EX-10.91



 





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.




 









 








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.