NETGEAR, INC FORM 10-K (Annual Report) Filed 02/26/13 for the Period Ending 12/31/12 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 350 EAST PLUMERIA DRIVE SAN JOSE, CA 95134 4089078000 0001122904 NTGR 3661 - Telephone and Telegraph Apparatus Communications Services Services 12/31 http://www.edgar-online.com © Copyright 2013, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2012 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission file number 000-50350 _______________ NETGEAR, Inc.
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Table of Contents TABLE OF CONTENTS PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Item 10. Item 11. Item 12. Item 13. Item 14. Item 15.
Table of Contents PART I This Annual Report on Form 10-K (“Form 10-K”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 below, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Table of Contents has increased significantly as well, where users seek to connect their televisions to the Internet and for entertainment content. Finally, as the usage of networks, including the Internet, has increased, users have become much more focused on the security of their connections and the protection of the data within their networks.
Table of Contents Product Offerings Our product line consists of wired and wireless devices, including devices that enable commercial business networking, broadband access and network connectivity. These products are available in multiple configurations to address the needs of our customers in each geographic region in which our products are sold. Commercial business networking.
Table of Contents such as fiber optic cabling, which is common in more sophisticated business environments. Security requirements within our products for commercial business broadband access include firewall, virtual private network and content threat management capabilities that allow for secure interactions between remote offices and business headquarter locations over the Internet.
Table of Contents acquire the Linksys division of Cisco Systems, creating a consolidated and formidable competitor. Other companies with significant resources could also become direct competitors, either through acquiring a competitor or through internal efforts.
Table of Contents our manufacturers purchase all necessary parts and materials to produce complete, finished goods. To maintain quality standards for our suppliers, we have established our own product quality organization based in Hong Kong and mainland China. They are responsible for auditing and inspecting process and product quality on the premises of our ODMs, CMs and OEMs. We obtain several key components from limited or sole sources.
Table of Contents maintain and protect our proprietary rights. We hold 73 issued United States patents that expire between years 2013 and 2028 and 20 foreign patents that expire between 2012 and 2026. In addition, we currently have a number of pending United States and foreign patent applications related to technology and products offered by us.
Table of Contents Long-lived assets Long-lived assets, comprising fixed assets, are reported based on the location of the asset. Long-lived assets by geographic location are as follows (in thousands): December 31, 2012 United States Americas (excluding U.S.
Table of Contents public accounting with a number of accounting firms. Ms. Gorjanc holds a B.A. in Accounting (with honors) from the University of Texas at El Paso and a M.S. in Taxation from Golden Gate University. Mark G. Merrill is our co-founder and has served as our Chief Technology Officer since January 2003. From September 1999 to January 2003, he served as Vice President of Engineering and served as Director of Engineering from September 1995 to September 1999. From 1987 to 1995, Mr.
Table of Contents Item 1A. Risk Factors Investing in our common stock involves a high degree of risk. The risks described below are not exhaustive of the risks that might affect our business. Other risks, including those we currently deem immaterial, may also impact our business. Any of the following risks could materially adversely affect our business operations, results of operations and financial condition and could result in a significant decline in our stock price.
Table of Contents • the inability to maintain stable operations by our suppliers and other parties with which we have commercial relationships; • delays in the introduction of new products by us or market acceptance of these products; • an increase in price protection claims, redemptions of marketing rebates, product warranty and stock rotation returns or allowance for doubtful accounts; • litigation involving alleged patent infringement; • epidemic or widespread product failure, or unanticipated
Table of Contents • changes in stock market analyst recommendations regarding our common stock, other comparable companies or our industry generally. Economic conditions are likely to materially adversely affect our revenue and results of operations.
Table of Contents Many of our existing and potential competitors have longer operating histories, greater name recognition and substantially greater financial, technical, sales, marketing and other resources. These competitors may, among other things, undertake more extensive marketing campaigns, adopt more aggressive pricing policies, obtain more favorable pricing from suppliers and manufacturers, and exert more influence on sales channels than we can.
Table of Contents We have experienced delays and quality issues in releasing new products in the past, which resulted in lower quarterly net revenue than expected. In addition, we have experienced, and may in the future experience, product introductions that fall short of our projected rates of market adoption. Online Internet reviews of our products are increasingly becoming a significant factor in the success of our new product launches, especially in the retail business unit.
Table of Contents If we are unable to obtain a sufficient supply of components, or if we experience any interruption in the supply of components, our product shipments could be reduced or delayed or our cost of obtaining these components may increase. Component shortages and delays affect our ability to meet scheduled product deliveries, damage our brand and reputation in the market, and cause us to lose sales and market share.
Table of Contents The average selling prices of our products typically decrease rapidly over the sales cycle of the product, which may negatively affect our net revenue and gross margins. Our products typically experience price erosion, a fairly rapid reduction in the average unit selling prices over their respective sales cycles. In order to sell products that have a falling average unit selling price and maintain margins at the same time, we need to continually reduce product and manufacturing costs.
Table of Contents • entering into territories or markets that we have limited or no prior experience with; • establishing or maintaining business relationships with customers, vendors and suppliers who may be new to us; • overcoming the employee, customer, vendor and supplier turnover that may occur as a result of the acquisition; • diverting management's attention from running the day to day operations of our business; and • potential post-closing disputes.
Table of Contents We are subject to, and must remain in compliance with, numerous laws and governmental regulations concerning the manufacturing, use, distribution and sale of our products, as well as any such future laws and regulations. Some of our customers also require that we comply with their own unique requirements relating to these matters.
Table of Contents If we fail to successfully overcome the challenges associated with managing and profitably growing our broadband service provider sales channel, our net revenue and gross profit will be negatively impacted. We sell a substantial portion of our products through broadband service providers worldwide. Our service provider business unit accounted for a significant portion of our growth in 2011 and throughout 2012.
Table of Contents We rely on a limited number of retailers, wholesale distributors and service provider customers for a substantial portion of our sales, and our net revenue could decline if they refuse to pay our requested prices or reduce their level of purchases or if there is significant consolidation in our customer base which results in less customers to sell our products. We sell a substantial portion of our products through retailers, including Best Buy Co., Inc.
Table of Contents disrupt our business. Although our largest customers may vary from period to period, we anticipate that our operating results for any given period will continue to depend on large orders from a small number of customers. We depend substantially on our sales channels, and our failure to maintain and expand our sales channels would result in lower sales and reduced net revenue. To maintain and grow our market share, net revenue and brand, we must maintain and expand our sales channels.
Table of Contents • unexpected increases in manufacturing and repair costs; • inability to control the quality and reliability of finished products; • inability to control delivery schedules; • potential lack of adequate capacity to manufacture all or a part of the products we require; and • potential labor unrest affecting the ability of the third-party manufacturers to produce our products.
Table of Contents parties, and we are unable to obtain licenses or independently develop alternative technology on a timely basis, we may be subject to indemnification obligations, be unable to offer competitive products, or be subject to increased expenses. Finally, consumer class-action lawsuits related to the marketing and performance of our home networking products have been asserted and may in the future be asserted against us.
Table of Contents customer confidential information is accessed without authorization, our business will be harmed. Furthermore, operating an online cloud service is a new business for us and we may not have the expertise to properly manage risks related to data security and systems security.
Table of Contents If our goodwill or amortizable intangible assets become impaired we may be required to record a significant charge to earnings. Under generally accepted accounting principles, we review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment at least annually.
