EXHIBIT 10.91
Advancing technologies, such as fiber optic and wireless technologies, may make
some of our products less competitive.
Technological developments could have a material adverse effect on our business.
For example, a significant increase in the rate of installations using fiber
optic systems or an increase in the cost of copper-based systems would have a
material adverse effect on our business. While we do manufacture and sell fiber
optic cables, any acceleration in the erosion of our sales of copper cables due
to increased market demand for fiber optic cables would most likely not be
offset by an increase in sales of our fiber optic cables. Also, advancing
wireless technologies, as they relate to network and communications systems,
represent an alternative to certain copper cables we manufacture and may reduce
customer demand for premise wiring. Traditional telephone companies are facing
increasing competition within their respective territories from, among others,
voice over Internet protocol, or “VoIP,” providers and wireless carriers.
Wireless communications depend heavily on a fiber optic backbone and do not
depend as much on copper-based systems. An increase in the acceptance and use of
VoIP and wireless technology, or introduction of new wireless or fiber-optic
based technologies, may have a material adverse effect on the marketability of
our products and our profitability. Our sales of copper premise cables currently
face downward pressure from wireless and VoIP technology, and a significant
increase in the acceptance and use of these technologies would heighten this
pressure and the negative impact it may have on our results of operations.
We are substantially dependent upon distributors and retailers for non-exclusive
sales of our products and they could cease purchasing our products at any time.
During 2005 and the first nine fiscal months of 2006, approximately 39% and 34%,
respectively, of our domestic net sales were made to independent distributors
and four and three, respectively, of our ten largest customers were
distributors. During 2005 and the first nine fiscal months of 2006,
approximately 11% and 10%, respectively, of our domestic net sales were to
retailers, and the two largest retailers, The Home Depot and AutoZone, accounted
for approximately 3% and 2%, respectively, of our worldwide net sales in 2005
and 2% and 1%, respectively, of such sales in the first nine fiscal months of
2006. These distributors and retailers are not contractually obligated to carry
our product lines exclusively or for any period of time. Therefore, these
distributors and retailers may purchase products that compete with our products
or cease purchasing our products at any time. The loss of one or more large
distributors or retailers could have a material adverse effect on our ability to
bring our products to end users and on our results of operations. Moreover, a
downturn in the business of one or more large distributors or retailers could
adversely affect our sales and could create significant credit exposure.
Provisions in our constituent documents could make it more difficult to acquire
our company.
Our amended and restated certificate of incorporation and amended and restated
by-laws contain provisions that may discourage, delay or prevent a third party
from acquiring us, even if doing so would be beneficial to our stockholders.
Under our amended and restated certificate of incorporation, only our board of
directors may call special meetings of stockholders, and stockholders must
comply with advance notice requirements for nominating candidates for election
to our board of directors or for proposing matters that can be acted upon by
stockholders at stockholder meetings. Directors may be removed by stockholders
only for cause and only by the effective vote of at least 662/3% of the voting
power of all shares of capital stock then entitled to vote generally in the
election of directors, voting together as a single class. Additionally,
agreements with certain of our executive officers may have the effect of making
a change of control more expensive and, therefore, less attractive. Pursuant to
our amended and restated certificate of incorporation, our board of directors
may by resolution establish one or more series of preferred stock, having such
number of shares, designation, relative voting rights, dividend rates,
conversion rights, liquidation or other rights, preferences and limitations as
may be fixed by our board of directors without any further stockholder approval.
Such rights, preferences, privileges and limitations as may be established could
have the further effect of impeding or discouraging the acquisition of control
of our company.

 

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Issuances of additional series of preferred stock could adversely affect holders
of our common stock.
Our board of directors is authorized to issue additional series of preferred
stock without any action on the part of our stockholders. Our board of directors
also has the power, without stockholder approval, to set the terms of any such
series of preferred stock that may be issued, including voting rights,
conversion rights, dividend rights, preferences over our common stock with
respect to dividends or if we liquidate, dissolve or wind up our business and
other terms. If we issue preferred stock in the future that has preference over
our common stock with respect to the payment of dividends or upon our
liquidation, dissolution or winding-up, or if we issue preferred stock with
voting rights that dilute the voting power of our common stock, the rights of
holders of our common stock or the market price of our common stock could be
adversely affected.