Thrifty Car Rental 2010 Annual Report Download - page 28

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Our systems contain personal information about our customers. Our failure to maintain the
security of the data we hold, whether the result of our own error or that of others, could harm our
reputation or give rise to legal liabilities, resulting in a material adverse effect on our results of
operations or cash flows.
Risk Factors Relating to a Potential Business Combination Transaction
Certain Transactions or Events Could Make Us Liable for a $44.6 Million Termination
Fee, Plus Reimbursement of Transaction Expenses
Because our stockholders did not approve the proposed acquisition of the Company by
Hertz at a time when a competing takeover proposal had been announced and had not been
withdrawn, we could be liable to Hertz for a termination fee of approximately $44.6 million, plus
reimbursement of up to $5 million of Hertz’s transaction expenses, if, within 12 months after the
October 1, 2010 termination date of our Merger Agreement with Hertz, we enter into a definitive
agreement with a third party with respect to the consummation of a “Company Takeover
Transaction”, our Board of Directors recommends to our stockholders a Company Takeover
Transaction, or a Company Takeover Transaction is consummated. A Company Takeover
Transaction includes (i) a proposal for the merger, consolidation, share exchange, business
combination, reorganization, recapitalization or similar transaction involving more than 50% of the
assets of the Company and its subsidiaries; (ii) the direct or indirect acquisition of assets or
businesses representing 50% or more of the assets of the Company and its subsidiaries, whether
pursuant to an acquisition of securities, assets or otherwise; or (iii) the acquisition of 50% or more of
any class of the issued and outstanding equity or voting securities of the Company. In the event that
such termination fee were to become payable, there can be no assurance that the relevant third
party will agree to bear all or any portion of such fee.
Cooperation with Avis Budget in Seeking Regulatory Approval of a Possible Merger
Transaction and Risks to the Company Whether or Not We Enter into a Definitive
Agreement with Avis Budget
As previously announced, we have agreed to cooperate with Avis Budget in seeking
regulatory approval of a possible business combination transaction with Avis Budget, but we have
not entered into any definitive agreement with Avis Budget. Avis Budget may not be able to obtain
such approval on reasonable terms and, even if it does, we may not be able to reach agreement with
Avis Budget on the terms of a merger or other business combination transaction. Any such
agreement would be subject to the approval of our stockholders and possibly other material
conditions, such as potential divestitures of assets or businesses of either or both of the Company
and Avis Budget, or the approval of Avis Budget’s stockholders. Our efforts to cooperate with Avis
Budget in seeking regulatory approval and any proposed business combination transaction with Avis
Budget or any other third party, whether or not consummated, may result in a diversion of
management’s attention from day-to-day operations, a loss of key personnel, and a disruption of our
operations. Any proposed transaction with Avis Budget could also affect our relationships with third
parties. Any definitive agreement with respect to a business combination transaction would also
likely impose customary restrictions on the conduct of our business outside of the ordinary course
prior to the closing of the transaction or the termination of the agreement, which may also adversely
affect our ability to manage our operations effectively in light of changes in economic or market
conditions or to execute our business strategy and meet our financial goals.
Continuing to Operate as a Stand-Alone Company
We will also face risks to our business and prospects if we continue as a stand-alone
company, including constraints on our ability to increase revenues and operating income, given the
challenges we face in increasing our market share in the key airport and local markets we serve,
high barriers to entry in the insurance replacement market, capital and other constraints on
expanding company-owned stores internationally, and the challenges we would face in further
reducing our expenses.
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