Table of Contents Furthermore, if the strategic objectives of an investment have been achieved, or if the investment or business diverges from our strategic objectives, we may seek to dispose of the investment. Our non-marketable equity investments in private companies are not liquid, and we may not be able to dispose of these investments on favorable terms or at all. The occurrence of any of these events could harm our results.
Table of Contents to these risks as we continue to develop and market more products containing third-party software, such as our TV connectivity, security and network attached storage products. If the redemption rate for our end-user promotional programs is higher than we estimate, then our net revenue and gross margin will be negatively affected. From time to time we offer promotional incentives, including cash rebates, to encourage end-users to purchase certain of our products.
Table of Contents While we believe we generally have good relations with our employees, employees in certain jurisdictions have rights which give them certain collective rights. If management must expend significant resources and effort to address and comply with these rights, our business may be harmed. We are also required to comply with local environmental legislation and our customers rely on this compliance in order to sell our products.
Table of Contents the value of our cash equivalents and short-term investments could decline and result in a material impairment, which could have a material adverse effect on our financial condition and operating results. Economic conditions, political events, war, terrorism, public health issues, natural disasters and other circumstances could materially adversely affect us.
Table of Contents research and development facilities in Atlanta, Chicago, San Diego, Beijing and Nanjing China, and in Taipei, Taiwan. From time to time we consider various alternatives related to our long-term facilities needs. While we believe our existing facilities provide suitable space for our operations and are adequate to meet our immediate needs, it may be necessary to lease additional space to accommodate future growth.
Table of Contents Company Performance Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance of our common stock shall not be deemed “filed” with the SEC or “soliciting material” under the Exchange Act and shall not be incorporated by reference into any such filings.
Table of Contents Repurchase of Equity Securities by the Company Period October 1, 2012 - October 28, 2012 Average Price Paid per Share Total Number of Shares Purchased (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs 917 $37.32 — 4,831,220 October 29, 2012 - November 25, 2012 — — — 4,831,220 November 26, 2012 - December 31, 2012 — — — 4,831,220 917 $37.
Table of Contents Item 6. Selected Financial Data The following selected consolidated financial data are qualified in their entirety, and should be read in conjunction with, the consolidated financial statements and related notes thereto, and “Management's Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.
Table of Contents (2) Stock-based compensation expense was allocated as follows: Year Ended December 31, 2012 2011 2010 2009 2008 (In thousands) Cost of revenue Research and development Sales and marketing General and administrative $ 1,347 2,787 4,751 5,487 $ 999 2,476 5,136 5,151 $ 913 2,271 4,710 4,307 $ 959 1,973 4,147 3,945 $ 864 3,218 3,406 3,835 As of December 31, 2012 2011 2010 2009 2008 (In thousands) Consolidated Balance Sheet Data: Cash, cash equivalents and short-term inve
Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion of our financial condition and results of operations together with the audited consolidated financial statements and notes to the financial statements included elsewhere in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties.
Table of Contents brand name, timeliness of new product introductions, product availability, performance, features, functionality and reliability, ease-of-installation, maintenance and use, and customer service and support. To remain competitive, we believe we must continue to aggressively invest resources in developing new products and enhancing our current products while continuing to expand our channels and maintaining customer satisfaction worldwide.
Table of Contents In addition to warranty-related returns, certain distributors and retailers generally have the right to return product for stock rotation purposes. Upon shipment of the product, we reduce revenue for an estimate of potential future stock rotation returns related to the current period product revenue.
Table of Contents including goodwill by considering the following factors: macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in our share price.
Table of Contents likely-than-not recognition threshold should be measured in order to determine the tax benefit to be recognized in the financial statements. We include interest expense and penalties related to uncertain tax positions as additional tax expense.
Table of Contents Results of Operations The following table sets forth the Consolidated Statements of Operations and the percentage change from the preceding year for the periods indicated: Year Ended December 31, 2012 % Change 2011 % Change 2010 (In thousands, except percentage data) Net revenue 1,271,921 7.7 % $ 1,181,018 30.9 % Cost of revenue $ $ 902,052 888,368 9.5 % 811,572 34.6 % 602,805 Gross profit 383,553 3.8 % 369,446 23.5 % 299,247 61,066 25.4 % 48,699 21.
Table of Contents Net Revenue Our net revenue consists of gross product shipments, less allowances for estimated returns for stock rotation and warranty, price protection, end-user customer rebates and other sales incentives deemed to be a reduction of net revenue and net changes in deferred revenue. Year Ended December 31, 2012 % Change 2011 % Change 2010 (In thousands, except percentage data) Total net revenue $ 1,271,921 7.7% $ 1,181,018 30.
Table of Contents products. The increase in APAC net revenue was attributable to increased sales to service provider customers, as well as, increased sales of our retail and commercial products.
Table of Contents Operating Expenses Research and Development Expense Research and development expenses consist primarily of personnel expenses, payments to suppliers for design services, safety and regulatory testing, product certification expenditures to qualify our products for sale into specific markets, prototypes and other consulting fees. Research and development expenses are recognized as they are incurred.
Table of Contents operating expense related marketing, and freight expenses of $1.8 million. Payroll-related expenses, excluding stock-based compensation, were relatively flat year-over-year, as an increase of $3.8 million in personnel-related costs due to increased annual headcount were offset by a decrease of $3.8 million in variable compensation. Sales and marketing headcount decreased by 5 employees to 352 employees at December 31, 2012 compared to 357 employees at December 31, 2011 .
Table of Contents December 31, 2011. In addition, we incurred $464,000 in transition services in connection with the acquisition of the Customer Networking Solutions division of Westell Technologies, Inc. during the year ended December 31, 2011. For a further discussion of restructuring and other charges, refer to Note 4, Restructuring and Other Charges , in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
Table of Contents 9.5 percentage points for 2011. The increase in the effective tax rate from earnings of foreign operations in 2012 compared to 2011 resulted from a decrease in the profitability of international operations located in tax jurisdictions with rates below 35%. Additionally, the effective tax rate was higher due to the expiration of tax laws providing for the US federal research credit for the year ended December 31, 2012.
Table of Contents Retail Year Ended December 31, 2012 % Change 2011 % Change 2010 ( in thousands, except percentage data) Net revenue $ Percentage of net revenue 504,797 4.8% $ 39.7% Contribution income 86,808 Contribution margin 481,795 10.6% $ 40.8% 6.4% 17.2 % 435,484 48.3% 81,589 13.5% 16.9 % 71,862 16.5 % 2012 vs 2011 The retail business unit experienced a slight increase in revenue from 2011 to 2012.
Table of Contents 2011 vs 2010 We experienced strong net revenue growth in the commercial business unit from 2010 to 2011. The increase was driven by an increase in demand across our product lines. In particular, revenue from our network storage product line and switch products increased by 15.1% and 18.6%, respectively. We also experienced strong growth in contribution income. The increase in contribution income was primarily due to revenue growth, while the increase in operating expenses was moderate.
Table of Contents 2012 . This decrease is primarily attributable to our increased inventory levels to support current and expected demand levels for our products. We enter into foreign currency forward-exchange contracts, which typically mature in three to five months, to hedge a portion of our exposure to foreign currency fluctuations of foreign currency-denominated revenue, costs of revenue, certain operating expenses, receivables, payables, and cash balances.
Table of Contents We lease office space, cars and equipment under non-cancelable operating leases with various expiration dates through December 2026. Rent expense in the years ended December 31, 2012 , 2011 , and 2010 was $7.6 million , $7.0 million and $6.4 million , respectively. The terms of some of the office leases provide for rental payments on a graduated scale. We recognize rent expense on a straight-line basis over the lease period, and have accrued for rent expense incurred but not paid.
