Petsmart 2012 Annual Report Download - page 22

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ultimate costs. Although our estimates of liabilities incurred do not anticipate significant changes in historical trends for these
variables, any changes could have a considerable effect upon future claim costs and currently recorded liabilities and could have
a material impact on our consolidated financial statements.
Pending legislation, weather, catastrophic events, disease, or other factors, could disrupt our operations, supply chain and the
supply of small pets and products we sell, which could harm our reputation and decrease sales.
There is generally a significant amount of legislation pending at the federal, state, provincial and local levels regarding the
handling of pets. This legislation may impair our ability to transport the small pets we sell in our stores. The small pets we sell in
our stores are susceptible to health risks and diseases that can quickly decrease or destroy the supply of these pets. In addition,
our supply of products may be negatively impacted by weather, catastrophic events, disease, supply chain malfunctions,
contamination or trade barriers. Any disruption in our operations or the supply of products to our stores could harm our reputation
and decrease our sales.
Fluctuations in the stock market, as well as general economic and market conditions, may impact our operations, sales, financial
results and market price of our common stock.
Over the last several years, the market price of our common stock has been subject to significant fluctuations. The market
price of our common stock may continue to be subject to significant fluctuations in response to the impact on our operations, sales
and financial results of a variety of factors including, but not limited to:
• General economic changes;
• Actions taken by our competitors, including new product introductions and pricing changes;
• Changes in the strategy and capability of our competitors;
• Our ability to successfully integrate acquisitions;
• The prospects of our industry;
• Natural disasters, hostilities and acts of terrorism; and
• National or regional catastrophes or circumstances, such as a pandemic or other public health or welfare scare.
In addition, the stock market in recent years has experienced price and volume fluctuations that often have been unrelated or
disproportionate to the operating performance of companies. These fluctuations, as well as general economic and market conditions,
including but not limited to those listed above, may harm the market price of our common stock. Further, a change in an analyst's
published opinion or rating of our business could impact the market price of our common stock.
We have implemented some anti-takeover provisions that may prevent or delay an acquisition of us that may not be beneficial
to our shareholders.
Our restated certificate of incorporation, as amended, and bylaws include provisions that may delay, defer or prevent a change
in management or control that our shareholders may not believe is in their best interests. These provisions include:
• The ability of our Board of Directors to issue, without stockholder approval, up to 10,000,000 shares of preferred stock
in one or more series with rights, obligations and preferences determined by the Board of Directors;
• No right of stockholders to call special meetings of stockholders;
• No right of stockholders to act by written consent;
• Certain advance notice procedures for nominating candidates for election to the Board of Directors; and
• No right to cumulative voting.
In addition, our restated certificate of incorporation requires a 66 2/3% vote of stockholders to:
• alter or amend our bylaws;
• remove a director without cause; or
• alter, amend or repeal certain provisions of our restated certificate of incorporation.
We are also subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, and the application
of Section 203 could delay or prevent an acquisition of PetSmart.