No matters were submitted to a vote of the security holders during the quarter ended December 31, 2006.
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Item 1B. Unresolved Staff Comments.
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4.
Submission of Matters to a Vote of Security Holders