Table of Contents We are exposed to risks associated with foreign exchange rate fluctuations due to our international sales and operating activities. These exposures may change over time as business practices evolve and could negatively impact our operating results and financial condition. We began using foreign currency forward contract derivatives in the fourth quarter of 2008 to partially offset our business exposure to foreign exchange risk on our foreign currency denominated assets and liabilities.
Table of Contents Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of NETGEAR, Inc.: In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a) (1) present fairly, in all material respects, the financial position of NETGEAR, Inc.
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Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. The Company and Summary of Significant Accounting Policies The Company NETGEAR, Inc. (“NETGEAR” or the “Company”) was incorporated in Delaware in January 1996. The Company is a global networking company that delivers innovative products to consumers, businesses and service providers.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Certain risks and uncertainties The Company's products are concentrated in the networking industry, which is characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Fair value measurements The carrying amounts of the Company's financial instruments, including cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Goodwill Goodwill represents the purchase price over estimated fair value of net assets of businesses acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually during the fourth quarter.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in our share price.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) range, generally evidenced by approximately 80% of such historical stand-alone transactions falling within +/-15% of the median price . The Company determines ESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Computation of net income per share Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options and awards.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The results of AVAAK have been included in the consolidated financial statements since the date of acquisition. Pro forma results of operations for the acquisition are not presented as the financial impact to the Company's consolidated results of operations is not material.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) operations for the acquisition are not presented as the financial impact to the Company's consolidated results of operations is not material. The Company paid $6.6 million of the aggregate purchase price in the second quarter of 2012, and expects to pay the remaining $0.6 million , less amounts used to satisfy certain claims, twelve months after the closing of the acquisition.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) A total of $3.7 million of the $19.5 million in acquired intangible assets was designated as technology. The value was calculated based on the present value of the future estimated cash flows derived from estimated savings attributable to the core technology and discounted at 16.0% . This $3.7 million is being amortized over its estimated useful life of 4 years. A total of $0.1 million of the $19.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 3. Balance Sheet Components (in thousands) Short-Term Investments As of December 31, 2012 Unrealized Gain Cost U.S.
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Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) the first fiscal quarter in 2013 and the estimated future cost to complete these IPR&D projects is $0.1 million . As of December 31, 2012 , $1.0 million of the IPR&D had reached technical feasibility and as a result, was reclassified from IPR&D to technology. Amortization of purchased intangible assets in the years ended December 31, 2012 , 2011 and 2010 was $4.9 million , $4.8 million and $5.3 million , respectively.
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Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 5. Derivative Financial Instruments The Company’s subsidiaries have had, and will continue to have material future cash flows, including revenue and expenses, which are denominated in currencies other than the Company’s functional currency. The Company and all its subsidiaries designate the U.S. dollar as the functional currency.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Cash flow hedges To help manage the exposure of operating margins to fluctuations in foreign currency exchange rates, the Company hedges a portion of its anticipated foreign currency revenue, costs of revenue and certain operating expenses. These hedges are designated at the inception of the hedge relationship as cash flow hedges under the authoritative guidance for derivatives and hedging.
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Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 8. Income Taxes Income before income taxes consists of the following (in thousands): Year Ended December 31, 2012 United States International $ Total $ 2011 102,159 27,123 129,282 $ 2010 79,318 44,892 124,210 $ $ 95,291 (4,067) 91,224 $ Year Ended December 31, 2012 Current: U.S. Federal State Foreign $ 34,666 4,555 6,097 45,318 Deferred: U.S.
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Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of December 31, 2012 , the Company has approximately $22.3 million and $0.2 million of acquired federal and state net operating loss carry forwards as well as $0.4 million of California tax credits carryforwards. All of these losses and $0.1 million of these credits are subject to annual usage limitations under Internal Revenue Code Section 382. The federal losses expire in different years beginning in fiscal 2021 .
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) respectively. As of December 31, 2012 and December 31, 2011 , accrued interest and penalties on a gross basis was $1.8 million and $1.9 million , respectively. Included in accrued interest are amounts related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Guarantees and Indemnifications The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) OptimumPath's appeal of the District Court's summary judgment rulings before the Federal Circuit on March 5, 2012. On March 7, 2012, the Federal Circuit affirmed the District Court's summary judgment rulings in favor of the defendants.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) remaining for consideration in re-examination, and the Previously Cancelled Claims are no longer of record in the offensive case by Ruckus against the Company, there are no remaining claims for re-examination in the '912 Patent and the '912 Patent cannot be asserted against the Company. Thus, the Company and Ruckus requested that the Court lift the stay of this litigation and calendar a case management conference.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Ericsson patents. The Company has been accused of infringing eight U.S. patents: 5,790,516; 6,330,435; 6,424,625; 6,519,223; 6,772,215; 5,987,019; 6,466,568; and 5,771,468 ("the '468 Patent"). Ericsson generally alleges that the Company and the other defendants have infringed and continue to infringe the Ericsson patents through the defendants' IEEE 802.11-compliant products.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) On September 28, 2012, the Court issued its summary judgment ruling. The Court did not invalidate the '769 Patent and ruled that some of the Company's cards infringed the '769 Patent.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) States Judicial Panel on Multidistrict Litigation (“JPML”). The pending motion to transfer would serve to consolidate all of the Innovatio lawsuits including the Company's pending declaratory judgment action in Delaware-and transfer them to a single court for coordinated pretrial proceedings.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) to sue by both parties for the life of the patents in suit between the parties that applies to the patents in suit and all related patents, including without limitation the foreign counterparts. Each party agreed to bear its own costs and attorneys' fees. This arrangement does not have a material impact on the Company's consolidated financial position, results of operations, or cash flows.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Pragmatus Telecom, LLC v. NETGEAR, Inc. On December 6, 2012, Pragmatus Telecom, LLC (“Pragmatus”), filed a lawsuit against the Company asserting that the Company's use of a system “to provide live chat service over the Internet” infringes U.S. Patent Nos. 6,311,231, 6,668,286, and 7,159,043 ("'231 patent", "'286 patent", and "'043 patent", respectively).
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) it has met the applicable requirements of current WEEE Legislation and similar legislation in other jurisdictions, to the extent implementation requirements have been published. Additionally, the EU enacted the Restriction of Hazardous Substances Directive (“RoHS Legislation”), the REACH Regulation, Packaging Directive and the Battery Directive.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 11. Employee Benefit Plans 2000 Stock Option Plan In April 2000, the Company adopted the 2000 Stock Option Plan (the “2000 Plan”). The 2000 Plan provides for the granting of stock options to employees and consultants of the Company. Options granted under the 2000 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”).
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) granted to a 10% shareholder shall not be less than 110% of the estimated fair value of the underlying stock on the date of grant. Options granted under the 2006 Plan generally vest over four years , with the first tranche vesting at the end of 12 months and the remaining shares underlying the option vesting monthly over the remaining three years .
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Option Activity Stock options activity under the stock option plans during the year ended December 31, 2012 was as follows: Outstanding Options Weighted Average Weighted Average Remaining Aggregate Number of Exercise Price Per Contractual Intrinsic Shares Share Term Value (In thousands) (In dollars) (In years) (In thousands) December 31, 2011 Granted Exercised Cancelled and expired $ 27.03 34.01 23.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) RSU Activity RSU activity under during the year ended December 31, 2012 was as follows: Outstanding RSUs Weighted Average December 31, 2011 RSUs granted RSUs vested RSUs cancelled December 31, 2012 Weighted Average Remaining Number of Exercise Price Per Contractual Shares Share Term (In thousands) (In dollars) (In years) 177 51 (105) (11) 112 $ Aggregate Intrinsic Value (In thousands) 27.86 31.79 28.77 32.
