Petsmart 2002 Annual Report Download - page 24

Fluctuations in the stock market as well as general economic and market conditions may harm the market
price of our common stock.
Over the last several years, the market price of our common stock has been subject to signiÑcant
Öuctuation. The market price of our common stock may continue to be subject to signiÑcant Öuctuations in
response to operating results and other factors, including:
‚ announcements by analysts regarding their assessment of PETsMART and its prospects;
‚ announcements of our Ñnancial results, particularly if they diÅer from investors' expectations;
‚ 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 and consolidations;
‚ the prospects of our industry; and
‚ hostilities and acts of terrorism.
In addition, the stock market in recent years has experienced price and volume Öuctuations that often
have been unrelated or disproportionate to the operating performance of companies. These Öuctuations, as
well as general economic and market conditions, may harm the market price of our common stock.
We have implemented some anti-takeover provisions, including a stockholder rights plan that may prevent
or delay an acquisition of us that might be beneÑcial to our stockholders.
Our restated certiÑcate of incorporation and bylaws include provisions that may delay, defer or prevent a
change in management or control that our stockholders might not believe is in their best interests. These
provisions include:
‚ a classiÑed board of directors consisting of three classes;
‚ 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 certiÑcate 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 certiÑcate of incorporation.
In August 1997, our board of directors adopted a Stockholder Rights Plan, commonly referred to as a
poison pill, under which one preferred share purchase right was distributed on August 29, 1997 for each share
of common stock held on that date. 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 have the eÅect of delaying or
preventing an acquisition of PETsMART.
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