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Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) and administrative costs, stock-based compensation expenses, amortization of intangibles, acquisition-related integration costs, restructuring costs, litigation reserves and interest and other income (expense), net. The Company does not evaluate operating segments using discrete asset information.
Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The Company conducts business across three geographic regions: Americas, Europe, Middle-East and Africa (“EMEA”) and Asia Pacific ("APAC'). Net revenue by geography comprises gross revenue less such items as end-user customer rebates and other sales incentives deemed to be a reduction of net revenue per the authoritative guidance for revenue recognition, sales returns and price protection.
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Table of Contents NETGEAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The Company's investments in cash equivalents and available-for-sale securities are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company enters into foreign currency forward contracts with only those counterparties that have long-term credit ratings of A+/A2 or higher.
Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Table of Contents information required by this Item regarding our Code of Ethics is incorporated by reference to the information contained in the section captioned “Corporate Governance Policies and Practices” in our Proxy Statement. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of our Code of Ethics by posting such information on our website at http://www.netgear.
Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedule (a) The following documents are filed as part of this report: (1) Financial Statements.
Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on the 26th day of February 2013. NETGEAR, INC. Registrant /s/ PATRICK C.S. LO Patrick C.S.
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Table of Contents INDEX TO EXHIBITS Exhibit Number 2.1** 3.3 3.5 4.1 10.1 10.2# 10.3# 10.4# 10.5# 10.8# 10.9# 10.10# 10.12# 10.14* 10.15* 10.24* 10.25* 10.26* 10.33# 10.34 10.35 10.41** 10.44 10.45 10.46# 10.47# 10.49# 10.50# 10.51# 10.52# 10.53# 10.54# 10.55# 10.56# 21.1 23.1 24.1 31.
Table of Contents 31.2 32.1 32.2 101.INS*** 101.SCH*** 101.CAL*** 101.DEF*** 101.LAB*** 101.PRE*** # * ** *** (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) / 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (13) Certification of Chief Executive Officer pursuant to 18 U.S.C.
NETGEAR, INC. 2003 STOCK PLAN (as amended effective upon the 2006 annual meeting of stockholders) Purposes of the Plan . The purposes of this 2003 Stock Plan are: 1. • responsibility, to attract and retain the best available personnel for positions of substantial • to provide additional incentive to Employees, Directors and Consultants, and • to promote the success of the Company's business.
election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or (iv) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or In the absence of an established market for the Common Stock, the Fair Market Value shall be (iii) determined in good faith by the Admini
Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant. (dd) " Rule 16b-3 " means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. (ee) " SAR Agreement " means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual SAR grant.
Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more "outside directors" within the meaning of Section 162(m) of the Code. (iii) Rule 16b-3 . To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. (iv) Other Administration .
have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; (x) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option, Stock Purchase Right or Stock Appreciation Right previously granted by the Administrator; (xi) to make all other determinations deemed necessary or advisable for administering the Plan. (c) Effect of Administrator's Decision .
7. Term of Plan . Subject to Section 21 of the Plan, the Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten (10) years unless terminated earlier under Section 17 of the Plan. 8. Term of Option . The term of each Option shall be stated in the Option Agreement. In the case of an Incentive Stock Option, the term shall be ten (10) years from the date of grant or such shorter term as may be provided in the Option Agreement.
(iv) other Shares which, in the case of Shares acquired directly or indirectly from the Company, (A) have been owned by the Optionee for more than six (6) months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; (v) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; (vi) a reduction in the amount of any
or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. (c) Disability of Optionee .
indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the Administrator. (c) Other Provisions . The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. (d) Rights as a Stockholder .
no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option, Stock Purchase Right or Stock Appreciation Right. (b) Dissolution or Liquidation .
Right (or restricted stock issued pursuant to a Stock Purchase Right) or Stock Appreciation Right, for each Share of Optioned Stock subject to the Option, Stock Purchase Right (or restricted stock issued pursuant to a Stock Purchase Right) or Stock Appreciation Right, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control. 16. Date of Grant .
20. Reservation of Shares . The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 21. Stockholder Approval . The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under Applicable Laws.
NETGEAR, INC. 2003 STOCK PLAN STOCK OPTION AGREEMENT Unless otherwise defined herein, the terms defined in the 2003 Stock Plan shall have the same defined meanings in this Stock Option Agreement. I.
Accelerated Vesting : Notwithstanding the vesting schedule above, 100% of the Shares subject to the Option shall vest (i) upon a Change in Control; or (ii) Optionee's termination of employment as a result of Retirement (as defined below), death or Disability.
Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”). B. Exercise of Option . (a) Right to Exercise . This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement. (b) Method of Exercise .
E. Term of Option . This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement. F. Tax Obligations . (a) Withholding Taxes .
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
EXHIBIT A NETGEAR, INC. 2003 STOCK PLAN EXERCISE NOTICE NETGEAR, Inc. 350 East Plumeria Drive Santa Clara, CA 95134 Attention: Stock Administrator 1. Exercise of Option . Effective as of today, ________________, _____, the undersigned (“Purchaser”) hereby elects to purchase ______________ shares (the “Shares”) of the Common Stock of NETGEAR, Inc. (the “Company”) under and pursuant to the 2003 Stock Plan (the “Plan”) and the Stock Option Agreement dated, _____ (the “Option Agreement”).
6. Entire Agreement; Governing Law . The Plan and Option Agreement are incorporated herein by reference.
NETGEAR, INC. 2003 EMPLOYEE STOCK PURCHASE PLAN (amended March 23, 2012) The following constitute the provisions of the Employee Stock Purchase Plan of NETGEAR, Inc. 1. Purpose . The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions.
securities of the Company, or such surviving entity or its parent outstanding immediately after such merger or consolidation; or (iv) A change in the composition of the Board, as a result of which fewer than a majority of the Directors are Incumbent Directors.
relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company. Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated three (3) months and one (1) day following the commencement of such leave. (m) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.
(r) “ Parent ” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. (s) “ Plan ” shall mean this Employee Stock Purchase Plan, which includes a Code Section 423(b) Plan and a Non-423(b) Component. (t) “ Purchase Price ” shall mean 85% of the Fair Market Value of a share of Common Stock on the Exercise Date; provided however, that the Purchase Price may be adjusted by the Administrator pursuant to Section 20.
with respect to future offerings without shareholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter. 5. Participation . An Eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of Exhibit A to this Plan and filing it with the Company’s payroll office prior to the applicable Offering Date. 6. Payroll Deductions .
(f) At the time the option is exercised, in whole or in part, or at the time some or all of the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company’s federal, state, or other tax liability payable to any authority, national insurance, social security or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock.
Common Stock that were available for sale under the Plan on the Offering Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Offering Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to
Common Stock under the Plan shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 hereof, and such participant’s option shall be automatically terminated. 12. Interest . No interest shall accrue on the payroll deductions of a participant in the Plan. 13. Stock .
dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. (c) from time to time. 16. All beneficiary designations shall be in such form and manner as the Administrator may designate Transferability .
(b) Dissolution or Liquidation . In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation.
than U.S.
EXHIBIT A NETGEAR, INC. EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT _____ Original Application Offering Date:___________ _____ Change in Payroll Deduction Rate _____ Change of Beneficiary(ies) 1. ____________________ hereby elects to participate in the NetGear, Inc. Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”) and subscribes to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Employee Stock Purchase Plan. 2.
compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by me.
Employee’s Social Security Number: Employee’s Address: ____________________________________ ____________________________________ ____________________________________ ____________________________________ I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
EXHIBIT B NETGEAR, INC. EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWAL The undersigned participant in the Offering Period of the NETGEAR, Inc. Employee Stock Purchase Plan which began on ____________, ______ (the “Offering Date”) hereby notifies the Company that he or she hereby withdraws from the Offering Period and that such notice is being given prior to the Exercise Date for the Offering Period.
EXECUTION COPY ASSET PURCHASE AGREEMENT by and among NETGEAR, INC., NETGEAR HOLDINGS LIMITED, NETGEAR INTERNATIONAL LIMITED, NETGEAR CANADA LIMITED, NETGEAR AUSTRALIA PTY LTD, SIERRA WIRELESS, INC., SIERRA WIRELESS AMERICA, INC.
TABLE OF CONTENTS ARTICLE 1 DEFINITIONS AND INTERPRETATIONS2 1.1 Certain Definitions 2 1.2 Additional Definitions 14 1.3 Certain Interpretations 17 ARTICLE 2 THE TRANSACTIONS17 2.1 Sale and Transfer of Assets 17 2.2 Excluded Assets 2.3 Assumed Liabilities 2.4 Liabilities Not Assumed 2.5 Transfer of Acquired Assets and Assumed Liabilities 2.6 Non-Assignable Assets 2.7 Transfer of Acquired Assets; Risk of Loss 18 20 21 22 23 24 ARTICLE 3 PURCHASE PRICE25 3.1 Purchase Price 25 3.
TABLE OF CONTENTS (cont’d) 5.13 Contracts 45 5.14 Customers and Suppliers 5.15 Employee Matters 5.16 Employee Benefits Plans 5.17 Legal Proceedings 5.18 Compliance with Laws; Permits 5.19 Brokerage Fees 5.20 Related Party Transactions 5.21 Credit Support 50 5.22 Anticorruption 50 5.23 Export Control Laws 5.24 AirCard Products; Product Defect and Warranty 5.25 Books and Records 5.
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TABLE OF CONTENTS (cont’d) 8.9 Bulk Sales 62 8.10 Business Relationships; Payment s. 8.11 Carve-Out Financial Statements . 8.12 Other Actions Required to Be Taken . 8.13 Cooperation Regarding Intellectual Property Matters 63 63 64 65 ARTICLE 9 EMPLOYEE MATTERS66 9.1 Employment Offers 66 9.2 Sellers Payment of Pre-Closing Wages and Seller Benefit Plan Contributions 9.3 280G Information 9.4 Buyers’ 401(k) Plan 9.5 No Third Party Beneficiaries 67 67 67 ARTICLE 10 TAX MATTERS67 10.
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TABLE OF CONTENTS (cont’d) 13.6 Specific Performance 78 13.7 Other Remedies 13.8 No Third Party Beneficiaries 13.9 Entire Agreement 13.10 Governing Law 13.11 Dispute Resolution 13.12 Consent to Jurisdiction 13.13 WAIVER OF JURY TRIAL 13.
SCHEDULES Schedule 1.1(hh) Excluded Books and Records Schedule 1.1(xx)(i) Named Individuals for Sellers Knowledge Schedule 1.1(ssss) Transferred Leases Schedule 1.1(uuuu) Transferred Patents Schedule 1.1(vvvv) Transferred Permits Schedule 1.1(wwww)(i) Schedule 1.1(wwww)(ii) Transferred Tangible Property: Excluded Carlsbad Tangible Property Transferred Tangible Property: All Other Transferred Tangible Property Not Located at Carlsbad Schedule 1.1(yyyy) Transferred Trademarks Schedule 2.
ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of January 28, 2013 by and among NETGEAR, INC.
Article 1 DEFINITIONS AND INTERPRETATIONS 1.1 Certain Definitions . For all purposes of and under this Agreement, the capitalized terms in this Section 1.1 shall have the meanings set forth below. (a) “ Accounting Firm ” shall mean Deloitte LLP, and if such firm refuses or is unable to perform the requested services, Buyers and Sellers shall negotiate in good faith to agree upon a different, mutually acceptable accounting firm.
(h) “ AirCard Products ” shall mean mobile broadband devices (including USB Modems, mobile hotspots and PC cards) (and all components thereof), consisting of (i) the products and services listed in Section 5.24(a)(i) of the Sellers Disclosure Schedule and prior versions thereof; in each case together with the Ancillary Product Materials, and (ii) the mobile broadband devices currently under development as listed or described on Section 5.24(a)(ii) of the Sellers Disclosure Schedule.
(iii) changes in, or announcements of changes in, applicable Law or accounting rules or principles, including changes in GAAP, provided such changes or announcements do not have a materially disproportionate effect on the AirCard Business relative to other businesses in the industry in which the AirCard Business operates; (iv) acts of God, acts of war, terrorism or natural disasters, provided such events do not have a materially disproportionate effect on the AirCard Business relative to other businesses in
(s) “ Code ” shall mean the Internal Revenue Code of 1986, as amended. (t) “ Commissioner ” means the Commissioner of Competition appointed under subsection 7(1) of the Competition Act or any person duly authorized to exercise the powers and perform the duties of the Commissioner of Competition. (u) “ Competition Act ” means the Competition Act (Canada), and the rules and regulations promulgated thereunder, as amended.
in connection with the Transactions contemplated hereunder and effective upon the consummation of the Transactions at the Closing contemplated hereunder. (dd) “ Environmental Laws ” shall mean all Laws and all common law relating to pollution or protection of the environment, public health and safety, or worker health and safety. (ee) “ Escrow Agent ” shall mean U.S.
(v) arising from cash/book overdrafts; (vi) determined on the basis of actual, not notional, obligations with respect to interest rate protection agreements, interest rate swap agreements, foreign currency exchange agreements, or other interest or exchange rate hedging agreements or arrangements; (vii) secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien (other than Permitted Liens) on property owned or acquired by such Person;
(v) trade names, logos, common law trademarks and service marks and trademark and service mark registrations, and related goodwill and applications therefor (“ Trademarks ”); (vi) (vii) all rights in databases and data collections; and any similar or equivalent rights to any of the foregoing, including but not limited to moral rights (as applicable), (clauses (ii) - (vii), inclusive, referred to as “ Non-Patent IP ”).
(bbb) “ Licensed Technology ” shall mean all Shared Technology listed or described on Section 5.12(a)(i) of the Sellers Disclosure Schedule, together with the 9x15 Modules Technology that is not otherwise within the Transferred Technology. For the avoidance of doubt, Licensed Technology does not include any Intellectual Property Rights.
(kkk) “ Order ” shall mean any order, judgment, award, decision, decree, injunction, ruling, writ or assessment of any Governmental Authority (whether temporary, preliminary or permanent) that is binding on any Person or its property under applicable Law. (lll) “ Other IP ” shall mean Intellectual Property Rights other than Patents and Trademarks.
(uuu) “ Retained Business ” shall mean the businesses of Canadian Seller and all of its Subsidiaries, including US Seller and Australian Seller, other than the AirCard Business, including: (i) the design, development, manufacturing, testing, marketing, supporting, distributing and selling of the products, Business Software and services available for sale, as of the date hereof (and all components and prior versions thereof), and the products and Business Software currently under development, all as listed o
or organization is a general partner (excluding any such partnership where such party, corporation or organization or any Subsidiary of such party does not have a majority of the voting interest in such partnership). (eeee) “ Sufficiency Representation ” shall mean the representations and warranties of Sellers set forth in Section 5.5 (Sufficiency of Assets), as such representations and warranties shall also be made as of the Closing in accordance with Section 4.3(b)(i) (B) and Section 4.
(kkkk) “ Third Party Components ” shall mean any Technology that is not exclusively owned by Sellers or any of their Subsidiaries and that is embedded in, incorporated into or distributed by Sellers or any of their Subsidiaries with any Business Software or any AirCard Product that is, as of the date hereof, sold or distributed, or offered for sale or distribution. (llll) “ Time of Closing ” shall mean the time of Closing on the Closing Date.
(vvvv) “ Transferred Permits ” shall mean the Permits (and such pending applications therefor or renewals thereof) set forth on Schedule 1.1(vvvv) . (wwww) “ Transferred Tangible Propert y” shall mean (i) all Tangible Property located in the Carlsbad, California premises and used in, held for use in or necessary for the operation of the AirCard Business, other than the Tangible Property listed or described on Schedule 1.
Term Section Assumed Liabilities 2.3 Australian Buyer Preamble Australian Seller Preamble Bills of Sale 4.2(a)(vi) Business Confidential Information 8.5(b) Buyer Indemnified Parties Buyers 12.2(a) Buyers Relocation Deadline 2.7(a) Canadian Buyer Preamble Canadian Seller Preamble Claim Certificate 12.4(a) Closing 4.1 Closing Date 4.1 Closing Inventory 3.2(a)(ii) Closing MDF Liabilities 3.2(a)(iii) Confidentiality Agreement 8.5(a) Copyrights 1.1(qq)(iii) Demand 13.
Term Section Non-Competition and Non-Solicitation Agreement 1.1(fff) Out-Licenses 5.13(a)(iv) Party Preamble Parties Preamble Patents 1.1(qq)(i) Paying Party 10.1 Post-Closing Buyers Facility 2.7(a) Post-Closing Statement 3.2(c) Pre-Closing Statement 3.2(b) Prime Transferred Technology 1.1(xxxx) Purchase Price 3.1(a) Related Party 5.20 Resolution Period 3.2(e) Response 13.11(f) Retained Business Confidential Information 8.5(c) Retained Patents 2.2(b) Review Period 3.
1.3 Certain Interpretations (a) When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. When a reference is made in this Agreement to a Schedule, such reference shall be to a Schedule to this Agreement (as applicable) unless otherwise indicated.
and Buyers shall (and, where applicable, shall cause their Subsidiaries to), in accordance with the Bills of Sale, purchase, acquire and accept from Sellers, all right, title and interest in, to and under the following assets, properties and rights of Sellers or any of their Subsidiaries, (collectively, the “ Acquired Assets ”), free and clear of all Liens other than (x) the Permitted Liens, and (y) the Assumed Liabilities that constitute Liens: (a) the Transferred Tangible Property; (b) the Transferred
excluded from the AirCard Business and the Acquired Assets and shall remain the property of Sellers and their Subsidiaries after the Closing: (a) all Tangible Property that is not Transferred Tangible Property; (b) all Patents that are not Transferred Patents (“ Retained Patents ”); (c) all Trademarks that are not Transferred Trademarks; (d) all Other IP that is not Transferred Other IP; (e) all Technology that is not Transferred Technology; (f) an undivided joint ownership interest in all Joint I
2.3 Assumed Liabilities . Subject to the terms and conditions set forth in this Agreement (including the terms of Section 2.
2.4 Liabilities Not Assumed .
thereof) ending on or prior to the Closing Date in accordance with Section 10.1 , (ii) all Liabilities of Sellers or any of their Affiliates for unpaid Taxes of any person under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or non-U.S.
assumptions, releases and acquittances and such other instruments, and shall take such further actions, as may be necessary or appropriate to fully and effectively sell, transfer, assign, and convey and deliver to Buyers and their Subsidiaries all of the properties, rights, titles, interests, estates, remedies, powers and privileges intended to be expressly conveyed to Buyers and their Subsidiaries under this Agreement and to fully and effectively sell, transfer, assign, and convey and deliver to Buyers and
and (iv) Buyers and Sellers shall mutually cooperate to provide any other alternative arrangements as may be reasonably required to implement the purposes of this Agreement and the other Transaction Agreements. If and when such consent, approval or waiver is obtained, Sellers shall, and shall cause their Subsidiaries to, sell, transfer, assign, convey and deliver such Non-Assignable Asset to Buyers or their applicable Subsidiaries for no additional consideration.
2.7 including to disconnect, detach, remove, package and crate such Excluded Assets for transport.
(i) at the Closing, an amount in U.S. dollars equal to the Estimated Adjusted Cash Purchase Price, minus an amount equal to the Escrow Amount shall be paid by Buyers to the Sellers or their designee(s); (ii) at the Closing, an amount equal to the Escrow Amount in U.S.
Price ”), together with reasonably detailed supporting documentation for such calculations and any additional documentation and information reasonably requested by Buyers (which shall be promptly provided by Sellers).
such disputed items, to provide supporting material to the Accounting Firm in defense of their respective positions with respect to such disputed items and to submit a written statement responding to the other Party’s position with respect to such disputed items and (C) subject to customary confidentiality and indemnity agreements, provide the Accounting Firm with access to their respective books, records, personnel and representatives and such other information as the Accounting Firm may require in order t
3.4 Withholding . Buyers and the Escrow Agent shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement such amounts as may be required to be deducted or withheld therefrom under any other provision of federal, state, local, or foreign Tax Law or under any applicable Law.
(ix) an Assignment and Assumption of Lease with respect to each Transferred Lease, in substantially the same form and substance as mutually agreed by the Parties as of the date hereof (the “ Assignment of Lease ”), executed by each applicable Seller, together with the written consent of the underlying lessor or sublessor under each such Transferred Lease to the assignment thereof, if required pursuant to the terms of such Transferred Lease, in substantially the same form and substance as mutually agreed by
shall be held in such accounts as partial security for the indemnification, compensation and reimbursement obligations of Sellers under this Agreement (collectively, the “ Escrow Fund ”). The Escrow Fund shall be held and disbursed by the Escrow Agent under and pursuant to the terms of the Escrow Agreement. 4.3 Closing Conditions (a) Closing Conditions of Both Parties .
(b) Additional Closing Conditions of Buyers . The obligations of Buyers to consummate the Transactions shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may only be waived in writing exclusively by Buyers: (i) Accuracy of Sellers Representations and Warranties . (A) Each of the representations and warranties of Sellers set forth in Section 5.1 (Sellers Organization and Good Standing; Authority and Enforceability), Section 5.
therewith in a manner that would be adverse to Buyers, as determined by Buyers acting reasonably and in good faith. (vi) Required Permits . (A) Each Transferred Permit set forth on Schedule 4.3(b)(vi)(A) shall have been transferred and delivered to, and shall inure to the benefit of, Buyers, and Sellers shall have provided evidence of the transfer of each such Transferred Permit in form and substance reasonably satisfactory to Buyers. (B) Each Permit set forth on Schedule 4.
otherwise), in each case, sufficient to enable Buyers and their Subsidiaries to continue to design, develop, manufacture, test, market, support, distribute and sell AirCard Products uninterrupted from and after the Closing in a manner substantially the same as it was operated prior to the Closing. (B) Buyers shall have entered into written Contracts with the Persons identified with a double asterisk on Section 5.
(C) Each of the representations and warranties of Buyers set forth in this Agreement (other than the representations and warranties set forth in Section 6.1 and Section 6.
5.1 Sellers’ Organization and Good Standing; Authority and Enforceability (a) Canadian Seller is a corporation duly organized, validly existing and in good standing under the Canada Business Corporations Act and is not a non-resident of Canada for purposes of the Income Tax Act (Canada). US Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
5.3 Conflicts . Except as set forth in Section 5.
5.6 AirCard Business Financial Statements . The AirCard Business Financial Statements are attached as Section 5.6 of the Sellers Disclosure Schedule. The AirCard Business Financial Statements present fairly, and the financial statements required to be delivered pursuant to Section 8.12(c)(iii) when so delivered will present fairly, the results of operations and assets of the AirCard Business for the periods and as of the dates covered thereby.
AirCard Business or the Acquired Assets has been proposed by any Taxing Authority. No written claim has ever been made that any Seller or any of such Seller’s Subsidiaries or its operations is or may be subject to taxation in a jurisdiction in which it does not file Tax Returns by virtue of the operation of the AirCard Business or ownership of the Acquired Assets. (e) Except as set forth in Section 5.
(c) Each Transferred Lease is a valid and binding agreement of the applicable Seller or its Subsidiary and is in full force and effect in accordance with its terms.
identifies all Permits currently held by Sellers or any of their Subsidiaries pursuant to any Environmental Laws with respect to the AirCard Business and the Transferred Leasehold Property, and all underground and aboveground storage tanks located on property included in the AirCard Business and the Transferred Leasehold Property.
applications of Transferred IP that constitutes Registered IP and material correspondence with any Governmental Authority related to such unpublished applications filed or received by Sellers and their Subsidiaries. To the Knowledge of Sellers, each item of Registered IP included in the Transferred IP is subsisting, valid and enforceable.
export or manufacture of AirCard Products or Business Software infringes, misappropriates or otherwise violates or constitutes the unauthorized use of any Intellectual Property Rights of any Person or (B) demanding or offering to license to Sellers or any of their Subsidiaries any Intellectual Property Rights in connection with the AirCard Business.
(k) Except as set forth in Section 5.
within the Transferred Technology. To the Knowledge of Sellers, there has been no unauthorized disclosure by any Person of any such confidential information and trade secrets. 5.13 Contracts (a) Section 5.13(a) of the Sellers Disclosure Schedule sets forth a complete and accurate list of all Material Contracts as of the date hereof and all Transferred Contracts.
Contract; (iii) give any Person the right to accelerate the maturity or performance of any Transferred Contract; or (iv) give any Person the right to cancel, terminate or modify any Transferred Contract. Neither Sellers nor any of their Subsidiaries have received any written notice (or, to the Knowledge of Sellers, other communication) regarding any actual or possible material violation or material breach of, or material default under, any Transferred Contract, which remains uncured.
Assumed Liabilities. No event has occurred, and no condition or circumstance exists, that will (with or without notice or lapse of time), constitute or result in a material violation by Sellers or their Subsidiaries of, or a material failure on the part of Sellers or any of their Subsidiaries to comply with, any Laws respecting employment that are applicable to the AirCard Business, any of the Acquired Assets or the Assumed Liabilities.
(j) Other than as set out in Section 5.15(j) of the Sellers Disclosure Schedule, as of the date hereof, no Offered Employee is currently in receipt of or, to the Knowledge of Sellers, has threatened to claim under a long term disability or permanent health insurance scheme or policy within the next twelve (12) months. (k) There are no pending Actions with any dismissed Non-U.S.
Offered Employee that is a “nonqualified deferred compensation plan” (as defined for purposes of Code Section 409A(d)(1)) and, to the Knowledge of Sellers, each such Contract or plan is, or has been, in documentary and operational compliance with Code Section 409A and the applicable guidance issued thereunder.
in all material respects with each Transferred Permit. Neither Sellers nor any of their Subsidiaries have received any written notice (or, to the Knowledge of Sellers, other communication) from any Governmental Authority regarding: (i) any actual or possible material violation of or material failure to comply with any term or requirement of any Transferred Permit; or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Transferred Permit. 5.
(b) Sellers and their Subsidiaries are, and have at all times been, in compliance in all material respects with the terms of all applicable Export Approvals that are applicable to the AirCard Business or any of the Acquired Assets; (c) There are no pending or, to the Knowledge of Sellers, threatened claims against Sellers or their Subsidiaries with respect to such Export Approvals; (d) To the Knowledge of Sellers, there are no presently existing facts or circumstances pertaining to Sellers’ or their Subsidi
5.25 Books and Records . Sellers and their Subsidiaries have made and kept (and provided Buyers reasonable access to) all Transferred Books and Records, which, in reasonable detail, accurately and fairly reflect the activities of the AirCard Business, except as such is reflected in the Excluded Books and Records.
assuming the due authorization, execution and delivery by Sellers, constitutes (or will constitute) a legal, valid and binding obligation of such Buyer, enforceable against such Buyer in accordance with its respective terms, subject in each case to bankruptcy, insolvency, reorganization or other similar Laws of general application affecting the rights and remedies of creditors, and to general principles of equity. 6.3 Governmental Approvals .
ARTICLE 7 INTERIM CONDUCT OF AIRCARD BUSINESS 7.1 Conduct of AirCard Business . Except as expressly contemplated by this Agreement, as set forth in Section 7.
(a) modify or amend in any material respect or terminate any Transferred Contract, Transferred Lease or Transferred Permit, other than pursuant to the expiration of a Transferred Contract, Transferred Lease or Transferred Permit in accordance with its terms; (b) other than sales of Inventory in the ordinary course of business, sell, lease, license, transfer or otherwise dispose of or encumber any Acquired Assets or Licensed IP (but only to the extent such sale, lease, license, transfer, disposition or encum
such settlement or cessation, (i) any royalty payment obligation or injunctive or equitable relief will be imposed against Buyers and their Subsidiaries, or (ii) such settlement or cessation does not expressly and unconditionally release Buyers and their Subsidiaries from all Liabilities with respect to such Action, with prejudice; (m) commence any Action relating to the AirCard Business or the Acquired Assets other than (i) for the routine collection of amounts owed or (ii) in such cases where the failure
filings or other filings or submissions to a Governmental Authority under an Antitrust Law, other than information that is confidential competitively-sensitive information, (iii) supply any additional information that reasonably may be required or requested by a Governmental Authority under an Antitrust Law, (iv) advise the other of any material written or verbal communications that it receives from a Governmental Authority in respect of any filing, submission or request for information under an Antitrust L
pursuant to this Section 8.3(a) shall be deemed to affect or modify, amend or supplement any representation or warranty set forth herein or the Sellers Disclosure Schedule, or the conditions to the obligations of the Parties to consummate the Transactions in accordance with the terms and conditions hereof, or the remedies available to the Parties hereunder.
confidentiality of such information consistent with such applicable Law or Order.
Agreements, or as explicitly permitted by this Section 8.5 or Section 8.
(iii) Sellers may disclose such copies of the Transaction Agreements (including the schedules and exhibits attached to such Transaction Agreements and the Sellers Disclosure Schedule) in connection with any material investment to be made in Sellers or their Subsidiaries or in connection with a business combination involving, or change of control of, Sellers; provided that prior to disclosing such copies, Sellers shall have entered into a customary confidentiality agreement with the recipient of such copies
8.7 Public Statements .
8.10 Business Relationships; Payment s. (a) Sellers shall provide reasonable cooperation at the expense of, and upon the written request of, Buyers to assist in the transition of the business relationships of the AirCard Business existing prior to the Closing, including relationships with customers, suppliers and others.
or incorporates by reference the Carve-Out Financial Statements or other financial statements of the AirCard Business prepared by Sellers pursuant to this Section 8.
(e) Sellers shall, and shall cause their Subsidiaries to, use reasonable best efforts to complete, as promptly as practicable, the development of the AirVantage Management Services, as detailed in the ACMS Marketing Requirements Document delivered by Sellers to Buyers on January 27, 2013 (the “ ACMS Marketing Requirements ”), at no cost to Buyers.
assist Buyers in connection with (i) the prosecution, licensing, and enforcement of the Transferred Patents and defending against any Patents asserted against Buyers with respect to the AirCard Business, and (ii) third-party licensing arrangements, including making reasonably available to Buyers, upon reasonable advance notice, any employees retained by Sellers and their Subsidiaries, and (b) upon Sellers’ reasonable request and at no charge to Sellers, Buyers will reasonably cooperate with and assist Selle
Sellers shall provide all reasonable assistance to Buyers and their Subsidiaries in connection with the offers of employment or service to the Offered Employees contemplated by this section. Those Offered Employees who accept employment or service from Buyers or one of their Subsidiaries pursuant to the offers of employment or service made pursuant to this Section 9.
such Taxes, “ Straddle Period Taxes ”) shall be apportioned between the applicable Seller, on the one hand, and the applicable Buyer, on the other hand, based on the portion of the period ending at 11:59 p.m. on the Closing Date and the portion of the period beginning on the day after the Closing Date, respectively.
10.5 Records . Notwithstanding the provisions of Section 8.3 or Section 8.
11.2 Effect of Pre-Closing Termination . In the event of the valid termination of this Agreement in accordance with the terms of this Section 11.
warranty of Sellers set forth in this Agreement, or in respect of the Specified Matters, or in the certificate delivered by or on behalf of Sellers pursuant to Section 4.3(b)(iv) prior to the expiration of the applicable Survival Period, then such representation or warranty or right shall survive the expiration of the applicable Survival Period and remain in full force and effect solely with respect to such claim until the final resolution thereof. 12.
(ii) any non-fulfillment or breach of any covenant or other agreement of Buyers under this Agreement; and (iii) any Action relating to any matter of the type referred to in clauses (i) or (ii) above (including any Action commenced by any Seller Indemnified Party for the purpose of enforcing any of its rights under this Article 12 ).
(b) The maximum aggregate amount of Losses that the Buyer Indemnified Parties shall be entitled to recover: (i) under Section 12.2(a)(ii) and Section 12.2(a)(vi) , in each case, in respect of all breaches of or inaccuracies in all representations or warranties made by Sellers set forth in this Agreement or in the certificate delivered by or on behalf of Sellers pursuant to Section 4.
to claims for indemnification, compensation or reimbursement that are subject to the limitation contained in Section 12.3(b)(i) .
detail of the Indemnifying Party’s basis for objecting to such matter. In the event that the Indemnifying Party shall fail to object to any matter set forth in a Claim Certificate within the foregoing thirty (30)-day period, the Indemnifying Party shall be deemed to have irrevocably agreed and consented to indemnify, compensate and reimburse the Indemnified Party in respect of such items of Loss pursuant to the terms of this Agreement. 12.5 Third Party Claims .
of or inaccuracy or alleged inaccuracy in Section 5.4 (Title) or Section 5.12 (Intellectual Property); (vi) the claim is made by a customer of the AirCard Business; (vii) the claim is in respect of a Specified Matter; or (viii) the claim is in respect of the matters described in Section 12.
Day (or on the next Business Day if sent by electronic mail or facsimile after the close of normal business hours or on a non-Business Day): (i) if to Buyers, to: NETGEAR, Inc. 350 E. Plumeria Dr.
or be deemed a waiver of any subsequent breach hereunder. No single or partial exercise of any right, power or remedy conferred by this Agreement shall preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 13.3 Successors and Assigns .
13.8 No Third Party Beneficiaries . Except as specifically set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person any rights or remedies under or by reason of this Agreement or any other certificate, document, instrument or agreement executed in connection herewith nor be relied upon other than the Parties hereto and their permitted successors or assigns.
(e) Notwithstanding any statute or rule governing limitations of actions, any arbitration relating to or arising from any Dispute shall be commenced by service of an arbitration demand.
claim that affords the prevailing Party the right to recover attorneys’ fees and/or costs, then the arbitrator shall award to the Party that substantially prevails in the arbitration its costs and expenses, including reasonable attorneys’ fees. The arbitrator’s award shall be final, nonappealable and binding upon the Parties, subject only to the provisions of 9 U.S.C. Section 10, and may be entered as a judgment in any court of competent jurisdiction.
instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent that such defense relates to lack of authenticity. [Remainder of page intentionally left blank.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be effective as of the date first above written. NETGEAR, INC. By: /s/ Patrick C. S. Lo Name: Patrick C. S.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be effective as of the date first above written.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be effective as of the date first above written. NETGEAR INTERNATIONAL LIMITED By: /s/ Patrick C. S. Lo Name: Patrick C. S.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be effective as of the date first above written.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be effective as of the date first above written. NETGEAR AUSTRALIA PTY LTD By: /s/ Patrick C. S. Lo Name: Patrick C. S.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement to be effective as of the date first above written. SIERRA WIRELESS, INC. By: /s/ Jason W. Cohenour Name: Jason W. Cohenour Title: CEO SIERRA WIRELESS AMERICA, INC. By: /s/Jason W. Cohenour Name: Jason W.
Exhibit 21.1 Subsidiaries and Affiliates of the Registrant NETGEAR, INC. NETGEAR INTERNATIONAL, INC. SKIPJAM CORP Avaak, Inc, INFRANT TECHNOLOGIES LLC Netgear Canada Ltd. NETGEAR HOLDINGS LTD NETGEAR INTERNATIONAL LTD Netgear Asia Holding Ltd NETGEAR ASIA PTE. LIMITED Netgear Australia Pty Ltd. NETGEAR AUSTRIA GMBH Netgear (Beijing) Network Technology Co., Ltd NETGEAR Belgium BVBA NETGEAR Cyprus Ltd.
Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-107718, 333-136892, 333-136895, 333151638, 333-160869, 333-168349 and 333-181892) of NETGEAR, Inc. of our report dated February 26, 2013 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
EXHIBIT 31.1 CHIEF EXECUTIVE OFFICER CERTIFICATION I, Patrick C.S. Lo, certify that: 1. I have reviewed this annual report on Form 10-K of NETGEAR, Inc. (the “Registrant”); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.
EXHIBIT 31.2 CHIEF FINANCIAL OFFICER CERTIFICATION I, Christine M. Gorjanc, certify that: 1. I have reviewed this annual report on Form 10-K of NETGEAR, Inc. (the “Registrant”); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3.
EXHIBIT 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002 In connection with the Annual Report of NETGEAR, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2012 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Patrick C.S. Lo, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
EXHIBIT 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002 In connection with the Annual Report of NETGEAR, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2012 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christine M. Gorjanc, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
